Company Registration No. 06462818 (England and Wales)
LONDON WEALTH MANAGEMENT LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2021
LONDON WEALTH MANAGEMENT LIMITED
COMPANY INFORMATION
Directors
J P Hoban
B J Howland
E T Tudor
Secretary
J P Hoban
Company number
06462818
Registered office
Batchworth House
Batchworth Place
Church Street
Rickmansworth
Hertfordshire
WD3 1JE
Auditor
Mercer & Hole
Batchworth House
Batchworth Place
Church Street
Rickmansworth
Hertfordshire
WD3 1JE
Business address
6 Kingly Street
London
W1B 5PF
LONDON WEALTH MANAGEMENT LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Directors' responsibilities statement
5
Independent auditor's report
6 - 8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Statement of cash flows
12
Notes to the financial statements
13 - 21
LONDON WEALTH MANAGEMENT LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 JANUARY 2021
- 1 -
The directors present the strategic report for the year ended 31 January 2021.
Fair review of the business
The financial year ended 31 January 2021 has proved a good year for the business, resulting in a 10% increase in revenue taking total turnover over £2 million for the year. Client portfolios performed strongly against benchmark, remaining within their agreed asset allocated risk mandates, given challenging investment markets and political outlook. We maintain our commitment to face-to-face client meetings in order to regularly review objectives and underlying attitudes to investment risk, resulting in appropriate asset allocation and allowing us to deliver positive client outcomes. This was adapted to video meetings where required during the pandemic.
The year focussed on alleviating client worries on BREXIT and COVID-19, as well the implementation of the Senior Manager & Certification Regime Requirements.
As a BIPRU regulated firm, the company continues to be capitalised in excess of regulatory imposed minimum capital adequacy requirements.
Principal risks
Management continue to formally meet quarterly to regularly plan and control principal risks that affect the business, namely:
Uncertainties in the stock market continue, resulting in anticipated greater volatility in client portfolios, but management look to evaluate risks on an ongoing basis via our robust risk analysis of underlying portfolios.
Key performance indicators
Internal management accounts and cash-flow forecasts are reviewed on a monthly basis and are considered a sufficient and suitable indicator of our underlying business position and performance.
Future outlook
The company is potentially looking to a modest increase in client numbers that require our bespoke financial planning led discretionary investment services.
LONDON WEALTH MANAGEMENT LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2021
- 2 -
S172 statement
The directors take their duties and responsibilities for managing the company seriously and the directors have applied the requirements of section 172.
In considering the likely long-term consequences of any strategic decisions they make, the directors recognise their understanding of the business and the evolving environment in which the company operates is critical. Through their day-to-day involvement in the business, the directors are able to keep pace with the changes and challenges faced and can ensure this is incorporated into their strategic plans.
By providing a safe and secure working environment for employees, the directors are mindful that the company's employees are fundamental and core to the business and delivery of the Board's strategic plans. The success of the business depends on attracting, developing, retaining and motivating employees. Delivering the strategy also requires good relationships with suppliers, clients, governments and local communities and the directors work continuously to achieve this.
In order to maintain the company's reputation for high standards of business conduct the directors review and approve clear plans, policies and frameworks periodically, and regular compliance reviews so they can ensure that those high standards are maintained across all relationships, internally and externally. This is complemented by the way the directors monitor ongoing changes with governance standards and adapt the company's policies and procedures to reflect those that are relevant to the size and industry of the business.
Finally, the directors recognise their role is key through not just their words but their own actions in ensuring the desired culture is embedded in the values, attitudes and behaviours the company demonstrates through its external activities and stakeholder relationships.
J P Hoban
Director
11 March 2021
LONDON WEALTH MANAGEMENT LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 JANUARY 2021
- 3 -
The directors present their annual report and financial statements for the year ended 31 January 2021.
Principal activities
The principal activity of the company continued to be that of
provision of financial services.
Results and dividends
The results for the year are set out on page 9.
Ordinary dividends were paid amounting to £564,000. 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:
J P Hoban
B J Howland
E T Tudor
Research and development
London Wealth Management Limited have undertaken Research & Development
expenditure
in the year
relat
ing
to
essential
web based software which collates client information from other systems and presents this information in a client friendly report.
Other 'off the shelf' systems are unable to provide the bespoke requirements of London Wealth Management Limited, relating to servicing client portfolios and providing financial planning advice. This uniquely developed system, provides the evidence to both clients and the FCA that the company's obligations in this area are well met.
Auditor
The auditor, Mercer & Hole, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
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 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.
Other matters
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.
LONDON WEALTH MANAGEMENT LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2021
- 4 -
On behalf of the board
J P Hoban
Director
11 March 2021
LONDON WEALTH MANAGEMENT LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 JANUARY 2021
- 5 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the 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;
-
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.
LONDON WEALTH MANAGEMENT LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF LONDON WEALTH MANAGEMENT LIMITED
- 6 -
Opinion
We have audited the financial statements of London Wealth Management Limited (the 'company') for the year ended 31 January 2021 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 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 January 2021 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.
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' r
eport 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.
LONDON WEALTH MANAGEMENT LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF LONDON WEALTH MANAGEMENT LIMITED
- 7 -
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 identifie
d
material misstatements in the strategic report and the directors'
r
eport
.
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.
Responsibilities of directors
As explained more fully in the directors'
r
esponsibilities
s
tatement, 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.
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.
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
.
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
Based on our understanding of the company and industry, we identified that the principal risks of non-compliance with laws and regulations related to breaches of FCA regulations and health & safety regulations, and we considered the extent to which non-compliance may have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006.
We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements and the financial report (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate entries including journals to overstate revenue or understate expenditure, and management bias in accounting estimates.
LONDON WEALTH MANAGEMENT LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF LONDON WEALTH MANAGEMENT LIMITED
- 8 -
Audit procedures performed by the engagement team included:
-
discussions with management, including considerations of known or suspected instances of non-compliance with laws and regulations and fraud;
-
evaluation of the operating effectiveness of management's controls designed to prevent and detect irregularities;
-
review correspondence with the FCA for evidence of breaches;
-
review cash book transactions for evidence of client asset holding in breach of FCA permissions;
-
identifying and testing journal entries.
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 collusions.
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.
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.
Mark Cassidy FCA (Senior Statutory Auditor)
For and on behalf of Mercer & Hole
11 March 2021
Chartered Accountants
Statutory Auditor
Batchworth House
Batchworth Place
Church Street
Rickmansworth
Hertfordshire
WD3 1JE
LONDON WEALTH MANAGEMENT LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 JANUARY 2021
- 9 -
2021
2020
Notes
£
£
Turnover
2
2,028,848
1,844,402
Administrative expenses
(1,142,916)
(990,317)
Operating profit
3
885,932
854,085
Interest receivable and similar income
6
1,500
2,029
Profit before taxation
887,432
856,114
Tax on profit
7
(170,483)
(161,098)
Profit for the financial year
716,949
695,016
The Statement of Comprehensive Income has been prepared on the basis that all operations are continuing operations.
LONDON WEALTH MANAGEMENT LIMITED
BALANCE SHEET
AS AT
31 JANUARY 2021
31 January 2021
- 10 -
2021
2020
Notes
£
£
£
£
Fixed assets
Tangible assets
9
52,926
59,695
Current assets
Debtors
10
35,957
41,525
Cash at bank and in hand
1,019,112
829,415
1,055,069
870,940
Creditors: amounts falling due within one year
11
(311,131)
(286,720)
Net current assets
743,938
584,220
Total assets less current liabilities
796,864
643,915
Capital and reserves
Called up share capital
13
150,000
150,000
Profit and loss reserves
646,864
493,915
Total equity
796,864
643,915
The financial statements were approved by the board of directors and authorised for issue on 11 March 2021 and are signed on its behalf by:
J P Hoban
B J Howland
Director
Director
Company Registration No. 06462818
LONDON WEALTH MANAGEMENT LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JANUARY 2021
- 11 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 February 2019
150,000
362,899
512,899
Year ended 31 January 2020:
Profit and total comprehensive income for the year
-
695,016
695,016
Dividends
8
-
(564,000)
(564,000)
Balance at 31 January 2020
150,000
493,915
643,915
Year ended 31 January 2021:
Profit and total comprehensive income for the year
-
716,949
716,949
Dividends
8
-
(564,000)
(564,000)
Balance at 31 January 2021
150,000
646,864
796,864
LONDON WEALTH MANAGEMENT LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 JANUARY 2021
- 12 -
2021
2020
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
16
920,266
896,102
Income taxes paid
(159,341)
(164,959)
Net cash inflow from operating activities
760,925
731,143
Investing activities
Purchase of tangible fixed assets
(8,385)
(63,937)
Issue of other loans
(343)
659
Interest received
1,500
2,029
Net cash used in investing activities
(7,228)
(61,249)
Financing activities
Dividends paid
(564,000)
(564,000)
Net cash used in financing activities
(564,000)
(564,000)
Net increase in cash and cash equivalents
189,697
105,894
Cash and cash equivalents at beginning of year
829,415
723,521
Cash and cash equivalents at end of year
1,019,112
829,415
LONDON WEALTH MANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2021
- 13 -
1
Accounting policies
Company information
London Wealth Management Limited is a
private
company
limited by shares
incorporated in England and Wales.
The registered office is
Batchworth House, Batchworth Place, Church Street, Rickmansworth, Hertfordshire, WD3 1JE.
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 a
mounts
in these financial statements are
rounded to the nearest £.
The financial statements have been prepared under the principal accounting policies adopted as set out below. These policies have been consistently applied to all years presented.
1.2
Going concern
COVID-19
true
continues to dominate
the world social and economic climate. The
operates
in an environment of uncertainty associated with the current situation. The directors are continuously monitoring the situation and are confident that they have the resources to deal with the changing circumstances for the foreseeable future.
The accounts are therefore prepared on a going concern basis.
1.3
Turnover
Turnover represents
invoiced sales of financial services, excluding value added tax
.
1.4
Tangible fixed assets
Tangible fixed assets
are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:
Leasehold improvements
Over the five year lease
Fixtures, fittings & equipment
25% on cost
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
Impairment of fixed assets
At each reporting
period
end date, the
company
reviews the carrying amounts of its tangible
assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). 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.
LONDON WEALTH MANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2021
1
Accounting policies
(Continued)
- 14 -
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.
1.6
Cash and cash equivalents
Cash at bank and in hand
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.
1.7
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ 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.
LONDON WEALTH MANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2021
1
Accounting policies
(Continued)
- 15 -
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.
Basic financial liabilities
Basic financial liabilities, including creditors, 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
paymen
ts 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. A
m
ounts 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
s
ubsequently 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 th
r
ough 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.
1.8
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.
1.9
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
LONDON WEALTH MANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2021
1
Accounting policies
(Continued)
- 16 -
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.
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
All pension costs relate to contributions the company makes into personal pension schemes. Contributions payable are charged to the profit and loss account in the period to which they relate.
1.12
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 lease
s
asset are consumed.
1.13
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.
LONDON WEALTH MANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2021
- 17 -
2
Turnover and other revenue
An analysis of the company's turnover is as follows:
2021
2020
£
£
Turnover analysed by class of business
Financial services
2,028,848
1,844,402
2021
2020
£
£
Other significant revenue
Interest income
1,500
2,029
3
Operating profit
2021
2020
Operating profit for the year is stated after charging:
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
7,250
7,300
Depreciation of owned tangible fixed assets
15,154
7,684
Operating lease charges
72,618
71,965
4
Auditor's remuneration
2021
2020
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
7,250
7,300
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2021
2020
Number
Number
Directors
3
3
Employees
8
8
Total
11
11
LONDON WEALTH MANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2021
5
Employees
(Continued)
- 18 -
Their aggregate remuneration comprised:
2021
2020
£
£
Wages and salaries
443,290
416,413
Social security costs
45,210
42,630
Pension costs
192,613
56,175
681,113
515,218
6
Interest receivable and similar income
2021
2020
£
£
Interest income
Interest on bank deposits
1,500
2,029
Investment income includes the following:
Interest on financial assets not measured at fair value through profit or loss
1,500
2,029
7
Taxation
2021
2020
£
£
Current tax
UK corporation tax on profits for the current period
172,240
161,098
Adjustments in respect of prior periods
(1,757)
Total current tax
170,483
161,098
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2021
2020
£
£
Profit before taxation
887,432
856,114
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2020: 19.00%)
168,612
162,662
Tax effect of expenses that are not deductible in determining taxable profit
2,342
6,918
Change in unrecognised deferred tax assets
1,286
(8,482)
Under/(over) provided in prior years
(1,757)
Taxation charge for the year
170,483
161,098
LONDON WEALTH MANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2021
- 19 -
8
Dividends
2021
2020
£
£
Interim paid
564,000
564,000
9
Tangible fixed assets
Leasehold improvements
Fixtures, fittings & equipment
Total
£
£
£
Cost
At 1 February 2020
51,960
46,380
98,340
Additions
8,385
8,385
At 31 January 2021
51,960
54,765
106,725
Depreciation and impairment
At 1 February 2020
4,612
34,033
38,645
Depreciation charged in the year
10,392
4,762
15,154
At 31 January 2021
15,004
38,795
53,799
Carrying amount
At 31 January 2021
36,956
15,970
52,926
At 31 January 2020
47,348
12,347
59,695
10
Debtors
2021
2020
Amounts falling due within one year:
£
£
Trade debtors
180
67
Other debtors
11,618
15,159
Prepayments and accrued income
24,159
26,299
35,957
41,525
LONDON WEALTH MANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2021
- 20 -
11
Creditors: amounts falling due within one year
2021
2020
£
£
Trade creditors
19,455
15,529
Corporation tax
172,240
161,098
Other taxation and social security
92,697
80,013
Other creditors
876
3,113
Accruals and deferred income
25,863
26,967
311,131
286,720
12
Retirement benefit schemes
2021
2020
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
192,613
56,175
The company operates a
defined contribution
pension scheme for all qualifying employees.
The assets of the scheme are held separately from those of the company in an independently administered fund.
13
Share capital
2021
2020
2021
2020
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary A shares of £1 each
136,500
136,500
136,500
136,500
Ordinary B shares of £1 each
13,500
13,500
13,500
13,500
150,000
150,000
150,000
150,000
14
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:
2021
2020
£
£
Within one year
70,000
70,000
Between two and five years
186,667
256,667
256,667
326,667
LONDON WEALTH MANAGEMENT LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2021
- 21 -
15
Directors' transactions
Interest free loans have been granted by the company to its directors as follows:
Description
% Rate
Opening balance
Amounts advanced
Amounts repaid
Closing balance
£
£
£
£
Interest Free Director's Loan
-
1,080
8,596
(8,547)
1,129
Interest Free Director's Loan
-
879
8,540
(8,859)
560
Interest Free Director's Loan
-
1,512
8,543
(7,930)
2,125
3,471
25,679
(25,336)
3,814
The balances outstanding at 31 January 2021 were repaid shortly after the year end.
16
Cash generated from operations
2021
2020
£
£
Profit for the year after tax
716,949
695,016
Adjustments for:
Taxation charged
170,483
161,098
Investment income
(1,500)
(2,029)
Depreciation and impairment of tangible fixed assets
15,154
7,684
Movements in working capital:
Decrease in debtors
5,911
4,400
Increase in creditors
13,269
29,933
Cash generated from operations
920,266
896,102
17
Analysis of changes in net funds
1 February 2020
Cash flows
31 January 2021
£
£
£
Cash at bank and in hand
829,415
189,697
1,019,112
2021-01-31
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