The members present their annual report and financial statements for the year ended 31 December 2023.
The principal activity of the limited liability partnership ('LLP') continued to be that of investment and corporate finance advisory services on behalf of the LLP's parent undertaking Greenstone Resources Limited (a company domiciled in Guernsey that provides investment management services to a range of private equity investment vehicles through its subsidiaries Greenstone Management Ltd and Greenstone II Management Ltd).
Given that the LLP's revenue is entirely derived from the affiliated undertakings listed above, the LLP's principal risks relate to the credit default, foreign exchange and liquidity risks associated with receipt or income on a timely basis from these counterparties. These risks are managed through regular dialogue with the affiliated undertaking to ensure that the LLP maintains sufficient working capital to meet its liabilities as they fall due.
From an operational perspective, the key risk of the LLP relates to the potential for non-compliance with the regulations issued by the Financial Conduct Authority that could lead to the LLP being subject to a fine or ban on trading activities. This is managed through periodic review of the LLP's compliance framework by Senior Management.
The members intend for the LLP's current principal activities to remain the same for the foreseeable future. The results of the LLP for the year are set out in the statement of comprehensive income on page 6. The LLP continues to perform as anticipated and continues to be profitable; generating positive cash flows from operating activities and before discretionary payments to members. Whilst the LLP remains dependent on revenue from its Guernsey affiliates, Greenstone Management Limited and Greenstone Management II Limited (investment managers to Greenstone Resources LP I and II, respectively - "Funds"), the members are not aware of any reason that these agreements will be terminated in the foreseeable future. Greenstone Resources LP was due to terminate in August 2023, but the termination date has been extended by an additional 1 year, and Greenstone Resources II LP has 3 years until it reaches its termination date.
After making reasonable enquiries, assessing all data relating to the LLP's liquidity, the Members have a reasonable expectation that the Partnership has adequate resources to continue in operational existence for the foreseeable future and do not consider there to be any threat to the going concern status of the LLP. For this reason, they have adopted the going concern basis in preparing the consolidated financial statements.
The members' drawing policy allows each member to draw a proportion of their profit share, subject to the cash requirements of the business.
A member's capital requirement is linked to their share of profit and the financing requirement of the limited liability partnership. There is no opportunity for appreciation of the capital subscribed. Just as incoming members introduce their capital at "par", so the retiring members are repaid their capital at "par".
The designated members who held office during the year and up to the date of signature of the financial statements were as follows:
In accordance with the limited liability partnership's membership agreement, Saffery LLP have expressed a willingness to be reappointed as auditor of the limited liability partnership.
The members are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law (as applied by The Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008) requires the members to prepare financial statements for each financial year. Under that law the members 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 (as applied by The Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008) the members 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 limited liability partnership and of the profit or loss of the limited liability partnership 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 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 limited liability partnership will continue in business.
The members are responsible for keeping adequate accounting records that are sufficient to show and explain the limited liability partnership’s transactions and disclose with reasonable accuracy at any time the financial position of the limited liability partnership and enable them to ensure that the financial statements comply with the Companies Act 2006 (as applied by The Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008). They are also responsible for safeguarding the assets of the limited liability partnership and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
We have audited the financial statements of Greenstone Capital LLP (the 'limited liability partnership') for the year ended 31 December 2023 which comprise the statement of comprehensive income, the statement of financial position, the reconciliation of members' interests, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
Basis for opinion
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 limited liability partnership 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 members' 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 limited liability partnership’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 members with respect to going concern are described in the relevant sections of this report.
Other information
The members are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. 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.
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, 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.
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, and for such internal control as the members 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 members are responsible for assessing the limited liability partnership'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 members either intend to liquidate the limited liability partnership or to cease operations, or have no realistic alternative but to do so.
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.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud are detailed below.
Identifying and assessing risks related to irregularities:
We assessed the susceptibility of the limited liability partnership’s financial statements to material misstatement and how fraud might occur, including through discussions with the members, discussions within our audit team planning meeting, updating our record of internal controls and ensuring these controls operated as intended. We evaluated possible incentives and opportunities for fraudulent manipulation of the financial statements. We identified laws and regulations that are of significance in the context of the limited liability partnership by discussions with members and by updating our understanding of the sector in which the limited liability partnership operates.
Laws and regulations of direct significance in the context of the limited liability partnership include The Companies Act 2006 as applied to limited liability partnerships and UK Tax legislation.
Audit response to risks identified:
We considered the extent of compliance with these laws and regulations as part of our audit procedures on the related financial statement items including a review of financial statement disclosures. We reviewed the limited liability partnership's records of breaches of laws and regulations, minutes of meetings and correspondence with relevant authorities to identify potential material misstatements arising. We discussed the limited liability partnership's policies and procedures for compliance with laws and regulations with members of management responsible for compliance.
During the planning meeting with the audit team, the engagement partner drew attention to the key areas which might involve non-compliance with laws and regulations or fraud. We enquired of management whether they were aware of any instances of non-compliance with laws and regulations or knowledge of any actual, suspected or alleged fraud. We addressed the risk of fraud through management override of controls by testing the appropriateness of journal entries and identifying any significant transactions that were unusual or outside the normal course of business. We assessed whether judgements made in making accounting estimates gave rise to a possible indication of management bias. At the completion stage of the audit, the engagement partner’s review included ensuring that the team had approached their work with appropriate professional scepticism and thus the capacity to identify non-compliance with laws and regulations and fraud.
The company is regulated by the FCA. We discussed the company's authorisation and permitted activities with the SMF16 and obtained evidence of this from the FCA register. We obtained additional evidence about compliance by discussing any breaches with the SMF16 and SMF17 and reviewing correspondence with the FCA.
There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through 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.
Use of our report
This report is made solely to the limited liability partnership's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006 as applied to limited liability partnerships. Our audit work has been undertaken so that we might state to the limited liability partnership'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 limited liability partnership and the limited liability partnership's members as a body, for our audit work, for this report, or for the opinions we have formed.
The income statement has been prepared on the basis that all operations are continuing operations.
The LLPs principle activities are disclosed in the members report. Greenstone Capital LLP is a limited liability partnership incorporated in England and Wales. The registered office is 71 Queen Victoria Street, London, EC4V 4BE.
These financial statements have been prepared in accordance with the Statement of Recommended Practice "Accounting by Limited Liability Partnerships" issued in December 2018, together with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”). The accounts have been prepared on a going concern basis under the historical cost convention and in accordance with the requirements of the Companies Act 2006. the accounts have been prepared on the historical cost basis except for the modification to a fair value basis for certain financial instruments as specified in the accounting policies below.
The financial statements are prepared in sterling, which is the functional currency of the limited liability partnership. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared on the historical cost convention. The principle accounting policies adopted are set out below.
After making reasonable enquiries and assessing all data relating to the Group's liquidity, the Members have a reasonable expectation that the LLP and Group has adequate resources to continue in operational existence for the foreseeable future and do not consider there to be any threat to the going concern status of the LLP. For this reason, they have adopted the going concern basis in preparing the financial statements.
Turnover represents amount receivable for the provision of investment advisory and corporate advisory services and is recognised on an accruals basis net of rebates and excluding Value Added Tax.
Interest receivable has been recognised on an accruals basis using the effective interest method.
Tangible fixed assets are recognised at cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure tat is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. The assets' residual values, useful lives and depreciation methods are reviewed , and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date. Depreciation has been provided at the following rates in order to write off the assets over their estimated useful lives.
Depreciation has been provided at the following rates in order to write off the assets over their estimated useful lives.
The gains or losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the Statement of Comprehensive Income. Any impairment is recognised in the Statement of Comprehensive Income.
At each reporting period end date, the limited liability partnership reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks.
The limited liability partnership 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 limited liability partnership's statement of financial position when the limited liability partnership becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and 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.
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.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the limited liability partnership 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.
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Financial liabilities are derecognised when the limited liability partnership’s obligations expire or are discharged or cancelled.
The LLP uses forward foreign currency contracts from time to time to reduce exposure to foreign exchange rates from USD denominated turnover. Derivative financial instruments are initially measured at fair value on the date on which a derivative contract is entered into and are subsequently measured at fair value through Profit or Loss. Derivatives are carried as assets when the fair value is positive and as liabilities when the fair value is negative. The fair value of the forward currency contracts is calculated by reference to current forward exchange contracts with similar maturity profiles provided by a third party exchange broker. Any gain or loss on the valuation of derivative contracts is recognised in the Statement of Comprehensive Income.
No provision for tax has been made in the financial statements of the LLP as each partner will be responsible for their own taxation.
The LLP contributes to the defined contribution pension schemes of certain employees. The pension charge is recognised as an expense on an accruals basis in the Statement of Comprehensive Income and represents the amounts payable by the LLP to the pension scheme for the period.
Amounts payable under operating leases are charged to the statement of comprehensive income on a straight line accruals basis over the lease term.
The functional and presentational currency of the LLP is the Pound Sterling. Transactions in foreign currencies are recorded at the rate ruling at the date of transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the Statement of Financial Position date. All differences are taken to the Statement of Comprehensive Income.
Debtors and creditors
Trade receivables are measured at fair value on initial recognition which equates to the amount expected to be receivable on settlement of the asset. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortized cost using the effective interest methods less any impairment.
Trade payables are initially measured at fair value which approximates to the amount expected to be required to settle the obligations on behalf of the LLP. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
Distribution and allocation of profits
Profits are distributed to members on a discretionary basis in line with the partnership agreement. The LLP has no fixed obligation to allocate profits to its members. Accordingly, members' remuneration is shown as a deduction from Members interests. Members drawings are recognised as an interest free loan to members until satisfied by the discretionary allocation of profits. Where profit allocations exceed drawings made by members of the LLP, this represented as a loan amount due to the members of the LLP.
Administrative expenses
Expenses incurred have been recognised on an accruals basis.
In the application of the limited liability partnership’s accounting policies, the members are required to make judgements and estimates about the carrying amount of assets and liabilities as at the statement of financial position date and the amounts reported for revenues and expenses during the year that are not readily apparent from other sources.
The estimates and associated assumptions are based on evidence available at the time; including historical experience and other factors that are considered to be applicable. Due to the inherent subjectivity involved in making such estimates, the actual results and outcomes may differ. Estimates are reviewed on an on-going basis and revisions to accounting estimates are recognised in the year in which the estimates is revised.
The members have not identified any specific significant estimates or judgements relating to the application of the LLP's accounting policies
The average number of persons (excluding members) employed by the partnership during the year was:
Their aggregate remuneration comprised:
In the year to 31 December 2023 100% (2022 - 100%) of the LLP's turnover was in relation to services performed in the UK for entities in Guernsey or related to costs incurred by the LLP that have been recharged to these entities.
Impairment tests have been carried out where appropriate and the following impairment losses have been recognised in profit or loss:
All impaired assets have been disposed of in the period as reflected in note 10.
The limited liability partnership operates a defined contribution pension scheme for all qualifying employees (auto enrolment scheme). The assets of the scheme are held separately from those of the limited liability partnership in an independently administered fund. The outstanding pension liability at 31 December 2023 is £338 (2022: £338).
In the event of a winding up the amounts included in "Loans and other debts due to members" will rank equally with unsecured creditors.
At the reporting end date the limited liability partnership had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
During the period the LLP allocated profit of £11,920 (2022: £13,748) to Greenstone Resources (UK) Limited which is a Corporate Member of the LLP. In addition the LLP paid professional fees of £10,590 inclusive of VAT (2022: £9,898) on behalf of Greenstone Resources (UK) Limited. At 31 December 2023 the amount due from the LLP to the Corporate Member was £11,480 (2022: £10,350).
Additionally, the LLP provided advisory services to Greenstone Management Limited ("GP1") and Greenstone Management II Limited ("GP2") during the year ended 31 December 2023. The fees arising from the services was £503,697 and £3,308,378 respectively (2022: £650,055 and £3,723,287). At 31 December 2023 the LLP had an amount outstanding due from GP1 of nil (2022: £nil) and GP2 of £nil (2022: £nil).
During the period the LLP recharged operational and organisational expenses to Greenstone Resources LP ("Fund I") and Greenstone Resources II LP ("Fund II") for £27,870 and £76,554 respectively (2022: £12,485 and £111,308). At 31 December 2023 the LLP had an amount outstanding due from Fund I of £2,995 (2022: £nil) and due to Fund II of £12,591 (2022: due from £27,374).
There is no entitlement for members to draw out or receive back, at any time while they are members of the LLP, their share of the LLP's capital. All repayments of capital to members is at the discretion of the members. Consequently, members' capital is disclosed as equity.