Company Registration No. 07535381 (England and Wales)
Spark44 Limited
Annual Report and Financial Statements
For the year ended 31 March 2022
Spark44 Limited
Company Information
Directors
Mr. Derek Simpson
(Appointed 31 March 2022)
Mr. Malcolm Fernandes
(Appointed 30 November 2022)
Mr. Gareth John Newton
(Appointed 6 July 2022)
Company number
07535381
Registered office
30 Fenchurch Street
London
EC3M 3BD
Auditors
Moore Kingston Smith LLP
Charlotte Building
17 Gresse Street
London
W1T 1QL
Bankers
HSBC Bank plc
City of London Corporate Centre
60 Queen Victoria Street
London
EC4N 4TR
Solicitors
Lewis Silkin LLP
5 Chancery Lane
Clifford's Inn
London
EC4A 1BL
Spark44 Limited
Contents
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 8
Profit and loss account
9
Statement of comprehensive income
10
Balance sheet
11
Statement of changes in equity
12
Notes to the financial statements
13 - 26
Spark44 Limited
Strategic Report
For the year ended 31 March 2022
Page 1
The directors present the strategic report for the year ended 31 March 2022.
Review of the Business
During the year, the
Company
continued to service global, regional and local marketing communications
activities for Jaguar Land Rover as shown in more detail in the Profit and Loss Account as set out on page
9
of this Report, until 1 August 2021.
The principal client, Jaguar Land Rover, looked to increase its data and digital capabilities within its marketing function. To accomplish this, Jaguar Land Rover approached multiple suppliers with the view to leveraging their existing knowledge and technology to combine with Spark44’s deep brand knowledge and end to end capabilities. After a rigorous selection process, Accenture
Song
was the supplier chosen to join forces with Spark44 to service Jaguar Land Rover marketing communication needs from 1 August 2021.
As of 31 March 2022, Accenture
(UK) Limited
purchased the shares of Spark44 (JV) Limited
, the company's parent company,
with a view to wind down the
C
ompany and
Spark44 (JV) Limited's other subsidiaries
.
Principal risks and uncertainties
With the transfer of trade and intended dissolution of the
C
ompany the directors consider the most significant risks to the business to be:
-
Cash trapped in jurisdictions where international money transfer could present significant problems. In total the balance sheet holds £
3,746,858
cash and equivalents as at 31 March 2022.
-
Uncertain tax exposure from liquidating entities globally, which cannot be quantified.
Financial risk management
The
Company's
operations expose it to limited financial risks other than minimal credit and foreign exchange risk which has not therefore required the Directors to delegate the responsibility of monitoring financial risk management to a sub-committee of the Board.
Spark44 Limited
Strategic Report (Continued)
For the year ended 31 March 2022
Page 2
Key performance indicators
The Company manages its internal operational and financial performance using a number of KPIs, the most important of which are as follows:
Financial
2022
2021
£'000
£'000
Gross Profit (Revenue)
12,668
32,686
Operating Profit/ (loss)
(1,042)
1,987
Profit/ (loss) after Tax, available for distribution
(1,270)
1,820
Operational
2022
2021
Operating profit margin
-8.2%
6.10%
Number of Full-time employees
163
425
Revenue per employee
77,717
76,907
Outlook & Future Developments
The assets will be transferred to Accenture (UK) Limited and then the Company will be placed into liquidation.
Mr. Gareth John Newton
Director
16 December 2022
Spark44 Limited
Directors' Report
For the year ended 31 March 2022
Page 3
The directors present their annual report and financial statements for the year ended 31 March 2022.
Principal activities
The principal activity of the Company is to manage all demand creation for its joint venture partner, Jaguar Land Rover Limited, both within the UK and globally. This includes creative and strategic ideation for the Jaguar and Land Rover brands and the co-ordination, management, design and production of all advertising and marketing materials delivered to its customers through all media, including on-line and off-line communication channels.
In May 2021 the Company's principal client and parent company announced a restructuring of the creative offering, joining forces with Accenture
Song
. Having completed this the
C
ompany has ceased trading at 31 March 2022. Under the 2006 Companies Act, section 414C(11), the information relating to future developments and risk management is included in the Strategic Report.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr. Marcus Waters
(Resigned 30 July 2021)
Mr. Avanesh Sharma
(Resigned 31 March 2022)
Mrs. Emma Forster
(Resigned 30 July 2021)
Mr. Dudley Desborough
(Resigned 30 July 2021)
Mr. Wilfried Huth
(Appointed 1 October 2021 and resigned 31 March 2022)
Mr. Daniel Burton
(Appointed 31 March 2022 and resigned 1 December 2022)
Mr. Derek Simpson
(Appointed 31 March 2022)
Mr. John McLaughlin
(Appointed 31 March 2022 and resigned 29 June 2022)
Mr. Malcolm Fernandes
(Appointed 30 November 2022)
Mr. Gareth John Newton
(Appointed 6 July 2022)
Results and dividends
The results for the year are set out on page 9.
Dividends of £3,909,918 were declared during the year to 31 March 2022.
Disabled persons
Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the
C
ompany continues and that the appropriate training is arranged. It is the policy of the
C
ompany that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.
Employee involvement
The
C
ompany's policy is to consult and discuss with employees, through unions, staff councils and at meetings, matters likely to affect employees' interests.
Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the
C
ompany's performance.
The Company’s immediate parent company operates a Share Option Plan as a means to reward and incentivise senior staff and management of all subsidiary companies, including Spark44 Limited
.
Spark44 Limited
Directors' Report (Continued)
For the year ended 31 March 2022
Page 4
Auditor
The auditor, Moore Kingston Smith LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of directors' responsibilities
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the
C
ompany and of the profit or loss of the
C
ompany for that period. In preparing these financial statements, the directors 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 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
ompany will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the
C
ompany’s transactions and disclose with reasonable accuracy at any time the financial position of the
C
ompany and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the
C
ompany and therefore taking reasonable steps for the prevention and detection of fraud and other irregularities.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the Company’s
auditor
is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the Company’s
auditor
is aware of that information.
On behalf of the board
Mr. Gareth John Newton
Director
16 December 2022
Spark44 Limited
Independent Auditor's Report
To the Members of Spark44 Limited
Page 5
Opinion
We have audited the financial statements of Spark44 Limited
(the '
C
ompany')
for the year ended 31 March 2022 which comprise the Profit And Loss Account, the Statement of Comprehensive Income, the Balance Sheet, the Statement of Changes in Equity and notes to the financial statements, 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 FRS 102
The Financial Reporting Standard applicable in the UK and Republic of Ireland
(United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
-
give a true and fair view of the state of the
ompany's affairs as at 31 March 2022 and of its loss for the year then ended;
-
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-
have been prepared in accordance with the requirements of the Companies Act 2006.
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
Auditor's
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 UK, including the FRC’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.
Accounts prepared on a basis other than that of a going concern
As disclosed in note 1.2 to the financial statements,
t
he
Company
has ceased trading at 31 March 2022 and so accordingly
these accounts have been
prepared on a basis other than that of a going concern.
The other information comprises the information included in the annual report, other than the financial statements and our auditor's 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.
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.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit
:
-
the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements
; and
-
the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
Spark44 Limited
Independent Auditor's Report (Continued)
To the Members of Spark44 Limited
Page 6
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identifie
d
material misstatements in the Strategic Report and the Directors'
R
eport
.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
-
adequate accounting records have not been kept, 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
-
certain disclosures of
remuneration specified by law are not made; or
-
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the Directors'
R
esponsibilities
S
tatement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of
financial statements
that are free from material misstatement, whether due to fraud or error.
In preparing the
financial statements
, the
directors are
responsible for assessing the Company
'
s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the
directors
either
intend
to liquidate the Company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
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
auditor's
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.
Spark44 Limited
Independent Auditor's Report (Continued)
To the Members of Spark44 Limited
Page 7
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
The objectives of our audit in respect of fraud, are; to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses to those assessed risks; and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the
C
ompany.
Our approach was as follows:
-
We obtained an understanding of the legal and regulatory requirements applicable to the
C
ompany and considered that the most significant are the Companies Act 2006, UK financial reporting standards as issued by the Financial Reporting Council, and UK taxation legislation.
-
We obtained an understanding of how the
C
ompany complies with these requirements by discussions with management and those charged with governance.
-
We assessed the risk of material misstatement of the financial statements, including the risk of material misstatement due to fraud and how it might occur, by holding discussions with management and those charged with governance.
-
We inquired of management and those charged with governance as to any known instances of non-compliance or suspected non-compliance with laws and regulations.
-
Based on this understanding, we designed specific appropriate audit procedures to identify instances of non-compliance with laws and regulations. This included making enquiries of management and those charged with governance and obtaining additional corroborative evidence as required.
As part of an audit in accordance with ISAs (UK) we exercise professional judgement and maintain professional scepticism throughout the audit. We also:
-
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
-
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purposes of expressing an opinion on the effectiveness of the
C
ompany’s internal control.
-
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
-
Conclude on the appropriateness of the
directors'
use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the
C
ompany’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the
C
ompany to cease to continue as a going concern.
-
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
Spark44 Limited
Independent Auditor's Report (Continued)
To the Members of Spark44 Limited
Page 8
Use of our 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 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 Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
Esther Carder (Senior Statutory Auditor)
for and on behalf of Moore Kingston Smith LLP
20 December 2022
Chartered Accountants
Statutory Auditor
Charlotte Building
17 Gresse Street
London
W1T 1QL
Spark44 Limited
Profit and Loss Account
For the year ended 31 March 2022
Page 9
2022
2021
Notes
£
£
Turnover
3
18,751,763
43,683,064
Cost of sales
(6,083,947)
(10,997,406)
Gross profit
12,667,816
32,685,658
Administrative expenses
(13,280,823)
(31,251,078)
Other operating income
1,286,198
552,714
Exceptional item
4
(891,750)
Intercompany bad debt write off
4
(822,945)
Operating (loss)/profit
5
(1,041,504)
1,987,294
Interest receivable and similar income
9
21,008
618
Interest payable and similar expenses
10
(41)
(39)
(Loss)/profit before taxation
(1,020,537)
1,987,873
Taxation
11
(249,393)
(167,869)
(Loss)/profit for the financial year
(1,269,930)
1,820,004
The Profit and Loss Account has been prepared on the basis that all operations are
not
continuing operations.
Spark44 Limited
Statement of Comprehensive Income
For the year ended 31 March 2022
Page 10
2022
2021
£
£
(Loss)/profit for the year
(1,269,930)
1,820,004
Other comprehensive income
-
-
Total comprehensive income for the year
(1,269,930)
1,820,004
Spark44 Limited
Balance Sheet
As at 31 March 2022
Page 11
2022
2021
Notes
£
£
£
£
Fixed assets
Intangible assets
13
5,631
Tangible assets
14
1,231,194
1,236,825
Current assets
Debtors
15
2,368,191
17,459,251
Cash at bank and in hand
3,746,858
1,354,674
6,115,049
18,813,925
Creditors: amounts falling due within one year
16
(1,150,567)
(9,906,420)
Net current assets
4,964,482
8,907,505
Total assets less current liabilities
4,964,482
10,144,330
Capital and reserves
Called up share capital
18
1
1
Other reserves
215,872
Profit and loss reserves
4,964,481
9,928,457
Total equity
4,964,482
10,144,330
The financial statements were approved by the board of directors and authorised for issue on 16 December 2022 and are signed on its behalf by:
Mr. Gareth John Newton
Director
Company Registration No. 07535381
Spark44 Limited
Statement of Changes in Equity
For the year ended 31 March 2022
Page 12
Share capital
Share based payment reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 April 2020
1
215,872
8,108,453
8,324,326
Year ended 31 March 2021:
Profit and total comprehensive income for the year
-
-
1,820,004
1,820,004
Balance at 31 March 2021
1
215,872
9,928,457
10,144,330
Year ended 31 March 2022:
Loss and total comprehensive income for the year
-
-
(1,269,930)
(1,269,930)
Dividends
12
-
-
(3,909,918)
(3,909,918)
Reversal of share based payments
-
(215,872)
215,872
-
Balance at 31 March 2022
1
4,964,481
4,964,482
Spark44 Limited
Notes to the Financial Statements
For the year ended 31 March 2022
Page 13
1
Accounting policies
Company information
Spark44 Limited is a limited company domiciled and incorporated in
England and Wales
.
The registered office is
30 Fenchurch Street, London, EC3M 3BD.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in
sterling
, which is the functional currency of the Company.
Monetary a
mounts
in these financial statements are
rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The Company has taken advantage of the following disclosure exemptions:
1.2
Going concern
During the year the Company's principal client and parent company announced a restructuring of the creative offering, joining forces with Accenture
true
Song
. In every location the majority of staff have been transferred over to Accenture
Song
as well as some property leases and contracts from the Company.
The C
ompany
has ceased trading at 31 March 2022 and so accordingly
these accounts have been
prepared on a basis other than that of a going concern.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for services provided in the normal course of business
, and
is shown net of VAT and other sales related taxes
.
The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that are recoverable
.
Spark44 Limited
Notes to the Financial Statements (Continued)
For the year ended 31 March 2022
1
Accounting policies
(Continued)
Page 14
1.4
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date
where
it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the
fair
value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
Amortisation 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:
Software
Straight line over 3 years
1.5
Tangible fixed assets
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:
Land and Buildings Leasehold
Straight line over the term of the lease
Fixtures, fittings & equipment
Straight line over 4 years
Computer equipment
Straight line over 3 years
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
.
1.6
Cash and cash equivalents
Cash and cash equivalents 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.
1.7
Financial instruments
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.
Fair value measurement of financial instruments
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.
Spark44 Limited
Notes to the Financial Statements (Continued)
For the year ended 31 March 2022
1
Accounting policies
(Continued)
Page 15
Basic financial assets
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.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in
profit
or
loss
, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Trade debtors, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as 'loans and receivables', Loans and receivables are measured at amortised cost using the effective interest method, less impairment.
Interest is recognised by applying the effective interest method, except for short-term receivables when the recognition of interest would be immaterial. The effective interest method of calculating the amortised cost of a debt instrument and of allocating the interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the debt instrument to the net carrying amount on initial recognition.
Impairment of financial assets
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.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it 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.
Classification of financial liabilities
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
C
ompany after deducting all of its liabilities.
Spark44 Limited
Notes to the Financial Statements (Continued)
For the year ended 31 March 2022
1
Accounting policies
(Continued)
Page 16
Basic financial 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
paymen
ts 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. A
m
ounts 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.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts,
are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are
s
ubsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in
profit
or
loss
in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as
being measured at
fair value th
r
ough profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the
C
ompany’s contractual obligations
expire or are discharged or cancelled.
1.8
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the
profit and loss account
because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The
C
ompany’s
liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Spark44 Limited
Notes to the Financial Statements (Continued)
For the year ended 31 March 2022
1
Accounting policies
(Continued)
Page 17
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the
profit and loss account
, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the
C
ompany
has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.9
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or
fixed assets
.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the Company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.10
Retirement benefits
The Company operates a defined contribution scheme for the benefit of its employees. Contributions payable are charged to the profit and loss account in the year they are payable.
1.11
Share-based payments
Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted using the
Black-Scholes
model. The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest. A corresponding adjustment is made to equity.
1.12
Leases
Rentals payable under operating leases,
including
any lease incentives received, are charged to
profit or loss
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 lease
s
asset are consumed.
1.13
Government grants
Government grants are recognised at the fair value of the asset receive
d
or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met
. Where a
grant does not specify performance conditions
it
is recognised in income when the proceeds are received or receivable
. A grant received before the recognition criteria are satisfied is recognised as a liability.
Spark44 Limited
Notes to the Financial Statements (Continued)
For the year ended 31 March 2022
1
Accounting policies
(Continued)
Page 18
1.14
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation are included in the
profit and loss account
for the period.
2
Judgements and key sources of estimation uncertainty
In the application of the
C
ompany’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.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant
effect on amounts recognised in the financial statements.
Revenue recognition
Revenue from contracts is assessed on an individual basis with revenue earned being ascertained based on the stage of completion of the contract which is estimated using a combination of the milestones in the contract and the time spent to date compared to the total time expected to be required to undertake the contract. Estimates of the total time required to undertake the contracts are made on a regular basis and subject to management review.
Joint Share Ownership Plan (JSOP)
The group operates a Joint Share Ownership Plan (JSOP) for the benefit of certain employees.
The JSOP is administered by an Employee Benefit Trust, the trustees of which own the legal title to the JSOP shares, while the beneficial ownership of the JSOP shares is held jointly by the trustees and the individual employee.
The group consider the award of a JSOP share to be an equity settled share-based payment transaction in light of the beneficial ownership transferred, together with the rights to dividends and voting this confers rather than a cash settled share-based payment.
Spark44 Limited
Notes to the Financial Statements (Continued)
For the year ended 31 March 2022
Page 19
3
Turnover and other revenue
An analysis of the
C
ompany's turnover is as follows:
2022
2021
£
£
Turnover
Fees and sale of services
18,576,057
42,591,356
Other income
175,706
1,091,708
18,751,763
43,683,064
Grants received
6,608
552,714
Turnover analysed by geographical market
2022
2021
£
£
UK
17,935,385
41,945,408
Europe
1,497
537,910
Rest of the World
814,881
1,199,746
18,751,763
43,683,064
4
Exceptional items
2022
2021
£
£
Expenditure
Lease cancellation
341,614
-
Employee severance
10,000
-
Other employee costs
222,892
-
Professional costs
317,244
-
Intercompany bad debt write off
822,945
-
1,714,695
-
Spark44 Limited
Notes to the Financial Statements (Continued)
For the year ended 31 March 2022
Page 20
5
Operating (loss)/profit
2022
2021
Operating (loss)/profit for the year is stated after charging/(crediting):
£
£
Exchange losses/ (gains)
58,125
9,905
Government grants
(6,608)
(552,714)
Fees payable to the company's auditors for the audit of the company's financial statements
18,000
22,000
Depreciation of owned tangible fixed assets
285,280
431,967
Loss/ (profit) on disposal of tangible fixed assets
(117,900)
1,172
Amortisation of intangible assets
5,631
7,851
Operating lease charges
654,755
2,444,453
6
Auditors' remuneration
2022
2021
Fees payable to the company's auditor and its associates:
£
£
For audit services
Audit of the company's financial statements
18,000
22,000
7
Employees
The average monthly number of persons (including directors) employed by the
C
ompany during the year was:
2022
2021
Number
Number
Employees
163
425
Directors
3
4
Total
166
429
Their aggregate remuneration comprised:
2022
2021
£
£
Wages and salaries
7,804,197
19,819,851
Social security costs
810,582
2,146,386
Pension costs
258,972
768,123
8,873,751
22,734,360
Spark44 Limited
Notes to the Financial Statements (Continued)
For the year ended 31 March 2022
Page 21
8
Directors' remuneration
2022
2021
£
£
Remuneration for qualifying services
331,937
759,788
Company pension contributions to defined contribution schemes
13,417
44,660
345,354
804,448
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 4 (2021 - 4).
Remuneration disclosed above include the following amounts paid to the highest paid director:
2022
2021
£
£
Remuneration for qualifying services
113,895
367,375
9
Interest receivable and similar income
2022
2021
£
£
Interest income
Interest on bank deposits
2,618
618
Interest receivable from group companies
18,390
Total income
21,008
618
10
Interest payable and similar expenses
2022
2021
£
£
Other finance costs:
Other interest
41
39
11
Taxation
2022
2021
£
£
Current tax
UK corporation tax on profits for the current period
(28,840)
176,637
Adjustments in respect of prior periods
(18,140)
(66,064)
Total current tax
(46,980)
110,573
Spark44 Limited
Notes to the Financial Statements (Continued)
For the year ended 31 March 2022
11
Taxation
(Continued)
Page 22
Deferred tax
Origination and reversal of timing differences
353,669
57,296
Other adjustments
(57,296)
Total deferred tax
296,373
57,296
Total tax charge
249,393
167,869
The actual charge for the year can be reconciled to the expected (credit)/charge for the year based on the profit or loss and the standard rate of tax as follows:
2022
2021
£
£
(Loss)/profit before taxation
(1,020,537)
1,987,873
Expected tax (credit)/charge based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
(193,902)
377,696
Tax effect of expenses that are not deductible in determining taxable profit
504,521
83,349
Adjustments in respect of prior years
(18,140)
(66,064)
Group relief
(176,497)
Permanent capital allowances in excess of depreciation
(362,258)
(78,058)
Loss/ (profit) on disposal of fixed assets
117,900
Movement on deferred tax
296,373
57,296
Provisions adjustment
(95,101)
(29,853)
Taxation charge for the year
249,393
167,869
12
Dividends
2022
2021
£
£
Final paid
3,909,918
Spark44 Limited
Notes to the Financial Statements (Continued)
For the year ended 31 March 2022
Page 23
13
Intangible fixed assets
Software
£
Cost
At 1 April 2021
1,451,120
Disposals
(1,451,120)
At 31 March 2022
Amortisation and impairment
At 1 April 2021
1,445,489
Amortisation charged for the year
5,631
Disposals
(1,451,120)
At 31 March 2022
Carrying amount
At 31 March 2022
At 31 March 2021
5,631
14
Tangible fixed assets
Land and buildings leasehold
Fixtures, fittings & equipment
Computer equipment
Total
£
£
£
£
Cost
At 1 April 2021
3,468,040
685,139
1,879,547
6,032,726
Additions
4,475
4,475
Disposals
(3,468,040)
(685,139)
(1,884,022)
(6,037,201)
At 31 March 2022
Depreciation and impairment
At 1 April 2021
2,502,262
599,478
1,699,792
4,801,532
Depreciation charged in the year
128,545
23,771
132,964
285,280
Eliminated in respect of disposals
(2,630,807)
(623,249)
(1,832,756)
(5,086,812)
At 31 March 2022
Carrying amount
At 31 March 2022
At 31 March 2021
965,778
85,661
179,755
1,231,194
Spark44 Limited
Notes to the Financial Statements (Continued)
For the year ended 31 March 2022
Page 24
15
Debtors
2022
2021
Amounts falling due within one year:
£
£
Trade debtors
247,451
1,000,482
Corporation tax recoverable
451,236
421,149
Amounts due from fellow group undertakings
174,367
12,861,095
Other debtors
1,482,009
1,086,311
Prepayments and accrued income
13,128
1,793,841
2,368,191
17,162,878
Deferred tax asset (note 17)
296,373
2,368,191
17,459,251
16
Creditors: amounts falling due within one year
2022
2021
£
£
Trade creditors
120,276
402,854
Amounts due to fellow group undertakings
765,002
Other taxation and social security
4,873
883,353
Other creditors
14,640
485
Accruals and deferred income
245,776
8,619,728
1,150,567
9,906,420
HSBC Bank PLC held a fixed and floating charge over the present and future assets of the company registered on 13 June 2014. This charge was satisfied on 2 July 2021.
17
Deferred taxation
Deferred tax assets and liabilities are offset where the
C
ompany has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Assets
Assets
2022
2021
Balances:
£
£
Accelerated capital allowances
-
272,891
Other provisions
-
23,482
-
296,373
Spark44 Limited
Notes to the Financial Statements (Continued)
For the year ended 31 March 2022
17
Deferred taxation
(Continued)
Page 25
As the
C
ompany has ceased trading, the deferred tax asset is deemed irrecoverable and cannot be offset against future profits. Therefore balance has been written off.
18
Share capital
2022
2021
£
£
Ordinary share capital
Issued and fully paid
1 Ordinary share of £1
1
1
19
Retirement benefit schemes
Defined contribution schemes
The Company operates a defined contribution pension scheme for all qualifying employees.
The assets of the scheme are held separately from those of the
C
ompany in an independently administered fund.
The charge to profit and loss in respect of defined contribution schemes was £258,972 (2021: £768,123).
Retirement benefits totalling £nil (2021: £126,771) were outstanding at the year end and are included within creditors.
20
Operating lease commitments
Lessee
At the reporting end date the
C
ompany had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2022
2021
£
£
Within one year
3,012
1,779,017
Between two and five years
39,978
5,842,988
In over five years
5,223,106
42,990
12,845,111
Due to the marketing services takeover by Accenture
Song
, all
office
leases held by the
C
ompany have been cancelled
or transferred
by year end as the office space is no longer necessary.
Spark44 Limited
Notes to the Financial Statements (Continued)
For the year ended 31 March 2022
Page 26
21
Related party transactions
The Company has taken advantage of the exemption available in FRS 102 Paragraph 33.1A whereby it has not disclosed transactions with the
immediate
parent company or any wholly owned subsidiary undertaking.
On the 31 March 2022 the Company was
indirectly
acquired by Accenture (UK) Limited from its previous parent Jaguar Land Rover
Limited
. At the year end date the Company, Spark44 Limited, is a subsidiary of Spark44 (JV) Limited, itself a subsidiary of Accenture (UK) Limited.
During the year the Company made sales of £376,025 to Accenture (UK) Limited. All outstanding trade debtors directly in relation to Accenture (UK)
Limited
at year end are reflected in the intercompany account.
At the year end amounts due to the Company from Jaguar Land Rover are £203,776.
22
Ultimate controlling party
The immediate controlling company is Spark44 (JV) Limited, a company registered in England and Wales, by virtue of its controlling stake in Spark44 Limited.
The ultimate controlling parent company is Accenture
plc
, a company incorporated in Ireland, by virtue of its controlling stake in Spark44 (JV) Limited.
Results of Spark44 Limited are included in the consolidated accounts of Spark44 (JV) Limited.
Copies of the accounts for Spark44 (JV) Limited are available from Companies House, Crown Way, Cardiff, CF14 3UZ.
2022-03-31
2021-04-01
false
CCH Software
CCH Accounts Production 2022.300
Mr. Marcus Waters
Mr. Avanesh Sharma
Mrs. Emma Forster
Mr. Dudley Desborough
Mr. Wilfried Huth
Mr. Marcus Waters
Mr. Avanesh Sharma
Mrs. Emma Forster
Mr. Dudley Desborough
Mr. Wilfried Huth
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