Company registration number:
07049166
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COMPANY INFORMATION
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CONTENTS
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STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2020
The company’s principal activity is to structure and administer investments in socially responsible companies and infrastructure projects and to distribute these investments to retail investors via its online platform. By doing this the company aims to mobilise capital to build a more sustainable and socially just society, while providing investors with the opportunity to earn a decent return.
The company reported revenue for the year of £1.36m (2019: £1.84m) and total losses of £0.311m (2019: £0.966m). The total equity for the company equals £1.157m (2019: £0.784m).
Income fell in 2020 due to market uncertainty linked to COVID-19 which fed through to the deal pipeline. During the period, the company cut back on discretionary spend to manage risks associated with COVID-19, but did make key investments in its long term growth and to position itself to capitalise on the recovery and growth in ESG investing. The company will continue to invest ahead of income and therefore expects to incur losses over the coming years. The company also intends to make investments in 2021 to ensure it continues to build a long-term competitive advantage within the market. The company also raised capital by way of an issue of convertible equity in the last quarter of 2020. The company expanded its product offering in 2020 by launching Community Municipal Investments. This product enables residents to invest in their council and support the delivery of its strategic goals such as reaching net zero carbon emissions in line with or ahead of the UK Government’s legislated target of 2050. The company operates as a certified B Corporation which means it has a legal responsibility imbedded in its company articles to consider the interests of its decisions not simply on its shareholders, but also its staff and customers as well as the environment and society.
The principal risks and uncertainties faced by the company include: regulatory risk, performance of the successfully funded companies and general market uncertainty, specifically the continued recruitment of suitable companies to the platform looking for investment and investing clients to provide the investment funds.
Risk management is carried out through a comprehensive set of policies and procedures as well as other internal controls. The directors and senior management regularly meet and review business risk.
The directors and senior management team manage the business based on a wide range of management information, but the key information is the following:
2019 2020 Revenue £1.84m £1.36m Net Profit -£0.966m -£0.311m Other monitored Key Performance Indicators include: - Total debenture issuance - Number of investing clients - Marketing cost per £ invested Performance is assessed against these metrics on a regular basis and budgets and plans are adjusted as required.
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STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
This report was approved by the board
and signed on its behalf.
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DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2020
The directors present their report and the financial statements for the year ended 31 December 2020.
The directors are responsible for preparing the Strategic Report, the Directors' 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 Company and of the profit or loss of the Company for that period.
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.
The loss for the year, after taxation, amounted to £
310,581
(2019 -
loss
£
965,896
)
.
The company has no distributable reserves from which to declare a dividend.
The directors who served during the year were:
Future forecasts predict increase in revenue and profits to be generated in the coming years. The directors have no reason to believe that a material uncertainty exists that may cast doubt on the ability of the company to continue as a going concern.
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DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2020
The company intends to continue to make prudent investments in growing the business in order to provide its retail investors with a wide range of socially responsible companies, councils and infrastructure projects for investment, while at the same time continuing to grow brand awareness and customer numbers. The company intends to fund this growth through its own means and by raising further equity when needed.
The company is exploring further new products and intends to launch these in 2021 / 2022.
The company has chosen in accordance with Section 414C(11) of the Companies Act 2006 (Strategic Report and Directors' Report) Regulations 2013 to set out within the company's Strategic Report the Company's Strategic Report information Required by Schedule 7 of the Large and Medium Sized Companies and Groups (Accounts and Reports) Regulation 2008. This includes information that would have been included in the business review and details of the principal risks and uncertainties.
Under section 487(2) of the Companies Act 2006, Menzies LLP will be deemed to have been reappointed as auditors 28 days after these financial statements were sent to members or 28 days after the latest date prescribed for filing the accounts with the registrar, whichever is earlier.
This report was approved by the board and signed on its behalf.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ABUNDANCE INVESTMENT LTD
We have audited the financial statements of Abundance Investment Ltd (the 'Company') for the year ended 31 December 2020, which comprise the Statement of Income and Retained Earnings, the Statement of Financial Position, the Statement of Cash Flows, the Statement of Changes in Equity
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.
In connection with our audit of the financial statements, 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.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ABUNDANCE INVESTMENT LTD (CONTINUED)
In our opinion, based on the work undertaken in the course of the 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.
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 Strategic Report or the Directors' Report.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ABUNDANCE INVESTMENT LTD (CONTINUED)
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:
• The Company is subject to laws and regulations that directly affect the financial statements including financial reporting legislation. We determined that the following laws and regulations were most significant including: The Companies Act, Health and Safety regulations and Client Money regulations issued by the FCA. We assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items. • We understood how the Company is complying with those legal and regulatory frameworks by: making inquiries to management, those responsible for legal and compliance procedures and the company secretary. We corroborated our inquiries through our review of board minutes. • The engagement partner assessed whether the engagement team collectively had the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations. The assessment did not identify any issues in this area. • We assessed the susceptibility of the Company’s financial statements to material misstatement, including how fraud might occur. Audit procedures performed by the engagement team included: - Identifying and assessing the design effectiveness of controls management has in place to prevent and detect fraud; - Understanding how those charged with governance considered and addressed the potential for override of controls or other inappropriate influence over the financial reporting process; - Challenging assumptions and judgements made by management in its significant accounting estimates; and identifying and testing journal entries, in particular any journal entries posted with unusual account combinations. • As a result of the above procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following areas: - Lack of segregation of duties in the accounts department. - Posting of unusual journals. - Management of Client Money accounts. Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation
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.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ABUNDANCE INVESTMENT LTD (CONTINUED)
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
Chartered Accountants
Statutory Auditor
Victoria House
50-58 Victoria Road
Hampshire
GU14 7PG
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STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 DECEMBER 2020
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STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2020
The financial statements were approved and authorised for issue by the board and were signed on its behalf by
:
The notes on pages 14 to 26 form part of these financial statements.
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STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED
31 DECEMBER 2020
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STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2020
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ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 DECEMBER 2020
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
Abundance Investment Ltd is a private company, limited by shares and incorporated in the United Kingdom. The address of the registered office, which is also the principal place of business, and company number are disclosed on the company information page.
2.
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 the Republic of Ireland and the Companies Act 2006
.
The preparation of 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:
Grants of a revenue nature are recognised in the Statement of Income and Retained Earnings in the same period as the related expenditure. The grant income in the year relates to the Coronavirus Job Retention Scheme furlough receipts.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
2.
Accounting policies (continued)
The fair value of the award also takes into account non-vesting conditions. These are either factors beyond the control of either party (such as a target based on an index) or factors which are within the control of one or other of the parties (such as the Company keeping the scheme open or the employee maintaining any contributions required by the scheme). Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to profit or loss over the remaining vesting period. Where equity instruments are granted to persons other than employees, profit or loss is charged with fair value of goods and services received. The Company does not recognise share based payments if they are solely contingent on a future event which has neither happened and of which there is no current expectation that it will happen.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
2.
Accounting policies (continued)
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
The estimated useful lives range as follows:
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives.
Depreciation is provided on the following basis:
At the start of the year the Company changed the accounting policy for furniture, fittings and equipment to 25% straight line basis to bring in line with the reality of asset useage.
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 profit or loss.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
2.
Accounting policies (continued)
Significant judgements The directors do not consider there to be any significant judgements made in the process of applying the entity's accounting policies. Key sources of estimation uncertainty Accounting estimates and assumptions are made concerning the future and by their nature, will rarely equal the related actual outcome. The directors do not consider that there are any key sources of estimation uncertainty that impact the Company.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
10.
Taxation (continued)
There were no factors that may affect future tax charges.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
The share premium account is the amount received for the shares in excess of the par value. The other reserves account relates to capital received in advance during the year in relation to a future capital subscription. This amount is not repayable. The profit and loss account records retained earnings.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
The company operates a defined contribution pension scheme. The pension cost charge for the year represents
contributions payable by the company to the scheme and amounted to £17,260 (2019 - £17,314). Contributions totalling £7,080 (2019 - £4,699) were payable to the scheme at the end of the year and are included in creditors.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2020
At the balance sheet date the Directors owed the company £Nil (2019: £4,059).
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