Company registration number 06058014 (England and Wales)
ION ASSET ARCHITECTURE UK LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
ION ASSET ARCHITECTURE UK LIMITED
COMPANY INFORMATION
Director
Dennis Lohfert
Company number
06058014
Registered office
43-45 Dorset Street
London
W1U 7NA
Auditor
Fisher, Sassoon & Marks
43-45 Dorset Street
London
W1U 7NA
ION ASSET ARCHITECTURE UK LIMITED
CONTENTS
Page
Strategic report
1 - 3
Director's report
4 - 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 - 23
ION ASSET ARCHITECTURE UK LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The director presents the strategic report for the year ended 31 December 2023.
Review of the business
The results for the year are acceptable and reflect the uncertain trading conditions experienced by the industry.
The board of directors have formalised a strategy that is expected to improve the performance of the company for the subsequent periods.
Principal risks and uncertainties
As a service provider the directors consider that the key financial risk exposures faced by the company relate to credit risk and the need to maintain sufficient liquidity to satisfy regulatory capital requirements and working capital needs. The company does not take trade positions which expose it to material price risk nor does it have a material exposure to foreign exchange movements.
The company's financial risk management objectives are therefore to minimise the key financial risks through having clearly defined terms of business with counter parties and stringent credit control over transactions with them and regular monitoring of cash flow and management accounts to ensure regulatory capital requirements are not breached and the company maintains adequate working capital.
Development and performance
The Company had net assets of £1,271,419 (2022: £1,166,223) which included £531,616 (2022: £504,986) of cash balances.
Key performance indicators
Key performance indicators are turnover £4,670,000 (2022: £3,538,873) an increase of 32% and net assets of £1,271,419 (2022: £1,166,223) an increase of 9%,The increase in net assets was due to the increase in retained earnings.
ION ASSET ARCHITECTURE UK LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Directors statement of compliance with duty to promote the success of the company
The directors of the Company have acted in the way they consider, in good faith, would most likely promote the success of the company for the benefit of its shareholders, employees and customers as a whole. In doing so the directors have regarded (amongst other matters):
The Director works closely with Compliance and undergo regular update to ensure that they act in the best interest of the business and are following conduct rules consistently. The Director is in regular dialogue with their ultimate parent company and shareholders to assess and align the strategic direction and activities. The Director sees material value in aligning with strategic direction where they are satisfied that this does not materially conflict with the legal or regulatory obligations.
The Director meets regularly and is collectively responsible for ensuring that the Company's operations are aligned to the strategy, regulatory compliance requirements and good governance practices, including how the Company will act fairly with all stakeholders.
The Director and Senior Managers, who hold a key role, are held accountable and assume the below additional responsibilities: ·
The Director is responsible for the setting and implementation of the Risk Management Framework (RMF) that strives for a robust, consistent and disciplined management of risk with the aim of facilitating the achievement of the Company’s corporate vision and strategic objectives.
Take reasonable steps to ensure the business of the firm is controlled effectively. The Director ensures an audit trail is available for key decisions taken and any decisions made are in the best interests of clients. Information is only stored for the appropriate length of time and technological system updates are given a high priority to ensure accuracy and security of data is not compromised.
Take reasonable steps to ensure the business of the firm complies with the relevant requirements and standards of the regulatory system. The Director constantly reviews and monitors key areas of the business and seeks advice from internal and external consultants when necessary.
Take reasonable steps to ensure any delegation of responsibilities is an appropriate person and oversee the discharge of the delegated responsibility effectively. The Director pushes for professional growth and development for all employees and encourages staff to think independently, without heavily relying on senior management where possible. The Director is regularly updated on employee performance and ensure this is reflected in their remuneration.
The Director always considers the views and interests of stakeholders and addresses the requirements above as follows;
Long Term Considerations
The Director understands that the future success of the business is built around long-term strategies and potential consequences need to be recognised alongside any risks. Any risks are required to be managed effectively, with processes in place to handle immediate term and long-term implications, allowing the business to continue to operate.
Company Employees
The Director recognises that the employees are the Company's greatest asset. We are therefore committed to investing in our employees' personal and professional development. We offer a selection of rewards, benefits and training to ensure our employees are recognised for their efforts whilst ensuring their health and wellbeing are maintained.
Business Relationships
Conducting business with integrity, respect and diligence is essential for all our stakeholders. The Director has put in place specialised teams to ensure conduct rules are followed during daily business interactions, whilst complying with all relevant regulatory standards. We constantly monitor employee performance through meetings with managers to ensure a reliable and accurate service is being provided to stakeholders.
ION ASSET ARCHITECTURE UK LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
Regulatory Relationships
The Company is authorised and regulated in the UK by the FCA, who supervise the Company through periodic and ad-hoc reporting requirements. This ensures the financial performance, position and capital adequacy of the Company is within the requirements set out by the FCA. Through a dedicated Compliance team, the Director has adapted the business to ensure strong compliance with the regulatory environment.
The Company's capital adequacy position is managed and monitored in accordance with FCA's Investment Firm Prudential Regime (IFPR) from 1st January 2022. (It previously monitored its prudential requirements in accordance with the FCA's BIPRU rules and EU Capital Requirement Directive Ill.) The Company has established processes and controls in place to monitor and manage its capital adequacy position in accordance with the FCA's Internal Capital and Risk Assessment (ICARA) process (previously the ICAAP). This ensures the Company maintains a strong capital base to support the development of its business, it can continue to operate as a going concern and complies with relevant FCA rules and guidance.
Suppliers and Customers
Suppliers are key to ensuring the Company meets the high standard of conduct which is expected by stakeholders. Active supplier management is maintained and reviewed to aid the best goods and services being delivered. Extensive due diligence checks are carried out on potential customers and once onboarded, the Company works closely with customers to provide the highest level of service. The Director remains dedicated to forging and preserving good relationships with customers, as this is crucial to the Company's success.
Community and Environment
We support charities and welfare initiatives across our global community, including those run and close to our employees. The Company understands that small changes can make a big difference to our immediate environment. Therefore, we have implemented environmental practices to reduce our overall carbon footprint such as recycling. The company is committed to ensuring there is transparency in our own business and in our approach to tackling modern slavery throughout our business under the Modern Slavery Act 2015. We expect the same high standards from all our contractors, suppliers and other business partners.
Shareholders
Regular communication is maintained with shareholders through direct engagement by the Director in the form of meetings and emails. The shareholders are involved in all matters of strategic importance, including financial performance, risks and opportunities.
Dennis Lohfert
Director
10 April 2024
ION ASSET ARCHITECTURE UK LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
The director presents his annual report and financial statements for the year ended 31 December 2023.
Principal activities
The principal activity of the company relates to the provision of consultancy and hedge fund advisory services to the parent company and other funds.
Results and dividends
The results for the year are set out on page 9.
No ordinary dividends were paid. The director does not recommend payment of a final dividend.
Director
The director who held office during the year and up to the date of signature of the financial statements was as follows:
Dennis Lohfert
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; and
- pay in accordance with the company's contractual and other legal obligations.
Financial instruments
Treasury operations and Financial instruments
The company operates a treasury function which is responsible for managing the liquidity, interest and foreign currency risks associated with the company’s activities.
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.
Interest rate risk
The company does not use interest rate derivatives to manage its exposure to changes in interest rates.
Foreign currency risk
The company’s principal foreign currency exposures arise from making foreign currency transactions. The company does not hedge in order to fix the cost in sterling.
Credit risk
Investments of cash surpluses are made through a bank and companies which must fulfil credit rating criteria approved by the Board.
All customers who wish to trade on credit terms are subject to credit verification procedures. Trade debtors are monitored on an ongoing basis and provision is made for doubtful debts where necessary.
Post reporting date events
There are no matters to report.
Future developments
The directors are confident about the Company's progress and believe the company is well placed to make further progress during the coming year.
ION ASSET ARCHITECTURE UK LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 5 -
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.
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:
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 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
Dennis Lohfert
Director
10 April 2024
ION ASSET ARCHITECTURE UK LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF ION ASSET ARCHITECTURE UK LIMITED
- 6 -
Opinion
We have audited the financial statements of Ion Asset Architecture 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:
give a true and fair view of the state of the company's affairs as at 31 December 2023 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the director's 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 director 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 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:
the information given in the strategic report and the director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the director's report have been prepared in accordance with applicable legal requirements.
ION ASSET ARCHITECTURE UK LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ION ASSET ARCHITECTURE UK 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 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:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of 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.
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.
the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
we identified the laws and regulations applicable to the company through discussions with directors and other management;
we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Financial Conduct Authority (FCA), Companies Act 2006, taxation legislation, anti-bribery, anti-money-laundering, employment legislation;
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.
ION ASSET ARCHITECTURE UK LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ION ASSET ARCHITECTURE UK LIMITED
- 8 -
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;
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations; and
understanding the design of the company’s remuneration policies.
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 as set out in note 2 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 including the FCA and reviewing the company’s compliance monitoring procedures and findings.
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.
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
10 April 2024
Chartered Accountants
Statutory Auditor
43-45 Dorset Street
London
W1U 7NA
ION ASSET ARCHITECTURE UK LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
2023
2022
Notes
£
£
Turnover
3
4,670,000
3,538,873
Administrative expenses
(4,546,326)
(3,604,558)
Operating profit/(loss)
4
123,674
(65,685)
Interest receivable and similar income
7
9,388
3,513
Profit/(loss) before taxation
133,062
(62,172)
Tax on profit/(loss)
8
(27,866)
7,439
Profit/(loss) for the financial year
105,196
(54,733)
The profit and loss account has been prepared on the basis that all operations are continuing operations.
ION ASSET ARCHITECTURE UK LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
9
40,032
29,270
Investments
10
8,486
8,486
48,518
37,756
Current assets
Debtors
11
1,603,880
1,356,030
Cash at bank and in hand
531,616
504,986
2,135,496
1,861,016
Creditors: amounts falling due within one year
12
(912,595)
(732,549)
Net current assets
1,222,901
1,128,467
Net assets
1,271,419
1,166,223
Capital and reserves
Called up share capital
14
550,000
550,000
Profit and loss reserves
15
721,419
616,223
Total equity
1,271,419
1,166,223
The financial statements were approved and signed by the director and authorised for issue on 10 April 2024
Dennis Lohfert
Director
Company registration number 06058014 (England and Wales)
ION ASSET ARCHITECTURE UK LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 January 2022
550,000
670,956
1,220,956
Year ended 31 December 2022:
Loss and total comprehensive income
-
(54,733)
(54,733)
Balance at 31 December 2022
550,000
616,223
1,166,223
Year ended 31 December 2023:
Profit and total comprehensive income
-
105,196
105,196
Balance at 31 December 2023
550,000
721,419
1,271,419
ION ASSET ARCHITECTURE UK LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
19
48,115
35,110
Income taxes paid
(133,111)
Net cash inflow/(outflow) from operating activities
48,115
(98,001)
Investing activities
Purchase of tangible fixed assets
(30,873)
(21,992)
Interest received
9,388
3,513
Net cash used in investing activities
(21,485)
(18,479)
Net increase/(decrease) in cash and cash equivalents
26,630
(116,480)
Cash and cash equivalents at beginning of year
504,986
621,466
Cash and cash equivalents at end of year
531,616
504,986
ION ASSET ARCHITECTURE UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 13 -
1
Accounting policies
Company information
Ion Asset Architecture UK Limited is a private company limited by shares incorporated in England and Wales. The registered office is 43-45 Dorset Street, London, W1U 7NA.
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
Atruet the time of approving the financial statements, the director has a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the director continues to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover represents fees receivable for the provision of research consultancy and hedge fund advisory services as well as performance fees from funds under Ion Asset Architecture UK Limited's management.
Turnover is recognised at the fair value of the consideration received or receivable services provided in the normal course of business, and is shown net of VAT and other sales related taxes.
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
3 Years Straight Line
Computer equipment
3 Years Straight Line
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.5
Fixed asset investments
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
ION ASSET ARCHITECTURE UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Entities in which the company has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.
1.6
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, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.7
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.8
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.
ION ASSET ARCHITECTURE UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
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.
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.
ION ASSET ARCHITECTURE UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
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.
1.9
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.
1.10
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.
1.11
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.
ION ASSET ARCHITECTURE UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 17 -
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.
1.12
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.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.14
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
2
Judgements and key sources of estimation uncertainty
In the application of the 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 directors do not consider there to be any critical judgements or key sources of estimation uncertainty involved in the preparation of the company's financial statements.
ION ASSET ARCHITECTURE UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2023
2022
£
£
Turnover analysed by class of business
Fees
4,670,000
3,538,873
2023
2022
£
£
Turnover analysed by geographical market
U.K.
4,670,000
3,538,873
2023
2022
£
£
Other revenue
Interest income
9,388
3,513
4
Operating profit/(loss)
2023
2022
Operating profit/(loss) for the year is stated after charging/(crediting):
£
£
Exchange losses/(gains)
4
(398)
Fees payable to the company's auditors for the audit of the company's financial statements
10,000
6,750
Depreciation of owned tangible fixed assets
20,111
24,099
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Employees
40
28
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
2,923,724
2,158,815
Social security costs
352,736
266,875
Pension costs
269,808
187,993
3,546,268
2,613,683
ION ASSET ARCHITECTURE UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
6
Director's remuneration
2023
2022
£
£
Remuneration for qualifying services
240,000
215,000
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
6,306
2,214
Other interest income
3,082
1,299
Total income
9,388
3,513
2023
2022
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
6,306
2,214
8
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
27,866
Adjustments in respect of prior periods
(7,439)
Total current tax
27,866
(7,439)
ION ASSET ARCHITECTURE UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
8
Taxation
(Continued)
- 20 -
The actual charge/(credit) for the year can be reconciled to the expected charge/(credit) for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Profit/(loss) before taxation
133,062
(62,172)
Expected tax charge/(credit) based on the standard rate of corporation tax in the UK of 25.00% (2022: 19.00%)
33,266
(11,813)
Unutilised tax losses carried forward
681
Effect of change in corporation tax rate
(1,970)
Permanent capital allowances in excess of depreciation
(8,160)
(886)
Depreciation on assets not qualifying for tax allowances
4,730
4,579
Taxation charge/(credit) for the year
27,866
(7,439)
9
Tangible fixed assets
Fixtures, fittings & equipment
Computer equipment
Total
£
£
£
Cost
At 1 January 2023
26,512
265,117
291,629
Additions
1,797
29,076
30,873
At 31 December 2023
28,309
294,193
322,502
Depreciation and impairment
At 1 January 2023
24,670
237,689
262,359
Depreciation charged in the year
1,736
18,375
20,111
At 31 December 2023
26,406
256,064
282,470
Carrying amount
At 31 December 2023
1,903
38,129
40,032
At 31 December 2022
1,842
27,428
29,270
10
Fixed asset investments
2023
2022
£
£
Other investments
8,486
8,486
ION ASSET ARCHITECTURE UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
11
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
1,253,968
1,139,967
Corporation tax recoverable
8,120
8,120
Other debtors
222,257
128,720
Prepayments and accrued income
119,535
79,223
1,603,880
1,356,030
Other debtors includes a rent deposit in the sum of £101,081 (2022: £47,144) assigned to the landlord under a rent deposit agreement.
12
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
73,378
60,304
Corporation tax
27,866
Other taxation and social security
498,170
363,323
Other creditors
31,702
31,859
Accruals and deferred income
281,479
277,063
912,595
732,549
13
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
269,808
187,993
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.
14
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary Shares of £1 each
550,000
550,000
550,000
550,000
ION ASSET ARCHITECTURE UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
15
Profit and loss reserves
2023
2022
£
£
At the beginning of the year
616,223
670,956
Profit/(loss) for the year
105,196
(54,733)
At the end of the year
721,419
616,223
16
Related party transactions
Remuneration of key management personnel
The remuneration of key management personnel is as follows.
2023
2022
£
£
Aggregate compensation
240,000
215,000
During the year, the company earned fees amounting to £4,670,000 (2022: £3,538,875) from Hobarton Limited under a formal Service-Level Agreement (SLA). Hobarton Limited is a company registered in the Isle of Man. This company is a related party by virtue of it being owned by a family relative of J Wilson, a 50% shareholder in the parent entity. At the year end, the Company was owed an amount of £1,254,000 (2022: £1,140,000) by Hobarton Limited representing research, development and performance fees due.
17
Events after the reporting date
There are no matters to report.
18
Ultimate controlling party
The ultimate parent entity is Ion Asset Architecture Limited, an entity registered at P.O. Box 3483 Road Town, Tortola, VG1110, British Virgin Islands.
ION ASSET ARCHITECTURE UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
19
Cash generated from operations
2023
2022
£
£
Profit/(loss) for the year after tax
105,196
(54,733)
Adjustments for:
Taxation charged/(credited)
27,866
(7,439)
Investment income
(9,388)
(3,513)
Depreciation and impairment of tangible fixed assets
20,111
24,099
Movements in working capital:
Increase in debtors
(247,850)
(296,314)
Increase in creditors
152,180
373,010
Cash generated from operations
48,115
35,110
20
Analysis of changes in net funds
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
504,986
26,630
531,616
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