Company registration number 06110770 (England and Wales)
INVESTMENT FUND SERVICES LIMITED
ANNUAL REPORT
AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
INVESTMENT FUND SERVICES LIMITED
COMPANY INFORMATION
Directors
Andrew Staley
Allan Hamer
Helen Redmond
Helen Derbyshire
Guy Sears
Sarah Peaston
Sally Helston
(Appointed 12 August 2022)
Secretary
Norah Burns
Company number
06110770
Registered office
Marlborough House
59 Chorley New Road
Bolton
Auditor
Barlow Andrews LLP
Carlyle House
78 Chorley New Road
Bolton
Bankers
HSBC Bank Plc
60 Queen Victoria Street
London
INVESTMENT FUND SERVICES LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Profit and loss account
8
Balance sheet
9
Statement of changes in equity
10
Notes to the financial statements
11 - 18
INVESTMENT FUND SERVICES LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 1 -
The directors present the strategic report for the year ended 30 September 2022.
Fair review of the business
During the year to 30 September 2022, assets under management (‘AUM’), which are the key driver of revenue for IFSL, increased by 41% (from £6,540m to £9,239m).
A reorganisation of the Marlborough Group resulted in a considerable increase in the scale of IFSL’s trading activities. Under the changes, another group company, Marlborough Fund Managers Limited (‘MFM’), ceased trading on 26 November 2021 and all its ACD trading activities were transferred to IFSL. Assets and liabilities were transferred at book value, with no gain or loss to the group.
IFSL’s revenue, all of which was derived from ACD services and associated activities, was £67.2m (2021: £30.1m), an increase of 123% from the previous year. The increase was mainly due to the transfer of ACD activities from MFM. In all, the ACD activities of 22 funds were transferred to IFSL, with £3,894m of assets (at year-end). The restructure has reduced the number of regulated firms in the group and there is now only one ACD business, IFSL. The changes have also delivered operational efficiencies.
During the year, IFSL saw the loss of one of its larger trading partners, resulting in a reduction in AUM of approximately £850m. However, shortly after year-end IFSL commenced activity with a new trading partner, with a similar level of AUM. This new contract and the AUM transferred from MFM significantly outweigh the lost AUM.
IFSL also launched a number of new funds, including its first ESG-orientated funds.
Expenses rose by 128% to £66.8m (2021: £29.3m). This was mainly due to increases in external investment management and advisory fees resulting from higher AUM. IFSL also increased its investment in people and technology. This will enable the business to maintain high standards of governance as it grows.
The business recorded profit before tax of £368k (2021: £838k).
The capital position was strengthened during the year through the retention of profits within the business and the issue of £4m worth of shares at the time of the restructure. The business had net assets at the year-end of £9.5m, including cash at bank of £9.7m.
The largest items on the balance sheet are amounts due to and from fund investors, with each totalling around £35m (2021: £41m). These arise from transactions in the units/shares in the funds under management during the normal settlement cycle and were settled within a few days of the year-end.
The directors are satisfied with the results and the financial position for the year under review. The business remains profitable, and quality of service continues to act as a key differentiator for IFSL. One of the reasons for this is the quality of its highly experienced and collaborative senior leadership and relationship management teams. IFSL is committed to service excellence and high standards of business conduct and has continued to invest in people and technology to maintain consistent standards as it grows.
IFSL’s activities are not expected to change in the foreseeable future. The focus is on working strategically with existing ACD clients, while also forming new partnerships, to achieve growth in AUM. The directors are confident IFSL employs people with the appropriate talent and experience to meet its objectives, while maintaining the culture of the business.
The directors believe strong relationships with stakeholders will enable the business to overcome the economic, regulatory and other challenges it faces in the year ahead.
In addition to financial performance, the business is aware of its environmental responsibilities and endeavours to minimise its impact on the environment by recycling and reducing energy consumption wherever possible.
INVESTMENT FUND SERVICES LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 2 -
Principal risks and uncertainties
Sustainability is about creating higher-quality assets, better workplaces and stronger communities. To this end the Marlborough Group has this year developed and approved a corporate ESG policy and a net zero carbon strategy. The policy outlines the aims of the group across environmental, social and governance themes, including achieving carbon-neutral status by 2025. The group has signed up to the Climate Pledge, as well as becoming a supporter of the Task Force on Climate-Related Financial Disclosures (TCFD). Training has been given to the board and further training and initiatives will be rolled out to all staff as part of an ongoing green education programme.
In terms of its social obligations, the company believes that strong relationships need to be maintained with all stakeholders, most notably its employees. IFSL has a range of policies in place focusing on employee welfare. For example, a flexible hybrid working policy has been adopted and remuneration is regularly reviewed to ensure all staff are appropriately rewarded.
Statement by the directors in performance of their statutory duties in accordance with s172(1) Companies Act 2006
The board of directors of IFSL consider that they have acted in a way that would be most likely to promote the success of the company for the benefit of its members as a whole in its decision making, and in doing so have considered the statutory duties as follows:
a) likely consequence of any decision in the long term;
b) interests of the company’s employees;
c) need to foster the company’s business relationships with suppliers, customers and others;
d) the impact of the company’s operations on the community and the environment;
e) desirability of the company maintaining a reputation for high standards of business conduct; and,
f) need to act fairly between members of the company.
IFSL is a wholly owned subsidiary of Marlborough Group Holdings Limited (“MGHL”). From the perspective of IFSL’s Board, as a result of the Group’s governance structure, the matters that the company is responsible for under Section 172(1) of the Companies Act 2006 (“s172”), as above, have been considered to an appropriate extent by MGHL’s board in relation to both the Group and to IFSL. IFSL’s board have also considered relevant matters where appropriate as part its decisions as included within this report. To the extent necessary for an understanding of the development, performance and position of IFSL, an explanation of how the MGHL’s board has considered the matters set out in s172 (for the Group and for IFSL) is set out within MGHL’s annual report, which does not form part of this report.
Allan Hamer
Director
20 January 2023
INVESTMENT FUND SERVICES LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 3 -
The directors present their annual report and financial statements for the year ended 30 September 2022.
Principal activities
The principal activity of Investment Fund Services Limited (‘IFSL’) is to act as the authorised corporate director (‘ACD’) for open-ended investment companies and as the authorised fund manager for unit trusts.
Results and dividends
The results for the year are set out on page 8.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Andrew Staley
Allan Hamer
Wayne Green
(Resigned 24 March 2022)
Helen Redmond
Helen Derbyshire
Guy Sears
David Kiddie
(Resigned 2 December 2021)
Sarah Peaston
Sally Helston
(Appointed 12 August 2022)
Auditor
The auditor, Barlow Andrews LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Energy and carbon report
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company. The company has therefore taken advantage of exemptions from the disclosure requirements relating to energy and carbon reporting.
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
Allan Hamer
Director
20 January 2023
INVESTMENT FUND SERVICES LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 4 -
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 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 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 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.
INVESTMENT FUND SERVICES LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF INVESTMENT FUND SERVICES LIMITED
- 5 -
Opinion
We have audited the financial statements of Investment Fund Services Limited (the 'company') for the year ended 30 September 2022 which comprise the Profit And Loss Account, 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 company's affairs as at 30 September 2022 and of its profit 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.
Conclusions relating to going concern
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 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.
INVESTMENT FUND SERVICES LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF INVESTMENT FUND SERVICES LIMITED
- 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 identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which 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' responsibilities statement, 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.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the financial services sector;
we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006, taxation legislation, FCA regulations, employment, environmental and health and safety legislation;
we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and
identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
INVESTMENT FUND SERVICES LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF INVESTMENT FUND SERVICES LIMITED
- 7 -
We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
To address the risk of fraud through management bias and override of controls, we:
performed analytical procedures to identify any unusual or unexpected relationships;
tested journal entries to identify unusual transactions; and
assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
agreeing financial statement disclosures to underlying supporting documentation;
reading the minutes of meetings of those charged with governance;
enquiring of management as to actual and potential litigation and claims; and
reviewing correspondence with relevant regulators.
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's 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.
Emma Woods
Senior Statutory Auditor
For and on behalf of Barlow Andrews LLP
20 January 2023
Chartered Accountants
Statutory Auditor
Carlyle House
78 Chorley New Road
Bolton
INVESTMENT FUND SERVICES LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 8 -
2022
2021
Notes
£
£
Turnover
3
67,206,727
30,096,122
Administrative expenses
(66,840,242)
(29,263,956)
Operating profit
4
366,485
832,166
Interest receivable and similar income
7
1,442
5,600
Profit before taxation
367,927
837,766
Taxation
8
(70,724)
(156,166)
Profit for the financial year
297,203
681,600
The profit and loss account has been prepared on the basis that all operations are continuing operations.
There is no other comprehensive income for the year. The total comprehensive income is the profit for the financial year shown above.
INVESTMENT FUND SERVICES LIMITED
BALANCE SHEET
AS AT
30 SEPTEMBER 2022
30 September 2022
- 9 -
2022
2021
Notes
£
£
£
£
Fixed assets
Investments
9
100
100
Current assets
Debtors
11
42,665,569
44,790,530
Investments
12
14,927
Cash at bank and in hand
9,742,908
5,203,898
52,408,477
50,009,355
Creditors: amounts falling due within one year
13
(42,862,903)
(44,760,984)
Net current assets
9,545,574
5,248,371
Net assets
9,545,674
5,248,471
Capital and reserves
Called up share capital
15
4,010,000
10,000
Profit and loss reserves
5,535,674
5,238,471
Total equity
9,545,674
5,248,471
The financial statements were approved by the board of directors and authorised for issue on 20 January 2023 and are signed on its behalf by:
Allan Hamer
Director
Company Registration No. 06110770
INVESTMENT FUND SERVICES LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 10 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 October 2020
10,000
4,556,871
4,566,871
Year ended 30 September 2021:
Profit and total comprehensive income for the year
-
681,600
681,600
Balance at 30 September 2021
10,000
5,238,471
5,248,471
Year ended 30 September 2022:
Profit and total comprehensive income for the year
-
297,203
297,203
Issue of share capital
15
4,000,000
-
4,000,000
Balance at 30 September 2022
4,010,000
5,535,674
9,545,674
INVESTMENT FUND SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 11 -
1
Accounting policies
Company information
Investment Fund Services Limited is a private company limited by shares incorporated in England and Wales. The registered office is Marlborough House, 59 Chorley New Road, Bolton.
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 amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of certain financial instruments at fair value. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 7 ‘Statement of Cash Flows’ – Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’ – Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 33 ‘Related Party Disclosures’ – Compensation for key management personnel.
Investment Fund Services Limited is a wholly owned subsidiary of Marlborough Group Holdings Limited and the results of Investment Fund Services Limited are included in the consolidated financial statements of Marlborough Group Holdings Limited which are available from Companies House, Crown Way, Cardiff.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for the provision of management services and from the servicing of transactions in the funds under management in the period. Revenue is recognised as the services are provided on a day to day basis.
1.4
Fixed asset investments
Interests in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
INVESTMENT FUND SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
1
Accounting policies
(Continued)
- 12 -
1.5
Cash and cash equivalents
Cash at bank and in hand are basic financial assets and include cash in hand and deposits held at call with banks.
1.6
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.
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.
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 are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
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 company after deducting all of its liabilities.
INVESTMENT FUND SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
1
Accounting policies
(Continued)
- 13 -
Basic financial liabilities
Basic financial liabilities, including creditors and loans from fellow group companies, 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 receipts discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.7
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.8
Taxation
The tax expense represents the sum of the tax currently payable.
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 company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
1.9
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
1.10
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.11
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 leased asset are consumed.
1.12
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 in the period are included in profit or loss.
INVESTMENT FUND SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 14 -
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2022
2021
£
£
Turnover analysed by class of business
Provision of management services
67,206,727
30,096,122
2022
2021
£
£
Turnover analysed by geographical market
United Kingdom
67,206,727
30,096,122
2022
2021
£
£
Other revenue
Interest income
1,416
5,529
Dividends received
26
71
4
Operating profit
2022
2021
Operating profit for the year is stated after charging:
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
15,444
12,940
Operating lease charges
125,892
37,543
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2022
2021
Number
Number
Directors
7
10
INVESTMENT FUND SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
5
Employees
(Continued)
- 15 -
2022
2021
£
£
Wages and salaries
5,197,123
3,879,739
Social security costs
581,827
425,923
Pension costs
427,502
276,628
6,206,452
4,582,290
Staff costs include amounts recharged from the parent company, Marlborough Group Holdings Limited, in relation to 214 (2021: 163) employees and directors employed on group contracts providing services to Investment Fund Services Limited.
6
Directors' remuneration
2022
2021
£
£
Remuneration for qualifying services
767,967
672,338
Company pension contributions to defined contribution schemes
57,042
40,573
825,009
712,911
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 7 (2021 - 7).
Remuneration disclosed above include the following amounts paid to the highest paid director:
2022
2021
£
£
Remuneration for qualifying services
178,425
135,820
Company pension contributions to defined contribution schemes
13,163
12,929
7
Interest receivable and similar income
2022
2021
£
£
Interest income
Interest on bank deposits
1,416
5,529
Other income from investments
Dividends received
26
71
Total income
1,442
5,600
INVESTMENT FUND SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
7
Interest receivable and similar income
(Continued)
- 16 -
Investment income includes the following:
Interest on financial assets not measured at fair value through profit or loss
1,416
5,529
Dividends from financial assets measured at fair value through profit or loss
26
71
8
Taxation
2022
2021
£
£
Current tax
UK corporation tax on profits for the current period
70,724
159,865
Adjustments in respect of prior periods
(3,699)
Total current tax
70,724
156,166
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2022
2021
£
£
Profit before taxation
367,927
837,766
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
69,906
159,176
Tax effect of expenses that are not deductible in determining taxable profit
823
702
Under/(over) provided in prior years
(3,699)
Dividend income
(5)
(13)
Taxation charge for the year
70,724
156,166
9
Fixed asset investments
2022
2021
Notes
£
£
Investments in subsidiaries
10
100
100
INVESTMENT FUND SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 17 -
10
Subsidiaries
Details of the company's subsidiaries at 30 September 2022 are as follows:
Name of undertaking
Registered
Nature of business
Class of
% Held
office
shareholding
Directly
IFSL Professional Services Limited
Marlborough House, 59 Chorley New Road, Bolton
Dormant
Ordinary
100.00
11
Debtors
2022
2021
Amounts falling due within one year:
£
£
Trade debtors
5,692,573
3,017,397
Money due from deals
35,134,629
40,954,791
Amount due from group undertakings
1,025,486
Other debtors
51,896
Prepayments and accrued income
760,985
818,342
42,665,569
44,790,530
12
Current asset investments
2022
2021
£
£
Unlisted investments
14,927
13
Creditors: amounts falling due within one year
2022
2021
£
£
Trade creditors
2,844,992
1,906,844
Amounts due to group undertakings
1,272,773
745,559
Corporation tax
79,431
108,706
Money due on deals
35,049,052
40,632,830
Accruals and deferred income
3,616,655
1,367,045
42,862,903
44,760,984
INVESTMENT FUND SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2022
- 18 -
14
Retirement benefit schemes
2022
2021
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
427,502
276,628
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
15
Share capital
2022
2021
2022
2021
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
4,010,000
10,000
4,010,000
10,000
Each share issued is entitled to one vote in any circumstances.
16
Related party transactions
Transactions with related parties
The company has managed 84 authorised collective investment schemes during the year and generated income of £67,206,727 (2021: £30,096,122) directly from these funds. At 30 September 2022, there was £5,638,592 (2021: £3,019,260) due from the funds.
17
Ultimate controlling party
The parent company is Marlborough Group Holdings Limited.
UFC Fund Management Plc is the ultimate group parent.
The company is included in the consolidated accounts of Marlborough Group Holdings Limited and UFC Fund Management Plc. The registered office of these companies is Marlborough House, 59 Chorley New Road, Bolton.
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