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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Molten Ventures Plc | LSE:GROW | London | Ordinary Share | GB00BY7QYJ50 | ORD GBP0.01 |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 10.00 | 4.21% | 247.50 | 248.50 | 249.50 | 252.50 | 228.00 | 228.00 | 1,023,868 | 16:35:26 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Finance Services | -215.7M | -243.4M | -1.5909 | -1.57 | 381.73M |
From Apr 2019 to Apr 2024
TIDMGROW
RNS Number : 0889K
Draper Esprit PLC
16 September 2016
For immediate release: 16 September 2016
DRAPER ESPRIT PLC
("DRAPER ESPRIT")
FINAL RESULTS FOR ESPRIT CAPITAL PARTNERS LLP
FORMERLY KNOWN AS DRAPER ESPRIT LLP
FOR THE YEARED 31 MARCH 2016
Draper Esprit (AIM: GROW, ESM: GRW), one of the leading venture capital investors involved in the creation, funding and development of high-growth digital technology businesses in the UK, the Republic of Ireland and Europe, today publishes historical financial information in respect of Esprit Capital Partners LLP ("ECP") (formerly known as Draper Esprit LLP) for the year ended 31 March 2016. ECP was acquired by Draper Esprit at the time of its Initial Public Offering in June 2016 ("IPO"), along with the Initial Portfolio.
The admission document published at the time of the IPO contained audited historical financial information on ECP for the three years ended 31 March 2015 and unaudited financial information for the six months ended 30 September 2015. The audited historical financial performance in respect of ECP for the year ended 31 March 2016 is now being released in accordance with the rules of AIM and ESM. However, as explained in the Admission Document, the historical financial performance of ECP is of limited relevance to the performance of Draper Esprit going forward.
As set out in the Admission Document, the net asset value ("NAV") of the Initial Portfolio as at 31 December 2015 was GBP74.8 million. The unaudited NAV of the Initial Portfolio as at 31 March 2016 was GBP76.8 million.
On 6 September 2016 Draper Esprit announced that Intel, a Santa Clara based global technology company (NASDAQ: INTC), had made a conditional offer for portfolio Company Movidius Ltd ("Movidius"), which will result in an estimated total cash return of approximately GBP27 million for Draper Esprit before provision for accrued tax and carried interest payments.
The Group had an unaudited pro-forma Net Asset Value ("NAV") including goodwill at admission of GBP128.7 million with the disclosed audited NAV of the holding in Movidius of GBP7.5m as at 31 December 2015.
The sale is expected to complete before the end of 2016 and is estimated to increase the Group's total NAV by approximately 21%, when compared to the pro-forma NAV (excluding goodwill and cash) reported at the time of the Group's admission to AIM / ESM in June 2016. The Group intends to invest the proceeds of the transaction in line with its existing investment policy.
The acquisition of ECP occurred after 31 March 2016 and consolidated results for Draper Esprit are not presented at this date. Consolidated results for Draper Esprit for the 6 months ended 30 September 2016 will be published in due course, including the NAV as at 30 September 2016.
Simon Cook, CEO Draper Esprit commented:
"Since the IPO, we have continued to experience strong deal-flow and have invested GBP3.1 million to acquire a stake in Stockholm-based digital health company Lifesum (www.lifesum.com), alongside Nokia Growth Partners, and existing investors Bauer Media and VC SparkLabs Global Ventures. Lifesum, launched in 2013, has created one of Europe's fastest growing health apps with over 15 million users.
"We were also extremely pleased to have announced the sale of Movidius to Intel. This is a great example of our business model in action. We were able to help an incredible management team with superior European technology to become a leading global platform. Movidius' technology is enabling the next generation of computing devices with vision interfaces and the sale will allow the business to take full advantage of Intel's global leadership and strong market position and the obvious market benefits this will bring."
"Our motivation for listing our business model was twofold. Firstly, we wanted to be able to invest for longer in our emerging companies and to be able to build bigger stakes as companies remained private for longer periods, capturing more value for shareholders. Secondly, we wanted to further democratise funding for entrepreneurs. We believe strongly in the investment opportunities in Europe and despite the doom-mongers' predictions, little has changed for us post the Brexit vote. If anything the macro environment is now even more attractive for our permanent capital model."
"We look forward to presenting a more meaningful update in our first trading update, which is planned for early October."
*-ends-*
Enquiries
Draper Esprit plc Simon Cook (Chief Executive Officer) Brian Caulfield (Managing Partner) +44 (0)20 7931 8800 Numis Securities Nominated Adviser & Joint Broker Alex Ham Garri Jones Richard Thomas Paul Gillam +44 (0)20 7260 1000 Goodbody Stockbrokers ESM Adviser & Joint Broker Don Harrington Linda Hickey Dearbhla Gallagher +353 1 667 0420 Belvedere Communications (PR) John West Kim van Beeck +44 (0)20 3567 0510
FINANCIAL STATEMENTS
Esprit Capital Partners LLP
Formerly known as Draper Esprit LLP
For the year ended 31 March 2016
Registered number OC318087
Information
Designated Members
S C Cook (resigned 15 June 2016)
S M Chapman (resigned 15 June 2016)
G Redman (resigned 15 June 2016)
Draper Esprit plc (appointed 15 June 2016
Draper Esprit Nominee Limited (appointed 15 June 2016)
LLP Registered Number
OC318087
Registered Office
c/o Draper Esprit plc, 1010 Cambourne Business Park, Cambridge, CB23 6DP
Independent Auditor
Grant Thornton UK LLP, 30 Finsbury Square, London, EC2P 2YU
Members' Report
for the year ended 31 March 2016
The members present their annual report together with audited financial statements of Esprit Capital Partners LLP (formerly Draper Esprit LLP) for the year ended 31 March 2016.
Principal Activities
The principal activity of the Group is the provision of investment management services and consultancy.
Designated Members
S C Cook, S M Chapman and G Redman were designated members of the LLP throughout the period.
Members' Capital and Interests
Each member's subscription to the capital of the LLP determines their share of the profit and is non-refundable. Detail of changes in members' capital in the year ended 31 March 2016 are set out in the financial statements.
Members are remunerated from profits of the LLP and are required to make their own provision for pensions. Profits are allocated and divided between members after finalisation of the financial statements. Members draw a proportion of their profit shares monthly during the year in which it is made, with the balance of profit being distributed after the year end, subject to the cash requirements of the business.
Business Review
The LLP was incorporated on 1 March 2006 and was authorised by the FCA on 27 June 2006 to perform certain regulated activities. Encore Ventures LLP, a controlled subsidiary of Esprit Capital Partners LLP, was incorporated on 31 July 2009 and was authorised by the FCA on 9 March 2010 to perform regulated activities.
During the year there was a restructuring of the investment in Encore Ventures LLP, whereby the LLP transferred c. 30% of its interest to the two individual members of Encore Ventures LLP at cost (GBP3,000).
The consolidated income statement shows a profit for the year, after members' remuneration charged as an expense of GBP361,000 (2015: loss of GBP168,000, 2014: loss of GBP104,000). The Group maintains sufficient capital and the members consider the result for the period to be satisfactory.
On 15(th) June 2016 the LLP and Group were acquired by Draper Esprit plc as part of an AIM listing which also included acquisition of the Esprit Capital III LP fund which Esprit Capital Partners manages.
Members' Responsibilities Statement
The members are responsible for preparing the financial statements in accordance with applicable law and accounting standards.
The Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008 (the 2008 Regulations) require the members to prepare financial statements for each financial year. Under the law the members have elected to prepare financial statements in accordance with International Financial Reporting Standards as adopted by the European Union (IFRSs). The financial statements are required by law to give a true and fair view of the state of affairs of the Group and LLP and of the profit or loss of the Group for that period. In preparing these financial statements, the members are required to:
-- Select suitable accounting policies and then apply them consistently; -- Make judgements and accounting estimates that are reasonable and prudent;
-- State whether applicable accounting standards have been followed, subject to any material departures disclosed and explained within the financial statements;
-- Prepare the financial statements on a going concern basis unless it is inappropriate to presume that the Group will continue in business.
The members are responsible for keeping adequate accounting records that are sufficient to show and explain the LLP and the Group's transactions and disclose with reasonable accuracy at any time the financial position of the Group and enable them to ensure the financial statements comply with the 2008 Regulations. They are also responsible for safeguarding assets of the LLP and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The members confirm that:
-- so far as each member is aware, there is no relevant audit information of which the LLP's auditor is unaware;
-- the members have taken all the steps they ought to have taken as members in order to make themselves aware of any relevant audit information and to establish that the auditors are aware of that information.
The members are responsible for the maintenance and integrity of the corporate and financial information included on the LLP's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
Auditor
Grant Thornton UK LLP, having expressed their willingness to continue in office, will be deemed reappointed for the next financial year in accordance with section 487(2) of the Companies Act 2006 as modified by the Limited Liability Partnerships Regulations 2008, unless the partnership received notice under section 488(1) of the Companies Act 2006 as modified by the Limited Liabilities Partnership regulations 2008.
This report was approved by the members on 14 September 2016 and signed on their behalf by:
G Redman
for and on behalf of Draper Esprit plc, Designated Member
Independent auditor's report to the members of Esprit Capital Partners LLP
We have audited the financial statements of Esprit Capital Partners LLP for the year ended 31 March 2016 which comprise the Consolidated Income Statement, Consolidated Statement of Comprehensive Income, Consolidated Statement of Financial Position, Esprit Capital Partners LLP Statement of Financial Position, Consolidated Statement of Cash Flows, Esprit Capital Partners LLP Statement of Cash Flows, Consolidated Statement of Changes in Members' Equity, Esprit Capital Partners LLP Statement of Changes in Members' Equity and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.
This report is made solely to the members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006, as applied to limited liability partnerships by the Limited Liability Partnership (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008. Our audit work has been undertaken so that we might state to the 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 partnership and the members as a body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of members and auditor
As explained more fully in the Members' Responsibilities Statement, the members are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements is provided on the Financial Reporting Council's website at www.frc.org.uk/auditscopeukprivate.
Opinion on financial statements
In our opinion the financial statements:
-- give a true and fair view of the state of the Group's and of the parent limited liability partnership's affairs as at 31 March 2016 and of its profit for the year then ended;
-- have been properly prepared in accordance with IFRSs as adopted by the European Union; and
-- have been prepared in accordance with the requirements of the Companies Act 2006 as applied to limited liability partnerships by the Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006 as applied to limited liability partnerships requires us to report to you if, in our opinion:
-- adequate accounting records have not been kept by the parent limited liability partnership, 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 -- we have not received all the information and explanations we require for our audit.
William Pointon
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
London
14 September 2016
Consolidated income statement for the years ended 31 March 2016, 2015 and 2014
Hot Features
Premium
2016 2015 2014
Note GBP'000s GBP'000s GBP'000s
Revenue 5 2,466 2,796 3,174
Staff costs and members'
remuneration 7 (1,499) (1,660) (2,234)
Depreciation and amortisation 10 (3) (6) (8)
Other operating charges 6 (708) (962) (984)
Fund raising costs (172) (242) (13)
Revaluation of investments
held at FVTPL 19 247 (71) (29)
--------- --------- ---------
Operating profit/(loss) 331 (145) (94)
Finance income/(expense) 30 (23) (10)
--------- --------- ---------
Profit/(Loss) on ordinary
activities before tax 361 (168) (104)
Tax expense in corporate 8 - - -
subsidiaries
--------- --------- ---------
Profit/(Loss) for the financial
year before members' profit
shares 361 (168) (104)
--------- --------- ---------
Profit for the year attributable
to non-controlling interests 193 242 165
Profit/(Loss) available for
discretionary division among
members 168 (410) (269)
--------- --------- ---------
Consolidated statement of comprehensive income for the years ended 31 March 2016, 2015 and 2014
2016 2015 2014
GBP'000s GBP'000s GBP'000s
Profit/(Loss) available for
discretionary division among
members 361 (168) (104)
Other Comprehensive Income
Items that will be reclassified
subsequently to profit and
loss:
Foreign exchange differences
on consolidation 42 (91) 31
--------- --------- ---------
Total comprehensive income
for the financial year, net
of tax 403 (259) (73)
Total comprehensive income
for the financial year attributable
to:
Members 210 (501) (238)
Non-controlling interests 193 242 165
Total comprehensive income
for the financial year 403 (259) (73)
--------- --------- ---------
The notes below form part of these financial statements.
Consolidated statement of financial position as at 31 March 2016, 2015, 2014 and 1 April 2013
2016 2015 2014 2013
Note GBP'000s GBP'000s GBP'000s GBP'000s
Assets
Non-current assets
Property, plant and equipment 10 4 5 11 12
Investments 12 2,631 2,341 2,427 2,268
--------- --------- --------- ---------
Total non-current assets 2,635 2,346 2,438 2,280
Current assets
Trade and other receivables 13 535 813 868 794
Cash and cash equivalents 14 750 521 1,393 2,521
--------- --------- --------- ---------
Total current assets 1,285 1,334 2,261 3,315
Current liabilities
Trade and other payables 15 955 904 1,079 1,226
Members Capital (refundable) - 10 10 10
--------- --------- --------- ---------
Total current liabilities 955 914 1,089 1,236
Total liabilities 955 914 1,089 1,236
--------- --------- --------- ---------
Net assets 2,965 2,766 3,610 4,359
--------- --------- --------- ---------
Equity
Members' reserves 2,838 2,673 3,426 4,210
Non-controlling interests (8) - - -
Currency translation differences
on group undertakings 51 9 100 69
Members' capital (non-refundable) 84 84 84 80
--------- --------- --------- ---------
Total equity 2,965 2,766 3,610 4,359
--------- --------- --------- ---------
Members' interests
Members' capital 84 84 84 80
Members' reserves 2,838 2,673 3,426 4,210
Amounts due (from) members
(included in trade and other
receivables) - (16) (16) (12)
--------- --------- --------- ---------
Total members' interests 17 2,922 2,741 3,494 4,278
--------- --------- --------- ---------
The financial statements were approved and authorised for issue by the Members and were signed for and on their behalf on 14 September 2016.
G Redman
for and on behalf of Draper Esprit plc, Designated Member
The notes below form part of these financial statements.
Esprit Capital Partners LLP statement of financial position as at 31 March 2016, 2015, 2014 and 1 April 2013
2016 2015 2014 2013
Note GBP'000s GBP'000s GBP'000s GBP'000s
Assets
Non-current assets
Property, plant and equipment 10 4 5 11 12
Investments 7 10 10 10
--------- --------- --------- ---------
Total non-current assets 11 15 21 22
Current assets
Trade and other receivables 13 958 669 1,013 949
Cash and cash equivalents 14 374 91 140 91
--------- --------- --------- ---------
Total current assets 1,332 760 1,153 1,040
Current liabilities
Trade and other payables 15 590 739 719 457
Members Capital (refundable) - 10 10 10
--------- --------- --------- ---------
Total current liabilities 590 749 729 467
Total liabilities 590 749 729 467
--------- --------- --------- ---------
Net assets/(liabilities) 753 26 445 595
--------- --------- --------- ---------
Equity
Members' reserves 669 (58) 361 515
Members' capital (non-refundable) 84 84 84 80
--------- --------- --------- ---------
Total equity 753 26 445 595
--------- --------- --------- ---------
Members' interests
Members' capital 84 84 84 80
Members' reserves 669 (58) 361 515
Amounts due (from) members
(included in trade and other
receivables) - (16) (16) (16)
--------- --------- --------- ---------
Total members' interests 17 753 10 429 579
--------- --------- --------- ---------
The financial statements were approved and authorised for issue by the Members and were signed for and on their behalf on 14 September 2016.
G Redman
for and on behalf of Draper Esprit plc, Designated Member
The notes below form part of these financial statements.
Consolidated statement of cash flows for the years ended 31 March 2016, 2015 and 2014
2016 2015 2014
Note GBP'000s GBP'000s GBP'000s
Cash flows from operating
activities
Profit/(loss) for the financial
year available for discretionary
division amongst members 361 (168) (104)
Adjustments to reconcile
profit/(loss) to net cash
flows generated by/(used
in) operating activities
Revaluation of investments
at FVTPL (247) 71 29
Finance (income)/expense (30) 23 10
Depreciation and amortisation 10 3 6 8
Decrease/(increase) in trade
and other receivables 61 255 (74)
Increase/(decrease) in trade
and other payables (49) (175) (137)
--------- --------- ---------
Net cash generated by/(used
in) operating activities 99 12 (268)
Tax paid by corporate subsidiaries - - -
--------- --------- ---------
Net cash inflow/(outflow)
from operating activities 99 12 (268)
Cash flows from financing
activities
Payments from/(to) members 190 (543) (515)
Payments to non-controlling
interests (204) (242) (165)
Interest received/(paid) 30 (23) (10)
Capital contributions by
members 17 16 - 4
Net cash inflow/(outflow)
from financing activities 32 (808) (686)
Cash flows from investing
activities
Purchase of property, plant
and equipment 10 (2) - (7)
Purchase of investments 19 (532) (353) (179)
Proceeds from sale of investments 592 354 -
--------- --------- ---------
Net cash inflow/(outflow)
from investing activities 58 1 (186)
Net increase/(decrease) in
cash and cash equivalents 189 (795) (1,140)
Cash and cash equivalents
at beginning of year 14 521 1,393 2,521
Impact of foreign exchange
revaluation 40 (77) 12
--------- --------- ---------
Cash and cash equivalents
at end of year 750 521 1,393
--------- --------- ---------
The notes below form part of these financial statements.
Esprit Capital Partners LLP statement of cash flows for the years ended 31 March 2016, 2015 and 2014
2016 2015 2014
Note GBP'000s GBP'000s GBP'000s
Cash flows from operating
activities
Profit/(loss) for the financial
year available for discretionary
division amongst members 727 (419) (154)
Adjustments to reconcile
profit/(loss) to net cash
flows generated by/(used
in) operating activities
Finance (income)/expense (7) - -
Depreciation and amortisation 10 3 6 8
Decrease/(increase) in trade
and other receivables (305) 344 (64)
Increase/(decrease) in trade
and other payables (149) 20 262
--------- --------- ---------
Net cash generated by/(used
in) operating activities 269 (49) 52
Tax paid by corporate subsidiaries - - -
--------- --------- ---------
Net cash inflow/(outflow)
from operating activities 269 (49) 52
Cash flows from financing
activities
Payments from/(to) members - - -
Capital contributions by
members 17 16 - 4
Net cash inflow/(outflow)
from financing activities 16 - 4
Cash flows from investing
activities
Purchase of property, plant
and equipment 10 (2) - (7)
Net cash inflow/(outflow)
from investing activities (2) - (7)
Net increase/(decrease) in
cash and cash equivalents 283 (49) 49
Cash and cash equivalents
at beginning of year 14 91 140 91
Cash and cash equivalents
at end of year 374 91 140
--------- --------- ---------
The notes below form part of these financial statements.
Consolidated statement of changes in members' equity for the years ended 31 March 2014, 2015 and 2016
Members
capital Foreign Amount
classified Members exchange attributable
as other reserve to owners Non-controlling
equity interests of parent interests Total
GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s
Balance at 31
March 2013 80 4,210 69 4,359 - 4,359
Profit/(Loss)
for the year
available for
discretionary
division between
members - (269) - (269) 165 (104)
Other comprehensive
income - - 31 31 - 31
------------ ----------- ----------- -------------- ---------------- ---------
Total comprehensive
income - (269) 31 (238) 165 (73)
Amounts withdrawn
by members - (515) - (515) - (515)
Capital introduced
by members 4 - - 4 - 4
Transactions
with non-controlling
interests - - - - (165) (165)
Balance at 31
March 2014 84 3,426 100 3,610 - 3,610
Profit/(Loss)
for the year
available for
discretionary
division between
members - (410) - (410) 242 (168)
Other comprehensive
income - - (91) (91) - (91)
------------ ----------- ----------- -------------- ---------------- ---------
Total comprehensive
income - (410) (91) (501) 242 (259)
Amounts withdrawn
by members - (343) - (343) - (343)
Transactions
with non-controlling
interests - - - - (242) (242)
Balance at 31
March 2015 84 2,673 9 2,766 - 2,766
Profit/(Loss)
for the year
available for
discretionary
division between
members - 168 - 168 193 361
Other comprehensive
income - - 42 42 - 42
------------ ----------- ----------- -------------- ---------------- ---------
Total comprehensive
income - 168 42 210 193 403
Amounts withdrawn - - - - -
by members
Transactions
with non-controlling
interests - (3) - (3) (201) (204)
Balance at 31
March 2016 84 2,838 51 2,973 (8) 2,965
The notes below form part of these financial statements.
Esprit Capital Partners LLP statement of changes in members' equity for the years ended 31 March 2014, 2015 and 2016
Members'
other Members
interests Capital Total
GBP'000s GBP'000s GBP'000s
Balance at 31 March 2013 515 80 595
Profit/(Loss) for the year
available for discretionary
division between members (154) - (154)
Capital introduced - 4 4
Balance at 31 March 2014 361 84 445
Profit/(Loss) for the year
available for discretionary
division between members (419) - (419)
Balance at 31 March 2015 (58) 84 26
Profit/(Loss) for the year
available for discretionary
division between members 727 - 727
Balance at 31 March 2016 669 84 753
The notes below form part of these financial statements.
Notes to the financial statements for the years ended 31 March 2016, 2015 and 2014
1. General information
Esprit Capital Partners LLP is engaged in investment management activities. Esprit Capital Partners LLP's registered address is 1010 Cambourne Business Park, Cambourne, Cambridge, CB23 6DP.
Information on the Group's structure is given in note 11. Information on other related party relationships of the Group is provided in note 21.
Going Concern
The Partners have assessed the current financial position of Esprit Capital Partners LLP, along with future cash flow requirements to determine if the LLP has the financial resources to continue as a going concern for the foreseeable future. The conclusion of this assessment is that it is appropriate that the Group be considered a going concern. For this reason, the Partners continue to adopt the going concern basis in preparing the Financial Statements.
Basis of preparation
The Financial Statements of Esprit Capital Partners LLP for the year ended 31 March 2016 have been prepared by the Members of Esprit Capital Partners LLP.
The Financial Statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) and IFRIC interpretations as adopted by the European Union. The Financial Statements have also been prepared under the historical cost convention, except for investments valued at 'fair value through profit or loss' (FVTPL).
For all periods up to and including the year ended 31 March 2015, the LLP has prepared its statutory accounts in accordance with UK GAAP. These Financial Statements, for the year ended 31 March 2016, are the first that the LLP has prepared in accordance with IFRS. The date of transition is 1 April 2013.
The preparation of Financial Statements in conformity with IFRSs requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the LLP's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the Financial Statements are disclosed later in these accounting policies.
The Financial Statements are presented in sterling (GBP), rounded to the nearest thousand pounds.
2. Adoption of new and revised Standards
IFRS 1 First time adoption of IFRSs: sets out the provisions for first time adoption of International Financial Reporting Standards. The impact of the adoption on Members' equity in the opening and closing balances sheets of the Group, dated 1 April 2013 and 31 March 2015 are as follows:
1 April 2013 UK GAAP IFRS
2013 Impact 2013
GBP'000s GBP'000s GBP'000s
Assets and Liabilities
Total non-current
assets a,b 374 1,906 2,280
Total current assets 3,315 - 3,315
Total current liabilities c (1,212) (24) (1,236)
--------- --------- ---------
Net assets 2,477 1,882 4,359
--------- --------- ---------
Equity
Members' reserves 2,397 1,882 4,279
Members' capital
(non-refundable) 80 - 80
--------- --------- ---------
Total equity 2,477 1,882 4,359
--------- --------- ---------
a - Inclusion of Esprit Capital III GP LP on consolidation; +GBP1,824,000 investments
b - Revaluation of investment in DFJ Esprit II Founder LP as FVTPL; +GBP82,000 investments
c - Holiday pay accrual; +(GBP24,000) accruals
31 March 2014 UK GAAP IFRS
2014 Impact 2014
GBP'000s GBP'000s GBP'000s
Assets and Liabilities
Total non-current
assets a,b 439 1,999 2,438
Total current assets c 1,609 652 2,261
Total current liabilities d,e (648) (441) (1,089)
--------- --------- ---------
Net assets 1,400 2,210 3,610
--------- --------- ---------
Equity
Members' reserves 1,316 2,210 3,526
Members' capital
(non-refundable) 84 - 84
--------- --------- ---------
Total equity 2,400 2,210 3,610
--------- --------- ---------
a - Inclusion of Esprit Capital III GP LP on consolidation; +GBP1,918,000 Investments, +GBP652k cash, +(GBP413k) deferred income
b - Revaluation of investment in DFJ Esprit II Founder LP as FVTPL; +GBP81,000 investments
c - Inclusion of Esprit Capital III GP LP on consolidation; +GBP652k cash,
d - Inclusion of Esprit Capital III GP LP on consolidation; +(GBP413k) deferred income
e - Holiday pay accrual; +(GBP28,000) accruals
Inclusion of Esprit Capital III GP LP on consolidation decreased the revaluation of investments held at FVTPL by GBP146k for the year ended 31 March 2014, decreasing profit for the year by the same amount.
31 March 2015 UK GAAP IFRS
2015 Impact 2015
GBP'000s GBP'000s GBP'000s
Assets and Liabilities
Total non-current
assets a,b 254 2,092 2,346
Total current assets c 1,409 (75) 1,334
Total current liabilities d,e (734) (180) (914)
--------- --------- ---------
Net assets 929 1,837 2,766
--------- --------- ---------
Equity
Members' reserves 845 1,837 2,682
Members' capital
(non-refundable) 84 - 84
--------- --------- ---------
Total equity 929 1,837 2,766
--------- --------- ---------
a - Inclusion of Esprit Capital III GP LP on consolidation; +GBP2,015,000 investments
b - Revaluation of investment in DFJ Esprit II Founder LP as FVTPL; +GBP77,000 investments
c - Inclusion of Esprit Capital III GP LP in consolidation; +(GBP75,000) other debtors
d - Inclusion of Esprit Capital III GP LP in consolidation; +(GBP164,000) deferred income
e - Holiday pay accrual; +(GBP16,000) accruals
The impact of the adoption of IFRS on the Group profit or loss for the year ended 31 March 2015 is as follows:
Year ended 31 March UK GAAP IFRS
2015
2015 Impact 2015
GBP'000s GBP'000s GBP'000s
Revenue a 2,664 132 2,796
Staff costs and Members'
remuneration b (1,646) (16) (1,660)
Depreciation & amortisation (6) - (6)
Other operating charges (962) - (962)
Fund raising costs (242) - (242)
Revaluation of investments c,
held at FVTPL d - (71) (71)
--------- --------- ---------
Operating profit/(loss) (190) 45 (145)
Finance expense (23) - (23)
(Loss) on ordinary
activities before tax (213) 45 (168)
a - Inclusion of Esprit Capital III GP LP on consolidation; +GBP132,000
b - Holiday pay accrual; +(GBP16,000)
c - Revaluation of investment in DFJ Esprit II Founder LP as FVTPL; +GBP77,000
d - Revaluation of investment in Esprit Capital III GP LP as FVTPL; +(GBP148,000)
Inclusion of Esprit Capital III GP LP on consolidation constitutes a prior period error under IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors ('IAS 8') as the Group's control over the entity existed prior to the transition date.
Distribution of profits to Members in the year ended 31 March 2013 have since been deemed an automatic allocation and therefore do not constitute amounts due from Members. As such, trade and other receivables and Members' reserves have been restated by +(GBP511,000), constituting a further correction of a prior period error under IAS 8.
The accounting policies applicable under the Parent LLP's previous accounting framework are not materially different to IFRS and have not impacted on equity or profit or loss.
New standards, interpretations and amendments not yet effective
The following new standards, which have not been applied in these Financial Statements, will or may have an effect on the Group's future financial statements:
IFRS 9 Financial Instruments: IFRS 9 will eventually replace IAS 39 in its entirety. The process has been divided into three main components, being classification and measurement; impairment; and hedge accounting. The Group provisionally assesses the potential effect to be immaterial given the majority of its financial assets will continue to be held at FVTPL. IFRS 9 is expected to be implemented in 2018 (not yet adopted by the EU).
IFRS 15 Revenue from contracts with customers: IFRS 15 establishes principles for reporting useful information to users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity's contracts with customers. It is effective for periods beginning on or after 1 January 2018, (not yet adopted by the EU) and will supersede IAS 18 Revenue. The potential impact on Group's future financial statements has not yet been assessed.
The potential impact of other new standards, interpretations and amendments that are not yet effective has not yet been assessed.
3. Significant accounting policies
The significant accounting policies disclosed below are those observed in the years ending 31 March 2016, 2015 and 2014.
Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for services provided in the normal course of business, net of discounts, VAT and other sales related taxes. All revenue from services is generated within the United Kingdom and is stated exclusive of value added tax. Revenue from services comprises:
a. Fund management services
Fund management fees are either earned at a fixed annual rate or are set at a fixed percentage of funds under management, measured either by commitments or invested cost, depending on the investment stage of the fund being managed. Revenues are recognised as the related services are provided.
b. Arrangement fees
Occasionally Esprit Capital Partners may charge a fee as part of arranging an investment from one of the Funds it manages into a portfolio company. Such fees are charged at a rate determined on a case-by-case basis and are recognised and payable upon successful completion of the investment.
c. Portfolio directors' fees
Portfolio directors' fees are charged to an investee company and payable to Esprit Capital Partners as the fund manager. Esprit Capital Partners only charges directors' fees on a limited number of the investee companies. Fees are recognised as the related services are provided.
d. Deferred income
The Fund management fees are typically billed either quarterly or half-yearly in advance. Where fees have been billed for an advance period the amounts are credited to deferred income, and then subsequently released through the profit and loss account across the period the fees relate to.
Leases
All leases are classified as operating leases. Rentals payable under operating leases are charged to income on a straight-line basis over the term of the relevant lease, except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
Retirement benefit costs
The Group helps arrange private defined contribution pension provision for its employees and members and makes a fixed monthly contribution as a percentage of agreed remuneration into each individuals' personal scheme. Payments to the schemes are recognised as an expense in the period when they are due. The Group does not provide a pension scheme itself.
Operating Expenses
Operating expenses are recognised in profit or loss upon utilisation of the service or as incurred.
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax in the corporate subsidiaries of Esprit Capital Partners LLP. Tax expense recognised in profit or loss comprises the sum of deferred tax and current tax not recognised in other comprehensive income or directly in equity.
Calculation of current tax is based on tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period. Deferred income taxes are calculated using the liability method.
Deferred tax assets are recognised to the extent that it is probable that the underlying tax loss or deductible temporary difference will be utilised against future taxable income. This is assessed based on the Group's forecast of future operating results, adjusted for significant non-taxable income and expenses and specific limits on the use of any unused tax loss or credit.
Deferred tax liabilities are generally recognised in full, although IAS 12 'Income Taxes' specifies limited exemptions. As a result of these exemptions the Group does not recognise deferred tax on temporary differences relating to goodwill, or to its investments in subsidiaries.
Property, Plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and any recognised impairment loss. Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives, using the straight-line method, on the following basis:
Leasehold improvements - over the term of the lease
Fixtures and equipment - 33%
Computer equipment - 33%
The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits, together with other short-term, highly liquid investments maturing within 90 days from the date of acquisition that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value.
Foreign currencies
Transactions in foreign currencies are recorded at the rate of exchange ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated using the rates of exchange at the reporting date and the gains and losses on translation are included in the income statement.
The individual financial statements of the Group's subsidiary undertakings are presented in their functional currency. For the purpose of these consolidated financial statements, the results and financial position of each subsidiary undertaking are expressed in pounds sterling, which is the functional currency of the LLP and the presentation currency for these consolidated financial statements.
The assets and liabilities of the Group's undertakings whose functional currency is not pounds sterling are translated at exchange rates prevailing on the reporting date. Income and expense items are translated at the average exchange rates for the period.
Exchange differences are charged or credited to other comprehensive income and recognised in the currency translation reserve within equity.
Members' remuneration and interests
Members' rights to participate in the profits or losses, or assets of an LLP are analysed between those that give rise to, from the LLP's perspective, either a financial liability or equity. Members' different participation rights are analysed separately into liability and equity elements.
-- Members' remuneration
Amounts becoming due to members in respect of participation rights in the profits of the LLP for an accounting period that gives rise to liabilities are presented as an expense within the profit and loss account (within the heading Members' remuneration).
-- Members' interests
Members' capital is accounted for either as equity or a liability depending upon its nature. Where the LLP has a contractual obligation to deliver cash or another financial asset to the member, the capital is treated as debt. Where the LLP has an unconditional right to avoid delivering cash or other financial assets to a member in respect of such amount (i.e. repayments of the members' capital is discretionary), it is treated as equity.
Segmental reporting
The Group considers that it only has a single operating segment, investment management.
Basis of consolidation
The Group financial statements consolidate those of the parent entity and all of its subsidiaries as of 31 March 2016. Other than those listed below all of the Groups' subsidiaries have a reporting date of 31 March.
Esprit Capital Holdings Limited - 30 June
Esprit Nominees Limited - 30 June
Esprit Capital I GP Limited - 31 December
DFJ Esprit II GP Limited - 31 December
Esprit Capital III Founder GP Limited - 31 December
Esprit Capital III GP LP - 31 December
Encore I GP Limited - 31 December
Encore I Founder GP Limited - 31 December
Esprit Capital I (CIP) Limited - 31 December [Dormant]
Esprit Capital III MLP LLP - 31 December [Dormant]
Esprit Capital III GP Limited - 31 December [Dormant]
All transactions and balances between Group companies are eliminated on consolidation, including unrealised gains and losses on transactions between Group companies. Where unrealised losses on intra-group asset sales are reversed on consolidation, the underlying asset is also tested for impairment from a Group perspective. Amounts reported in the financial statements of subsidiaries have been adjusted where necessary to ensure consistency with the accounting policies adopted by the Group.
Profit or loss and other comprehensive income of subsidiaries acquired or disposed of during the year are recognised from the effective date of acquisition, or up to the effective date of disposal, as applicable.
The Group attributes total comprehensive income or loss of subsidiaries between the owners of the parent and the non-controlling interests based on their respective ownership interests or contractual arrangements. Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the Group's equity therein. Non-controlling interests consist of the amount of those interests at inception and the non-controlling members' share of changes in equity since.
Business combinations
The Group applies the acquisition method in accounting for business combinations. The consideration transferred by the Group to obtain control of a subsidiary is calculated as the sum of the acquisition-date fair values of assets transferred, liabilities incurred and the equity interests issued by the Group, which includes the fair value of any asset or liability arising from a contingent consideration arrangement. Acquisition costs are expensed as incurred. Assets acquired and liabilities assumed are generally measured at their acquisition-date fair values.
Financial instruments
Financial assets and financial liabilities are recognised in the Group's statement of financial position when the Group becomes a party to the contractual provisions of the instrument.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition.
Financial assets
All financial assets are recognised and derecognised on a trade date where the purchase or sale of a financial asset is under a contract whose terms require delivery of the financial asset within the timeframe established by the market concerned and are initially measured at fair value, plus transaction costs, except for those financial assets classified at fair value through profit or loss, which are initially measured at fair value.
Financial assets are classified by Esprit Capital Partners into the following specified categories: financial assets 'at fair value through profit or loss' (FVTPL) and 'loans and receivables'. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial recognition, these are measured at amortised cost using the effective interest method, less provision for impairment. Discounting is omitted where the effect of discounting is immaterial. The Group's cash and cash equivalents, trade and most other receivables fall into this category of financial instruments.
Individually significant receivables are considered for impairment when they are past due or when other objective evidence is received that a specific counterparty will default.
Financial assets at FVTPL
A financial asset may be designated as at FVTPL upon initial recognition if:
(a) such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise; or
(b) the financial asset forms part of a group of financial assets or financial liabilities or both, which is managed and its performance is evaluated on a fair value basis, in accordance with the Group's documented risk management or investment strategy, and information about the grouping is provided internally on that basis; or
(c) it forms part of a contract containing one or more embedded derivatives, and IAS 39 Financial Instruments: Recognition and Measurement permits the entire combined contract (asset or liability) to be designated as at FVTPL.
The Group consider that the co-investment interests it holds in Esprit Capital III Founder LP and DFJ Esprit II Founder LP are appropriately designated as at FVTPL as they meet criteria (b) above.
Assets within this category are measured at fair value with gains or losses recognised in profit or loss.
Fair value measurement
Management uses valuation techniques to determine the fair value of financial assets. This involves developing estimates and assumptions consistent with how market participants would price the assets. Management bases its assumptions on observable data as far as possible but this is not always available. In that case management uses the best information available. Estimated fair values, being the product of judgements, estimates and assumptions made by management, may vary from actual values (see note 20).
Impairment of financial assets
Financial assets, other than those at FVTPL, are assessed for indicators of impairment at each reporting 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 of the investment have been affected.
The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable is considered uncollectable, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognised in profit or loss.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.
Financial liabilities
Financial liabilities are recognised when the Group becomes a party to the contractual provisions of the instrument, and are derecognised when the contractual provisions are extinguished, discharged, cancelled or expire. Financial liabilities are initially measured at fair value, plus transaction costs.
Financial liabilities are measured subsequently at amortised cost using the effective interest
method. All interest-related charges are included within finance costs or finance income.
4. Critical accounting judgements and key sources of estimation uncertainty
In the application of the Group's accounting policies, which are described in note 3, the board of Esprit Capital Partners are required to make judgements, estimates and assumptions about the carrying amounts 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 if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
Critical judgements in applying the Group's accounting policies
The following are the critical judgements, apart from those involving estimations (which are dealt with separately below), that the board of Esprit Capital Partners have made in the process of applying the Group's accounting policies and that have the most significant effect on the amounts recognised in financial information.
Control assessment
The Group has a number of entities within its corporate structure and consideration has been made of which should be consolidated in accordance with IFRS 10. The Group consolidates all entities within this Financial Statements where it has control over the following: power over the investee to significantly direct relevant activities; exposure, or rights, to variable returns from its involvement with the investee; and the ability to use its power over the investee to affect the amount of the investor's returns. A summary of the conclusions from the Member's consideration of control and the relevant judgements and rationale are presented below.
Encore Ventures LLP At 31 March 2016 the Group held 71.2% of the capital in Encore Ventures LLP (100% at 31 March 2015 and 2014), which entitled it to control the relevant activities of the LLP with no restriction arising from any contractual rights. The minority members in Encore Ventures LLP have an entitlement to proportionate shares in the returns of the LLP, and as such the Group is fully exposed to variable returns arising from it. Consequently, the Members consider Encore Ventures LLP to be controlled by the Group.
General Partners Where the Group holds 100% of the (share) capital of each of the General Partners and there are no contractual rights in place that limit the Group's power over the relevant activities of the entity or its exposure to variable returns arising from its ownership, the General Partners are considered to be controlled.
Administrative companies The Group holds 100% of the share capital of various entities that form part of the Group's administrative structure. There are no contractual rights in place that restrict exposure to variable returns arising from ownership, or that limit the Group's power over the relevant activities of the entities or its ability to exercise that power. These entities are therefore considered to be controlled by the Group.
Limited Partnerships (co-investment) The limited partnerships that the Group's General Partners are members of are not considered to be controlled. The agreements in place within the partnerships, and the level of capital held within them, means that the Group has no significant influence over the relevant activities of the Limited Partnerships and there are significant restrictions on the allocation of returns arising from them so they are treated as investments at FVTPL.
Name of undertaking Location Principal activity Consolidated -------------------------- --------- ---------------------- ------------- Encore Ventures UK Investment management Yes LLP -------------------------- --------- ---------------------- ------------- Esprit Capital I UK General Partner Yes GP Limited -------------------------- --------- ---------------------- ------------- DFJ Esprit II GP Cayman General Partner Yes Limited -------------------------- --------- ---------------------- ------------- Esprit Capital III UK General Partner Yes Founder GP Limited -------------------------- --------- ---------------------- ------------- Esprit Capital III UK General Partner Yes GP LP -------------------------- --------- ---------------------- ------------- Encore I GP Limited Cayman General Partner Yes -------------------------- --------- ---------------------- ------------- Encore I Founder Cayman General Partner Yes GP Limited -------------------------- --------- ---------------------- ------------- Encore I GP LP Cayman General Partner No -------------------------- --------- ---------------------- ------------- Esprit Capital Management UK Admin company Yes Limited -------------------------- --------- ---------------------- ------------- Esprit Capital Holdings UK Admin company Yes Limited (dormant) -------------------------- --------- ---------------------- ------------- Esprit Nominees UK Admin company Yes Limited (dormant) -------------------------- --------- ---------------------- ------------- Esprit Capital I UK Admin company Yes CIP Limited (dormant) -------------------------- --------- ---------------------- ------------- Esprit Capital III UK Admin company Yes MLP LLP (dormant) -------------------------- --------- ---------------------- ------------- DFJ Esprit II Founder Cayman Co-investment No LP limited partnership -------------------------- --------- ---------------------- ------------- DFJ Esprit II Founder Cayman Co-investment No 2 LP limited partnership -------------------------- --------- ---------------------- ------------- Encore I Founder Cayman Co-investment No LP limited partnership -------------------------- --------- ---------------------- ------------- Encore I Founder Cayman Co-investment No 2014 LP limited partnership -------------------------- --------- ---------------------- ------------- Encore I Founder Cayman Co-investment No 2014-A LP limited partnership -------------------------- --------- ---------------------- ------------- Esprit Capital III UK Co-investment No Founder LP limited partnership -------------------------- --------- ---------------------- -------------
Limited partnership funds - Group entities act as the general partner and investment manager to the following limited partnerships:
Esprit Capital I Fund No.1 Limited Partnership
Esprit Capital I Fund No.2 Limited Partnership
DFJ Esprit II LP
Esprit Capital III LP
DFJ Esprit Capital III(i) LP
DFJ Esprit Capital III(i)-A LP
The Group receives a fixed rate compensation for its role as investment manager to these limited partnerships. The board of Esprit Capital Partners consider that these amounts are, in substance and form, "normal market rate" compensation for its role as investment manager, and the Group is not, therefore exposed to variable returns arising from the Limited Partnerships. The Group has no voting rights within the limited partnership funds, and it has no influence over the relevant activities of the funds being restricted to matters solely relevant to its role as investment manager. Consequently, the Group does not consider that it controls the funds and they are not included in the consolidation.
Key sources of estimation uncertainty
The key assumption concerning the future, and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
Valuation of unquoted equity investments
The judgements required to determine the appropriate valuation methodology of unquoted equity investments means there is a risk of material adjustment to the carrying amounts of assets and liabilities used to determine the carrying value of investments held within the Group. These judgements include a decision whether or not to impair or uplift investment valuations. See note 20 for detailed information regarding the fair value of investments.
5. Revenue
Revenue is derived solely within the United Kingdom, from continuing operations for all periods. An analysis of the Group's revenue is as follows:
2016 2015 2014
GBP'000s GBP'000s GBP'000s
Management Fees
Primary Fund - Esprit
Capital III LP 1,103 44% 1,235 44% 1,687 53%
Primary Fund - Esprit
Capital I Fund LP 91 105 378 12%
Secondary Fund - DFJ Esprit
II LP 100 421 15% 495 16%
Secondary Fund - DFJ Esprit
IIIi LP 300 12% 475 17% 433 14%
EIS Funds 549 333 186
Portfolio Directors' Fees 123 98 16
Other 200 129 (21)
--------- ---- --------- ---- --------- ----
Total 2,466 2,796 3,174
--------- ---- --------- ---- --------- ----
Where revenue from a single customer exceeds 10% during a year the percentage is shown in the above table, the funds listed above are those single customers.
6. Profit for the year
The profit for the year has been arrived at after charging:
2016 2015 2014
GBP'000s GBP'000s GBP'000s
Depreciation 3 6 8
Operating lease rentals - plant
and equipment 3 3 3
Operating lease rentals - property 84 184 231
Auditors' remuneration - Parent
LLP 19 15 15
Auditors' remuneration - subsidiary
undertakings 38 33 23
Auditors' remuneration - taxation
compliance services 43 58 35
7. Staff costs
The average monthly number of employees, including salaried members, during the year was 6, (2014: 5, 2013: 5).
Items included in staff costs 2016 2015 2014
GBP'000s GBP'000s GBP'000s
Members remuneration charged
as an expense 1,005 922 1,784
Salaries 439 671 406
Social security costs 40 52 23
Pension costs in respect of
defined contribution schemes 15 15 21
--------- --------- ---------
1,499 1,660 2,234
--------- --------- ---------
8. Tax expense in corporate subsidiaries
Certain companies consolidated in these financial statements are subject to corporate taxes based on their profits for the financial year. Income tax payable on the profits of the LLP and other LLPs consolidated within the Group is solely the personal liability of the individual members of those LLPs and consequently is not dealt with in these financial statements.
The charge to tax, which arises in the corporate subsidiaries included within these financial statements, is:
2016 2015 2014
GBP'000s GBP'000s GBP'000s
Current tax on income of subsidiaries - - -
for the year
Tax expense in corporate subsidiaries - - -
The following table reconciles the tax expense at the standard rate to the actual tax expense:
2016 2015 2014
GBP'000s GBP'000s GBP'000s
Profit/(Loss) on ordinary activities
before tax 361 (168) (104)
Less profit/(loss) arising
in LLPs/LPs 617 (130) (29)
--------- --------- ---------
Profit/(loss) on ordinary activities
of Group companies before tax (256) (38) (75)
Tax expense at UK standard
rate of 20% (2015: 21.5%, 2014:
22%) (51) (8) (16)
Expenses not deductible for - 24 -
tax purposes
Unrealised revaluation of investments (26) (16) 18
Other tax adjustments 77 - (2)
--------- --------- ---------
Total tax (credit)/charge for - - -
the year
--------- --------- ---------
9. Members' profit shares
2016 2015 2014
Average number of members 4 6 9
GBP'000s GBP'000s GBP'000s
Average members' remuneration
(charged as an expense) 237 154 198
Remuneration attributable to
highest paid member 364 344 269
The members consider that Simon Cook, Stuart Chapman and Graham Redman were key management personnel during the year. The remuneration attributable to the key personnel during the year was GBP732,000 (2015: GBP696,000; 2014: GBP887,000)
10. Property plant and equipment
Group and Esprit Capital Leasehold Fixtures Computer Total
Partners LLP Improvements and Equipment
Equipment
GBP'000s GBP'000s GBP'000s GBP'000s
Cost
At 1/4/2013 81 25 78 184
Additions - - 7 7
Disposals - - (10) (10)
At 31/3/2014 81 25 75 181
At 31/3/2015 81 25 75 181
Additions - - 2 2
At 31/3/2016 81 25 77 183
-------------- ----------- ----------- ---------
Aggregate depreciation
At 1/4/2013 81 25 66 172
Charge for the year - - 8 8
On Disposals - - (10) (10)
At 31/3/2014 81 25 64 170
Charge for the year - - 6 6
At 31/3/2015 81 25 70 176
Charge for the year - - 3 3
At 31/3/2016 81 25 73 179
-------------- ----------- ----------- ---------
Net Book Value
At 1/4/2013 - - 12 12
At 31/3/2014 - - 11 11
At 31/3/2015 - - 5 5
-------------- ----------- ----------- ---------
At 31/3/2016 - - 4 4
-------------- ----------- ----------- ---------
11. Subsidiaries
The Group consists of the parent entity, Esprit Capital Partners LLP, incorporated in England and Wales, and a number of subsidiaries held directly and indirectly by Esprit Capital Partners. Investments in subsidiaries are measured at cost less impairment. The financial statements consolidate the results and financial position of the Group, including all subsidiary undertakings. The active subsidiary undertakings are listed below.
Name of subsidiary Principal activity Holding Country
undertaking
Esprit Capital Holdings Intermediate 100% UK
Limited holding company
Esprit Capital Management Administrative 100% UK
Limited services
Esprit Nominees Limited Nominee 100% UK
Esprit Capital I Fund General 100% UK
GP Limited Partner
DFJ Esprit II GP Fund General 100% Cayman
Limited Partner
Esprit Capital III Fund General 100% UK
Founder GP Limited Partner
Esprit Capital III Co-investment 100% UK
GP LP vehicle
Fund General 100% Cayman
Encore I GP Limited Partner
Encore I Founder Fund General 100% Cayman
GP Limited Partner
Encore Ventures LLP Investment management 71% UK
Esprit Capital I Dormant 100% UK
CIP Limited
Esprit Capital III Dormant 100% UK
MLP LLP
Esprit Capital III Dormant 100% UK
GP Limited
Encore Ventures LLP 2016 2015 2014 2013
GBP'000s GBP'000s GBP'000s GBP'000s
Non-current assets - - - -
Current assets 317 286 378 463
--------- --------- --------- ---------
Total assets 317 286 378 463
--------- --------- --------- ---------
Non-current liabilities - - - -
Current liabilities 148 156 91 166
--------- --------- --------- ---------
Total liabilities 148 156 91 166
--------- --------- --------- ---------
Equity attributable to
members of the parent 177 130 287 297
--------- --------- --------- ---------
Non-controlling interests (8) - - -
--------- --------- --------- ---------
Encore Ventures LLP 2016 2015 2014
GBP'000s GBP'000s GBP'000s
--------- --------- ---------
Revenue 532 333 186
--------- --------- ---------
Profit/(Loss) for the year attributable
to members of the parent 29 (242) (175)
Profit/(Loss) for the year attributable
to non-controlling interests 193 242 165
--------- --------- ---------
Profit/(Loss) for the year 232 - (10)
--------- --------- ---------
Other comprehensive income/(loss)
for the year (all attributable
to members of the parent) - - -
--------- --------- ---------
Total comprehensive income for
the year attributable to members
of the parent 29 (242) (175)
Total comprehensive income for
the year attributable to non-controlling
interests 193 242 165
--------- --------- ---------
Total comprehensive income for
the year. 232 - (10)
--------- --------- ---------
12. Investments
The Group holds investments through co-investment vehicles of two of the Funds it manages, DFJ Esprit II LP and Esprit Capital III LP. The investments are predominantly unlisted securities and are carried at Fair Value Through Profit or Loss. The means of valuation of these investments is set out in note 20.
2016 2015 2014 2013
GBP'000s GBP'000s GBP'000s GBP'000s
Interest in DFJ Esprit
II Founder LP 259 327 371 445
Interest in Esprit Capital
III Founder LP 1,641 2,014 1,918 1,823
Other 731 - 138 -
--------- --------- --------- ---------
Total 2,631 2,341 2,427 2,268
--------- --------- --------- ---------
On 13 July 2015 the Group acquired a 50% stake of the carried interest of DFJ Esprit II LP, through DFJ Esprit II Founder 2 LP. At 31 March 2016 the fair value of the interest assigned, calculated in accordance with the policies applied with the Group's financial statements, was GBP436,000.
On 13 July 2015 the Group acquired a 4.5% interest in the carried interest of DFJ Esprit IIIi LP, through Encore I Founder LP and Encore I Founder 2014 LP. At 31 March 2016 the fair value of the interest assigned, calculated in accordance with the policies applied with the Group's financial statements was GBP295,000.
13. Trade and other receivables due within one year
Group 2016 2015 2014 2013
GBP'000s GBP'000s GBP'000s GBP'000s
Trade receivables 171 472 424 496
Other receivables and prepayments 364 125 428 286
Member's loan - 200 - -
Amounts due from members - 16 16 12
--------- --------- --------- ---------
535 813 868 794
--------- --------- --------- ---------
Esprit Capital Partners 2016 2015 2014 2013
LLP
GBP'000s GBP'000s GBP'000s GBP'000s
Trade receivables 116 255 688 272
Amounts owed by group undertakings 535 281 73 186
Other receivables and prepayments 307 101 234 476
Amounts due from members - 16 16 16
--------- --------- --------- ---------
958 669 1,013 949
--------- --------- --------- ---------
All amounts are short term. The net carrying value of all financial assets is considered a reasonable approximation of fair value. Ageing analysis of unimpaired trade receivables:
Group 2016 2015 2014 2013
GBP'000s GBP'000s GBP'000s GBP'000s
Current 160 361 407 456
30 days 11 - - -
60 days - 102 7 11
90 days+ - 9 10 29
--------- --------- --------- ---------
171 472 424 496
--------- --------- --------- ---------
There are no balances deemed past due but not impaired (2015: GBPnil, 2014: GBPnil, 2013: GBPnil).
14. Cash and cash equivalents
Cash and cash equivalents comprise:
Group 2016 2015 2014 2013
Cash at bank and in hand GBP'000s GBP'000s GBP'000s GBP'000s
Sterling (GBP) 749 520 699 2,433
US dollar ($) - - 1 1
Euro (EUR) 1 1 693 87
--------- --------- --------- ---------
750 521 1,393 2,521
--------- --------- --------- ---------
Esprit Capital Partners 2016 2015 2014 2013
LLP
Cash at bank and in hand GBP'000s GBP'000s GBP'000s GBP'000s
Sterling (GBP) 374 91 140 91
US dollar ($) - - - -
Euro (EUR) - - - -
--------- --------- --------- ---------
374 91 140 91
--------- --------- --------- ---------
15. Trade and other payables due within one year
Group 2016 2015 2014 2013
GBP'000s GBP'000s GBP'000s GBP'000s
Trade payables 154 99 247 180
Other taxation and social
security 16 14 7 14
Other payables 225 112 53 39
Accruals and deferred income 560 679 772 993
--------- --------- --------- ---------
955 904 1,079 1,226
--------- --------- --------- ---------
Esprit Capital Partners 2016 2015 2014 2013
LLP
GBP'000s GBP'000s GBP'000s GBP'000s
Trade payables 142 53 217 116
Amounts owed to group undertakings 4 126 239 21
Other taxation and social
security 9 9 - -
Other payables 4 3 3 8
Accruals and deferred income 431 548 260 312
--------- --------- --------- ---------
590 739 719 457
--------- --------- --------- ---------
All amounts are short term. The net carrying value of all financial liabilities is considered a reasonable approximation of fair value.
16. Operating leases as a lessee
The Group leases an office building under an operating lease. The future minimum lease payments are as follows:
Within After
1 year 1-5 years 5 years Total
GBP'000s GBP'000s GBP'000s GBP'000s
31 March 2016 - - - -
31 March 2015 - - - -
31 March 2014 192 768 - 960
Following renegotiation of the building lease for 14 Buckingham Gate in 2015, the termination date was brought forward to July 2016 and no further lease payments are payable.
17. Members' interests
Members Members Amounts Amount Non-controlling Total
capital other due attributable interests
classified interests from to members
as members
equity
GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s GBP'000s
Balance at 31
March 2013 80 4,210 (12) 4,278 - 4,278
Profit/(Loss)
for the year
available for
discretionary
division between
members - (269) - (269) 165 (104)
Amounts withdrawn
by members - (515) - (515) - (515)
Capital introduced
by members 4 - (4) - - -
Transactions
with non-controlling
interests - - - - (165) (165)
Balance at 31
March 2014 84 3,426 (16) 3,494 - 3,494
Profit/(Loss)
for the year
available for
discretionary
division between
members - (410) - (410) 242 (168)
Amounts withdrawn
by members - (343) - (343) - (343)
Transactions
with non-controlling
interests - - - - (242) (242)
Balance at 31
March 2015 84 2,673 (16) 2,741 - 2,741
Profit/(Loss)
for the year
available for
discretionary
division between
members - 168 - 168 193 361
Transactions
with members - - 16 16 - 16
Transactions
with non-controlling
interests - (3) - (3) (201) (204)
Balance at 31
March 2016 84 2,838 - 2,922 (8) 2,914
Esprit Capital Partners Members Members Amounts Amount
LLP capital other due attributable
classified interests from members to members
as equity
GBP'000s GBP'000s GBP'000s GBP'000s
Balance at 31 March 2013 80 515 (16) 579
Profit/(Loss) for the
year available for discretionary
division between members - (154) - (154)
Transactions with members 4 - - 4
------------ ----------- -------------- --------------
Balance at 31 March 2014 84 361 (16) 429
Profit/(Loss) for the
year available for discretionary
division between members - (419) - (419)
Transactions with members - - - -
------------ ----------- -------------- --------------
Balance at 31 March 2015 84 (58) (16) 10
Profit/(Loss) for the
year available for discretionary
division between members - 727 - 727
Transactions with members - - 16 16
------------ ----------- -------------- --------------
Balance at 31 March 2016 84 669 - 753
------------ ----------- -------------- --------------
18. Retirement benefits
The Group makes contributions to personal pension schemes set up to benefit its employees and members. The Group has no interest in the assets of these schemes and there are no liabilities arising from them beyond the agreed monthly contribution for each employee or member that is included in employment costs or members' remuneration in the income statement as appropriate.
19. Financial assets and liabilities
The description of each category of financial asset and financial liability and the related accounting policies are shown below. The carrying amounts of financial assets and financial liabilities held by the Group in each category are as follows:
1 April 2013 Designated Amortised Total
FVTPL cost
GBP'000s GBP'000s GBP'000s
Financial Assets
Investments in unlisted securities
(co-investments) 2,268 - 2,268
----------- ---------- ---------
Long term financial assets 2,268 - 2,268
Trade and other receivables - 508 508
Cash and cash equivalents - 2,521 2,521
----------- ---------- ---------
Short term financial assets - 3,029 3,029
Total financial assets 2,268 3,029 5,297
----------- ---------- ---------
Financial Liabilities
Trade and other payables - 542 542
----------- ---------- ---------
Total financial liabilities - 542 542
----------- ---------- ---------
31 March 2014 Designated Amortised Total
FVTPL cost
GBP'000s GBP'000s GBP'000s
Financial Assets
Investments in unlisted securities
(co-investments) 2,427 - 2,427
----------- ---------- ---------
Long term financial assets 2,427 - 2,427
Trade and other receivables - 440 440
Cash and cash equivalents - 1,393 1,393
----------- ---------- ---------
Short term financial assets - 1,833 1,833
Total financial assets 2,427 1,833 4,260
----------- ---------- ---------
Financial Liabilities
Trade and other payables - 570 570
----------- ---------- ---------
Total financial liabilities - 570 570
----------- ---------- ---------
31 March 2015 Designated Amortised Total
FVTPL cost
GBP'000s GBP'000s GBP'000s
Financial Assets
Investments in unlisted securities
(co-investments) 2,341 - 2,341
----------- ---------- ---------
Long term financial assets 2,341 - 2,341
Trade and other receivables - 688 688
Cash and cash equivalents - 521 521
----------- ---------- ---------
Short term financial assets - 1,209 1,209
Total financial assets 2,341 1,209 3,550
----------- ---------- ---------
Financial Liabilities
Trade and other payables - 415 415
----------- ---------- ---------
Total financial liabilities - 415 415
----------- ---------- ---------
31 March 2016 Designated Amortised Total
FVTPL cost
GBP'000s GBP'000s GBP'000s
Financial Assets
Investments in unlisted securities
(co-investments) 2,631 - 2,631
----------- ---------- ---------
Long term financial assets 2,631 - 2,631
Trade and other receivables 438 438
Cash and cash equivalents 750 750
----------- ---------- ---------
Short term financial assets - 1,188 1,188
Total financial assets 2,631 1,188 3,819
----------- ---------- ---------
Financial Liabilities
Trade and other payables - 736 736
----------- ---------- ---------
Total financial liabilities - 736 736
----------- ---------- ---------
Financial assets designated at FVTPL:
Investments in unlisted securities 2016 2015 2014
(co-investments)
GBP'000s GBP'000s GBP'000s
Fair Value at 1 April 2,341 2,427 2,268
Additions at cost 632 353 179
Return of funds (592) (354) -
Revaluation 247 (71) (29)
Foreign exchange revaluation
on consolidation 3 (14) 9
--------- --------- ---------
Fair Value at 31 March 2,631 2,341 2,427
--------- --------- ---------
The carrying amounts of financial assets and financial liabilities held by Esprit Capital Partners LLP in each category are as follows:
1 April 2013 Designated Amortised Total
FVTPL cost
GBP'000s GBP'000s GBP'000s
Financial Assets
Investments in subsidiaries - 10 10
------------ ---------- ---------
Long term financial assets - 10 10
Trade and other receivables 846 846
Cash and cash equivalents 91 91
---------- ---------
Short term financial assets 937 937
Total financial assets 947 947
---------- ---------
Financial Liabilities
Trade and other payables 457 457
---------- ---------
Total financial liabilities 457 457
---------- ---------
31 March 2014 Designated Amortised Total
FVTPL cost
GBP'000s GBP'000s GBP'000s
Financial Assets
Investments in subsidiaries - 10 10
------------ ---------- ---------
Long term financial assets - 10 10
Trade and other receivables - 872 872
Cash and cash equivalents - 140 140
------------ ---------- ---------
Short term financial assets - 1,012 1,012
Total financial assets - 1,022 1,022
------------ ---------- ---------
Financial Liabilities
Trade and other payables - 700 700
------------ ---------- ---------
Total financial liabilities - 700 700
------------ ---------- ---------
31 March 2015 Designated Amortised Total
FVTPL cost
GBP'000s GBP'000s GBP'000s
Financial Assets
Investments in subsidiaries - 10 10
------------ ---------- ---------
Long term financial assets - 10 10
Trade and other receivables - 578 578
Cash and cash equivalents - 91 91
------------ ---------- ---------
Short term financial assets - 669 669
Total financial assets - 679 679
------------ ---------- ---------
Financial Liabilities
Trade and other payables - 433 433
------------ ---------- ---------
Total financial liabilities - 433 433
------------ ---------- ---------
31 March 2016 Designated Amortised Total
FVTPL cost
GBP'000s GBP'000s GBP'000s
Financial Assets
Investments in subsidiaries - 7 7
------------ ---------- ---------
Long term financial assets - 7 7
Trade and other receivables - 871 871
Cash and cash equivalents - 374 374
------------ ---------- ---------
Short term financial assets - 1,245 1,245
Total financial assets - 1,252 1,252
------------ ---------- ---------
Financial Liabilities
Trade and other payables - 317 317
------------ ---------- ---------
Total financial liabilities - 317 317
------------ ---------- ---------
20. Fair value measurements
The co-investment interests held by the Group are held at FVTPL based on the underlying values of the co-investments in (Esprit Capital III Founder LP and DFJ Esprit II LP) in which the Group indirectly participates. The interests held yield a preferred return (a "hurdle") calculated against the cash invested, and subject to the underlying fund values being sufficient to meet or exceed the hurdle.
The Funds, Esprit Capital III Founder LP and DFJ Esprit II LP, invest in a number of early stage and growth companies, predominantly through unlisted securities. In the accounts of the Funds these investments are carried at fair value calculated as detailed below.
Unquoted investments are initially recognised at cost, including fees and transaction costs. Thereafter, investments are re-valued in accordance with the International Private Equity Valuation Guidelines ("IPEV") published by the European Venture Capital Association in December 2012. In line with the IPEV, the Manager may base valuations on earnings or revenues where applicable, market comparables, price of recent investments in the investee companies, or on net asset values inter alia.
Where the investment being valued was itself made recently, its cost will generally provide a good indication of fair value unless there is objective evidence that the investment has since been impaired, such as observable data suggesting a deterioration of the financial, technical, or commercial performance of the underlying business.
Where there has been any recent investment by third parties, the price of that investment will provide a basis of the valuation. The length of period for which it remains appropriate to use the price of recent investment depends on the specific circumstances of the investment, and the Group will consider whether the basis remains appropriate each time valuations are reviewed.
If the 'price of recent investment' methodology is no longer considered appropriate, the Group then considers alternative methodologies in the IPEV guidelines, being principally price-revenue or price-earnings multiples, depending upon the stage of the asset, requiring management to make assumptions over the timing and nature of future revenues and earnings when calculating fair value.
Where a fair value cannot be estimated reliably, the investment is reported at the carrying value at the previous reporting date unless there is evidence that the investment has since been impaired.
In all cases, valuations are based on the judgement of the Group after consideration of the above and upon available information believed to be reliable, which may be affected by conditions in the financial markets.
Due to the inherent uncertainty of the investment valuations, the estimated values may differ significantly from the values that would have been used had a ready market for the investments existed, and the differences could be material. Due to this uncertainty the Partnership may not be able to sell its investments at the carrying value in these financial statements when it desires to do so or to realise what it perceives to be fair value in the event of a sale.
Subsequent to their initial recognition, measurements of fair values of financial instruments are grouped into Levels 1 to 3 based on the degree to which the fair value is based on observable inputs.
-- Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;
-- Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and
-- Level 3 inputs are unobservable inputs for the asset or liability.
The investments held by the Group are valued on the basis of the non-public reported financial performance of the underlying funds which themselves are valued principally using Level 3 inputs. As a consequence the values of investments held within the Group at 31 March 2016, 31 March 2015 and 31 March 2014 are considered to be entirely based on Level 3 inputs and there were no transfers between Levels 1, 2 and 3 during these years.
Significant unobservable inputs for Level 3 Valuations
The Group's unlisted investments are all classified as Level 3 investments. The fair values of the unlisted investments have been determined principally through reference to externally generated data such as investment round share prices, although a significant proportion are valued using an internally generated revenue multiple. A quantitative sensitivity analysis of the impact that changes to the weighted average revenue multiple would have on the value of investments held by the Group is shown below:
Sensitivity analysis 2016 2015 2014 2013
- revenue multiple
GBP'000s GBP'000s GBP'000s GBP'000s
Value of Level 3 investments 2,631 2,340 2,288 2,266
Value sensitive to change
in revenue multiple 462 204 149 141
Weighted average revenue
multiple used 2.5x 3.0x 2.6x 3.1x
Sensitivity (+/-) 1x 1x 1x 1x
Effect on fair value
(+/-) 159 68 57 46
Financial instruments risk
Financial risk managemen
Financial risks are usually grouped by risk type: market, liquidity and credit risk. These risks are discussed in turn below.
Market risk - Foreign currency
A significant portion of the Group's revenue, investments and cash deposits are denominated in a currency other than sterling. The principal currency exposure risk is to changes in the exchange rate between EUR and GBP. Presented below is an analysis of the theoretical impact of 10% volatility in the exchange rate on Members equity.
The impact on revenues of a shift in exchange rates between EUR:GBP of +/- 10% would have had the following theoretical impact on profit/loss for the years ended 31 March.
Foreign currency exposures 2016 2015 2014
- Revenue
GBP'000s GBP'000s GBP'000s
Profit/(Loss) for the financial
year 361 (168) (104)
Profit/(Loss) after 10% decrease
in EUR:GBP 259 (194) (257)
Profit/(Loss) after 10% increase
in EUR:GBP 486 (70) 83
Impacts have been calculated based on revenues in the year of EUR1,310k, EUR1,547k and EUR1,576k for the years ended 31 March 2016, 2015 and 2014 respectively
The investment held by the Group into Esprit Capital III Founder LP is denominated in Euros. The theoretical impact of a change in the exchange rate of +/-10% between EUR:GBP would be as follows:
Foreign currency exposures 2016 2015 2014 2013
- Investments
GBP'000s GBP'000s GBP'000s GBP'000s
Investments denominated
in EUR 1,641 2,015 1,918 1,823
10% decrease in EUR:GBP 1,823 2,239 2,131 2,026
10% increase in EUR:GBP 1,492 1,832 1,743 1,658
Impacts have been calculated based on investment values at 31 March 2016, 2015 and 2014 of EUR2,077k, EUR2,754k, and EUR2,320k respectively.
Certain cash deposits held by the Group are denominated in Euros. The theoretical impact of a change in the exchange rate of +/-10% between EUR:GBP would be as follows:
Foreign currency exposures 2016 2015 2014 2013
- Cash
GBP'000s GBP'000s GBP'000s GBP'000s
Cash denominated in EUR 1 1 693 87
10% decrease in EUR:GBP 1 1 770 97
10% increase in EUR:GBP 1 1 630 79
Impacts have been calculated based on cash deposit balances at 31 March 2016, 2015, 2014 and 2013 of EUR1k, EUR1k, EUR1,114k and EUR103k respectively.
The combined theoretical impact on total equity of the changes to revenues, investments and cash and cash equivalents of a change in the exchange rate of +/-10% between EUR:GBP would be as follows
Foreign currency exposures 2016 2015 2014 2013
- Equity
GBP'000s GBP'000s GBP'000s GBP'000s
Total Equity 2,965 2,766 3,610 4,359
10% decrease in EUR:GBP 3,273 3,228 4,088 4,753
10% increase in EUR:GBP 2,709 2,517 3,220 4,037
Market risk - Price risk
The Group is exposed to equity price risks arising from the limited number of listed investments it holds within its co-investment holdings. Such investments are held for strategic rather than trading purposes as part of the underlying managed investment portfolios. The Group does not actively trade these investments.
Liquidity risk
Cash and cash equivalents comprise cash and short-term bank deposits with an original maturity of three months or less held in readily accessible bank accounts. The carrying amount of these assets is approximately equal to their fair value. Responsibility for liquidity risk management rests with the board of Esprit Capital Partners LLP, which has established a framework for the management of the Group's funding and liquidity management requirements. The Group manages liquidity risk by maintaining adequate reserves and by continuously monitoring forecast and actual cash flows.
All Group payable balances at 31 March 2016, 2015 and 2014 fall due for payment within one year.
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss. The Group is exposed to this risk for various financial instruments, for example by granting receivables to customers, placing deposits, investment in unlisted securities through its co-investments. The Group's trade receivables are amounts due from the investment funds under management, or underlying portfolio companies. The Group's & LLP's maximum exposure to credit risk is limited to the carrying amount of financial assets at 31 March as summarised below:
Classes of financial assets, 2016 2015 2014 2013
carrying amounts
Group GBP'000s GBP'000s GBP'000s GBP'000s
Investments in unlisted
securities (co-investments) 2,631 2,341 2,427 2,268
Trade and other receivables 438 688 440 508
Cash at bank and cash equivalents 750 521 1,393 2,521
--------- --------- --------- ---------
3,799 3,550 4,260 5,297
--------- --------- --------- ---------
2016 2015 2014 2013
Esprit Capital Partners GBP'000s GBP'000s GBP'000s GBP'000s
LLP
Investments in unlisted
securities 7 10 10 10
Trade and other receivables 871 578 871 846
Cash at bank and cash equivalents 374 91 140 91
--------- --------- --------- ---------
1,252 679 1,021 947
--------- --------- --------- ---------
All of the Group's trade and other receivables have been reviewed for indicators of impairment. Certain trade receivables within the LLP, relating to recovery of expenses from investee companies, were found to be impaired and an allowance for credit losses of GBP37,000 in year ended 31 March 2016 (2015: GBP3,000, 2014: GBP10,000) has been recorded accordingly within other expenses.
The Group's members consider that all of the above financial assets that are not impaired or past due for each of the 31 March reporting dates under review are of good credit quality. In respect of trade and other receivables the Group is not exposed to significant risk as the principal customers are the investment funds managed by the Group, and in these the Group has control of the banking as part of its management responsibilities.
Investments in unlisted securities are held within limited partnerships for which the Group acts as manager, and consequently the Group has responsibility itself for collecting and distributing cash associated with these investments.
The credit risk of amounts held on deposit is limited by the use of reputable banks with high quality external credit ratings and as such is considered negligible.
Capital management
The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern in order to provide returns for members of the Esprit Capital Partners LLP and to maintain and to minimise the cost of capital.
21. Related party transactions
The Group acts as manager to Esprit Capital I Fund LP and charges a management fee which amounted to GBP91,000 in the year (2015: GBP105,000, 2014: GBP378,000). This fee is included in revenue for the year.
The Group acts as manager to DFJ Esprit II LP and charges a management fee which amounted to GBP100,000 in the year (2015: GBP421,000, 2014: GBP495,000). This fee is included in revenue for the year.
The Group acts as manager to Esprit Capital III LP and charges a management fee which amounted to GBP1,103,000 in the year (2015: GBP1,235,000, 2014: GBP1,687,000). This fee is included in revenue for the year.
The Group acts as a manager to DFJ Esprit IIIi LP and charges a management fee which amounted to GBP300,000 (2015: GBP475,000, 2013: GBP433,000) in the year.
Esprit Capital Partners LLP may require that one of its members is appointed to the board of an investee company in a non-executive role. In such circumstances Esprit Capital Partners charges an administration fee to the investees for the provision of the director services. These fees which amounted to GBP123,000 (2015: GBP98,000, 2014: GBP16,000) have been included in the turnover for the year. Esprit Capital Partners does not exercise control or management through any of these non-executive positions
During the year ended 31 March 2015 the Group made a GBP200,000 uncollateralised loan to Simon Cook. The loan carried interest of 4%, which was considered to not differ materially from the market rate, and was repaid in full on 15 September 2015.
On 13 July 2015 the Board of the LLP declared a bonus payable to Simon Cook and Stuart Chapman as a consequence of them giving up their right to certain carried interest entitlements in support of the of the Group. An amount of GBP400,000 was declared payable immediately with a further GBP100,000 paid in the year and GBP100,000 accrued. At 31 March 2016 the fair value of interests assigned, calculated in accordance with the policies applied within the Group's financial statements was GBP731,000.
On 30 September 2015 the Board of the LLP declared a further bonus payable to Simon Cook and Stuart Chapman as a consequence of them giving up their right to certain carried interest entitlements in support of the of the Group. An amount of GBP150,000 was declared payable in relation to that transfer
22. Ultimate controlling party
The members of Esprit Capital Partners LLP do not consider there to be a single ultimate controlling party of the Group during the period. On 15 June 2016, the Parent and Group were acquired by Draper Esprit plc following admission to AIM (see note 23).
23. Post reporting date events
On 15 June 2016 the LLP and Group were acquired by Draper Esprit plc. All the existing members of the LLP transferred their capital to Draper Esprit plc on the date of acquisition and subsequently resigned from the LLP. Following admission to AIM the outstanding amounts payable to Simon Cook and Stuart Chapman (note 21) were settled.
On Admission and the completion of the Esprit Capital Acquisition, Simon Cook and Stuart Chapman assigned a portion of their personal entitlements in the carried interest in DFJ Esprit III(i) LP to the Group under an agreement entered in to after the balance sheet which is considered to be a derivative contract. The value of that derivative contract is a capital contribution from members. The fair value of the DFJ Esprit IIIi LP interest assigned, calculated in accordance with the policies applied with the Group's financial statements was GBP656,000. A payment of GBP75,000 each was made in favour of Simon Cook and Stuart Chapman in recognition of the transfer. The members of the LLP also assigned a 61.5% interest in the gains of DFJE III FP LP for GBPnil consideration. The fair value of the DFJE III FP LP interest assigned, calculated in accordance with the policies applied with the Group's financial statements was GBP444,000.
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCLFMBTMBIBBAF
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September 16, 2016 07:48 ET (11:48 GMT)
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