Arbion Limited
Annual Report and Financial Statements
For the year ended 31 December 2023
Company Registration No. 07044573 (England and Wales)
Arbion Limited
Company Information
Directors
Kirin Ohbi
Marco Pabst
(Appointed 22 February 2023)
Daniel Pasini
(Appointed 22 February 2023)
Carnegie Smyth
Secretary
Kirin Ohbi
Company number
07044573
Registered office
One Connaught Place
London
W2 2ET
Auditor
Moore Kingston Smith LLP
6th Floor
9 Appold Street
London
EC2A 2AP
United Kingdom
Bankers
Royal Bank of Scotland
62-63 Threadneedle St
London
EC2R 8LA
Arbion Limited
Contents
Page
Strategic report
1 - 4
Directors' report
5 - 6
Independent auditor's report
7 - 10
Income statement
11
Balance sheet
12
Statement of changes in equity
13
Statement of cash flows
14
Notes to the financial statements
15 - 27
Arbion Limited
Strategic Report
For the year ended 31 December 2023
Page 1
The Directors present the strategic report and financial statements for the year ended 31 December 2023.
Principle activities
The Company’s principle activity during the year was the provision of wealth management services, including discretionary management services, investment advice, debt advice and cash management. The Company is 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 business 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 Company’s expansion programme continues as we speak.
Turnover has increased to £5.9m (2022: £5.8m). Whilst this indicates a level of year-on-year consistency, there lies an inherent robustness stemming from the 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 business; 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 Company. We anticipate that the cyclical downturn in private investments will reverse course over the coming year, providing additional profitability.
Costs of sales have decreased to £2.4m (2022: £3.5m), whilst administrative costs have increased to £3.5m (2022: £2.7m). 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 Company’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, Arbion will continue to invest as necessary.
The Company returned to profitability in 2023, against a loss of £0.3m in the prior year. The business structure is set-up to be highly scalable, with considerable leverage to be gained from current levels.
Outlook
The business expects its current growth trajectories in client numbers, AUM levels and hires to all continue throughout 2024. Alongside this, the business will benefit from associated strong revenue increases and an improvement in profitability. The business 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 business 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 company that is truly client and outcome-focused with a resolute corporate strategy and established investment track record, such as Arbion.
Arbion Limited
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 Company and those which are relevant to the financial services market in general.
The Board of the Company 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 Company. The Company 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 Company 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 Company 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 Company is regulated by the Financial Conduct Authority 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 Company meets all regulatory requirements.
Operational Risk
Operational risk will arise where there is a risk resulting from the failure of any of the Company's processes, systems and controls.
The Company 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 Company'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 Company'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
A proportion of Arbion's management and performance fees are billed in foreign currencies, and to this extent the Company is exposed to fluctuations in foreign exchange rates. The Company coverts the majority of received foreign currency at spot to minimise this exposure. Due to the expense involved, Arbion has chosen not to actively hedge any foreign currency exposure at this time.
Arbion Limited
Strategic Report (Continued)
For the year ended 31 December 2023
Page 3
Market and Investment Risk
Arbion does not run its own trading book and so is only exposed to market risk in the sense that any impact on the Company's 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 Company'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 Company's assets are held in its own bank accounts and therefore the Company 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 Company. 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 Company advises clients only to bank with high quality financial institutions.
Arbion Limited
Strategic Report (Continued)
For the year ended 31 December 2023
Page 4
Directors' duties
The Directors of the Company, as those of all UK companies, confirm 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 company must act in the way he considers, in good faith, would be most likely to promote the
success of the company 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 company's employees,
(c) the need to foster the company's business relationships with clients, suppliers and others,
(d) the impact of the company's operations on the community and the environment,
(e) the desirability of the company maintaining a reputation for high standards of business conduct, and
(f) the need to act fairly as between members of the company.
The Directors confirm, 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 Directors believe both the Company and other stakeholders, including employees, clients
and others, benefit from the best results and outcomes.
The Company’s employees are its greatest asset, and the Directors recognise 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 Company. 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 Company. As an FCA-regulated business, treating customers fairly and
maintaining high standards of business conduct are core values of the Company. 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.
Additionally, the Company is a proud signatory of the United Nations Principles for Responsible Investment.
Carnegie Smyth
Director
23 April 2024
Arbion Limited
Directors' Report
For the year ended 31 December 2023
Page 5
The Directors present their report and financial statements for the year ended 31 December 2023.
Results and dividends
The results for the year are set out on page 11.
No ordinary dividends were paid. The Directors do not recommend payment of a final dividend.
Directors
The Directors who held office during the year and up to the date of signature of the financial statements were as follows:
Kirin Ohbi
Marco Pabst
(Appointed 22 February 2023)
Daniel Pasini
(Appointed 22 February 2023)
Carnegie Smyth
Paul Lester
(Resigned 1 January 2023)
Auditor
In accordance with the Company's articles, a resolution proposing that Moore Kingston Smith LLP be reappointed as auditor of the Company will be put at a General Meeting.
Statement of Directors' responsibilities
The Directors are responsible for preparing the Directors' 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 Company and of the profit or loss of the Company for that period. In preparing these financial statements, the Directors 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; and
- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the 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 Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Statement of disclosure to auditor
So far as the Directors are aware, there is no relevant audit information of which the Company's auditor are unaware. Additionally, the Directors have taken all the necessary steps that they ought to have taken as Directors in order to make themselves aware of all relevant audit information and to establish that the Company's auditors are aware of that information.
Arbion Limited
Directors' Report (Continued)
For the year ended 31 December 2023
Page 6
Disclosures included in the Strategic Report
The Company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the Company's Strategic Report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the Directors' Report. It has done so in respect of Principal Activities, Key Performance Indicators and Future Developments.
MiFIDPRU 8 Disclosure
The company is regulated by the Financial Conduct Authority (“FCA”) in the UK and is subject to minimum capital requirements imposed by the Regulator and the Investment Firms Prudential Regime (“IFPR”).
Details of the company’s unaudited IFPR disclosures, as required under MiFIDPRU 8, are included on the Company's website.
On behalf of the Board
Carnegie Smyth
Director
23 April 2024
Arbion Limited
Independent Auditor's Report
To the Members of Arbion Limited
Page 7
Opinion
We have audited the financial statements of Arbion Limited (the 'company') for the year ended 31 December 2023 which comprise the Profit and Loss Account, the Balance Sheet, the Statement of Changes in Equity, 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 FRS 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:
give a true and fair view of the state of the company's affairs as at 31 December 2023 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
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 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 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.
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 Limited
Independent Auditor's Report (Continued)
To the Members of Arbion Limited
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:
the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its 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:
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
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
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 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 company or to cease operations, or have no realistic alternative but to do so.
Arbion Limited
Independent Auditor's Report (Continued)
To the Members of Arbion Limited
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:
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purposes of expressing an opinion on the effectiveness of the company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
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 Limited
Independent Auditor's Report (Continued)
To the Members of Arbion Limited
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:
We obtained an understanding of the legal and regulatory requirements applicable to the company and considered that the most significant are the Companies Act 2006, UK financial reporting standards as issued by the Financial Reporting Council, the rules of the Financial Conduct Authority and UK taxation legislation.
We obtained an understanding of how the company complies with these requirements by discussions with management and those charged with governance.
We assessed the risk of material misstatement of the financial statements, including the risk of material misstatement due to fraud and how it might occur, by holding discussions with management and those charged with governance.
We inquired of management and those charged with governance as to any known instances of non-compliance or suspected non-compliance with laws and regulations.
Based on this understanding, we designed specific appropriate audit procedures to identify instances of non-compliance with laws and regulations. This included making enquiries of management and those charged with governance and obtaining additional corroborative evidence as required.
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.
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 so that we might state to the company'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 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 Limited
Income Statement
For the year ended 31 December 2023
Page 11
2023
2022
Notes
£
£
Turnover
3
5,855,304
5,810,503
Cost of sales
(2,403,963)
(3,542,955)
Gross profit
3,451,341
2,267,548
Administrative expenses
(3,532,542)
(2,733,973)
Other operating income
3
87,851
115,740
Exceptional item
4
(87,030)
Operating profit/(loss)
5
6,650
(437,715)
Interest receivable and similar income
8
27,902
116,827
Interest payable and similar expenses
9
(2)
Profit/(loss) before taxation
34,552
(320,890)
Tax on profit/(loss)
10
Profit/(loss) for the financial year
34,552
(320,890)
The Income Statement has been prepared on the basis that all operations are continuing operations.
The Company has taken advantage of FRS102 section 3 paragraph 3.19 to present only an Income Statement as it has no items of other comprehensive income.
Arbion Limited
Balance Sheet
As at 31 December 2023
Page 12
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
11
7,133
5,791
Tangible assets
12
60,554
75,996
Investments
13
81,879
81,879
149,566
163,666
Current assets
Debtors
16
1,911,123
2,475,009
Cash at bank and in hand
1,067,061
1,064,930
2,978,184
3,539,939
Creditors: amounts falling due within one year
17
(1,429,717)
(2,040,124)
Net current assets
1,548,467
1,499,815
Net assets
1,698,033
1,663,481
Capital and reserves
Called up share capital
18
10,793,847
10,793,847
Share premium account
19
210,040
210,040
Profit and loss reserves
(9,305,854)
(9,340,406)
Total equity
1,698,033
1,663,481
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:
Carnegie Smyth
Director
Company Registration No. 07044573
Arbion Limited
Statement of Changes in Equity
For the year ended 31 December 2023
Page 13
Share capital
Share premium account
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 January 2022
10,493,847
210,040
(9,019,516)
1,684,371
Year ended 31 December 2022:
Loss and total comprehensive income for the year
-
-
(320,890)
(320,890)
Issue of share capital
18
300,000
-
300,000
Balance at 31 December 2022
10,793,847
210,040
(9,340,406)
1,663,481
Year ended 31 December 2023:
Profit and total comprehensive income for the year
-
-
34,552
34,552
Balance at 31 December 2023
10,793,847
210,040
(9,305,854)
1,698,033
Arbion Limited
Statement of Cash Flows
For the year ended 31 December 2023
Page 14
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash absorbed by operations
23
(16,979)
(1,945,679)
Interest paid
(2)
Net cash outflow from operating activities
(16,979)
(1,945,681)
Investing activities
Purchase of intangible assets
(2,160)
(5,840)
Purchase of tangible fixed assets
(6,632)
(79,161)
Interest received
27,902
16,827
Dividends received
100,000
Net cash generated from investing activities
19,110
31,826
Financing activities
Proceeds from issue of shares
300,000
Repayment of borrowings
(351,259)
Net cash used in financing activities
-
(51,259)
Net increase/(decrease) in cash and cash equivalents
2,131
(1,965,114)
Cash and cash equivalents at beginning of year
1,064,930
3,030,044
Cash and cash equivalents at end of year
1,067,061
1,064,930
Arbion Limited
Notes to the Financial Statements
For the year ended 31 December 2023
Page 15
1
Accounting policies
Company information
Arbion Limited is a private company, limited by shares domiciled and incorporated in England and Wales. The registered office is One Connaught Place, London, W2 2ET.
1.1
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 pound.
The financial statements have been prepared on the historical cost convention. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The Company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the Company are consolidated in the financial statements of Arbion Holdings Limited. These consolidated financial statements are available from its registered office, One Connaught Place, London, W2 2ET.
1.2
Going concern
At the time of approving, the Directors believe the Company 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.true
At the Balance Sheet date the Company has net assets of £1,698,033 (2022: £1,663,481) and during the financial year recognised a profit of £34,552 (2022: £320,890 loss).
Having prepared a forecast for the twelve months from the date of approval of the financial statements, the Directors believe the Company 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.
Arbion Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 16
1.3
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.
1.4
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 basis:
Trademarks
10 years straight line
1.5
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, fittings & equipment
4 - 5 years straight line
Computer equipment
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 credited or charged to Income Statement.
1.6
Fixed asset investments
Investments in shares, other than investments in another group entity, in non-derivative financial instruments are accounted for as basic financial instruments. The investments are measured at fair value, with changes in fair value recognised in the profit or loss.
A subsidiary is an entity controlled by the Company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
Arbion Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 17
1.7
Impairment of fixed assets
At each reporting end date, the Company 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.
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.
1.8
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.
1.9
Financial instruments
The Company 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.
1.10
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 Company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Arbion Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 18
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 when the company has 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.
1.11
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 Company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13
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 leases asset are consumed.
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.
1.14
Foreign exchange
Monetary assets and liabilities denominated in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. All differences are taken to the income statement.
Arbion Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 19
2
Judgements and key sources of estimation uncertainty
In the application of the Company’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, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
The Directors do not consider that there are any significant judgements or sources of estimation uncertainty and will continue to consider this on an ongoing basis.
3
Turnover and other revenue
An analysis of the Company's turnover is as follows:
2023
2022
£
£
Turnover analysed by class of business
Management fees
5,558,638
5,075,364
Performance fees
38,879
139,579
Other fees and income
257,787
595,560
5,855,304
5,810,503
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
2,199,846
4,070,122
Europe
1,537,002
418,165
Rest of the World
2,118,456
1,322,216
5,855,304
5,810,503
2023
2022
£
£
Other significant revenue
Interest income
27,902
16,827
Dividends received
-
100,000
Rental income
87,851
115,740
Arbion Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 20
4
Exceptional item
2023
2022
£
£
Expenditure
Exceptional costs
-
87,030
The exceptional costs in the prior year related to the group restructure and rebrand enacted in year as noted in the Controlling Party note.
5
Operating profit/(loss)
2023
2022
Operating profit/(loss) for the year is stated after charging/(crediting):
£
£
Exchange differences apart from those arising on financial instruments measured at fair value through profit or loss
58,982
(45,226)
Fees payable to the Company's auditor for the audit of the Company's financial statements
24,000
20,700
Fees payable to the Company's auditor for non-audit services
23,000
21,780
Depreciation of owned tangible fixed assets
22,074
9,337
(Profit)/loss on disposal of tangible fixed assets
-
3,522
Amortisation of intangible assets
818
49
Operating lease charges
285,220
317,335
6
Employees
The average monthly number of persons (including Directors) employed by the Company during the year was:
2023
2022
Number
Number
Administration
3
6
Operations
16
13
Total
19
19
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
1,746,963
3,263,392
Social security costs
222,076
469,400
Pension costs
161,673
176,938
2,130,712
3,909,730
Arbion Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 21
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
189,428
451,759
Company pension contributions to defined contribution schemes
16,200
33,075
205,628
484,834
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
189,428
235,651
Company pension contributions to defined contribution schemes
16,200
16,200
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2022 - 1).
8
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
27,902
16,827
Income from fixed asset investments
Income from shares in group undertakings
100,000
Total income
27,902
116,827
Investment income includes the following:
Interest on financial assets not measured at fair value through profit or loss
27,902
16,827
9
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
-
2
Arbion Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 22
10
Taxation
The actual charge for the year can be reconciled to the expected charge/(credit) for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Profit/(loss) before taxation
34,552
(320,890)
Expected tax charge/(credit) based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
8,127
(60,969)
Tax effect of expenses that are not deductible in determining taxable profit
18,727
17,039
Tax effect of utilisation of tax losses not previously recognised
(25,043)
Unutilised tax losses carried forward
36,403
Group relief
52,650
Dividend income
(19,000)
Capital allowances
(1,811)
(21,200)
Provisions tax adjustment
(1,726)
Non-trade loan relationship credits per accounts
(3,197)
Taxation charge for the year
-
-
11
Intangible fixed assets
Trademarks
£
Cost
At 1 January 2023
5,840
Additions
2,160
At 31 December 2023
8,000
Amortisation and impairment
At 1 January 2023
49
Amortisation charged for the year
818
At 31 December 2023
867
Carrying amount
At 31 December 2023
7,133
At 31 December 2022
5,791
Arbion Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 23
12
Tangible fixed assets
Leasehold improvements
Fixtures, fittings & equipment
Computer equipment
Total
£
£
£
£
Cost
At 1 January 2023
139,901
81,990
96,617
318,508
Additions
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
8,651
51,903
60,554
At 31 December 2022
11
10,261
65,724
75,996
13
Fixed asset investments
2023
2022
£
£
Unlisted investments
81,879
81,879
The Company has not designated any financial assets that are not classified as held for trading as financial assets at fair value through profit or loss.
14
Subsidiaries
These financial statements are separate company financial statements for Squared Limited.
Details of the Company's subsidiaries at 31 December 2023 are as follows:
Name of undertaking
Registered office
Nature of business
Class of
% Held
shares held
Direct
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:
Arbion Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
14
Subsidiaries
(Continued)
Page 24
Name of undertaking
Capital and Reserves
Profit/(Loss)
£
£
Squared Limited
104,684
(29,966)
The results of the company have been consolidated in the ultimate parent company accounts.
15
Joint ventures
Details of the Company's joint ventures at 31 December 2023 are as follows:
Name of undertaking
Registered office
Nature of business
Interest
% Held
held
Direct
Signia Invest Holdco Limited
England and Wales
Financial Management
Ordinary
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.
16
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
1,309,292
1,771,576
Other debtors
290,160
281,709
Prepayments and accrued income
205,944
315,997
1,805,396
2,369,282
2023
2022
Amounts falling due after more than one year:
£
£
Other debtors
105,727
105,727
Total debtors
1,911,123
2,475,009
Arbion Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 25
17
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
696,323
238,025
Taxation and social security
76,265
217,160
Accruals and deferred income
657,129
1,584,939
1,429,717
2,040,124
Included within accruals and deferred income is a balance of £87,674 (2022: £87,674) relating to a dilapidations provision which represents estimated dilapidation costs and is expected to be settled on exiting the office lease.
18
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
10,793,847
10,793,847
10,793,847
10,793,847
During the year, the Company issued zero (2022: 300,000) ordinary shares of £1 each at par.
19
Share premium account
The share premium accounts includes the consideration paid above the par value for shares in the company.
20
Operating lease commitments
Lessee
At the reporting end date the Company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2022
£
£
Within one year
300,284
300,284
Between two and five years
300,284
600,568
600,568
900,852
Arbion Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 26
21
Related party transactions
Remuneration of key management personnel
The remuneration of key management personnel is as follows.
2023
2022
£
£
Aggregate compensation
1,896,736
3,504,719
During the year Arbion Partners LLP, a company in which Directors of Arbion Limited are members provided services to the Company to the value of £675,000 (2022: £nil). At the Balance Sheet date the Company owed Arbion Partners LLP £468,300 (2022: £nil).
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."
22
Ultimate controlling party
The immediate parent company is Arbion Holdings Ltd, a company incorporated in England and Wales. The company's registered office is 1 Connaught Place, London, W2 2ET.
Consolidated accounts are prepared and filed at the immediate parent company level.
Arbion Holdings Ltd became the controlling party of the company in the prior year, on the 7 April 2022, after purchasing 100% of the share capital of the Company from Grecco Limited.
23
Cash absorbed by operations
2023
2022
£
£
Profit/(loss) for the year after tax
34,552
(320,890)
Adjustments for:
Finance costs
2
Investment income
(27,902)
(116,827)
(Gain)/loss on disposal of tangible fixed assets
-
3,522
Amortisation and impairment of intangible assets
818
49
Depreciation and impairment of tangible fixed assets
22,074
9,337
Movements in working capital:
Decrease/(increase) in debtors
563,886
(444,973)
Decrease in creditors
(610,407)
(1,075,899)
Cash absorbed by operations
(16,979)
(1,945,679)
Arbion Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 27
24
Analysis of changes in net funds
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
1,064,930
2,131
1,067,061
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