ACCOUNTS - Final Accounts preparation
ACCOUNTS - Final Accounts preparation
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Company Information
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Contents
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Directors' report
for the year ended 30 June 2023
The directors present their report together with the Strategic report and the financial statements of Forada Limited ('the company') for the year ended 30 June 2023.
The profit for the year, after taxation, amounted to £18,674,261 (2022 (unaudited): £3,875,629).
The directors recommended payment of a dividend of £14,573,905 (2022 (unaudited): £4,303,041) during the year.
The directors of the company who were in office throughout the year and up to the date of signing the financial statements were:
The directors are responsible for preparing the Directors' report, the Strategic report and the financial statements in accordance with applicable law and regulations.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the company's financial statements and then apply them consistently;
∙make judgements and accounting estimates that are reasonable and prudent;
∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
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Directors' report (continued)
for the year ended 30 June 2023
Matters covered in the Strategic report
The company has chosen, in accordance with s.414C(11) of the Companies Act 2006, to set out in the company's Strategic report information required by Schedule 7 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, and Part 2 of The Companies (Miscellaneous Reporting) Regulations 2018 to be contained in the Directors' report. It has done so in respect of future developments.
The auditors, Buzzacott LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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Strategic report
for the year ended 30 June 2023
The directors present their Strategic report for the year ended 30 June 2023.
The directors are comfortable with the progress of the business this year and consider that the company continues to offer investment management services which are attractive to existing and new clients. In the year, Forada Limited was authorised by the FCA and the firm grew to 8 members of staff.
Forada has adopted a Responsible Investment Policy which considers the firm’s impact on the environment and the community. The directors are focussed on continuing to deliver investment performance for Forada’s clients, and to increase the investor base in the Forada Funds.
The principal risks faced by the business relate to the investment performance of the investment manager when considered against peer organisations and in absolute terms. The firm is also subject to foreign exchange risk, in particular for the rate of Pounds Sterling versus the US Dollar, as it is based in the United Kingdom and many of its principal expenses are denominated in Pounds Sterling, whilst its fees earned are denominated in US Dollars.
Forada considers its assets under management and year to date performance in each share class open to investors as key performance indicators.
In addition, Forada considers its regulatory capital as a multiple of its regulatory capital requirement to be a key indicator of financial health. This was 1.8 on 30 June 2023.
Directors have complied with s172 of the Companies Act 2006: the duty to promote the success of the company by carefully considering the likely consequences of any decision in the long term, taking advice where necessary in order to balance the interests of the strategy’s investors and employees, and by recognising the key importance of the firm’s reputation in its relationships with suppliers. Dialogue with key stakeholders as well as an appreciation of the evolving regulatory and competitive environment in which the firm operates are inputs into Director’s decision making. Forada has documented governance and decision-making procedures to assist with this. The Directors consider that the firm's Responsible Investment Policy lays out how the firm balances these responsibilities.
This report was approved by the board on 23 October 2023 and signed on its behalf.
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Independent auditors' report to the members of Forada Limited
for the year ended 30 June 2023
We have audited the financial statements of Forada Limited (the 'company') for the year ended 30 June 2023, which comprise the Statement of income and retained earnings, the Statement of financial position and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the Annual report other than the financial statements and our Auditors' report thereon. The directors are responsible for the other information contained within the Annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
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Independent auditors' report to the members of Forada Limited (continued)
for the year ended 30 June 2023
Other information (continued)
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Directors' report and the Strategic report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Directors' report and the Strategic report have been prepared in accordance with applicable legal requirements.
Other matters
The financial statements of the company for the year ended 30 June 2022, forming the comparative figures in these financial statements, are not audited.
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Directors' report and the Strategic report.
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Independent auditors' report to the members of Forada Limited (continued)
for the year ended 30 June 2023
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
How the audit was considered capable of detecting irregularties including fraud
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
∙the Senior Statutory Auditor ensured that the engagement team collectively had the appropriate competence,
capabilities and skills to identify or recognise non-compliance with applicable laws and regulations, including knowledge specific to auditing regulated investment management firms;
∙we made enquiries of management as to where they considered there was susceptibility to fraud, and their
knowledge of actual, suspected and alleged fraud;
∙we identified the laws and regulations that could reasonably be expected to have a material effect on the financial
statements of the company through discussions with directors and other management at the planning stage, and from our knowledge and experience of regulated investment management firms;
∙the audit team held a discussion to identify any particular areas that were considered to be susceptible to
misstatement, including with respect to fraud and non-compliance with laws and regulations; and
∙we focused our planned audit work on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company including Companies Act 2006, The Financial Services and Markets Act 2000 and taxation legislation.
We assessed the extent of compliance with the laws and regulations identified above through:
∙making enquiries of management;
∙reviewing legal expenditure throughout the year for any potential litigation or claims; and
∙considering the internal controls in place that are designed to mitigate risks of fraud and non-compliance with laws
and regulations.
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Independent auditors' report to the members of Forada Limited (continued)
for the year ended 30 June 2023
Auditors' responsibilities for the audit of the financial statements (continued)
To address the risk of fraud through management bias and override of controls, we:
∙determined the susceptibility of the company to management override of controls by checking the implementation of
controls and enquiring of individuals involved in the financial reporting process;
∙reviewed journal entries at the year end to identify unusual transactions;
∙performed analytical procedures to identify any large, unusual or unexpected transactions and investigated any large variances from the prior year;
∙reviewed accounting estimates and evaluated where judgements or decisions made by management indicated bias
on the part of the company's management;
∙tested the existence, completeness and cut-off of turnover by obtaining confirmations from third party administrators of the management and performance fees earned during the year; and
∙carried out substantive testing to check the occurrence and cut-off of expenditure.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which
included:
∙agreeing financial statement disclosures to underlying supporting documentation;
∙enquiring of management as to actual and potential litigation and claims; and
∙reviewing correspondence with HMRC and the Financial Conduct Authority.
There are inherent limitations in our audit procedures described above. Irregularities that result from fraud might be
inherently more difficult to detect that irregularities that result from error as they may involve deliberate concealment or collusion. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the members and other management and the inspection of regulatory and legal correspondence.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' report.
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an Auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Senior Statutory Auditor
130 Wood Street
EC2V 6DL
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Statement of income and retained earnings
for the year ended 30 June 2023
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Statement of financial position
as at
The financial statements were approved and authorised for issue by the board and were signed on its behalf on
The notes on pages 10 to 20 form part of these financial statements.
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Notes to the financial statements
for the year ended 30 June 2023
Forada Limited is a private company limited by shares and incorporated in England & Wales, registration number 10833901. The address of the registered office is C/O Buzzacott LLP, 130 Wood Street, London, EC2V 6DL and its principal place of business is 20 North Audley Street, London, W1K 6LX.
2.Significant accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' ('FRS 102') and the Companies Act 2006.
The preparation of these financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the company's accounting policies (see note 3). The following principal accounting policies have been applied.
The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102:
∙the requirements of Section 7 Statement of Cash Flows;
∙the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d).
This information is included in the consolidated financial statements of Forada Investments Limited as at 30 June 2023 and these financial statements may be obtained from The Registrar of Companies.
Investment Management Agreements. Management fees are recognised monthly, and performance fees are recognised when they crystallise. Turnover is recognised to the extent that it is probable that the economic benefits will flow to the company and the turnover can be reliably measured. Turnover is measured as the fair value of the consideration received or receivable, including discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before turnover is recognised:
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Notes to the financial statements
for the year ended 30 June 2023
2.Significant accounting policies (continued)
Turnover from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied: recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively. The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the company operates and generates income. Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the reporting date, except that:
∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be
recovered against the reversal of deferred tax liabilities or other future taxable profits; and
∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business
combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.
Tangible assets are measured at historical cost less accumulated depreciation and any accumulated impairment losses. Cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
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Notes to the financial statements
for the year ended 30 June 2023
2.Significant accounting policies (continued)
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the statement of comprehensive income. fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
The company only enters into transactions that result in the recognition of basic financial instruments like
trade debtors, debt instruments, creditors and loans to related parties. Financial assets measured at amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Statement of comprehensive income. For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate, which is an approximation of the amount that the company would receive for the asset if it were to be sold at the reporting date.
Functional and presentation currency
Transactions and balances
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Notes to the financial statements
for the year ended 30 June 2023
2.Significant accounting policies (continued)
shareholders, this is when paid. In the case of final dividends, this is when approved by the shareholders. There were no significant estimates or judgements made in the year.
The whole of the turnover is attributable to the company's principal activity, of providing investment management services.
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Notes to the financial statements
for the year ended 30 June 2023
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Notes to the financial statements
for the year ended 30 June 2023
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Notes to the financial statements
for the year ended 30 June 2023
10.Taxation (continued)
The rate of corporation tax has increased from 1 April 2023, and from this date the rate will taper from 19% for businesses with profits of less than £50,000 to 25% for businesses with profits over £250,000.
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Notes to the financial statements
for the year ended 30 June 2023
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Notes to the financial statements
for the year ended 30 June 2023
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Notes to the financial statements
for the year ended 30 June 2023
During the year, 400,000 (2022: 599,999) Ordinary shares were issued at par.
Profit and loss account
The profit and loss account includes current year and prior periods' retained earnings.
There were no contingent liabilities at 30 June 2023 or 30 June 2022.
There were no capital committments at 30 June 2023 or 30 June 2022.
The company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. The pension cost charge represents contributions payable by the company to the fund and amounted to £35,867 (2022 (unaudited): £75,736) . Contributions totalling £6,374 (2022 (unaudited): £2,775) were payable to the fund at the reporting date and are included in creditors.
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Notes to the financial statements
for the year ended 30 June 2023
The immediate parent undertaking is Forada Investments Limited.
The smallest and largest group of undertakings for which group accounts are prepared which includes this company is headed by Forada Investments Limited. These consolidated financial statements can be obtained from The Registrar of Companies, Companies House, Crown Way, Cardiff, Wales, CF14 3UZ, DX 33050, Cardiff. The ultimate controlling party is Jonathan Ridgway.
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