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Registration number: 10493331

London European Securities Limited

Annual Report and Unaudited Financial Statements

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:

M Young

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 director on 26 October 2023
 

.........................................
M Young
Director

 

London European Securities Limited

(Registration number: 10493331)
Balance Sheet as at 31 December 2022

Note

2022
£

2021
£

Fixed assets

 

Tangible assets

5

29,108

48,949

Investments

6

20,937

102

 

50,045

49,051

Current assets

 

Debtors

7

14,077,264

12,872,350

Cash at bank and in hand

 

18,199

523,788

 

14,095,463

13,396,138

Creditors: Amounts falling due within one year

8

(5,689,323)

(5,682,331)

Net current assets

 

8,406,140

7,713,807

Total assets less current liabilities

 

8,456,185

7,762,858

Creditors: Amounts falling due after more than one year

8

(7,535,909)

(7,138,952)

Net assets

 

920,276

623,906

Capital and reserves

 

Called up share capital

10

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:

The members have not required the Company to obtain an audit of its accounts for the year in question in accordance with section 476; and

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 director on 26 October 2023
 

.........................................
M Young
Director

 

London European Securities Limited

Notes to the Unaudited Financial Statements for the Year Ended 31 December 2022

1

General information

The Company is a private company limited by share capital, incorporated in England and Wales.

The address of its registered office is:
114 St. Martin's Lane
London
WC2N 4BE
England

Principal activity

The principal activity of the Company is commercial finance lending and investing.

2

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

Transactions in foreign currencies are initially recorded at the functional currency rate prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated into the respective functional currency of the entity at the rates prevailing on the reporting period date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the initial transaction dates.

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

All financial assets and liabilities are initially measured at transaction price (including transaction costs), except for those financial asset and liabilities classified as at fair value through profit or loss, which are initially measured at fair value (which is normally the transaction price excluding transaction costs), unless the arrangement constitutes a financing transaction. If an arrangement constitutes a finance transaction, the financial asset or financial liability is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.

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

3

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.

4

Staff numbers

The average number of persons employed by the Company (including the director) during the year, was 3 (2021 - 3).

5

Tangible assets

Office equipment
 £

Total
£

Cost or valuation

At 1 January 2022

72,701

72,701

Disposals

(1,348)

(1,348)

At 31 December 2022

71,353

71,353

Depreciation

At 1 January 2022

23,752

23,752

Charge for the year

19,409

19,409

Eliminated on disposal

(916)

(916)

At 31 December 2022

42,245

42,245

Carrying amount

At 31 December 2022

29,108

29,108

At 31 December 2021

48,949

48,949

 

London European Securities Limited

Notes to the Unaudited Financial Statements for the Year Ended 31 December 2022

6

Investments

2022
£

2021
£

Investments in subsidiaries

20,937

102

Subsidiaries

£

Cost or valuation

At 1 January 2022

102

Additions

20,835

At 31 December 2022

20,937

Provision

Carrying amount

At 31 December 2022

20,937

At 31 December 2021

102

7

Debtors

Note

2022
£

2021
£

Trade debtors

 

616,454

1,154,990

Amounts owed by group undertakings

 

12,184,533

5,913,296

Amounts owed by related parties

13

450,987

400,507

Other debtors

 

656,174

3,925,011

Prepayments

 

169,116

178,546

Client Account

 

-

1,300,000

 

14,077,264

12,872,350

 

London European Securities Limited

Notes to the Unaudited Financial Statements for the Year Ended 31 December 2022

8

Creditors

Creditors: amounts falling due within one year

Note

2022
£

2021
£

Due within one year

 

Loans and borrowings

9

5,433,101

5,404,385

Trade creditors

 

34,607

130,244

Amounts owed to group undertakings

 

28,051

36,588

Corporation tax

 

69,641

42,189

Taxation and social security

 

89,618

60,910

Other creditors

 

34,305

8,015

 

5,689,323

5,682,331

Creditors: amounts falling due after more than one year

Note

2022
£

2021
£

Due after one year

 

Loans and borrowings

9

7,535,909

7,138,952

 

London European Securities Limited

Notes to the Unaudited Financial Statements for the Year Ended 31 December 2022

9

Loans and borrowings

2022
£

2021
£

Non-current loans and borrowings

Secured debentures

7,535,909

7,138,952

2022
£

2021
£

Current loans and borrowings

Bank borrowings

70,000

90,000

Secured debentures

5,363,101

5,314,385

5,433,101

5,404,385

There are fixed and floating charges over the company's assets on all secured debentures included in loans and borrowings.

10

Share capital

Allotted, called up and fully paid shares

 

2022

2021

 

No.

£

No.

£

Executive E shares of £1 each

1,000

1,000

1,000

1,000

Ordinary A shares of £1 each

34,182

34,182

34,182

34,182

 

35,182

35,182

35,182

35,182

 

London European Securities Limited

Notes to the Unaudited Financial Statements for the Year Ended 31 December 2022

11

Dividends

There were no dividends paid or proposed in either the current year or the previous year.

12

Operating leases

The total of future minimum lease payments is as follows:

2022
 £

2021
 £

Not later than one year

55,000

55,000

13

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

359,060

126,515

(111,451)

374,124

         
       

 

2021

At 1 January 2021
£

Advances to director
£

Repayments by director
£

At 31 December 2021
£

M Young

Advances and repayments

303,631

165,179

(109,750)

359,060

         
       

 

Director's remuneration

The director's remuneration for the year was as follows:

2022
£

2021
£

Remuneration

275,000

225,000