Company Registration No. 06909016 (England and Wales)
LEK SECURITIES UK LIMITED
ANNUAL REPORT AND
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
LEK SECURITIES UK LIMITED
COMPANY INFORMATION
Director
Charles Lek
Company number
06909016
Registered office
288 Bishopsgate
London
EC2M 4QP
Auditor
Fisher, Sassoon & Marks
43-45 Dorset Street
London
W1U 7NA
LEK SECURITIES UK LIMITED
CONTENTS
Page
Strategic report
1
Director's report
2 - 3
Independent auditor's report
4 - 6
Statement of comprehensive income
7
Balance sheet
8
Statement of changes in equity
9
Statement of cash flows
10
Notes to the financial statements
11 - 20
LEK SECURITIES UK LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

The director presents the strategic report and financial statements for the year ended 31 December 2023.

Fair review of the business

The company results reflect operating losses, primarily bad debts and foreign exchange losses, incurred following the decision to cease undertaking broking and custody services in 2022 (having agreed voluntarily to conditions imposed by the Financial Conduct Authority("FCA")). The company has now submitted an application to the FCA to cancel its FCA authorisation. The director's intention is to wind down the company, subject to the FCA approving the cancellation of application, and concluding any other legal and regulatory obligations.

 

Subsequent to the year end a client of Lek Securities UK Limited served a Claim Form and Particulars of Claim on the company. The client’s claims broadly relate to the services the company provided under a written Custody, Brokerage and Business Services Agreement, the status of assets transferred by the client to the company under Trust and charges the company levied under the Services Agreement. The company filed and served its Defence and Counterclaim. The Director has sought legal advice and believes the company has strong merits in defending its case and has firm grounds to advance its counterclaim. Reference to the claims are detailed in notes 17 and 18 to the financial statements.

 

Development and performance

At the year end, the company had net assets of £686,502 (2022: £6,508,552).

 

Key performance indicators

The key performance indicators are gross profit of £864,758 (2022 : £14,737,990) and operating loss of (£651,503) (2022: £11,225,757 operating profit) as disclosed in the statutory profit and loss account.

Director's statement of compliance with their duty to promote the success of the Company

The director of the company has acted in a way that he consider's, in good faith, would most likely promote the success of the company for the benefit of its shareholders, employees and customers as a whole, and in doing so, the director has considered (amongst other matters):

 

On behalf of the board

Charles Lek
Director
16 January 2025
LEK SECURITIES UK LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -

The director presents his annual report and financial statements for the year ended 31 December 2023.

Principal activities

The principal activity of the company continued to be that of bespoke execution, custody, settlement and clearing services.

Results and dividends

The results for the year are set out on page 7.

Interim dividends amounting to £4,328,552 were paid on 1 February 2023.

Director

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

Charles Lek
Supplier payment policy

The company's current policy concerning the payment of trade creditors is to:
- settle the terms of payment with suppliers when agreeing the terms of each transaction,
- ensure that suppliers are made aware of the terms of payment by inclusion of the relevant terms in contracts,
- pay in accordance with the company's contractual and other legal obligations.

Financial instruments
Liquidity risk

The company manages its cash and borrowing requirements in order to maximise interest income and minimise interest expense, whilst ensuring the company has sufficient liquid resources to meet the operating needs of the business.

Foreign currency risk

The company’s principal foreign currency exposures arise from holding foreign currencies. Company policy permits but does not demand that these exposures may be hedged in order to fix the cost in sterling.

Credit risk

Investments of cash surpluses are made through banks and companies which must fulfil credit rating criteria approved by the Board.

Post reporting date events

Subsequent to the year end a client of Lek Securities UK Limited served a Claim Form and Particulars of Claim on the company. The client’s claims broadly relate to the services the company provided under a written Custody, Brokerage and Business Services Agreement, the status of assets transferred by the client to the company under Trust and charges the company levied under the Services Agreement. The company filed and served its Defence and Counterclaim. The Director has sought legal advice and believes the company has strong merits in defending its case and has firm grounds to advance its counterclaim. Reference to the claims are detailed in notes 17 and 18 to the financial statements.

 

Future developments

There are no matters to report.

Auditor

In accordance with the company's articles, a resolution proposing that Fisher, Sassoon & Marks be reappointed as auditor of the company will be put at a General Meeting.

LEK SECURITIES UK LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
Energy and carbon report

As the company has not consumed more than 40,000 kWh of energy in this reporting period, it qualifies as a low energy user under these regulations and is not required to report on its emissions, energy consumption or energy efficiency activities.

Statement of director's responsibilities

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

 

Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless he is 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 director is required to:

 

 

The director is 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. He is 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 each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually 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 auditor is aware of that information.

 

 

On behalf of the board
Charles Lek
Director
16 January 2025
LEK SECURITIES UK LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF LEK SECURITIES UK LIMITED
- 4 -
Opinion

We have audited the financial statements of Lek Securities UK Limited (the 'company') for the year ended 31 December 2023 which comprise the statement of comprehensive income, 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 Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the 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.

Emphasis of matter

We draw attention to Note 1.2 to the financial statements which explains that the director intends to liquidate the company and therefore does not consider it to be appropriate to adopt the going concern basis of accounting in preparing the financial statements. Accordingly the financial statements have been prepared on a basis other than going concern as described in Note 1.2.

 

Subsequent to the year end the company was served with a legal claim by a client of the company as detailed in notes 17 and 18 to the financial statements.

 

Our opinion is not modified in respect of these matters.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The director is 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.

Opinions on other matters prescribed by the Companies Act 2006

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

LEK SECURITIES UK LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF LEK SECURITIES UK LIMITED (CONTINUED)
- 5 -
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 director's report.

 

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

Responsibilities of director

As explained more fully in the director's responsibilities statement, the director is 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 director determines 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 director is 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 director either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.

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.

The extent to which 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.

 

 

LEK SECURITIES UK LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF LEK SECURITIES UK LIMITED (CONTINUED)
- 6 -

We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

To address the risk of fraud through management bias and override of controls, we:

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

 

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 through collusion.

 

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

This report is made solely to the 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.

Jonathan Marks
Senior Statutory Auditor
For and on behalf of Fisher, Sassoon & Marks
16 January 2025
Chartered Accountants
Statutory Auditor
43-45 Dorset Street
London
W1U 7NA
LEK SECURITIES UK LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 7 -
Continuing
Discontinued
31 December
Continuing
Discontinued
31 December
operations
operations
2023
operations
operations
2022
Notes
£
£
£
£
£
£
Turnover
3
-
1,045,414
1,045,414
-
21,365,514
21,365,514
Cost of sales
-
0
(180,656)
(180,656)
-
0
(6,627,524)
(6,627,524)
Gross profit
-
864,758
864,758
-
14,737,990
14,737,990
Administrative expenses
-
0
(1,516,261)
(1,516,261)
-
0
(3,512,233)
(3,512,233)
Operating (loss)/profit
4
-
(651,503)
(651,503)
-
11,225,757
11,225,757
Interest receivable and similar income
8
-
0
-
0
-
0
-
0
18,013
18,013
(Loss)/profit before taxation
-
0
(651,503)
(651,503)
-
0
11,243,770
11,243,770
Tax on (loss)/profit
9
-
0
112,763
112,763
-
0
(2,143,988)
(2,143,988)
(Loss)/profit for the financial year
-
0
(538,740)
(538,740)
-
0
9,099,782
9,099,782
LEK SECURITIES UK LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 8 -
2023
2022
Notes
£
£
£
£
Current assets
Debtors
13
1,242,899
357,328
Cash at bank and in hand
1,468,627
8,085,098
2,711,526
8,442,426
Creditors: amounts falling due within one year
15
(1,070,266)
(1,933,874)
Net current assets
1,641,260
6,508,552
Capital and reserves
Called up share capital
16
2,180,000
2,180,000
Profit and loss reserves
(538,740)
4,328,552
Total equity
1,641,260
6,508,552
The financial statements were approved and signed by the director and authorised for issue on 16 January 2025
Charles Lek
Director
Company registration number 06909016 (England and Wales)
LEK SECURITIES UK LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 January 2022
2,180,000
2,534,369
4,714,369
Year ended 31 December 2022:
Profit and total comprehensive income
-
9,099,782
9,099,782
Dividends
11
-
(7,305,599)
(7,305,599)
Balance at 31 December 2022
2,180,000
4,328,552
6,508,552
Year ended 31 December 2023:
Loss and total comprehensive income
-
(538,740)
(538,740)
Dividends
11
-
(4,328,552)
(4,328,552)
Balance at 31 December 2023
2,180,000
(538,740)
1,641,260
LEK SECURITIES UK LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash (absorbed by)/generated from operations
22
(2,254,903)
20,819,568
Income taxes paid
(33,016)
(5,454,036)
Net cash (outflow)/inflow from operating activities
(2,287,919)
15,365,532
Investing activities
Interest received
-
0
18,013
Net cash (used in)/generated from investing activities
-
18,013
Financing activities
Dividends paid
(4,328,552)
(7,305,599)
Net cash used in financing activities
(4,328,552)
(7,305,599)
Net (decrease)/increase in cash and cash equivalents
(6,616,471)
8,077,946
Cash and cash equivalents at beginning of year
8,085,098
7,152
Cash and cash equivalents at end of year
1,468,627
8,085,098
LEK SECURITIES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
1
Accounting policies
Company information

Lek Securities UK Limited is a private company limited by shares incorporated in England and Wales. The registered office is 288 Bishopsgate, London, EC2M 4QP.

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 £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

1.2
Going concern

In accordance with his responsibilities, the director has considered the appropriateness of the going concern basis for the preparation of the financial statements. It is the intention of the director to cease operations of the company albeit subject to no longer being authorised by the FCA and concluding the legal action against the company as described in note 17. As a consequence, the director has determined that the financial statements should be prepared on a basis other than that of a going concern.true

 

No material adjustments arose as a result of this change in preparation.

1.3
Turnover

Turnover represents amounts receivable for the provision of broking, settlement and custody services which are recognised on the date of settlement of the transaction.

1.4
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:

Fixtures, fittings & equipment
25% Straight Line Basis
Computer equipment
25% Straight Line Basis

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 profit or loss.

1.5
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.

LEK SECURITIES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 12 -
1.6
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.

 

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

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

Other financial assets

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

Impairment of financial assets

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

 

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

 

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

Derecognition of financial assets

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

Classification of financial liabilities

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

LEK SECURITIES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

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

 

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

Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.7
Equity instruments

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

1.8
Derivatives

Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to fair value at each reporting end date. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.

 

A derivative with a positive fair value is recognised as a financial asset, whereas a derivative with a negative fair value is recognised as a financial liability.

1.9
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.

LEK SECURITIES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
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.

1.10
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

 

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.

1.11
Retirement benefits

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

1.12
Foreign exchange

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

1.13

Assets held under trust

The Company acts as a trustee to money and assets held under relevant trust arrangements on behalf of clients whose funds/assets cannot be returned without approval from the Office of Financial Sanctions Implementation (OFSI). Such assets are not shown on the face of the balance sheet as the company is not beneficially entitled to thereto.

LEK SECURITIES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 15 -
2
Judgements and key sources of estimation uncertainty

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 considered to be relevant. Actual results may differ from these estimates.

 

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

 

The director does not consider there to be any critical judgements or key sources of estimation uncertainty involved in the preparation of the company's financial statements except as stated below.

Critical judgements

The following judgements (apart from those involving estimates) were exercised by the director when assessing amounts recognised in the financial statements.

Legal claim against the company

Subsequent to the year end a client of Lek Securities UK Limited served a Claim Form and Particulars of Claim on Lek UK. The client’s claims broadly relate to the services Lek UK provided under a written Custody, Brokerage and Business Services Agreement, the status of assets transferred by the client to Lek UK under Trust and charges Lek UK levied under the Services Agreement. Lek UK filed and served its Defence and Counterclaim. The Director has sought legal advice and believes the company has strong merits in defending its case and has firm grounds to advance its counterclaim.

3
Turnover and other revenue

An analysis of the company's turnover is as follows:

2023
2022
£
£
Turnover analysed by class of business
Gross commission
677,295
16,772,821
Fees direct
344,568
230,377
Client interest
11,083
4,246,256
Interest receivabe
12,468
116,060
1,045,414
21,365,514
2023
2022
£
£
Turnover analysed by geographical market
EU
1,045,414
21,365,514
2023
2022
£
£
Other revenue
Interest income
-
18,013
LEK SECURITIES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 16 -
4
Operating (loss)/profit
2023
2022
Operating (loss)/profit for the year is stated after charging/(crediting):
£
£
Exchange losses/(gains)
189,226
(390,900)

Exchange differences recognised in profit or loss during the year, except for those arising on financial instruments measured at fair value through profit or loss, amounted to £189,226 (2022 - £390,900).

5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
23,546
15,000
6
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2023
2022
Number
Number
2
4

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
289,694
2,490,088
Social security costs
11,484
54,589
Pension costs
6,500
6,799
307,678
2,551,476
7
Director's remuneration
2023
2022
£
£
Remuneration for qualifying services
160,000
2,100,966
Remuneration disclosed above include the following amounts paid to the highest paid director:
Remuneration for qualifying services
-
2,049,966
LEK SECURITIES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
8
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
-
0
17,743
Interest receivable from group companies
-
0
270
Total income
-
0
18,013
2023
2022
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
-
0
18,013
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
-
0
2,141,329
Adjustments in respect of prior periods
(112,763)
2,659
Total current tax
(112,763)
2,143,988

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

2023
2022
£
£
(Loss)/profit before taxation
(651,503)
11,243,770
Expected tax (credit)/charge based on the standard rate of corporation tax in the UK of 19.00% (2022: 19.00%)
(123,786)
2,136,316
Tax effect of expenses that are not deductible in determining taxable profit
11,023
5,013
Tax effect of income not taxable in determining taxable profit
-
0
2,659
Taxation (credit)/charge for the year
(112,763)
2,143,988
10
Discontinued operations

The company has ceased to undertake broking,settlement and custody services and applied to cancel its FCA authorisation. Accordingly all revenues and costs are classified as arising from discontinued operations.

LEK SECURITIES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
11
Dividends
2023
2022
£
£
Interim paid
4,328,552
7,305,599
12
Tangible fixed assets
Fixtures, fittings & equipment
Computer equipment
Total
£
£
£
Cost
At 1 January 2023 and 31 December 2023
3,300
9,948
13,248
Depreciation and impairment
At 1 January 2023 and 31 December 2023
3,300
9,948
13,248
Carrying amount
At 31 December 2023
-
0
-
0
-
0
At 31 December 2022
-
0
-
0
-
0
13
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors and trading assets
116,914
299,566
Corporation tax recoverable
112,763
-
0
Amount due from parent undertaking
954,758
-
0
Other debtors
6,770
6,770
Prepayments and accrued income
51,694
50,992
1,242,899
357,328

 

14
Financial instruments
2023
2022
£
£
Carrying amount of financial assets
Debt instruments measured at amortised cost
1,078,442
306,336
Carrying amount of financial liabilities
Measured at amortised cost
1,059,365
1,850,889
LEK SECURITIES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
15
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors and trading liabilities
25,818
845,222
Amounts due to fellow group undertakings
218
29,556
Corporation tax
-
0
33,016
Other taxation and social security
10,901
49,969
Other creditors
936,161
-
Accruals and deferred income
97,168
976,111
1,070,266
1,933,874
16
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary Shares of £1 each
2,180,000
2,180,000
2,180,000
2,180,000
17
Contingent liabilities

Subsequent to the year end a client of Lek Securities UK Limited served a Claim Form and Particulars of Claim on the company. The client’s claims broadly relate to the services the company provided under a written Custody, Brokerage and Business Services Agreement, the status of assets transferred by the client to the company under Trust and charges the company levied under the Services Agreement. The company filed and served its Defence and Counterclaim. The Director has sought legal advice and believes the company has strong merits in defending its case and has firm grounds to advance its counterclaim. Accordingly, the director has not made a provision in the financial statements.

18
Events after the reporting date

Subsequent to the year end a client of Lek Securities UK Limited served a Claim Form and Particulars of Claim on the company. The client’s claims broadly relate to the services the company provided under a written Custody, Brokerage and Business Services Agreement, the status of assets transferred by the client to the company under Trust and charges the company levied under the Services Agreement. The company filed and served its Defence and Counterclaim. The Director has sought legal advice and believes the company has strong merits in defending its case and has firm grounds to advance its counterclaim.

LEK SECURITIES UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
19
Related party transactions

The following amounts were outstanding at the reporting end date:

2023
2022
Amounts due to related parties
£
£
LEK Securities Corporation
218
29,556

 

2023
2022
Amounts due from related parties
£
£
LEK Holdings Limited
954,758
-

The amount owed by the parent company was interest free and unsecured. The balance represents monies distributed to the parent as a dividend on 1 February 2023 which exceeded the distributable reserves of the company ( as shown in the audited accounts for 2022).

21
Ultimate controlling party

The ultimate parent is Lek Holdings Limited by virtue of its shareholding in LEK Securities UK Limited.

The ultimate controlling party is Charles Lek by virtue of his shareholding in LEK Holdings Ltd.

22
Cash (absorbed by)/generated from operations
2023
2022
£
£
(Loss)/profit for the year after tax
(538,740)
9,099,782
Adjustments for:
Taxation (credited)/charged
(112,763)
2,143,988
Investment income
-
0
(18,013)
Movements in working capital:
(Increase)/decrease in debtors
(772,808)
32,226,582
Decrease in creditors
(830,592)
(22,632,771)
Cash (absorbed by)/generated from operations
(2,254,903)
20,819,568
23
Analysis of changes in net funds
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
8,085,098
(6,616,471)
1,468,627
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