Principle_Capital_Investm - Accounts

The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.true

For the financial year ended 31 December 2019 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.

The directors acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.

The members have not required the company to obtain an audit of its financial statements for the year in question in accordance with section 476.

These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.

Principle Capital Investments Limited is a private company limited by shares incorporated in England and Wales. The registered office is Eastcastle House, 27-28 Eastcastle Street, London, W1W 8DH.

These financial statements have been prepared in accordance with “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £000's.

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

The company has taken advantage of the exemption under section 399 of the Companies Act 2006 not to prepare consolidated accounts, on the basis that the group of which this is the parent qualifies as a small group. The financial statements present information about the company as an individual entity and not about its group.

The directors have considered all factors, including in the wider economy, as part of their assessment of going concern. Although the current economic climate creates both cash flow and profitability risks for the company, the directors believe on balance that they have sufficient resources to enable trading to continue for a period of at least one year from the date of approval of the financial statements, on the basis of information currently available to them as at the point of approving these. Accordingly, these financial statements have been prepared on the going concern basis.true

Dividend income from equity investments is taken into account by reference to the date the security becomes "ex-dividend". Such income is presented as investment income so as to reflect the returns receivable as a result of the portfolio management.

Interest from short term deposits and fixed interest securities is accounted for on a time apportionment basis so as to reflect the effective yield. Where the company has elected to receive dividends in the form of additional shares rather than cash, the amount of cash dividend foregone is recognised as revenue return.

Interest receivable are included as revenue return on an accurate basis.

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

The business of the company is investing in financial assets with a view to profiting from their total return in the form of dividends, interest or increases in market value. Accordingly, interests in subsidiaries, associates and jointly controlled entities are initially measured at transaction price excluding transaction costs, and are subsequently designated as assets held at fair value through profit and loss ("FVTPL") hence are measured at fair value at each reporting date. Changes in fair value are recognised in profit or loss.

A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

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

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

The special reserve was created on 1 March 2006 pursuant to the granting of a Court Order and is available to purchase (buy-back) the company's Ordinary Shares. The reserve is also distributable to shareholders. The special reserve balance arose from the share premium account created following the issue of shares in the period ended 31 December 2006. A further £40.155 million was transferred from the share premium account, being the remainder following the buyback of share capital by the company in 2008.

Monetary assets and liabilities denominated in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. All differences are taken to the profit and loss account.

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Investments included within fixed asset investments are held by accounting policy choice at fair value through profit and loss. In determining the fair value the directors are required to make an assessment of fair values based on net assets and future recoverability. This assessment places high reliance on the future performance of markets and the ability of the company to take advantage of that performance.

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

Details of the company's subsidiaries at 31 December 2019 are as follows:

Investments marked with * are subsidiaries of PCF Investments (BVI) Limited.

The registered offices of the subsidiaries are as follows:

1. Trinity Chambers, PO Box 4301, Road Town, Tortola, British Virgin Islands.

2. 190 Elgin Avenue, Grand Cayman, KY1-9005, Cayman Islands.

3. 6th Floor, Tower A, 1 CyberCity, Ebene, Mauritius.

Details of the company's associates at 31 December 2019 are as follows:

Investments marked with * are associates of PCF Investments (BVI) Limited.

The registered offices of all the associates is: 6th Floor, Tower A, 1 CyberCity, Ebene, Mauritius.

Included in retained profits are undistributable reserves of £1,135,036 (2018 - £1,165,291) relating to gains on investments and £53 (2018 - £53) relating to losses on investments.

This company has given a guarantee to certain loan creditors of a subsidiary company, to repay these balances should the subsidiary not have the resources to do so. There is no obligation at present on this company to repay these balances and the directors foresee no potential obligation in the short to medium term. The potential balance which would have to be repaid based on the loan creditor balances as at 31 December 2019 is £715,982 (2018 - £727,104).

During the year the company entered into the following transactions with related parties.

The following amounts were outstanding at the reporting end date:

The following amounts were outstanding at the reporting end date:

Details of guarantees given to related parties are provided in note 13.

Subsequent to the year end, COVID-19 has resulted in a global pandemic affecting economies globally.  The speed and severity of the impact has been unprecedented but many Governments, including within the UK, have introduced considerable measures to help businesses through this extremely challenging time.  At the time of approval of these accounts, the full effect of the pandemic is uncertain, but, as noted in note 1.2, the directors consider that the company remains a going concern.