Registration number:
London European Securities Limited
for the Year Ended 31 December 2022
Pages for Filing with Registrar
London European Securities Limited
Director's Report for the Year Ended 31 December 2022
The director presents his report and the financial statements for the year ended 31 December 2022.
Director of the Company
The director who held office during the year was as follows:
Review of the business
The company and its Investment Manager moved cautiously upon the practical ending of Covid restrictions and the immediate beginning of the war in Ukraine. These events drove up commodity prices and indicated that the world was poised to move into an area of higher inflation, higher interest rates looked imminently more possible. Although it wasn’t immediately clear how the economies in Europe would react to the end of the lock-down and the first major war in Europe in almost sixty years we decided we had no choice but to continue taking a cautious approach to our business and our lending levels.
We continued to lend cautiously against real estate assets with conservative bank valuations based on a 60 day sale price and as such the company enjoyed a position at the end of 2022 of aggregated property securities and mortgages with over twice the value of our absolute balance sheet. Even though some borrowers ran into difficulty during the pandemic some situations were managed to a satisfactory with a profitable conclusion for us but some properties were brought into receivership by us, all of these properties were sold into the market apart from two that we held in our own property book. We would consider moving forward over the coming years and continue to purchase and hold some properties in stock which would add to our overall group collateral and produce income generation.
During 2022 we finalised investments into a €44m real estate project in Germany where we took a 25% shareholding through a directly held German subsidiary this project was fully funded and pre-sold prior to our stake and also prior to construction started by one of Germany’s largest construction companies. Construction is ongoing and completion set for September 2025 with all units pre-sold to a large German Investment Fund.
Key Performance Indicators
We continued to see returning investment customers who were impressed with their fixed returns receiving timely delivery of Interest Payments and Maturing Capital and it was heartening to see happy customers in times of political and financial uncertainty illustrating our business model of providing secure investments and exceptional returns.
London European Securities Limited
Director's Report for the Year Ended 31 December 2022
Regulatory Framework
Our regulatory position with the FCA continued with the status quo that we are currently not undertaking any regulated activities although we monitor this position on an ongoing basis and constantly review the position with them. We had taken the opportunity to cease our registration with the FCA as an AIFM firm after in-depth consultation during 2021 with the FCA because we are not carrying out regulated activities. It should be emphasised that the firm trades on its own balance sheet and is not a collective investment company and is not a mini-bond provider. It only provides its sophisticated investors with substantial property security over and above their own individual exposure to investments in us and it does not solicit retail investments.
Financial Performance
Revenues decreased by 15% to £2.509m (previous year £2.949m) and overall profits decreased to £296,370 (previous year £804,227). Our net assets increased to £920,276 through the year (previous year £623,906). The company considers that the properties, investments and securities that it holds on its books are conservatively priced and well positioned for future valuations.
Moving Forwards
The board believes that the firm could pivot to a cautious and limited expansion in 2023 dependent on economic and political developments and is well placed to continue operations effectively, with liquidity and security whilst, gaining new lending opportunities and complementary property opportunities during ongoing operations. We currently have six employees and ten key and long standing outsource relationships, the company has the capacity with its exiting people and technology framework to expand and look for growth in the coming months and years, gradual expansion seems prudent, but we will dynamically monitor developments.
Small companies provision statement
This report has been prepared in accordance with the special provisions relating to companies subject to the small companies regime within Part 15 of the Companies Act 2006.
Approved and authorised by the
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London European Securities Limited
(Registration number: 10493331)
Balance Sheet as at 31 December 2022
Note |
2022 |
2021 |
|
Fixed assets |
|||
Tangible assets |
|
|
|
Investments |
|
|
|
|
|
||
Current assets |
|||
Debtors |
|
|
|
Cash at bank and in hand |
|
|
|
|
|
||
Creditors: Amounts falling due within one year |
( |
( |
|
Net current assets |
|
|
|
Total assets less current liabilities |
|
|
|
Creditors: Amounts falling due after more than one year |
( |
( |
|
Net assets |
|
|
|
Capital and reserves |
|||
Called up share capital |
35,182 |
35,182 |
|
Share premium reserve |
117,018 |
117,018 |
|
Retained earnings |
768,076 |
471,706 |
|
Shareholders' funds |
920,276 |
623,906 |
London European Securities Limited
(Registration number: 10493331)
Balance Sheet as at 31 December 2022
For the financial year ending 31 December 2022 the Company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.
Director's responsibilities:
• |
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• |
The director acknowledges his responsibilities for complying with the requirements of the Act with respect to accounting records and the preparation of accounts. |
These financial statements have been prepared in accordance with the special provisions relating to companies subject to the small companies regime within Part 15 of the Companies Act 2006.
These financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime. As permitted by section 444 (5A) of the Companies Act 2006, the director has not delivered to the registrar a copy of the Profit and Loss Account.
Approved and authorised by the
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London European Securities Limited
Notes to the Unaudited Financial Statements for the Year Ended 31 December 2022
General information |
The Company is a private company limited by share capital, incorporated in England and Wales.
The address of its registered office is:
England
Principal activity
The principal activity of the Company is commercial finance lending and investing.
Accounting policies |
Summary of significant accounting policies and key accounting estimates
The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.
Statement of compliance
These financial statements have been prepared in accordance with Financial Reporting Standard 102 Section 1A - 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' and the Companies Act 2006.
Basis of preparation
These financial statements have been prepared using the historical cost convention except that as disclosed in the accounting policies certain items are shown at fair value.
Going concern
The financial statements have been prepared on a going concern basis.
Turnover recognition
Turnover comprises the fair value of the consideration received or receivable for the provision of services and interest charged in the ordinary course of the Company’s activities. Turnover is shown net of value added tax, returns, rebates and discounts.
The Company recognises revenue when:
The amount of revenue can be reliably measured;
it is probable that future economic benefits will flow to the entity;
and specific criteria have been met for each of the Company's activities.
London European Securities Limited
Notes to the Unaudited Financial Statements for the Year Ended 31 December 2022
Government grants
Grants relating to revenue are recognised in income on a systematic basis over the periods in which the entity recognises the related costs for which the grant is intended to compensate. A grant that becomes receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the entity with no future related costs shall be recognised in income in the period in which it becomes receivable.
Foreign currency transactions and balances
Tax
The tax expense for the period comprises current tax. Tax is recognised in profit or loss, except that a change attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the company operates and generates taxable income.
Deferred income tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements and on unused tax losses or tax credits in the Company. Deferred income tax is determined using tax rates and laws that have been
enacted or substantively enacted by the reporting date.
The carrying amount of deferred tax assets are reviewed at each reporting date and a valuation allowance is set up against deferred tax assets so that the net carrying amount equals the highest amount that is more likely than not to be recovered based on current or future taxable profit.
Tangible assets
Tangible assets are stated in the statement of financial position at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.
The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.
London European Securities Limited
Notes to the Unaudited Financial Statements for the Year Ended 31 December 2022
Depreciation
Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:
Asset class |
Depreciation method and rate |
Office equipment |
25% straight line |
Business combinations
Business combinations are accounted for using the purchase method. The consideration for each acquisition is measured at the aggregate of the fair values at acquisition date of assets given, liabilities incurred or assumed, and equity instruments issued by the group in exchange for control of the acquired, plus any costs directly attributable to the business combination. When a business combination agreement provides for an adjustment to the cost of the combination contingent on future events, the group includes the estimated amount of that adjustment in the cost of the combination at the acquisition date if the adjustment is probable and can be measured reliably.
Investments
Investments in equity shares which are publicly traded or where the fair value can be measured reliably are initially measured at fair value, with changes in fair value recognised in profit or loss. Investments in equity shares which are not publicly traded and where fair value cannot be measured reliably are measured at cost less impairment.
Interest income on debt securities, where applicable, is recognised in income using the effective interest method. Dividends on equity securities are recognised in income when receivable.
Financial instruments
Financial assets and liabilities are only offset in the balance sheet when, and only when there exists a legally enforceable right to set off the recognised amounts and the company intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
London European Securities Limited
Notes to the Unaudited Financial Statements for the Year Ended 31 December 2022
Debtors
Basic financial assets, including trade and other debtors, are initially recognised at transaction price, 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. Such assets are subsequently carried at amortised cost using the effective interest method, less any impairment,
Trade debtors are amounts due from customers for services performed in the ordinary course of business.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.
Creditors
Basic financial liabilities, including trade and other creditors, loans from third parties and loans from related parties, 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 payments discounted at a market rate of interest. Such instruments are subsequently carried at amortised cost using the effective interest method, less any impairment.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade creditors are classified as current liabilities if the Company does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.
Share capital
Preference shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.
Research and development
Expenditure on research and development is charged to the profit and loss account in the year in which it is incurred.
London European Securities Limited
Notes to the Unaudited Financial Statements for the Year Ended 31 December 2022
Significant judgements and estimation uncertainty |
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported for assets and liabilities as at the balance sheet date and the amounts reported for revenues and expenses during the year. However, the nature of estimation means that actual outcomes could differ from those estimates. In the Director's opinion there are no significant judgements or key sources of estimation uncertainty.
Staff numbers |
The average number of persons employed by the Company (including the director) during the year, was
Tangible assets |
Office equipment |
Total |
|
Cost or valuation |
||
At 1 January 2022 |
|
|
Disposals |
( |
( |
At 31 December 2022 |
|
|
Depreciation |
||
At 1 January 2022 |
|
|
Charge for the year |
|
|
Eliminated on disposal |
( |
( |
At 31 December 2022 |
|
|
Carrying amount |
||
At 31 December 2022 |
|
|
At 31 December 2021 |
|
|
London European Securities Limited
Notes to the Unaudited Financial Statements for the Year Ended 31 December 2022
Investments |
2022 |
2021 |
|
Investments in subsidiaries |
|
|
Subsidiaries |
£ |
Cost or valuation |
|
At 1 January 2022 |
|
Additions |
|
At 31 December 2022 |
|
Provision |
|
Carrying amount |
|
At 31 December 2022 |
|
At 31 December 2021 |
|
Debtors |
Note |
2022 |
2021 |
|
Trade debtors |
|
|
|
Amounts owed by group undertakings |
|
|
|
Amounts owed by related parties |
450,987 |
400,507 |
|
Other debtors |
|
|
|
Prepayments |
|
|
|
Client Account |
- |
1,300,000 |
|
|
|
London European Securities Limited
Notes to the Unaudited Financial Statements for the Year Ended 31 December 2022
Creditors |
Creditors: amounts falling due within one year
Note |
2022 |
2021 |
|
Due within one year |
|||
Loans and borrowings |
|
|
|
Trade creditors |
|
|
|
Amounts owed to group undertakings |
|
|
|
Corporation tax |
69,641 |
42,189 |
|
Taxation and social security |
|
|
|
Other creditors |
|
|
|
|
|
Creditors: amounts falling due after more than one year
Note |
2022 |
2021 |
|
Due after one year |
|||
Loans and borrowings |
|
|
London European Securities Limited
Notes to the Unaudited Financial Statements for the Year Ended 31 December 2022
Loans and borrowings |
2022 |
2021 |
|
Non-current loans and borrowings |
||
Secured debentures |
|
|
2022 |
2021 |
|
Current loans and borrowings |
||
Bank borrowings |
|
|
Secured debentures |
|
|
|
|
There are fixed and floating charges over the company's assets on all secured debentures included in loans and borrowings.
Share capital |
Allotted, called up and fully paid shares
2022 |
2021 |
|||
No. |
£ |
No. |
£ |
|
|
|
1,000 |
|
1,000 |
|
|
34,182 |
|
34,182 |
|
|
|
|
London European Securities Limited
Notes to the Unaudited Financial Statements for the Year Ended 31 December 2022
Dividends |
There were no dividends paid or proposed in either the current year or the previous year.
Operating leases |
The total of future minimum lease payments is as follows:
2022 |
2021 |
|
Not later than one year |
|
|
Related party transactions |
Transactions with the director |
2022 |
At 1 January 2022 |
Advances to director |
Repayments by director |
At 31 December 2022 |
M Young |
||||
Advances and repayments |
|
|
( |
|
2021 |
At 1 January 2021 |
Advances to director |
Repayments by director |
At 31 December 2021 |
M Young |
||||
Advances and repayments |
|
|
( |
|
Director's remuneration
The director's remuneration for the year was as follows:
2022 |
2021 |
|
Remuneration |
|
|