REGISTERED NUMBER: |
STRATEGIC REPORT, REPORT OF THE DIRECTORS AND |
FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2024 |
FOR |
LONSIN CAPITAL LIMITED |
REGISTERED NUMBER: |
STRATEGIC REPORT, REPORT OF THE DIRECTORS AND |
FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2024 |
FOR |
LONSIN CAPITAL LIMITED |
LONSIN CAPITAL LIMITED (REGISTERED NUMBER: 09502842) |
CONTENTS OF THE FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 MARCH 2024 |
Page |
Company Information | 1 |
Strategic Report | 2 |
Report of the Directors | 6 |
Report of the Independent Auditors | 7 |
Income Statement | 10 |
Other Comprehensive Income | 11 |
Statement of Financial Position | 12 |
Statement of Changes in Equity | 13 |
Statement of Cash Flows | 14 |
Notes to the Statement of Cash Flows | 15 |
Notes to the Financial Statements | 16 |
LONSIN CAPITAL LIMITED |
COMPANY INFORMATION |
FOR THE YEAR ENDED 31 MARCH 2024 |
DIRECTORS: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
AUDITORS: |
Chartered Accountants & Statutory Auditors |
1 Kings Avenue |
London |
N21 3NA |
LONSIN CAPITAL LIMITED (REGISTERED NUMBER: 09502842) |
STRATEGIC REPORT |
FOR THE YEAR ENDED 31 MARCH 2024 |
The directors present their strategic report for the year ended 31 March 2024. |
REVIEW OF BUSINESS |
The principle activities of the company is investment advisory. The turnover for the year increased by approximately 10.9% to £272,712 (2023: £245,936). However, due to higher operational cost, company made an operating loss of £2,434 (2023:£15,118 profit). |
LONSIN CAPITAL LIMITED (REGISTERED NUMBER: 09502842) |
STRATEGIC REPORT |
FOR THE YEAR ENDED 31 MARCH 2024 |
PRINCIPAL RISKS AND UNCERTAINTIES |
Financial instruments |
As an asset manager of a distressed debt style fund, Lonsin Capital limited ("Lonsin") is mainly exposed to operational risk; however, there is additional exposure both to business risk and credit risk. All of these exposures are regarded as typical for a business engaged in the activity of asset management. Lonsin’s Compliance Officer, in conjunction with its Board, acts as risk manager and monitors and manages the risk exposures of the business with input from Lonsin’s various business groups. In assessing the risk appetite of the business, consideration has been given to identifying the material risks facing Lonsin’s operations. These include risks at both the client level and at the firm entity level taking the form of loss of revenue, loss of assets or higher cost. These risks are detailed in Lonsin’s Internal Capital and Risk Assessment Process ("ICARA") and are reviewed by the Board on a regular basis. Two specific factors have been considered in defining the risk appetite: firstly, the likelihood of occurrence of an event, and secondly, the impact level of an event. Further information on Lonsin’s risk exposures is set below: |
Credit Risk |
As an asset management firm, Lonsin is subject to credit risk. Lonsin receives investment management fees on a bimonthly or quarterly basis from its fund. Investment management fees for Lonsin’s fund shall be paid within 30 business days after an invoice is provided. Lonsin is a small Firm with a very simple operational infrastructure. |
Market Risk |
As an asset management firm, Lonsin’s portfolios are subject to market risk. Lonsin’s fees are asset based fees and Lonsin’s revenue increases as AUM and investment performance increase and will decrease if AUM and investment performance decrease. Lonsin has structured its business so that many costs are variable (i.e.custody costs) and will fall as its assets under management fall. More importantly, Lonsin keeps base salaries low and remunerates employees through discretionary bonuses. Surplus liquid capital is not at risk until a loss fully offsets Lonsin’s profit before remuneration and taxes, less any committed salaries and staff benefits.Lonsin’s core regulatory capital, surplus capital and free cash flow are primarily invested in cash deposits. Cash deposits are not subject to market risk. To mitigate against market risk, Lonsin’s Board does not invest capital that is (i) needed to meet core regulatory requirements, or (ii) needed to fund the operations of the business. |
Liquidity Risk |
The FCA have set forth in BIPRU 12.3 and 12.4 liquidity provisions for Investment Firms. Lonsin is categorised as a "non-ILAS Firm" and liquidity risk is not a material issue for the Firm with a very simple operational infrastructure. The liquidity rules enacted by the FCA under BIPRU 12 have very limited application and due to its small size and limited scope, Lonsin falls outside the legislative purpose of these rules, which is (1) systemic stability, (2) soundness of financial institutions and (3) consumer protection. Lonsin is unable to pose systemic risk and does not deal with retail clients who are afforded a higher level of protection by the FCA. Further, this ICARA assesses the capital adequacy of the Firm and not the Fund that we manage. As Lonsin is intimately tied to the continued performance of the Fund that we manage, the worst case scenario of these vehicles would result in a shut down. |
Operational Risk |
Operational risk refers to the risk of a direct or indirect loss resulting from inadequate or failed internal processes, people and systems, or from external events. Lonsin’s attempts to mitigate the impact of operational risks by (i) maintaining substantial financial resources, (ii) aligning the interests of all staff and shareholders with the supervision of the operations of the business through remuneration /bonuses, (iii) maintaining key operating procedures, (iv) periodically reviewing the operations of all material business groups, and (v) keeping Lonsin’s business, structure and operational requirements relatively simple. |
Concentration Risk |
Concentration risk is the risk that exposures to specific sectors or asset concentration could result in losses to Lonsin or its business. Lonsin’s business could suffer (i) from a decline in its investment performance, or (ii) if institutional investors shift their asset allocations to riskier funds, commodities or other types of investments.There is little Lonsin can do to minimise this risk except focusing on keeping its business simple and aligned with clients, and minimising overheads. It also ensures that its private and public equity and credit investment activities are diversified by geography and sectors. Hard limits are in place for its commingled fund to ensure investment diversification. |
Business Risk |
Business risk arises from changes in the core structure of the business that would prevent Lonsin from carrying out its business plan and desired strategy. Lonsin is a small, closely held organisation, where senior management also own a significant stake in the business. All material structural changes to its business are subject to discussion by the Executive Committee, at Directorship level, and by the Investment Committee if appropriate. |
LONSIN CAPITAL LIMITED (REGISTERED NUMBER: 09502842) |
STRATEGIC REPORT |
FOR THE YEAR ENDED 31 MARCH 2024 |
Interest Rate Risk |
Lonsin maintains fiduciary liability (also referred to as professional indemnity) and criminal liability (also referred to as errors and omissions) insurance policies which are set at a limit which Lonsin considers appropriate for the business of Lonsin and subject to a deductible which Lonsin can reasonably afford to meet if called upon. Lonsin would be exposed to potential losses in the event that an error occurred and its insurer was unable to recover anticipated insurance settlement proceeds. Lonsin attempts to obtain insurance only from well capitalised insurance firms to minimise the risk of loss arising from insurance risk. |
Currency Risk |
Lonsin's currency risk arises from the monetary assets and liabilities denominated in foreign currencies. |
Capital Risk Management |
Lonsin Capital Ltd ("Lonsin") is authorised and regulated by the Financial Conduct Authority ("the FCA"). In the United Kingdom the FCA is responsible for the implementation of the 2006 Capital Requirements Directive of the European Union, which set up a new regulatory capital framework for the financial services industry. |
The FCA regulations for the disclosures required under Pillar 3 are contained in the Prudential Sourcebook for Banks, Building Societies and Investment Firms ("BIPRU") and the General Prudential Source Book ("GENRU"). |
Further information on BIPRU and GENPRU can be found on the FCA’s website (www.fca.org.uk). These rules allow the business to exclude disclosures where the information is regarded as immaterial, proprietary or confidential. |
Capital Requirements Directive |
Disclosures required by Pillar 3 of the directive are available on request from Lonsin Capital Limited, Little Orchard Cottage,Wheatley Lane,Kingsley,Bordon, GU35 9NX. |
KEY FINANCIAL PERFORMANCE INDICATORS |
2024 | 2023 |
£ | £ |
Turnover | 272,712 | 245,936 |
Profit before tax | (2,434 | ) | 15,118 |
Net assets | 68,086 | 72,543 |
LONSIN CAPITAL LIMITED (REGISTERED NUMBER: 09502842) |
STRATEGIC REPORT |
FOR THE YEAR ENDED 31 MARCH 2024 |
DIRECTOR'S STATEMENT OF COMPLIANCE WITH DUTY TO PROMOTE SUCCESS OF THE COMPANY |
Engaging with our stakeholders |
The Board has a duty to promote the success of the Company for the benefit of its members as a whole having regard to the interests of our customers, our people, our relationship with our suppliers and the impact of our operations on the communities in which we operate, and to ensure that we maintain a reputation for high standards of business conduct. |
Our key stakeholders are our customers and our people. Our suppliers, regulators and the communities we operate in are also important stakeholder groups. All key Board decisions take into account the impact on relevant stakeholders. Increasingly, stakeholders are looking to understand our performance across multiple areas from performance to services, innovation, governance, workplace practices and corporate citizenship. The Board endeavours to gain an understanding of the perceptions and attitude of each stakeholder group and the weight they give to different issues. Where the views of different stakeholder groups do not align, the Board must decide on the best course of action to promote the Company’s long-term success. |
Clients |
We have built a strong and close relationship with our clients and the team works hard to maintain it. The interaction with our clients is trusting, professional and considerate of the circumstances of the customer.Transparency is valued by both the clients and the company. Clients are at the heart of our business. We aim to deliver truly outstanding, customer experiences, ensuring great outcomes. |
Key issues for customers include: |
(i) High quality advice with high customer care |
(ii) Ongoing advisory care |
People |
As a service organization, our people are key to our business. We want our people to feel engaged and empowered to deliver great outcomes for our customers and to be healthier and happier themselves. The Directors ensure that they meet up with all staff on a regular basis, and ensure that any issues are identified. |
Regulators |
The Company is regulated by the Financial Conduct Authority (FCA). Regulators ultimately aim to protect customers and ensure that they receive high levels of service. This clearly aligns with our strategy to put our customers front and centre. |
Our Regulators expect us to: |
(i) Have robust and effective processes and controls in place to mitigate risks and protect our customers. |
(ii) Provide a high quality service |
Suppliers |
Suppliers are critical to delivering high quality service to our customers. We aim to treat our suppliers fairly and pay them within agreed timescales, holding ourselves to high standards of business conduct. |
Communities and environment |
We play an active role in communities in which we operate and take care of the environment. |
ON BEHALF OF THE BOARD: |
LONSIN CAPITAL LIMITED (REGISTERED NUMBER: 09502842) |
REPORT OF THE DIRECTORS |
FOR THE YEAR ENDED 31 MARCH 2024 |
The directors present their report and the financial statements for the year ended 31 March 2024. |
PRINCIPAL ACTIVITY |
The principal activity of the company in the year under review was that of investment advisory. |
DIVIDENDS |
No dividends will be distributed for the year ended 31 March 2024. |
EVENTS SINCE THE END OF THE YEAR |
Information relating to events since the end of the year is given in the notes to the financial statements. |
DIRECTORS |
The directors shown below have held office during the whole of the period from 1 April 2023 to the date of this report. |
DIRECTORS' RESPONSIBILITIES STATEMENT |
The directors are responsible for preparing the Strategic Report, the Report of the Directors 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), including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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; |
- | 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 AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information. |
AUDITORS |
The auditors, AGK Partners, will be proposed for re-appointment at the forthcoming Annual General Meeting. |
ON BEHALF OF THE BOARD: |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
LONSIN CAPITAL LIMITED |
Opinion |
We have audited the financial statements of Lonsin Capital Limited (the 'company') for the year ended 31 March 2024 which comprise the Income Statement, Other Comprehensive Income, Statement of Financial Position, Statement of Changes in Equity, Statement of Cash Flows and Notes to the Statement of Cash Flows, Notes to the Financial Statements, including a summary of 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: |
- | give a true and fair view of the state of the company's affairs as at 31 March 2024 and of its loss 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. |
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 Auditors' 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. |
Other information |
The directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon. |
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. |
In connection with our audit of the financial statements, 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 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. |
Opinions on other matters prescribed by the Companies Act 2006 |
In our opinion, based on the work undertaken in the course of the audit: |
- | the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
- | the Strategic Report and the Report of the Directors 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 Report of the Directors. |
We have nothing to report in respect of the following matters where 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 directors' remuneration specified by law are not made; or |
- | we have not received all the information and explanations we require for our audit. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
LONSIN CAPITAL LIMITED |
Responsibilities of directors |
As explained more fully in the Directors' Responsibilities Statement set out on page six, 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 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. |
Auditors' 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 a Report of the Auditors 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. |
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: |
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows: |
- the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognize non-compliance with applicable laws and regulations; |
- we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the industry; |
- we assessed the extent of compliance with the laws and regulations identified above through making enquiries of |
management and inspecting legal correspondence; and identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit. |
We assessed the susceptibility of the company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by: |
- making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and |
- considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations. |
To address the risk of fraud through management bias and override of controls, we: |
- performed analytical procedures to identify any unusual or unexpected relationships; |
- tested journal entries to identify unusual transactions; |
- assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and |
- investigated the rationale behind significant or unusual transactions. |
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to: |
- agreeing financial statement disclosures to underlying supporting documentation; |
- reading the minutes of meetings of those charged with governance; |
- enquiring of management as to actual and potential litigation and claims; and |
- reviewing correspondence with HMRC, relevant regulators, and the company's legal advisors. |
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any. Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion. |
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
LONSIN CAPITAL LIMITED |
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 so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors 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. |
for and on behalf of |
Chartered Accountants & Statutory Auditors |
1 Kings Avenue |
London |
N21 3NA |
LONSIN CAPITAL LIMITED (REGISTERED NUMBER: 09502842) |
INCOME STATEMENT |
FOR THE YEAR ENDED 31 MARCH 2024 |
2024 | 2023 |
Notes | £ | £ |
TURNOVER | 3 |
Administrative expenses |
(7,692 | ) | 11,713 |
Other operating income |
OPERATING (LOSS)/PROFIT and |
(LOSS)/PROFIT BEFORE TAXATION | ( |
) |
Tax on (loss)/profit | 6 |
(LOSS)/PROFIT FOR THE FINANCIAL YEAR | ( |
) |
LONSIN CAPITAL LIMITED (REGISTERED NUMBER: 09502842) |
OTHER COMPREHENSIVE INCOME |
FOR THE YEAR ENDED 31 MARCH 2024 |
2024 | 2023 |
Notes | £ | £ |
(LOSS)/PROFIT FOR THE YEAR | ( |
) |
OTHER COMPREHENSIVE INCOME | - | - |
TOTAL COMPREHENSIVE (LOSS)/INCOME FOR THE YEAR |
( |
) |
LONSIN CAPITAL LIMITED (REGISTERED NUMBER: 09502842) |
STATEMENT OF FINANCIAL POSITION |
31 MARCH 2024 |
2024 | 2023 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Tangible assets | 7 |
CURRENT ASSETS |
Debtors | 8 |
Cash at bank |
CREDITORS |
Amounts falling due within one year | 9 |
NET CURRENT ASSETS |
TOTAL ASSETS LESS CURRENT LIABILITIES |
CAPITAL AND RESERVES |
Called up share capital | 10 |
Retained earnings | 11 |
SHAREHOLDERS' FUNDS |
The financial statements were approved by the Board of Directors and authorised for issue on |
LONSIN CAPITAL LIMITED (REGISTERED NUMBER: 09502842) |
STATEMENT OF CHANGES IN EQUITY |
FOR THE YEAR ENDED 31 MARCH 2024 |
Called up |
share | Retained | Total |
capital | earnings | equity |
£ | £ | £ |
Balance at 1 April 2022 |
Changes in equity |
Total comprehensive income | - |
Balance at 31 March 2023 |
Changes in equity |
Total comprehensive loss | - | ( |
) | ( |
) |
Balance at 31 March 2024 |
LONSIN CAPITAL LIMITED (REGISTERED NUMBER: 09502842) |
STATEMENT OF CASH FLOWS |
FOR THE YEAR ENDED 31 MARCH 2024 |
2024 | 2023 |
Notes | £ | £ |
Cash flows from operating activities |
Cash generated from operations | 1 |
Tax paid | ( |
) | ( |
) |
Net cash from operating activities |
Cash flows from investing activities |
Purchase of tangible fixed assets | ( |
) | ( |
) |
Net cash from investing activities | ( |
) | ( |
) |
Increase in cash and cash equivalents |
Cash and cash equivalents at beginning of year |
2 |
13,183 |
Cash and cash equivalents at end of year | 2 | 34,404 | 22,482 |
LONSIN CAPITAL LIMITED (REGISTERED NUMBER: 09502842) |
NOTES TO THE STATEMENT OF CASH FLOWS |
FOR THE YEAR ENDED 31 MARCH 2024 |
1. | RECONCILIATION OF (LOSS)/PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS |
2024 | 2023 |
£ | £ |
(Loss)/profit before taxation | ( |
) |
Depreciation charges |
(1,721 | ) | 16,602 |
Decrease in trade and other debtors |
Decrease in trade and other creditors | ( |
) | ( |
) |
Cash generated from operations |
2. | CASH AND CASH EQUIVALENTS |
The amounts disclosed on the Statement of Cash Flows in respect of cash and cash equivalents are in respect of these Statement of Financial Position amounts: |
Year ended 31 March 2024 |
31.3.24 | 1.4.23 |
£ | £ |
Cash and cash equivalents | 34,404 | 22,482 |
Year ended 31 March 2023 |
31.3.23 | 1.4.22 |
£ | £ |
Cash and cash equivalents | 22,482 | 13,183 |
3. | ANALYSIS OF CHANGES IN NET FUNDS |
At 1.4.23 | Cash flow | At 31.3.24 |
£ | £ | £ |
Net cash |
Cash at bank | 22,482 | 11,922 | 34,404 |
22,482 | 34,404 |
Total | 22,482 | 11,922 | 34,404 |
LONSIN CAPITAL LIMITED (REGISTERED NUMBER: 09502842) |
NOTES TO THE FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 MARCH 2024 |
1. | STATUTORY INFORMATION |
Lonsin Capital Limited is a |
The presentation currency of the financial statements is the Pound Sterling (£). |
The Company is regulated and authorised by the Financial Conduct Authority (FCA) and provides investment advisory and management services. |
2. | ACCOUNTING POLICIES |
Basis of preparing the financial statements |
Significant judgements and estimates |
In the application of the company's accounting policies, the director is 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 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. |
Revenue |
Revenue is measured at the fair value of the consideration received or receivable and represents the amount for fund management, managed accounts and investment advisory services net of value added taxes and trade discounts. The following criteria must also be met before revenue is recognised: |
Rendering of services |
Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied: |
- the amount of revenue can be measured reliably; |
- it is probable that the Company will receive the consideration due under the contract; |
- the stage of completion of the contract at the end of the reporting period can be measured |
reliably; and |
- the costs incurred and the costs to complete the contract can be measured reliably. |
Tangible fixed assets |
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. |
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method. |
Depreciation is provided on the following basis: |
Computer equipment - 25% |
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date. |
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss. |
LONSIN CAPITAL LIMITED (REGISTERED NUMBER: 09502842) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 MARCH 2024 |
2. | ACCOUNTING POLICIES - continued |
Financial instruments |
The Company only enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors. |
(i) Financial assets |
Basic financial assets, including trade and other debtors, cash and bank balances, are initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. |
Such assets are subsequently carried at amortised cost using the effective interest method. |
At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. 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 the Statement of Comprehensive Income. |
If there is 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 the Statement of Comprehensive Income. |
Financial assets are derecognised when (a) the contractual rights to the cash flows from the asset expire or are settled, or (b) substantially all the risks and rewards of the ownership of the asset are transferred to another party or (c) despite having retained some significant risks and rewards of ownership, control of the asset has been transferred to another party who has the practical ability to unilaterally sell the asset to an unrelated third party without imposing additional restrictions. |
(ii) Financial liabilities |
Basic financial liabilities, including trade and other creditors and accruals, 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 receipts discounted at a market rate of interest. 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. Trade creditors 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. |
Financial liabilities are derecognised when the liability is extinguished, that is when the contractual obligation is discharged, cancelled or expires. |
(iii) Offsetting |
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. |
Taxation |
Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. |
Current or deferred taxation assets and liabilities are not discounted. |
Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the statement of financial position date. |
LONSIN CAPITAL LIMITED (REGISTERED NUMBER: 09502842) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 MARCH 2024 |
2. | ACCOUNTING POLICIES - continued |
Deferred tax |
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the statement of financial position date. |
Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference. |
Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. |
Foreign currencies |
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions. |
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined. |
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges. |
Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Statement of income and retained earnings within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'. |
Hire purchase and leasing commitments |
Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease. |
Going concern |
The financial statements have been prepared on the going concern basis, which assumes that the Company will continue to be able to meet its liabilities as they fall due for a period of at least twelve months from the date of approval of these financial statements. |
The Company, as for any business, relies upon the generation of profits and cash to create working capital to meet its liabilities as they fall due. Based on the results to date and future projections, the directors are confident that the Company will continue to meet its liabilities as they fall due, looking forward at least twelve months from the date of signing these financial statements. The directors have a reasonable expectation that the company has adequate resources to meet Financial Conduct Authority capital adequacy and future working capital requirements and to continue in operational existence for the foreseeable future and they consider it appropriate to prepare the financial statements on a going concern basis. As a result, the directors have prepared the financial statements on a going concern basis. |
Cash and cash equivalents |
Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value. |
In the Statement of cash flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Company's cash management. |
LONSIN CAPITAL LIMITED (REGISTERED NUMBER: 09502842) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 MARCH 2024 |
3. | TURNOVER |
The turnover and loss (2023 - profit) before taxation are attributable to the one principal activity of the company. |
An analysis of turnover by class of business is given below: |
2024 | 2023 |
£ | £ |
An analysis of turnover by geographical market is given below: |
2024 | 2023 |
£ | £ |
United Kingdom |
4. | EMPLOYEES AND DIRECTORS |
2024 | 2023 |
£ | £ |
Wages and salaries |
The average number of employees during the year was as follows: |
2024 | 2023 |
Employees |
2024 | 2023 |
£ | £ |
Directors' remuneration |
5. | OPERATING (LOSS)/PROFIT |
The operating loss (2023 - operating profit) is stated after charging/(crediting): |
2024 | 2023 |
£ | £ |
Other operating leases |
Depreciation - owned assets |
Auditors' remuneration |
Foreign exchange differences | ( |
) | ( |
) |
LONSIN CAPITAL LIMITED (REGISTERED NUMBER: 09502842) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 MARCH 2024 |
6. | TAXATION |
Analysis of the tax charge |
The tax charge on the loss for the year was as follows: |
2024 | 2023 |
£ | £ |
Current tax: |
UK corporation tax |
Corporation tax - PY Adj. | 2,023 | - |
Tax on (loss)/profit |
Reconciliation of total tax charge included in profit and loss |
The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below: |
2024 | 2023 |
£ | £ |
(Loss)/profit before tax | ( |
) |
(Loss)/profit multiplied by the standard rate of corporation tax in the UK of |
( |
) |
Effects of: |
Depreciation in excess of capital allowances | - |
Adjustments to tax charge in respect of previous periods |
Movement in deferred tax | - | 184 |
Fixed asset differences | - | 98 |
Other tax adjustments | 560 | - |
Total tax charge | 2,023 | 3,154 |
7. | TANGIBLE FIXED ASSETS |
Plant and |
machinery |
£ |
COST |
At 1 April 2023 |
Additions |
At 31 March 2024 |
DEPRECIATION |
At 1 April 2023 |
Charge for year |
At 31 March 2024 |
NET BOOK VALUE |
At 31 March 2024 |
At 31 March 2023 |
LONSIN CAPITAL LIMITED (REGISTERED NUMBER: 09502842) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 MARCH 2024 |
8. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2024 | 2023 |
£ | £ |
Trade debtors |
Other debtors |
Prepayments and accrued income |
9. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2024 | 2023 |
£ | £ |
Tax |
Social security and other taxes |
Directors' current accounts | 84,551 | 84,551 |
Accruals and deferred income |
10. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 2024 | 2023 |
value: | £ | £ |
Ordinary shares | 0.01 | 1,000 | 1,000 |
11. | RESERVES |
Retained |
earnings |
£ |
At 1 April 2023 |
Deficit for the year | ( |
) |
At 31 March 2024 |
12. | RELATED PARTY DISCLOSURES |
During the year under review, management fees of £72,266 (2023: £68,217) were charged from companies under common control. |
During the year under review, rent of £ nil (2023: £15,533) were charged from companies under common control. |
At the year end, included in the trade debtors is an amount of £75,625 (2023: £ nil) due from companies under common control. |
As at the year end the company owed £84,551 (2023: £84,551) to directors. No interest has been charged on these balances. |
13. | POST BALANCE SHEET EVENTS |
There has been no significant events affecting the Company since the year-end. |
14. | ULTIMATE CONTROLLING PARTY |
The company was under the control of Mr J Croft and Mr M Elser through their shareholdings. |
LONSIN CAPITAL LIMITED (REGISTERED NUMBER: 09502842) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 MARCH 2024 |
15. | PUBLIC REMUNERATION DISCLOSURE |
Introduction |
The Investment Firms Prudential Regime (IFPR) is the FCA's new prudential regime for MiFID investment firms which aims to streamline and simplify the prudential requirements for UK investment firms. IFPR came into effect on 1st January 2022, and its provisions apply to Lonsin Capital Limited (or the Company) as an FCA authorized and regulated firm. |
The public disclosure requirements of IFPR are set out in MIFIDPRU 8, replacing the previous Pillar 3 requirements under Capital Requirements Regulation. |
The Company can be classified as a SNI firm given it does not breach any requirements set out in MIFIDPRU 1.2.1 R. |
The Company is applying the transitional provisions in respect of disclosures set out under MIFIDPRU TP12, which requires the firm to disclose the following information: |
- Remuneration Policy and practices (MIFIDPRU 8.6) |
- Provision of quantitative and qualitative disclosures in respect of the firm's remuneration arrangements. These disclosures have been made in line with the rules that were in force immediately preceding 1 January 2022 - in line with the requirements set out under MIFIDPRU TP 12.8. |
Remuneration Governance |
The Company has in place a Remuneration Policy which is approved by the Board at least annually. |
In view of the nature and size of the Company, the Board does not believe it is proportionate to have a Remuneration Committee but it will periodically monitor the remuneration practices of the Company to determine if the implementation of such a committee would enhance its practices. |
The Board has oversight of the Company's remuneration policies and refers to its remuneration Terms of Reference and the MIFIDPRU remuneration code. |
Furthermore, the Board ensures that the Company's standards, fairness, compliance objectives, corporate governance and maintaining a sound capital base are not compromised by its remuneration incentives. The Company has used external consultants to assist in the development of its remuneration policies and practices. |
The Company oversees and manages its risks through a combination of routine monitoring of policies and procedures, an annual independent audit (by AGK Partnership Ltd), a Compliance Manual, and the use of an independent outsourced compliance adviser (Cosegic Limited). |
Remuneration |
The company is a small SNI firm applying the philosophy of a small start-up. As such the remuneration policy is linear and mostly on a variable basis. |
When determining the variable remuneration paid to any Staff, the Company considers number of factors covering the firm as a whole and the individual staff, as appropriate. The Company's overall profitability, the absolute and relative performance of the individual and (as applicable), his conduct and adherence to the Firm's values, any disciplinary action taken against the individual and the results of the individual's performance review during the period in question will be taken into account. |
- The Company's staff is formed of three cofounder executive directors. |
- Two of the cofounders are shareholders of the Company and are not paid a fixed remuneration but they charge fees for the management of the Company and they are on a 100% variable remuneration. |
- The third cofounder is given a base salary, and it is on a 100% fixed remuneration. |