Year Ended
Registration number:
South West Investment Group (Capital) Limited
Contents
Company Information |
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Balance Sheet |
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Notes to the Financial Statements |
South West Investment Group (Capital) Limited
Company Information
Registered office |
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Auditors |
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Directors |
R G Coombs N L Pooley D I Brown |
South West Investment Group (Capital) Limited
Balance Sheet
31 March 2021
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2021 |
2020 |
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Fixed assets |
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Tangible assets |
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Current assets |
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Debtors |
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Investments |
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Cash at bank and in hand |
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Creditors: Amounts falling due within one year |
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Net current assets |
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Total assets less current liabilities |
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Creditors: Amounts falling due after more than one year |
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Net assets |
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Capital and reserves |
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Called up share capital |
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Other reserves |
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Profit and loss account |
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Shareholders' funds |
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South West Investment Group (Capital) Limited
Balance Sheet
31 March 2021
These financial statements have been prepared and delivered in accordance with the special provisions relating to companies subject to the small companies regime within Part 15 of the Companies Act 2006 and the option not to file the Profit and Loss Account has been taken.
Approved and authorised by the
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Company Registration Number: 02360656
South West Investment Group (Capital) Limited
Notes to the Financial Statements
Year Ended 31 March 2021
General information |
The company is a private company limited by share capital, incorporated in England and Wales.
The address of its registered office is:
These financial statements were authorised for issue by the
Accounting policies |
Summary of significant accounting policies and key accounting estimates
The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.
Statement of compliance
These financial statements have been prepared in accordance with Financial Reporting Standard 102 - 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' and the Companies Act 2006 as applicable to companies subject to the small companies regime. The disclosure requirements of Section 1A of FRS102 have been applied other than where additional disclosure is required to show a true and fair view.
The financial statements are prepared in pounds sterling which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest pound.
Basis of preparation
These financial statements have been prepared using the historical cost convention.
The preparation of financial statements in conformity with FRS102 requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the company's accounting policies. The areas involving a higher degree of judgement or complexity, or where assumptions and estimates are significant to the financial statements are outlined within this note.
Revenue recognition
Turnover comprises of fees and loan interest receivable on loans advanced by the company, and grants recognised in accordance with its policy as stated below.
Loan interest is recognised on an accruals basis, with monitoring fees in relation to loans advanced under certain funds being recognised on a receipts basis.
South West Investment Group (Capital) Limited
Notes to the Financial Statements
Year Ended 31 March 2021
Government grants
In relation to the South West Loan Fund, the Microcredit Loan Fund, the Cleantech Loan Fund and CDFA RGF Fund all capital grants received in advance of investment are carried forward on the balance sheet as deferred income.
Capital grants relating to loan investments in SMEs are recognised at the point at which loans are made and are released to the income and expenditure account. At the same time provisions for impairment are reflected as an expense.
For other older investments and the Seedbed fund, grants received (and then provided as loans) are accounted for on a 'net' basis whereby the profit and loss on grants received under lending arrangements made are only recognised when repayments are subsequently received from the loanee repaying the grant element of the loan. In the case of these funds, the directors believe this is to be the most appropriate accounting treatment to give a true and fair view given the nature of the investments.
Tangible assets
Tangible assets are stated in the balance sheet at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.
The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.
Depreciation
Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:
Asset class |
Depreciation method and rate |
Fixtures and fittings |
15% straight line |
Computer equipment |
33% straight line |
Intangible assets
Intangible fixed assets relate to software costs.
Software costs have a finite useful life, and are carried at cost less accumulated amortisation and impairment losses.
Amortisation
Amortisation is provided on intangible assets so as to write off the cost, less any estimated residual value, over their useful life as follows:
Asset class |
Amortisation method and rate |
Software costs |
Straight line over three years |
South West Investment Group (Capital) Limited
Notes to the Financial Statements
Year Ended 31 March 2021
Investments and loan provisioning
Loan balances are reviewed regularly and those that are no longer considered to be recoverable are written off.
Where there is any doubt about the recoverability of a loan, an assessment is made of the amount that is considered to be at risk, and of the probability that a default will occur in order to arrive at a provision for doubtful debts.
Loan receivable provisions are made in the profit and loss account where there is objective evidence of an event giving rise to impairment under an incurred loss model (rather than an expected loss model whereby the basis is that a loss may occur in future) in accordance with FRS 102 11.21 to 23.
Financial instruments
Classification
• Short term trade and other debtors and creditors;
• Current asset investments arising on the issuing of funds to third parties;
• Bank loans; and
• Cash and bank balances.
All financial instruments are classified as basic.
Recognition and measurement
Financial instruments are recognised when the company becomes party to the contractual provisions of the instrument and derecognised when in the case of assets, the contractual rights to cash flows from the assets expire or substantially all the risks and rewards of ownership are transferred to another party, or in the case of liabilities, when the company’s obligations are discharged, expire or are cancelled.
Except for bank loans, such instruments are initially measured at transaction price, including transaction costs, and are subsequently carried at the undiscounted amount of the cash or other consideration expected to be paid or received, after taking account of impairment adjustments.
Bank loans are initially measured at transaction price, including transaction costs, and are subsequently carried at amortised cost using the effective interest method.
South West Investment Group (Capital) Limited
Notes to the Financial Statements
Year Ended 31 March 2021
Accounting estimates and judgements
In applying the company’s accounting policies, the directors 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.
The areas where management have made significant judgements are as follows:
Provisioning of loan book
Management incorporate specific provisions against certain loan balances, based on the advice provided to them by their fund managers.
Provisions against loan receivables are recognised when management judge there is sufficient objective evidence of an impairment event.
Provisions are reviewed on a regular meeting by management as part of their quarterly board meetings.
Given the economic uncertainty and downturn, it is anticipated the pandemic will have a significant impact on the recoverability of loans in the future. However it is not possible to estimate the full impact at this point in time. This is partly due to the government support available to businesses and repayment holidays that have existed during the pandemic. This has allowed businesses to minimise their losses whilst not defaulting on their loans. As a result there have been no significant changes at the time these accounts are approved that have been observed which would result in a significant loan impairment. However as government support packages cease and become no longer available, businesses may face significant financial difficulties.
South West Investment Group (Capital) Limited
Notes to the Financial Statements
Year Ended 31 March 2021
Going concern
The balance sheet shows that the company has £7,164k (2020: £7,950k) net current assets which includes cash of £8,314k (2020: £9,495k) and investments of £1,625k (2020: £1,210k) as at 31 March 2021. In preparing and approving these financial statements the directors have given due consideration to going concern risks including the impact of the COVID-19 pandemic.
SWIG Capital’s role going forward is to continue providing a fund holding function for existing funds. The main aim of the funds is to invest in businesses that cannot access traditional sources of finance in the South West Region with a view to creating jobs and Gross Value Added (GVA) and to create legacy funds to re-invest in the Region.
SWIG Capital has in the past held and still holds a number of funds solely for investment in businesses.
The company continues to work with a number of existing funding bodies to identify exit strategies for a number of its funds to ensure continuity of access to finance provision in the South West. During the year, following an OJEU procurement process to identify a fund manager, the new SWLF II fund launched in July 2020 with an initial funding available of £5.73m.
SWIG Capital’s income is derived from each individual fund. The fees that SWIG Capital may receive are identified in the original fund business plans, agreed by the funders and can only relate to actual costs incurred with no profit element. All funds held at the year end, excluding SWLFII are in the realisation phase and significant monies have already been recouped, there is minimal financial risk for the Company as funds recovered to date and those re-invested into SWLFII (£5,261k) outweigh investments outstanding at the balance sheet date and the balance of further monies recovered, net of future bad debt will be the amount that is recycled and reinvested.
Given the economic uncertainty and downturn, it is anticipated the pandemic will potentially have a significant impact on the recoverability of loans in the future. However, it is not possible to estimate the full impact at this point in time. This is partly due to the government support available to businesses and repayment holidays that have existed during the pandemic. This has allowed businesses to minimise their losses whilst not defaulting on their loans. As a result there have been no significant changes at the time these accounts are approved that have been observed which would result in a significant loan impairment. However, as government support packages cease and become no longer available, businesses may face significant financial difficulties. To mitigate some of these potential future losses the active loan fund SWLFII was accredited for CBILS and all lending to date has been covered by this scheme.
The Board considers it is appropriate for the accounts to be prepared on a going concern basis for the reasons set out above and especially given the Company’s strong balance sheet and cash reserves outlined which provides sufficient headroom to deal with any potential loan write offs that are anticipated in the next 12 months from the date of approval of the financial statements.
Staff numbers |
The average number of persons employed by the company (including directors) during the year, was
South West Investment Group (Capital) Limited
Notes to the Financial Statements
Year Ended 31 March 2021
Tangible assets |
Furniture, fittings and equipment |
Total |
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Cost or valuation |
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At 1 April 2020 |
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Additions |
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At 31 March 2021 |
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Depreciation |
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At 1 April 2020 |
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Charge for the year |
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At 31 March 2021 |
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Carrying amount |
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At 31 March 2021 |
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At 31 March 2020 |
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Debtors |
2021 |
2020 |
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Amounts due from group undertakings |
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- |
Other debtors |
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South West Investment Group (Capital) Limited
Notes to the Financial Statements
Year Ended 31 March 2021
Investments |
Investments |
Total |
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Cost or valuation |
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At 1 April 2020 |
2,201,416 |
2,201,416 |
Loan book advances |
1,211,001 |
1,211,001 |
Repayments |
(852,643) |
(852,643) |
Written off |
(223,326) |
(223,326) |
At 31 March 2021 |
2,336,448 |
2,336,448 |
Provision |
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At 1 April 2020 |
991,043 |
991,043 |
Written off |
(194,595) |
(194,595) |
Movement in provision |
(85,505) |
(85,505) |
At 31 March 2021 |
710,943 |
710,943 |
Carrying amount |
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At 31 March 2021 |
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1,625,505 |
At 31 March 2020 |
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1,210,373 |
Of total investments above £1,176,539 (2020: £469,429) is recoverable in more than one year.
South West Investment Group (Capital) Limited
Notes to the Financial Statements
Year Ended 31 March 2021
Creditors |
Creditors: amounts falling due within one year
Note |
2021 |
2020 |
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Due within one year |
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Loans and borrowings |
- |
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Trade creditors |
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Amounts due to group undertakings |
- |
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Social security and other taxes |
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Other creditors |
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Exceptional provision |
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Creditors: amounts falling due after more than one year
Note |
2021 |
2020 |
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Due after one year |
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Loans and borrowings |
- |
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Deferred income |
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101,499 |
132,033 |
Other reserves |
Other reserves are the Business Development Reserve which is a subdivision of the profit and loss reserve.
Whilst it remains a distributable reserve, it should be noted that all of the Business Development Fund is accrued from funds managed by the company where there are conditions established over the future use of the profits from those funds.
The Directors of South West Investment Group (Capital) Limited actively monitor changes in EU regulations, or other requirements, to assess any impact they may have on the amounts held in the Business Development Fund. In the event that there is a known change in the applicable terms and conditions relating to such funds, or if an obligation were to arise either legally or constructively to transfer such funds to another body, then an appropriate transaction in respect of the amount due would be recognised at that time.
A provision has been recognised in respect of certain elements of this reserve of £2.69m (2020: £2.43m) for amounts that have or expect to be requested. During the current year, £nil (2020: £0.1m) was paid.
South West Investment Group (Capital) Limited
Notes to the Financial Statements
Year Ended 31 March 2021
Loans and borrowings |
2021 |
2020 |
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Current loans and borrowings |
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Bank borrowings |
- |
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2021 |
2020 |
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Loans and borrowings due after one year |
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Bank borrowings |
- |
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The amounts shown above as bank borrowings are secured against monies disclosed within cash and cash equivalents at the balance sheet date.
Parent and ultimate parent undertaking |
The company's immediate parent is
Park, Truro, Cornwall, TR4 9NY.
The most senior parent entity producing publicly available financial statements is
Audit report |