Release of Historical Financial Information

For immediate release: 16 September 2016

DRAPER ESPRIT PLC

("DRAPER ESPRIT")

FINAL RESULTS FOR ESPRIT CAPITAL PARTNERS LLP

FORMERLY KNOWN AS DRAPER ESPRIT LLP

FOR THE YEAR ENDED 31 MARCH 2016

Draper Esprit (AIM: GROW, ESM: GRW), one of the leading venture capital investors involved in the creation, funding and development of high-growth digital technology businesses in the UK, the Republic of Ireland and Europe, today publishes historical financial information in respect of Esprit Capital Partners LLP ("ECP") (formerly known as Draper Esprit LLP) for the year ended 31 March 2016.  ECP was acquired by Draper Esprit at the time of its Initial Public Offering in June 2016 ("IPO"), along with the Initial Portfolio. 

The admission document published at the time of the IPO contained audited historical financial information on ECP for the three years ended 31 March 2015 and unaudited financial information for the six months ended 30 September 2015.  The audited historical financial performance in respect of ECP for the year ended 31 March 2016 is now being released in accordance with the rules of AIM and ESM. However, as explained in the Admission Document, the historical financial performance of ECP is of limited relevance to the performance of Draper Esprit going forward.

As set out in the Admission Document, the net asset value ("NAV") of the Initial Portfolio as at 31 December 2015 was £74.8 million. The unaudited NAV of the Initial Portfolio as at 31 March 2016 was £76.8 million.

On 6 September 2016 Draper Esprit announced that Intel, a Santa Clara based global technology company (NASDAQ: INTC), had made a conditional offer for portfolio Company Movidius Ltd ("Movidius"), which will result in an estimated total cash return of approximately £27 million for Draper Esprit before provision for accrued tax and carried interest payments.

The Group had an unaudited pro-forma Net Asset Value ("NAV") including goodwill at admission of £128.7 million with the disclosed audited NAV of the holding in Movidius of £7.5m as at 31 December 2015.

The sale is expected to complete before the end of 2016 and is estimated to increase the Group's total NAV by approximately 21%, when compared to the pro-forma NAV (excluding goodwill and cash) reported at the time of the Group's admission to AIM / ESM in June 2016. The Group intends to invest the proceeds of the transaction in line with its existing investment policy.

The acquisition of ECP occurred after 31 March 2016 and consolidated results for Draper Esprit are not presented at this date. Consolidated results for Draper Esprit for the 6 months ended 30 September 2016 will be published in due course, including the NAV as at 30 September 2016.

Simon Cook, CEO Draper Esprit commented:

"Since the IPO, we have continued to experience strong deal-flow and have invested £3.1 million to acquire a stake in Stockholm-based digital health company Lifesum (www.lifesum.com), alongside Nokia Growth Partners, and existing investors Bauer Media and VC SparkLabs Global Ventures.  Lifesum, launched in 2013, has created one of Europe's fastest growing health apps with over 15 million users.

"We were also extremely pleased to have announced the sale of Movidius to Intel.  This is a great example of our business model in action.  We were able to help an incredible management team with superior European technology to become a leading global platform.  Movidius' technology is enabling the next generation of computing devices with vision interfaces and the sale will allow the business to take full advantage of Intel's global leadership and strong market position and the obvious market benefits this will bring."

"Our motivation for listing our business model was twofold. Firstly, we wanted to be able to invest for longer in our emerging companies and to be able to build bigger stakes as companies remained private for longer periods, capturing more value for shareholders. Secondly, we wanted to further democratise funding for entrepreneurs.  We believe strongly in the investment opportunities in Europe and despite the doom-mongers' predictions, little has changed for us post the Brexit vote. If anything the macro environment is now even more attractive for our permanent capital model."

"We look forward to presenting a more meaningful update in our first trading update, which is planned for early October."

*-ends-*

Enquiries

FINANCIAL STATEMENTS 

Esprit Capital Partners LLP

Formerly known as Draper Esprit LLP

For the year ended 31 March 2016

Registered number OC318087

Information

Designated Members

S C Cook (resigned 15 June 2016)

S M Chapman (resigned 15 June 2016)

G Redman (resigned 15 June 2016)

Draper Esprit plc (appointed 15 June 2016

Draper Esprit Nominee Limited (appointed 15 June 2016)

LLP Registered Number

OC318087

Registered Office

c/o Draper Esprit plc, 1010 Cambourne Business Park, Cambridge, CB23 6DP

Independent Auditor

Grant Thornton UK LLP, 30 Finsbury Square, London, EC2P 2YU

Members' Report

for the year ended 31 March 2016

The members present their annual report together with audited financial statements of Esprit Capital Partners LLP (formerly Draper Esprit LLP) for the year ended 31 March 2016.

Principal Activities

The principal activity of the Group is the provision of investment management services and consultancy.

Designated Members

S C Cook, S M Chapman and G Redman were designated members of the LLP throughout the period.

Members' Capital and Interests

Each member's subscription to the capital of the LLP determines their share of the profit and is non-refundable. Detail of changes in members' capital in the year ended 31 March 2016 are set out in the financial statements.

Members are remunerated from profits of the LLP and are required to make their own provision for pensions. Profits are allocated and divided between members after finalisation of the financial statements. Members draw a proportion of their profit shares monthly during the year in which it is made, with the balance of profit being distributed after the year end, subject to the cash requirements of the business.

Business Review

The LLP was incorporated on 1 March 2006 and was authorised by the FCA on 27 June 2006 to perform certain regulated activities. Encore Ventures LLP, a controlled subsidiary of Esprit Capital Partners LLP, was incorporated on 31 July 2009 and was authorised by the FCA on 9 March 2010 to perform regulated activities.

During the year there was a restructuring of the investment in Encore Ventures LLP, whereby the LLP transferred c. 30% of its interest to the two individual members of Encore Ventures LLP at cost (£3,000).

The consolidated income statement shows a profit for the year, after members' remuneration charged as an expense of £361,000 (2015: loss of £168,000, 2014: loss of £104,000). The Group maintains sufficient capital and the members consider the result for the period to be satisfactory.

On 15^th June 2016 the LLP and Group were acquired by Draper Esprit plc as part of an AIM listing which also included acquisition of the Esprit Capital III LP fund which Esprit Capital Partners manages.

Members' Responsibilities Statement

The members are responsible for preparing the financial statements in accordance with applicable law and accounting standards.

The Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008 (the 2008 Regulations) require the members to prepare financial statements for each financial year.  Under the law the members have elected to prepare financial statements in accordance with International Financial Reporting Standards as adopted by the European Union (IFRSs).  The financial statements are required by law to give a true and fair view of the state of affairs of the Group and LLP and of the profit or loss of the Group for that period. In preparing these financial statements, the members 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 accounting standards have been followed, subject to any material departures disclosed and explained within the financial statements;

·      Prepare the financial statements on a going concern basis unless it is inappropriate to presume that the Group will continue in business.

The members are responsible for keeping adequate accounting records that are sufficient to show and explain the LLP and the Group's transactions and disclose with reasonable accuracy at any time the financial position of the Group and enable them to ensure the financial statements comply with the 2008 Regulations. They are also responsible for safeguarding assets of the LLP and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The members confirm that:

·      so far as each member is aware, there is no relevant audit information of which the LLP's auditor is unaware;

·      the members have taken all the steps they ought to have taken as members in order to make themselves aware of any relevant audit information and to establish that the auditors are aware of that information.

The members are responsible for the maintenance and integrity of the corporate and financial information included on the LLP's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Auditor

Grant Thornton UK LLP, having expressed their willingness to continue in office, will be deemed reappointed for the next financial year in accordance with section 487(2) of the Companies Act 2006 as modified by the Limited Liability Partnerships Regulations 2008, unless the partnership received notice under section 488(1) of the Companies Act 2006 as modified by the Limited Liabilities Partnership regulations 2008.

This report was approved by the members on 14 September 2016 and signed on their behalf by:

G Redman

for and on behalf of Draper Esprit plc, Designated Member

Independent auditor's report to the members of Esprit Capital Partners LLP

We have audited the financial statements of Esprit Capital Partners LLP for the year ended 31 March 2016 which comprise the Consolidated Income Statement, Consolidated Statement of Comprehensive Income, Consolidated Statement of Financial Position, Esprit Capital Partners LLP Statement of Financial Position, Consolidated Statement of Cash Flows, Esprit Capital Partners LLP Statement of Cash Flows, Consolidated Statement of Changes in Members' Equity, Esprit Capital Partners LLP Statement of Changes in Members' Equity and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.

This report is made solely to the members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006, as applied to limited liability partnerships by the Limited Liability Partnership (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008.  Our audit work has been undertaken so that we might state to the 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 partnership and the members as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of members and auditor

As explained more fully in the Members' Responsibilities Statement, the members are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.

Scope of the audit of the financial statements

A description of the scope of an audit of financial statements is provided on the Financial Reporting Council's website at www.frc.org.uk/auditscopeukprivate.

Opinion on financial statements

In our opinion the financial statements:

·    give a true and fair view of the state of the Group's and of the parent limited liability partnership's affairs as at 31 March 2016 and of its profit for the year then ended;

·    have been properly prepared in accordance with IFRSs as adopted by the European Union; and

·    have been prepared in accordance with the requirements of the Companies Act 2006 as applied to limited liability partnerships by the Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008.

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters where the Companies Act 2006 as applied to limited liability partnerships requires us to report to you if, in our opinion:

·   adequate accounting records have not been kept by the parent limited liability partnership, 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

·   we have not received all the information and explanations we require for our audit.

William Pointon

Senior Statutory Auditor

for and on behalf of Grant Thornton UK LLP

Statutory Auditor, Chartered Accountants

London

14 September 2016

Consolidated income statement for the years ended 31 March 2016, 2015 and 2014

Consolidated statement of comprehensive income for the years ended 31 March 2016, 2015 and 2014

The notes below form part of these financial statements.

Consolidated statement of financial position as at 31 March 2016, 2015, 2014 and 1 April 2013

The financial statements were approved and authorised for issue by the Members and were signed for and on their behalf on 14 September 2016.

G Redman

for and on behalf of Draper Esprit plc, Designated Member

The notes below form part of these financial statements.

Esprit Capital Partners LLP statement of financial position as at 31 March 2016, 2015, 2014 and 1 April 2013

The financial statements were approved and authorised for issue by the Members and were signed for and on their behalf on 14 September 2016.

G Redman

for and on behalf of Draper Esprit plc, Designated Member

The notes below form part of these financial statements.

Consolidated statement of cash flows for the years ended 31 March 2016, 2015 and 2014

The notes below form part of these financial statements.

Esprit Capital Partners LLP statement of cash flows for the years ended 31 March 2016, 2015 and 2014

The notes below form part of these financial statements.

Consolidated statement of changes in members' equity for the years ended 31 March 2014, 2015 and 2016

The notes below form part of these financial statements.

Esprit Capital Partners LLP statement of changes in members' equity for the years ended 31 March 2014, 2015 and 2016

The notes below form part of these financial statements.

Notes to the financial statements for the years ended 31 March 2016, 2015 and 2014

1. General information

Esprit Capital Partners LLP is engaged in investment management activities. Esprit Capital Partners LLP's registered address is 1010 Cambourne Business Park, Cambourne, Cambridge, CB23 6DP.

Information on the Group's structure is given in note 11. Information on other related party relationships of the Group is provided in note 21.

Going Concern

The Partners have assessed the current financial position of Esprit Capital Partners LLP, along with future cash flow requirements to determine if the LLP has the financial resources to continue as a going concern for the foreseeable future. The conclusion of this assessment is that it is appropriate that the Group be considered a going concern.  For this reason, the Partners continue to adopt the going concern basis in preparing the Financial Statements.

Basis of preparation

The Financial Statements of Esprit Capital Partners LLP for the year ended 31 March 2016 have been prepared by the Members of Esprit Capital Partners LLP.

The Financial Statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) and IFRIC interpretations as adopted by the European Union. The Financial Statements have also been prepared under the historical cost convention, except for investments valued at 'fair value through profit or loss' (FVTPL).

For all periods up to and including the year ended 31 March 2015, the LLP has prepared its statutory accounts in accordance with UK GAAP. These Financial Statements, for the year ended 31 March 2016, are the first that the LLP has prepared in accordance with IFRS. The date of transition is 1 April 2013.

The preparation of Financial Statements in conformity with IFRSs requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the LLP's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the Financial Statements are disclosed later in these accounting policies.

The Financial Statements are presented in sterling (£), rounded to the nearest thousand pounds.

2. Adoption of new and revised Standards

IFRS 1 First time adoption of IFRSs: sets out the provisions for first time adoption of International Financial Reporting Standards. The impact of the adoption on Members' equity in the opening and closing balances sheets of the Group, dated 1 April 2013 and 31 March 2015 are as follows:

a - Inclusion of Esprit Capital III GP LP on consolidation; +£1,824,000 investments

b - Revaluation of investment in DFJ Esprit II Founder LP as FVTPL; +£82,000 investments

c - Holiday pay accrual; +(£24,000) accruals

a - Inclusion of Esprit Capital III GP LP on consolidation; +£1,918,000 Investments, +£652k cash, +(£413k) deferred income

b - Revaluation of investment in DFJ Esprit II Founder LP as FVTPL; +£81,000 investments

c -  Inclusion of Esprit Capital III GP LP on consolidation; +£652k cash,

d -  Inclusion of Esprit Capital III GP LP on consolidation; +(£413k) deferred income

e - Holiday pay accrual; +(£28,000) accruals

Inclusion of Esprit Capital III GP LP on consolidation decreased the revaluation of investments held at FVTPL by £146k for the year ended 31 March 2014, decreasing profit for the year by the same amount.

a - Inclusion of Esprit Capital III GP LP on consolidation; +£2,015,000 investments

b - Revaluation of investment in DFJ Esprit II Founder LP as FVTPL; +£77,000 investments

c - Inclusion of Esprit Capital III GP LP in consolidation; +(£75,000) other debtors

d -  Inclusion of Esprit Capital III GP LP in consolidation; +(£164,000) deferred income

e - Holiday pay accrual; +(£16,000) accruals

The impact of the adoption of IFRS on the Group profit or loss for the year ended 31 March 2015 is as follows:

a - Inclusion of Esprit Capital III GP LP on consolidation; +£132,000

b - Holiday pay accrual; +(£16,000)

c - Revaluation of investment in DFJ Esprit II Founder LP as FVTPL; +£77,000

d - Revaluation of investment in Esprit Capital III GP LP as FVTPL; +(£148,000)

Inclusion of Esprit Capital III GP LP on consolidation constitutes a prior period error under IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors ('IAS 8') as the Group's control over the entity existed prior to the transition date.

Distribution of profits to Members in the year ended 31 March 2013 have since been deemed an automatic allocation and therefore do not constitute amounts due from Members. As such, trade and other receivables and Members' reserves have been restated by +(£511,000), constituting a further correction of a prior period error under IAS 8.

The accounting policies applicable under the Parent LLP's previous accounting framework are not materially different to IFRS and have not impacted on equity or profit or loss.

New standards, interpretations and amendments not yet effective

The following new standards, which have not been applied in these Financial Statements, will or may have an effect on the Group's future financial statements:

IFRS 9 Financial Instruments: IFRS 9 will eventually replace IAS 39 in its entirety. The process has been divided into three main components, being classification and measurement; impairment; and hedge accounting. The Group provisionally assesses the potential effect to be immaterial given the majority of its financial assets will continue to be held at FVTPL. IFRS 9 is expected to be implemented in 2018 (not yet adopted by the EU).

IFRS 15 Revenue from contracts with customers: IFRS 15 establishes principles for reporting useful information to users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity's contracts with customers. It is effective for periods beginning on or after 1 January 2018, (not yet adopted by the EU) and will supersede IAS 18 Revenue. The potential impact on Group's future financial statements has not yet been assessed.

The potential impact of other new standards, interpretations and amendments that are not yet effective has not yet been assessed.

3.         Significant accounting policies

The significant accounting policies disclosed below are those observed in the years ending 31 March 2016, 2015 and 2014.  

Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for services provided in the normal course of business, net of discounts, VAT and other sales related taxes. All revenue from services is generated within the United Kingdom and is stated exclusive of value added tax. Revenue from services comprises:

a.         Fund management services

Fund management fees are either earned at a fixed annual rate or are set at a fixed percentage of funds under management, measured either by commitments or invested cost, depending on the investment stage of the fund being managed. Revenues are recognised as the related services are provided.

b.         Arrangement fees

Occasionally Esprit Capital Partners may charge a fee as part of arranging an investment from one of the Funds it manages into a portfolio company. Such fees are charged at a rate determined on a case-by-case basis and are recognised and payable upon successful completion of the investment.

c.         Portfolio directors' fees

Portfolio directors' fees are charged to an investee company and payable to Esprit Capital Partners as the fund manager. Esprit Capital Partners only charges directors' fees on a limited number of the investee companies. Fees are recognised as the related services are provided.

d.         Deferred income

The Fund management fees are typically billed either quarterly or half-yearly in advance. Where fees have been billed for an advance period the amounts are credited to deferred income, and then subsequently released through the profit and loss account across the period the fees relate to.

Leases

All leases are classified as operating leases. Rentals payable under operating leases are charged to income 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.

Retirement benefit costs

The Group helps arrange private defined contribution pension provision for its employees and members and makes a fixed monthly contribution as a percentage of agreed remuneration into each individuals' personal scheme. Payments to the schemes are recognised as an expense in the period when they are due. The Group does not provide a pension scheme itself.

Operating Expenses

Operating expenses are recognised in profit or loss upon utilisation of the service or as incurred.

Taxation

The tax expense represents the sum of the tax currently payable and deferred tax in the corporate subsidiaries of Esprit Capital Partners LLP. Tax expense recognised in profit or loss comprises the sum of deferred tax and current tax not recognised in other comprehensive income or directly in equity.

Calculation of current tax is based on tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period. Deferred income taxes are calculated using the liability method.

Deferred tax assets are recognised to the extent that it is probable that the underlying tax loss or deductible temporary difference will be utilised against future taxable income. This is assessed based on the Group's forecast of future operating results, adjusted for significant non-taxable income and expenses and specific limits on the use of any unused tax loss or credit.

Deferred tax liabilities are generally recognised in full, although IAS 12 'Income Taxes' specifies limited exemptions. As a result of these exemptions the Group does not recognise deferred tax on temporary differences relating to goodwill, or to its investments in subsidiaries.

Property, Plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and any recognised impairment loss. Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives, using the straight-line method, on the following basis:

Leasehold improvements - over the term of the lease

Fixtures and equipment - 33%

Computer equipment - 33%

The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits, together with other short-term, highly liquid investments maturing within 90 days from the date of acquisition that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value.

Foreign currencies

Transactions in foreign currencies are recorded at the rate of exchange ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated using the rates of exchange at the reporting date and the gains and losses on translation are included in the income statement.

The individual financial statements of the Group's subsidiary undertakings are presented in their functional currency. For the purpose of these consolidated financial statements, the results and financial position of each subsidiary undertaking are expressed in pounds sterling, which is the functional currency of the LLP and the presentation currency for these consolidated financial statements.

The assets and liabilities of the Group's undertakings whose functional currency is not pounds sterling are translated at exchange rates prevailing on the reporting date. Income and expense items are translated at the average exchange rates for the period.

Exchange differences are charged or credited to other comprehensive income and recognised in the currency translation reserve within equity.

Members' remuneration and interests 

Members' rights to participate in the profits or losses, or assets of an LLP are analysed between those that give rise to, from the LLP's perspective, either a financial liability or equity. Members' different participation rights are analysed separately into liability and equity elements.

·  Members' remuneration

Amounts becoming due to members in respect of participation rights in the profits of the LLP for an accounting period that gives rise to liabilities are presented as an expense within the profit and loss account (within the heading Members' remuneration).

·  Members' interests

Members' capital is accounted for either as equity or a liability depending upon its nature. Where the LLP has a contractual obligation to deliver cash or another financial asset to the member, the capital is treated as debt. Where the LLP has an unconditional right to avoid delivering cash or other financial assets to a member in respect of such amount (i.e. repayments of the members' capital is discretionary), it is treated as equity. 

Segmental reporting

The Group considers that it only has a single operating segment, investment management.

Basis of consolidation

The Group financial statements consolidate those of the parent entity and all of its subsidiaries as of 31 March 2016. Other than those listed below all of the Groups' subsidiaries have a reporting date of 31 March.

Esprit Capital Holdings Limited - 30 June

Esprit Nominees Limited - 30 June

Esprit Capital I GP Limited - 31 December

DFJ Esprit II GP Limited - 31 December

Esprit Capital III Founder GP Limited - 31 December

Esprit Capital III GP LP - 31 December

Encore I GP Limited - 31 December

Encore I Founder GP Limited - 31 December

Esprit Capital I (CIP) Limited - 31 December [Dormant]

Esprit Capital III MLP LLP - 31 December [Dormant]

Esprit Capital III GP Limited - 31 December [Dormant]

All transactions and balances between Group companies are eliminated on consolidation, including unrealised gains and losses on transactions between Group companies. Where unrealised losses on intra-group asset sales are reversed on consolidation, the underlying asset is also tested for impairment from a Group perspective. Amounts reported in the financial statements of subsidiaries have been adjusted where necessary to ensure consistency with the accounting policies adopted by the Group.

Profit or loss and other comprehensive income of subsidiaries acquired or disposed of during the year are recognised from the effective date of acquisition, or up to the effective date of disposal, as applicable.

The Group attributes total comprehensive income or loss of subsidiaries between the owners of the parent and the non-controlling interests based on their respective ownership interests or contractual arrangements. Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the Group's equity therein. Non-controlling interests consist of the amount of those interests at inception and the non-controlling members' share of changes in equity since.

Business combinations

The Group applies the acquisition method in accounting for business combinations. The consideration transferred by the Group to obtain control of a subsidiary is calculated as the sum of the acquisition-date fair values of assets transferred, liabilities incurred and the equity interests issued by the Group, which includes the fair value of any asset or liability arising from a contingent consideration arrangement. Acquisition costs are expensed as incurred. Assets acquired and liabilities assumed are generally measured at their acquisition-date fair values.

Financial instruments

Financial assets and financial liabilities are recognised in the Group's statement of financial position when the Group becomes a party to the contractual provisions of the instrument.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition.

Financial assets

All financial assets are recognised and derecognised on a trade date where the purchase or sale of a financial asset is under a contract whose terms require delivery of the financial asset within the timeframe established by the market concerned and are initially measured at fair value, plus transaction costs, except for those financial assets classified at fair value through profit or loss, which are initially measured at fair value.

Financial assets are classified by Esprit Capital Partners into the following specified categories: financial assets 'at fair value through profit or loss' (FVTPL) and 'loans and receivables'. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial recognition, these are measured at amortised cost using the effective interest method, less provision for impairment. Discounting is omitted where the effect of discounting is immaterial. The Group's cash and cash equivalents, trade and most other receivables fall into this category of financial instruments.

Individually significant receivables are considered for impairment when they are past due or when other objective evidence is received that a specific counterparty will default.

Financial assets at FVTPL

A financial asset may be designated as at FVTPL upon initial recognition if:

(a) such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise; or

(b) the financial asset forms part of a group of financial assets or financial liabilities or both, which is managed and its performance is evaluated on a fair value basis, in accordance with the Group's documented risk management or investment strategy, and information about the grouping is provided internally on that basis; or

(c) it forms part of a contract containing one or more embedded derivatives, and IAS 39 Financial Instruments: Recognition and Measurement permits the entire combined contract (asset or liability) to be designated as at FVTPL.

The Group consider that the co-investment interests it holds in Esprit Capital III Founder LP and DFJ Esprit II Founder LP are appropriately designated as at FVTPL as they meet criteria (b) above.

Assets within this category are measured at fair value with gains or losses recognised in profit or loss.

Fair value measurement

Management uses valuation techniques to determine the fair value of financial assets. This involves developing estimates and assumptions consistent with how market participants would price the assets. Management bases its assumptions on observable data as far as possible but this is not always available. In that case management uses the best information available. Estimated fair values, being the product of judgements, estimates and assumptions made by management, may vary from actual values (see note 20).

Impairment of financial assets

Financial assets, other than those at FVTPL, are assessed for indicators of impairment at each reporting 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 of the investment have been affected.

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable is considered uncollectable, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognised in profit or loss.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.

Financial liabilities

Financial liabilities are recognised when the Group becomes a party to the contractual provisions of the instrument, and are derecognised when the contractual provisions are extinguished, discharged, cancelled or expire. Financial liabilities are initially measured at fair value, plus transaction costs.

Financial liabilities are measured subsequently at amortised cost using the effective interest

method. All interest-related charges are included within finance costs or finance income.

4.         Critical accounting judgements and key sources of estimation uncertainty

In the application of the Group's accounting policies, which are described in note 3, the board of Esprit Capital Partners are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

Critical judgements in applying the Group's accounting policies

The following are the critical judgements, apart from those involving estimations (which are dealt with separately below), that the board of Esprit Capital Partners have made in the process of applying the Group's accounting policies and that have the most significant effect on the amounts recognised in financial information.

Control assessment

The Group has a number of entities within its corporate structure and consideration has been made of which should be consolidated in accordance with IFRS 10. The Group consolidates all entities within this Financial Statements where it has control over the following: power over the investee to significantly direct relevant activities; exposure, or rights, to variable returns from its involvement with the investee; and the ability to use its power over the investee to affect the amount of the investor's returns. A summary of the conclusions from the Member's consideration of control and the relevant judgements and rationale are presented below.

Encore Ventures LLP At 31 March 2016 the Group held 71.2% of the capital in Encore Ventures LLP (100% at 31 March 2015 and 2014), which entitled it to control the relevant activities of the LLP with no restriction arising from any contractual rights. The minority members in Encore Ventures LLP have an entitlement to proportionate shares in the returns of the LLP, and as such the Group is fully exposed to variable returns arising from it. Consequently, the Members consider Encore Ventures LLP to be controlled by the Group.

General Partners Where the Group holds 100% of the (share) capital of each of the General Partners and there are no contractual rights in place that limit the Group's power over the relevant activities of the entity or its exposure to variable returns arising from its ownership, the General Partners are considered to be controlled.

Administrative companies The Group holds 100% of the share capital of various entities that form part of the Group's administrative structure. There are no contractual rights in place that restrict exposure to variable returns arising from ownership, or that limit the Group's power over the relevant activities of the entities or its ability to exercise that power.  These entities are therefore considered to be controlled by the Group.

Limited Partnerships (co-investment) The limited partnerships that the Group's General Partners are members of are not considered to be controlled. The agreements in place within the partnerships, and the level of capital held within them, means that the Group has no significant influence over the relevant activities of the Limited Partnerships and there are significant restrictions on the allocation of returns arising from them so they are treated as investments at FVTPL.

Limited partnership funds - Group entities act as the general partner and investment manager to the following limited partnerships:

Esprit Capital I Fund No.1 Limited Partnership

Esprit Capital I Fund No.2 Limited Partnership

DFJ Esprit II LP

Esprit Capital III LP

DFJ Esprit Capital III(i) LP

DFJ Esprit Capital III(i)-A LP

The Group receives a fixed rate compensation for its role as investment manager to these limited partnerships. The board of Esprit Capital Partners consider that these amounts are, in substance and form, "normal market rate" compensation for its role as investment manager, and the Group is not, therefore exposed to variable returns arising from the Limited Partnerships. The Group has no voting rights within the limited partnership funds, and it has no influence over the relevant activities of the funds being restricted to matters solely relevant to its role as investment manager. Consequently, the Group does not consider that it controls the funds and they are not included in the consolidation.

Key sources of estimation uncertainty

The key assumption concerning the future, and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

Valuation of unquoted equity investments

The judgements required to determine the appropriate valuation methodology of unquoted equity investments means there is a risk of material adjustment to the carrying amounts of assets and liabilities used to determine the carrying value of investments held within the Group. These judgements include a decision whether or not to impair or uplift investment valuations. See note 20 for detailed information regarding the fair value of investments.

5.         Revenue 

Revenue is derived solely within the United Kingdom, from continuing operations for all periods. An analysis of the Group's revenue is as follows:

Where revenue from a single customer exceeds 10% during a year the percentage is shown in the above table, the funds listed above are those single customers.

6.         Profit for the year 

The profit for the year has been arrived at after charging:

7.         Staff costs

The average monthly number of employees, including salaried members, during the year was 6, (2014: 5, 2013: 5).

8.         Tax expense in corporate subsidiaries

Certain companies consolidated in these financial statements are subject to corporate taxes based on their profits for the financial year. Income tax payable on the profits of the LLP and other LLPs consolidated within the Group is solely the personal liability of the individual members of those LLPs and consequently is not dealt with in these financial statements.

The charge to tax, which arises in the corporate subsidiaries included within these financial statements, is:

The following table reconciles the tax expense at the standard rate to the actual tax expense:

9.         Members' profit shares

The members consider that Simon Cook, Stuart Chapman and Graham Redman were key management personnel during the year. The remuneration attributable to the key personnel during the year was £732,000 (2015: £696,000; 2014: £887,000)

10.        Property plant and equipment

11.        Subsidiaries

The Group consists of the parent entity, Esprit Capital Partners LLP, incorporated in England and Wales, and a number of subsidiaries held directly and indirectly by Esprit Capital Partners. Investments in subsidiaries are measured at cost less impairment. The financial statements consolidate the results and financial position of the Group, including all subsidiary undertakings. The active subsidiary undertakings are listed below.

12.        Investments

The Group holds investments through co-investment vehicles of two of the Funds it manages, DFJ Esprit II LP and Esprit Capital III LP.   The investments are predominantly unlisted securities and are carried at Fair Value Through Profit or Loss. The means of valuation of these investments is set out in note 20.

On 13 July 2015 the Group acquired a 50% stake of the carried interest of DFJ Esprit II LP, through DFJ Esprit II Founder 2 LP. At 31 March 2016 the fair value of the interest assigned, calculated in accordance with the policies applied with the Group's financial statements, was £436,000.

On 13 July 2015 the Group acquired a 4.5% interest in the carried interest of DFJ Esprit IIIi LP, through Encore I Founder LP and Encore I Founder 2014 LP. At 31 March 2016 the fair value of the interest assigned, calculated in accordance with the policies applied with the Group's financial statements was £295,000.

13.        Trade and other receivables due within one year

All amounts are short term. The net carrying value of all financial assets is considered a reasonable approximation of fair value.  Ageing analysis of unimpaired trade receivables:

There are no balances deemed past due but not impaired (2015: £nil, 2014: £nil, 2013: £nil).

14.        Cash and cash equivalents

Cash and cash equivalents comprise:

15.        Trade and other payables due within one year