Arbion Holdings Ltd.
Annual Report and Financial Statements
For the year ended 31 December 2023
Company Registration No. 14034019 (England and Wales)
Arbion Holdings Ltd.
Company Information
Directors
Daniel Pasini
(Appointed 13 November 2023)
Carnegie Smyth
Company number
14034019
Registered office
1 Connaught Place
1st Floor
London
W2 2ET
Auditor
Moore Kingston Smith LLP
6th Floor
9 Appold Street
London
EC2A 2AP
Bankers
Royal Bank of Scotland
62-63 Threadneedle St
London
EC2R 8LA
Arbion Holdings Ltd.
Contents
Page
Strategic report
1 - 4
Directors' report
5 - 6
Independent auditor's report
7 - 10
Group profit and loss account
11
Group balance sheet
12
Company balance sheet
13
Group statement of changes in equity
14
Company statement of changes in equity
15
Group statement of cash flows
16
Notes to the financial statements
17 - 37
Arbion Holdings Ltd.
Strategic Report
For the year ended 31 December 2023
Page 1

The Directors present the strategic report for the year ended 31 December 2023.

 

Principal activities

 

The Group’s principal activity during the year was the provision of wealth management services, including discretionary management services, investment advice, debt advice and cash management. Within the Group, subsidiary companies are regulated by the Financial Conduct Authority (FCA) and the U.S. Securities and Exchange Commission (SEC).

 

Review of the business

 

During 2023, the Arbion group accelerated the implementation of the management team’s corporate strategy, following the Group rebrand to Arbion towards the end of 2022 and earlier management buyout and corporate restructure. During the year, revenue streams have diversified and the investment offerings enhanced. The Group’s expansion programme continues as we speak.

 

Year-on-year, turnover has increased (2023: £5.9m), stemming from sustained growth in underlying recurring management fees. Underlying monthly management fees at year-end reflect an increase of 13% on the prior year-end equivalent period, despite the negative impact of the strengthening GBP given our large exposure to USD revenues. This reflects one evolution of the Group; there has been a significant growth of our non-GBP based revenues, and thus further fee currency diversification. On the other hand, other revenue areas have decreased due to a slow-down in opportunities in private investments, thus tempering the overall performance of the Group. We anticipate that the cyclical downturn in private investments will reverse course over the coming year, providing additional profitability.

 

Year-on-year the Group’s underlying costs of sales have decreased, whilst administrative costs have increased. Much of this can be attributed to a restructuring of costs within the business resulting in a transfer of costs bases between the two. In addition, professional services fees, within administrative costs, have increased by £0.2m year-on-year. This reflects costs involved in an in-depth review of the business with a view to enhancing the Group’s capabilities and future-proofing the business. We expect this upward cost trend to increase in-light of the recent “Dear CEO” letters sent by the FCA to all wealth management firms, demonstrating their increased expectations relating to financial crime and consumer duty. In this respect, the Arbion Group will continue to invest as necessary.

 

The Group made a loss for the year of £143,323 (2022: £127,983). However, the Group would have been profitable were it not for amounts written-off investments of £0.6m.

Outlook

 

The Group expects the underlying business’ current growth trajectories in client numbers, AUM levels and hires to all continue throughout 2024. Alongside this, the Group will benefit from associated strong revenue increases and an improvement in profitability. The Group continues to create significant value through its UHNW, Family Offices, and alternative investment offerings, including access to private investment opportunities. Management expect ever-increasing opportunities in this sector. It is the firm belief of the Directors, the Group is decisively positioned for the future and ultimately to be one of the leading businesses in this sector. There are many opportunities to be grasped for a business that is truly client and outcome-focused with a resolute corporate strategy and established investment track record, such as the Arbion Group.

Arbion Holdings Ltd.
Strategic Report (Continued)
For the year ended 31 December 2023
Page 2

Principal risks and uncertainties

 

There are a number of categories of risk to which the business is exposed; these encapsulate both risks that are specific to the Group and those which are relevant to the financial services market in general.

 

The Board of the Group is responsible for setting the risk appetite and for ensuring that the necessary controls and functions are in place to control, mitigate or eliminate any unwanted risks from the Group. The Group has a dedicated Risk and Compliance team. On a day-to-day basis the Board has delegated responsibility for the management of risk across the Group to this team. The team is responsible for ensuring that its function are adequately resourced to monitor the principal risks that the business is exposed to and to ensure compliance with current regulations and changing regulatory developments. Where appropriate the Group will enlist the help of external consultants to assist the team on any specific issues.

 

The principal risks to which the business is exposed include, but may not be limited to, the following:

 

Regulatory Risk

 

The subsidiaries are regulated by the Financial Conduct Authority (FCA) in respect of its investment and wealth management business in the United Kingdom, and the U.S. Securities and Exchange (SEC) in the United States of America. Failure to comply with the regulations set out by the FCA, or SEC, could lead to disciplinary action, financial penalties and reputational damage. The Risk and Compliance Team is responsible for ensuring that the Group meets all regulatory requirements.

 

Operational Risk

 

Operational risk will arise where there is a risk resulting from the failure of any of the Group’s processes, systems and controls.

 

The Group has documented policies and procedures designed to minimise operational risks in its principal lines of business and as a growing firm is developing and refining these on a continuing basis.

 

Employee Risk

 

The Group’s employees are its most valuable resource and therefore it seeks to recruit and retain the highest calibre staff.

 

Reputational risk

 

Reputational risk, defined as the risk of potential damage through a deterioration of the Group's reputation or due to a negative perception of its image among customers and/or counterparties. Arbion takes a holistic approach to reputational risk management consisting of preventive measures, monitored and managed by senior management.

 

Foreign Exchange Risk

 

The Group’s management and performance fees are billed in foreign currencies, and to this extent the Group is exposed to fluctuations in foreign exchange rates. The Group coverts the majority of received foreign currency at spot to minimise this exposure. Due to the expense involved, the Group has chosen not to actively hedge any foreign currency exposure at this time.

Arbion Holdings Ltd.
Strategic Report (Continued)
For the year ended 31 December 2023
Page 3

Market and Investment Risk

 

The Group does not run its own trading book and so is only exposed to market risk in the sense that any impact on the Group assets under management, as a result of negative market movements, would be likely to have an impact on the revenues earned from management and performance fees charged on client portfolios. Investment risk may also stem from a fall in markets or through the inappropriate management of clients' portfolios, the knock-on of any such investment risk may be a failure to satisfy clients' investment objectives and hence poor client retention.

 

Whilst it is not possible (and may not be desirable) to eliminate all market risk, the Group’s policy is to construct diversified portfolios for clients and allocate funds across asset classes and regions in order to minimise the impact of a fall in any single market or asset class. In addition, the Risk and Compliance team independently monitor the activities of the Investment Team in order to ensure that the level of risk in a portfolio is appropriate for its client and that excessive risks are not being taken.

 

Credit Risk

 

A large proportion of the Group’s assets are held in its own bank accounts and therefore the Group chooses to hold its own assets with only a small number of high quality institutions who have strong credit profiles.

 

Exposure to credit risk in relation to the potential non-payment of fees is kept to a minimum as any fees due are generally remitted by the client's bank from the account managed in their name by the Group. To this extent the greater source of credit risk in respect of these relationships could be seen to be the credit worthiness of the banking institution; as with its own assets, the Group advises clients only to bank with high quality financial institutions.

Arbion Holdings Ltd.
Strategic Report (Continued)
For the year ended 31 December 2023
Page 4

Director’s duties

The Director of the Group, as those of all UK companies, confirms they must act in accordance with a set of general duties. These duties are detailed in section 172 of the UK Companies Act 2006, which is summarised

as follows:

 

A director of a group must act in the way he considers, in good faith, would be most likely to promote the

success of the Group for the benefit of its members as a whole and, in doing so, have regard (amongst

other matters) to:

(a) the likely consequences of any decision in the long-term,

(b) the interests of the Group's employees,

(c) the need to foster the Group's business relationships with clients, suppliers and others,

(d) the impact of the Group's operations on the community and the environment,

(e) the desirability of the Group maintaining a reputation for high standards of business conduct, and

(f) the need to act fairly as between members of the Group.

 

The Director confirms, the implementation of the corporate strategy is considered within the context of the

long-term success of the business. Strategic management decisions are assessed and reviewed, as

necessary, to ensure they continue to align themselves with the evolving long-term direction of the business.

On this basis, the Director believes both the Group and other stakeholders, including employees, clients

and others, benefit from the best results and outcomes.

 

The Group's employees are its greatest asset, and the Director recognises the importance of the

contribution they make to the success of the business. Retention and recruitment of the highest calibre of

employees is therefore a key focus for the business. The positive wellbeing in the working environment and

the health of the staff are key focuses of the Group. Employees have access to a range of benefits, such

as private health care, life assurance, income protection insurance and the cycle to work scheme.

 

Maintaining positive client relationships are at the core of the business, therefore it is critical to

the success of the Group. As an FCA-regulated business, treating customers fairly and

maintaining high standards of business conduct are core values of the Group. The business ensures that it

continues to offer services which suit the needs of clients. There are processes in place for customer

complaint handling and dispute resolution. Furthermore, staff are given regular training on business conduct.

 

As a successful business, we feel a responsibility to act in a socially and environmentally positive manner. The

business has supported a number of charitable causes within the year and has ongoing philanthropical relationships.

On behalf of the Board

Carnegie Smyth
Director
23 April 2024
Arbion Holdings Ltd.
Directors' Report
For the year ended 31 December 2023
Page 5

The Directors present their annual report and financial statements for the year ended 31 December 2023.

Directors

The Directors who held office during the year and up to the date of signature of the financial statements were as follows:

Daniel Pasini
(Appointed 13 November 2023)
Carnegie Smyth
Results and dividends

No ordinary dividends were paid. The Directors do not recommend payment of a further dividend.

Auditor

In accordance with the Company's articles, a resolution proposing that Moore Kingston Smith LLP be reappointed as auditor of the group will be put at a General Meeting.

Statement of directors' responsibilities

The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and Company, and of the profit or loss of the Group for that period. In preparing these financial statements, the Directors are required to:

 

 

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group’s and Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Group and Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Group and Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Arbion Holdings Ltd.
Directors' Report (Continued)
For the year ended 31 December 2023
Page 6
Statement of disclosure to auditor

So far as the Director at the date of approving this report is aware, there is no relevant audit information of which the auditor of the company is unaware. Additionally, the Director has taken all the necessary steps that they ought to have taken as Director in order to make themselves aware of all relevant audit information and to establish that the auditor of the Company is aware of that information.

 

On behalf of the Board
Carnegie Smyth
Director
23 April 2024
Arbion Holdings Ltd.
Independent Auditor's Report
To the Members of Arbion Holdings Ltd.
Page 7
Opinion

We have audited the financial statements of Arbion Holdings Ltd. (the 'Parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2023 which comprise the Group Profit And Loss Account, the Group Balance Sheet, the Company Balance Sheet, the Group Statement of Changes in Equity, the Company Statement of Changes in Equity, the Group 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).

In our opinion the financial statements:

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 group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the Directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group's and Parent Company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The Directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

 

Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

 

We have nothing to report in this regard.

Arbion Holdings Ltd.
Independent Auditor's Report (Continued)
To the Members of Arbion Holdings Ltd.
Page 8

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors' Report.

 

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

 

Responsibilities of directors

As explained more fully in the Directors' Responsibilities Statement, the Directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

 

In preparing the financial statements, the Directors are responsible for assessing the Group's and Parent Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or Parent Company or to cease operations, or have no realistic alternative but to do so.

Arbion Holdings Ltd.
Independent Auditor's Report (Continued)
To the Members of Arbion Holdings Ltd.
Page 9
Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with ISAs (UK) we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

 

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

 

Arbion Holdings Ltd.
Independent Auditor's Report (Continued)
To the Members of Arbion Holdings Ltd.
Page 10

Explanation as to what extent the audit was considered capable of detecting irregularities, including

fraud

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 extent to which our procedures are capable of detecting irregularities,

including fraud is detailed below.

 

The objectives of our audit in respect of fraud, are; to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses to those assessed risks; and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the Company.

 

Our approach was as follows:

 

There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. 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.

Use of our report

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken for no purpose other than to draw to the attention of the Company’s members those matters we are required to include in an auditor's report addressed to them. To the fullest extent permitted by law, we do not accept or assume responsibility to any party other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Ryan Day (Senior Statutory Auditor)
for and on behalf of Moore Kingston Smith LLP
24 April 2024
Chartered Accountants
Statutory Auditor
6th Floor
9 Appold Street
London
EC2A 2AP
Arbion Holdings Ltd.
Group Profit and Loss Account
For the year ended 31 December 2023
Page 11
Year
Period
ended
ended
31 December
31 December
2023
2022
Notes
£
£
Turnover
3
5,930,023
2,981,132
Cost of sales
(2,478,682)
(1,186,905)
Gross profit
3,451,341
1,794,227
Administrative expenses
(3,291,024)
(1,920,751)
Other operating income
87,851
24,527
Exceptional item
4
-
0
(29,908)
Operating profit/(loss)
5
248,168
(131,905)
Interest receivable and similar income
9
27,902
5,102
Interest payable and similar expenses
10
(10,200)
(1,180)
Amounts written off investments
11
(580,787)
-
Loss before taxation
(314,917)
(127,983)
Tax on loss
12
171,594
-
0
Loss for the financial year
(143,323)
(127,983)
Loss for the financial year is all attributable to the owners of the parent company.

The profit and loss account has been prepared on the basis that all operations are continuing operations.

Arbion Holdings Ltd.
Group Balance Sheet
As at 31 December 2023
Page 12
2023
2022
Notes
£
£
£
£
Fixed assets
Negative goodwill
13
(2,831,998)
(3,155,655)
Other intangible assets
13
1,039,383
1,133,041
Total intangible assets
(1,792,615)
(2,022,614)
Tangible assets
14
60,554
75,996
Investments
15
1,057,455
1,637,242
(674,606)
(309,376)
Current assets
Debtors
19
1,710,658
2,259,342
Cash at bank and in hand
1,364,795
1,482,202
3,075,453
3,741,544
Creditors: amounts falling due within one year
20
(1,643,330)
(2,366,763)
Net current assets
1,432,123
1,374,781
Total assets less current liabilities
757,517
1,065,405
Provisions for liabilities
Deferred tax liability
21
(460,435)
(625,000)
(460,435)
(625,000)
Net assets
297,082
440,405
Capital and reserves
Called up share capital
24
89
89
Share premium account
249,599
249,599
Share based payment reserve
318,700
318,700
Profit and loss reserves
(271,306)
(127,983)
Total equity
297,082
440,405
The financial statements were approved by the Board of Directors and authorised for issue on 23 April 2024 and are signed on its behalf by:
23 April 2024
Carnegie Smyth
Director
Arbion Holdings Ltd.
Company Balance Sheet
As at 31 December 2023
31 December 2023
Page 13
2023
2022
Notes
£
£
£
£
Fixed assets
Investments
15
225,000
225,000
Current assets
Debtors
19
22,689
22,689
Cash at bank and in hand
1,995
1,995
24,684
24,684
Creditors: amounts falling due within one year
20
-
(22,127)
Net current assets
24,684
2,557
Net assets
249,684
227,557
Capital and reserves
Called up share capital
24
89
89
Share premium account
249,599
249,599
Other reserves
318,700
318,700
Profit and loss reserves
(318,704)
(340,831)
Total equity
249,684
227,557

As permitted by s408 Companies Act 2006, the Company has not presented its own profit and loss account and related notes. The Company’s profit for the year was £22,127 (2022 - £340,831 loss).

The financial statements were approved by the Board of Directors and authorised for issue on 23 April 2024 and are signed on its behalf by:
23 April 2024
Carnegie Smyth
Director
Company Registration No. 14034019 (England and Wales)
Arbion Holdings Ltd.
Group Statement of Changes in Equity
For the year ended 31 December 2023
Page 14
Share capital
Share premium account
Share based payment reserve
Profit and loss reserves
Total
Notes
£
£
£
£
£
Balance at 7 April 2022
-
0
-
0
-
-
0
-
Period ended 31 December 2022:
Loss and total comprehensive income for the period
-
-
-
(127,983)
(127,983)
Issue of share capital
24
89
249,599
-
-
249,688
Transfers
-
-
318,700
-
318,700
Balance at 31 December 2022
89
249,599
318,700
(127,983)
440,405
Year ended 31 December 2023:
Loss and total comprehensive income for the year
-
-
-
(143,323)
(143,323)
Balance at 31 December 2023
89
249,599
318,700
(271,306)
297,082
Arbion Holdings Ltd.
Company Statement of Changes in Equity
For the year ended 31 December 2023
Page 15
Share capital
Share premium account
Share based payment reserve
Profit and loss reserves
Total
Notes
£
£
£
£
£
Balance at 7 April 2022
-
0
-
0
-
-
0
-
Period ended 31 December 2022:
Loss and total comprehensive income for the period
-
-
-
(340,831)
(340,831)
Issue of share capital
24
89
249,599
-
-
249,688
Transfers
-
-
318,700
-
318,700
Balance at 31 December 2022
89
249,599
318,700
(340,831)
227,557
Year ended 31 December 2023:
Profit and total comprehensive income for the year
-
-
-
22,127
22,127
Balance at 31 December 2023
89
249,599
318,700
(318,704)
249,684
Arbion Holdings Ltd.
Group Statement of Cash Flows
For the year ended 31 December 2023
Page 16
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash absorbed by operations
27
(125,317)
(125,694)
Interest paid
(10,200)
(1,180)
Net cash outflow from operating activities
(135,517)
(126,874)
Investing activities
Purchase of intangible assets
(2,160)
(5,840)
Purchase of tangible fixed assets
(6,632)
(79,161)
Purchase of investments
(1,000)
1,461,976
Interest received
27,902
5,102
Net cash generated from investing activities
18,110
1,382,077
Financing activities
Proceeds from issue of shares
-
226,999
Net cash (used in)/generated from financing activities
-
226,999
Net (decrease)/increase in cash and cash equivalents
(117,407)
1,482,202
Cash and cash equivalents at beginning of year
1,482,202
-
0
Cash and cash equivalents at end of year
1,364,795
1,482,202
Arbion Holdings Ltd.
Notes to the Group Financial Statements
For the year ended 31 December 2023
Page 17
1
Accounting policies
Company information

Arbion Holdings Ltd. (“the Company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is 1 Connaught Place, 1st Floor, London, W2 2ET.

 

The group consists of Arbion Holdings Ltd. and all of its subsidiaries.

1.1
Reporting period

The prior period comparative information in the financial statements is presented for a reporting period shorter than one year as this was the first period since incorporation. The current year financial statements are presented for a year. For this reason the comparative amounts are not directly comparable.

1.2
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the Company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention modified to include certain financial instruments at fair value. The principal accounting policies adopted are set out below.

1.3
Business combinations

In the Parent Company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

 

Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.

Arbion Holdings Ltd.
Notes to the Group Financial Statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 18
1.4
Basis of consolidation

The consolidated Group financial statements consist of the financial statements of the Parent Company Arbion Holdings Ltd. together with all entities controlled by the Parent Company (its subsidiaries) and the Group’s share of its interests in joint ventures and associates.

 

All financial statements are made up to 31 December 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the Group.

 

All intra-group transactions, balances and unrealised gains on transactions between Group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Subsidiaries are consolidated in the Group’s financial statements from the date that control commences until the date that control ceases.

1.5
Going concern

At the time of approving the financial statements, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Thus, the Directors continue to adopt the going concern basis of accounting in preparing the financial statements.

 

At the Balance Sheet date, the Group has net assets of £297,082 (2022: £440,405) and during the financial year recognised a loss of £143,323 (2022: £127,983).

 

Having prepared a forecast for the twelve months from the date of approval of the financial statements, the Directors believe the Company and Group has adequate cash resources at its disposal in order to meet its obligations as and when they become due for at least twelve months from the date of approval of the financial statements.

 

In the event that revenue is significantly adversely impacted by external factors, as an ongoing measure, the business may consider cost-reductions or other measures, as deemed necessary.

 

It is on this basis that the Directors adopt the going concern basis of accounting in preparing the annual financial statements.

1.6
Turnover

Turnover represents amounts receivable for investment management and advisory services net of VAT.

 

Management and Performance fees are recognised as earned when, and to the extent that, the firm obtains the right to consideration in exchange for its performance under these contracts.

 

Introduction fees and private equity fees are also recognised as earned when, and to the extent that, the firm obtains the right to consideration in exchange for its performance under these contracts.

 

Other income represents rent receivable.

Arbion Holdings Ltd.
Notes to the Group Financial Statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 19
1.7
Intangible fixed assets - goodwill

Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. Negative goodwill represents the excess of the inducement received to acquire a business over the fair value of the net assets acquired.

 

The above amounts are initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Both positive and negative goodwill amounts are considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 10 years.

 

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

1.8
Intangible fixed assets other than goodwill

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

 

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Trademarks
10 years straight line
Customer relationships
10 years straight line
Trade name
20 year straight line
1.9
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Leasehold improvements
5 years straight line
Fixtures and fittings
4 - 5 years straight line
Computers
4 years straight line

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.

Arbion Holdings Ltd.
Notes to the Group Financial Statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 20
1.10
Fixed asset investments

Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available. Management have taken the view that a reasonable fair value for the unlisted investments held cannot be ascertained and therefore the company are precluded from measuring the investments at fair value.

 

In the Parent Company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

A subsidiary is an entity controlled by the Group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

Entities in which the Group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.

1.11
Impairment of fixed assets

At each reporting period end date, the Group reviews the carrying amounts of its tangible and intangible 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). Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

 

The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.12
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

Arbion Holdings Ltd.
Notes to the Group Financial Statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 21
1.13
Financial instruments

The Group 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 Group's Balance Sheet when the Group 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.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.

Arbion Holdings Ltd.
Notes to the Group Financial Statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 22
Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow Group companies and preference shares that are classified as debt, 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. Financial liabilities classified as payable within one year are not amortised.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Other financial liabilities

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 being measured at 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.

Derecognition of financial liabilities

Financial liabilities are derecognised when the Group's contractual obligations expire or are discharged or cancelled.

1.14
Equity instruments

Equity instruments issued by the Group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the Group.

1.15
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Arbion Holdings Ltd.
Notes to the Group Financial Statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 23
Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.16
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the Group is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.17
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.18
Share-based payments

Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted using an observable market price. The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest. A corresponding adjustment is made to equity.

When the terms and conditions of equity-settled share-based payments at the time they were granted are subsequently modified, the fair value of the share-based payment under the original terms and conditions and under the modified terms and conditions are both determined at the date of the modification. Any excess of the modified fair value over the original fair value is recognised over the remaining vesting period in addition to the grant date fair value of the original share-based payment. The share-based payment expense is not adjusted if the modified fair value is less than the original fair value.

 

Cancellations or settlements are treated as an acceleration of vesting and the amount that would have been recognised over the remaining vesting period is recognised immediately.

1.19
Leases

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

Arbion Holdings Ltd.
Notes to the Group Financial Statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 24

Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.

1.20
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

2
Judgements and key sources of estimation uncertainty

In the application of the Group’s accounting policies, the Directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

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

 

The Directors note that the fixed asset investments accounting policy detailed in Note 1.11 is a key judgement that impacts the current and prior year.

 

The Directors do not consider that there are any other significant judgements or sources of estimation uncertainty and will continue to consider this on an ongoing basis.

Arbion Holdings Ltd.
Notes to the Group Financial Statements (Continued)
For the year ended 31 December 2023
2
Judgements and key sources of estimation uncertainty
(Continued)
Page 25
Key sources of estimation uncertainty

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Negative goodwill

Due to the acquisition of Arbion Limited by Arbion Holdings Ltd. being for an amount of consideration which was less than the deemed fair value of net assets, a negative goodwill balance was recognised in the prior year. A third party report was produced by valuation experts with regards to the fair value of net assets of Arbion Limited. The valuation report and subsequent negative goodwill therein have been relied upon for disclosure in the financial statements. Included in the valuation was an estimation of the fair value of investments based on recent purchases of shares of the related entities. Internally generated intangible assets including trade name and customer relationships were also included in the valuation report based on the excess earnings method, which carries a certain level of estimation uncertainty.

 

The carrying value of intangible assets is reviewed for impairment when an event or changes in circumstances indicate the carrying value may not be fully recoverable. Based on the impairment reviews detailed above, no impairment has been recognised on goodwill in the current or the prior year.

 

Intangible assets and investments

The carrying value of the intangible assets and investments noted above are subject to estimation uncertainty. The useful lives and amortisation policies applied to the intangible assets as detailed in Notes 1.8 and 1.9 are material estimates made by management based on their understanding of the underlying assets. The annual amortisation charge for intangible assets is sensitive to changes in the estimated lives and residual values of the assets. The useful economic lives and residual values are re-assessed annually.

 

Intangible asset and investment impairment reviews are also performed annually. These reviews require an estimation of the value in use of the cash generating units to which the intangibles assets have been allocated and the recoverable value of the investments. The value in use calculation requires the entity to estimate the future cash flows expected to arise for the cash generating unit and a suitable discount rate to calculate present value. If actual performance falls short of forecast performance then an impairment may be required.

 

In the current year impairments have been recognised in respect certain investment held as detailed in Note 11 - Amounts written off investments. The quantum of these impairments is sensitive to fluctuations in the recoverable value of the underlying investments.

 

No impairment has been been recognised in respect of the intangible assets held on the group balance sheet, based on management discounted cash flow forecasts. The management assessment for one customer list that has a carrying value of £220,500 (2022: £245,700) builds in 25% year on year growth. If this growth were to fall 10% the value in use would drop to £133,000 and an impairment would be required. If there was no growth the value in use would drop to £94,000 and a further impairment would be required. These impairments would also impact the deferred tax liability.

Arbion Holdings Ltd.
Notes to the Group Financial Statements (Continued)
For the year ended 31 December 2023
Page 26
3
Turnover and other revenue
An analysis of the Group's turnover is as follows:
2023
2022
£
£
Turnover analysed by class of business
Management fees
5,607,353
2,448,897
Performance fees
64,883
139,579
Other fees and income
257,787
392,656
5,930,023
2,981,132
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
2,199,846
2,091,396
Europe
1,537,002
213,779
Rest of the World
2,193,175
675,957
5,930,023
2,981,132
2023
2022
£
£
Other revenue
Interest income
27,902
5,102
Rental income
87,851
18,750
4
Exceptional item
2023
2022
£
£
Expenditure
Exceptional costs
-
29,908

The exceptional costs in the prior period related to the Group restructure and rebrand enacted in the period, as noted in the Controlling Party note.

Arbion Holdings Ltd.
Notes to the Group Financial Statements (Continued)
For the year ended 31 December 2023
Page 27
5
Operating profit/(loss)
2023
2022
£
£
Operating profit/(loss) for the year is stated after charging/(crediting):
Exchange losses
58,982
31,373
Depreciation of owned tangible fixed assets
22,074
9,337
(Profit)/loss on disposal of tangible fixed assets
-
3,522
Amortisation of intangible assets
(227,839)
(57,115)
Share-based payments
-
318,700
Operating lease charges
285,220
92,353
6
Auditor's remuneration
2023
2022
Fees payable to the Company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the Company
5,000
10,652
Audit of the financial statements of the Company's subsidiaries
32,000
25,700
37,000
36,352
For other services
All other non-audit services
23,000
20,952
7
Employees

The average monthly number of persons (including Directors) employed by the Group and Company during the year was:

Group
Company
2023
2022
2023
2022
Number
Number
Number
Number
Operations
16
13
-
-
Administration
3
6
-
-
Total
19
19
-
0
-
0
Arbion Holdings Ltd.
Notes to the Group Financial Statements (Continued)
For the year ended 31 December 2023
7
Employees
(Continued)
Page 28

Their aggregate remuneration comprised:

Group
Company
2023
2022
2023
2022
£
£
£
£
Wages and salaries
1,746,963
1,567,578
-
0
-
Social security costs
222,076
186,398
-
-
Pension costs
161,673
36,257
-
0
-
0
2,130,712
1,790,233
-
0
-
8
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
189,428
51,099
Company pension contributions to defined contribution schemes
16,200
4,050
205,628
55,149
The number of Directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2022 - 1).
9
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
27,902
5,102

Investment income includes the following:

Interest on financial assets not measured at fair value through profit or loss
27,902
5,102
10
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
10,200
1,180
Arbion Holdings Ltd.
Notes to the Group Financial Statements (Continued)
For the year ended 31 December 2023
Page 29
11
Amounts written off investments
2023
2022
£
£
Amounts written off financial assets held at cost
(17,530)
-
Amounts written off investments held at fair value
(563,257)
-
(580,787)
-
12
Taxation
2023
2022
£
£
Deferred tax
Origination and reversal of timing differences
(171,594)
-
0

The actual (credit)/charge for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:

2023
2022
£
£
Loss before taxation
(314,917)
(127,983)
Expected tax credit based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
(74,068)
(24,317)
Tax effect of expenses that are not deductible in determining taxable profit
(67,140)
60,553
Tax effect of utilisation of tax losses not previously recognised
(30,247)
(40,441)
Unutilised tax losses carried forward
-
0
4,205
Effect of change in corporation tax rate
1,672
-
Capital allowances
(1,811)
-
0
Taxation credit
(171,594)
-
Arbion Holdings Ltd.
Notes to the Group Financial Statements (Continued)
For the year ended 31 December 2023
Page 30
13
Intangible fixed assets
Group
Negative goodwill
Trademarks
Customer relationships
Trade name
Total
£
£
£
£
£
Cost
At 1 January 2023
(3,236,569)
5,840
749,000
402,000
(2,079,729)
Additions
-
0
2,160
-
0
-
0
2,160
At 31 December 2023
(3,236,569)
8,000
749,000
402,000
(2,077,569)
Amortisation and impairment
At 1 January 2023
(80,914)
49
18,725
5,025
(57,115)
Amortisation charged for the year
(323,657)
818
74,900
20,100
(227,839)
At 31 December 2023
(404,571)
867
93,625
25,125
(284,954)
Carrying amount
At 31 December 2023
(2,831,998)
7,133
655,375
376,875
(1,792,615)
At 31 December 2022
(3,155,655)
5,791
730,275
396,975
(2,022,614)
The Company had no intangible fixed assets at 31 December 2023 or 31 December 2022.
14
Tangible fixed assets
Group
Leasehold improvements
Fixtures and fittings
Computers
Total
£
£
£
£
Cost
At 1 January 2023
139,901
81,990
96,617
318,508
Additions
-
0
1,930
4,702
6,632
At 31 December 2023
139,901
83,920
101,319
325,140
Depreciation and impairment
At 1 January 2023
139,890
71,729
30,893
242,512
Depreciation charged in the year
11
3,540
18,523
22,074
At 31 December 2023
139,901
75,269
49,416
264,586
Carrying amount
At 31 December 2023
-
0
8,651
51,903
60,554
At 31 December 2022
11
10,261
65,724
75,996
The Company had no tangible fixed assets at 31 December 2023 or 31 December 2022.
Arbion Holdings Ltd.
Notes to the Group Financial Statements (Continued)
For the year ended 31 December 2023
Page 31
15
Fixed asset investments
Group
Company
2023
2022
2023
2022
£
£
£
£
Unlisted investments
1,057,455
1,637,242
225,000
225,000
Movements in fixed asset investments
Group
Investments
£
Cost or valuation
At 1 January 2023
1,637,242
Additions
1,000
At 31 December 2023
1,638,242
Impairment
At 1 January 2023
-
Impairment losses
580,787
At 31 December 2023
580,787
Carrying amount
At 31 December 2023
1,057,455
At 31 December 2022
1,637,242
Movements in fixed asset investments
Company
Investments
£
Cost or valuation
At 1 January 2023 and 31 December 2023
225,000
Carrying amount
At 31 December 2023
225,000
At 31 December 2022
225,000
Arbion Holdings Ltd.
Notes to the Group Financial Statements (Continued)
For the year ended 31 December 2023
Page 32
16
Subsidiaries

Details of the Company's subsidiaries at 31 December 2023 are as follows:

Name of undertaking
Registered office
Nature of business
Class of shares held
% Held
Direct
Indirect
Arbion Limited
England and Wales
Financial Management
Ordinary Shares
100.00
Squared Limited
England and Wales
Financial Management
Ordinary Shares
100.00
The aggregate capital and reserves and the result for the year of the subsidiaries noted above was as follows:
Name of undertaking
Capital and Reserves
Profit/(Loss)
£
£
Arbion Limited
1,698,033
34,552
Squared Limited
104,684
(29,966)
17
Joint ventures

Details of joint ventures at 31 December 2023 are as follows:

Name of undertaking
Registered office
Nature of business
Interest held
% Held Indirect
Signia Invest Holdco Limited
England and Wales
Financial Management
Ordinary Shares
25%

For the year ended 30 June 2023, the joint venture's profit was £nil (2022: £nil) and the net liabilities were £41,998 (2022: £41,998).

 

The carrying value of the investment at the 31 December 2022 and 31 December 2023 was 25 pence. Signia Invest Holdco Limited was dissolved on 13 February 2024.

Arbion Holdings Ltd.
Notes to the Group Financial Statements (Continued)
For the year ended 31 December 2023
Page 33
18
Financial instruments
Group
Company
2023
2022
2023
2022
£
£
£
£
Carrying amount of financial assets
Debt instruments measured at amortised cost
1,455,473
1,926,702
22,689
22,689
Equity instruments measured at cost less impairment
1,057,455
1,637,242
225,000
225,000
Carrying amount of financial liabilities
Measured at amortised cost
1,567,065
2,149,603
-
22,127
19
Debtors
Group
Company
2023
2022
2023
2022
Amounts falling due within one year:
£
£
£
£
Trade debtors
1,309,292
1,771,576
-
0
-
0
Other debtors
57,849
49,399
22,689
22,689
Prepayments and accrued income
230,761
332,640
-
0
-
0
1,597,902
2,153,615
22,689
22,689
Amounts falling due after more than one year:
Other debtors
105,727
105,727
-
0
-
0
Deferred tax asset (note 21)
7,029
-
0
-
0
-
0
112,756
105,727
-
-
Total debtors
1,710,658
2,259,342
22,689
22,689
20
Creditors: amounts falling due within one year
Group
Company
2023
2022
2023
2022
£
£
£
£
Trade creditors
696,323
354,129
-
0
-
0
Other taxation and social security
76,265
217,160
-
-
Other creditors
5,100
4,721
-
0
-
0
Accruals and deferred income
865,642
1,790,753
-
0
22,127
1,643,330
2,366,763
-
0
22,127
Arbion Holdings Ltd.
Notes to the Group Financial Statements (Continued)
For the year ended 31 December 2023
Page 34
21
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the Group and Company, and movements thereon:

Liabilities
Liabilities
Assets
Assets
2023
2022
2023
2022
Group
£
£
£
£
Tax losses
-
-
7,029
-
Revaluations
460,435
625,000
-
-
460,435
625,000
7,029
-
The Company has no deferred tax assets or liabilities.
Group
Company
2023
2023
Movements in the year:
£
£
Liability at 1 January 2023
625,000
-
Credit to profit or loss
(171,594)
-
Liability at 31 December 2023
453,406
-

The deferred tax liability set out above is expected to reverse in the future, although the timing of this is uncertain, and relates to the revaluation of investments to fair value upon acquisition and the recognition of internally generated intangibles on change in control.

 

The deferred tax asset set out above is expected to reverse within 12 months and relates to the utilisation of tax losses against future expected profits of the same period.

22
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
161,673
36,257

A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the Group in an independently administered fund.

Arbion Holdings Ltd.
Notes to the Group Financial Statements (Continued)
For the year ended 31 December 2023
Page 35
23
Share-based payment transactions
Group
Number of share options
Weighted average exercise price
2023
2022
2023
2022
Number
Number
£
£
Outstanding at 1 January 2023
1,000
-
0.01
-
Granted
-
1,000
-
0.01
Outstanding at 31 December 2023
1,000
1,000
0.01
0.01
Exercisable at 31 December 2023
-
-
-
-

 

The options outstanding at 31 December 2023 had an exercise price of 1p, being the par value of shares in Arbion Holdings Ltd.

Group

The share option granted in 2022 was based on the fair value of net assets of Arbion Limited, being the 100% owned subsidiary of Arbion Holdings Ltd. The share options are in the name of Arbion Holdings Ltd. and are exercisable upon an exit event.

Group
Company
2023
2022
2023
2022
£
£
£
£
Expenses recognised in the year
Arising from equity settled share based payment transactions
-
318,700
-
318,700
24
Share capital
Group and company
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of 1p each
8
8
-
-
A Ordinary shares of 1p each
8,892
8,892
89
89
Arbion Holdings Ltd.
Notes to the Group Financial Statements (Continued)
For the year ended 31 December 2023
Page 36
25
Operating lease commitments
Lessee

At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

Group
Company
2023
2022
2023
2022
£
£
£
£
Within one year
300,284
300,284
-
-
Between two and five years
300,284
600,568
-
-
600,568
900,852
-
-
26
Related party transactions

During the year, Arbion Partners LLP, a company in which Directors of Arbion Limited are members, provided consultancy services to the Group to the value of £675,000 (2022: £nil). At the Balance Sheet date, £468,300 (2022: £nil) was due to Arbion Partners LLP.

 

The Company has taken the exemption to disclose related party transactions with companies under the same control in accordance with FRS 102 - Section 33 "Related Party Disclosures".

 

There were no other related party transactions that required disclosure under FRS 102.

27
Cash absorbed by group operations
2023
2022
£
£
Loss for the year after tax
(143,323)
(127,983)
Adjustments for:
Taxation credited
(171,594)
-
0
Finance costs
10,200
1,180
Investment income
(27,902)
(5,102)
(Gain)/loss on disposal of tangible fixed assets
-
3,522
Amortisation and impairment of intangible assets
(227,839)
(57,115)
Depreciation and impairment of tangible fixed assets
22,074
9,337
Other gains and losses
580,787
-
Equity settled share based payment expense
-
318,700
Movements in working capital:
Decrease in debtors
555,713
196,568
Decrease in creditors
(723,433)
(464,801)
Cash absorbed by operations
(125,317)
(125,694)
Arbion Holdings Ltd.
Notes to the Group Financial Statements (Continued)
For the year ended 31 December 2023
Page 37
28
Analysis of changes in net funds - group
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
1,482,202
(117,407)
1,364,795
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