Company registration number 12456947 (England and Wales)
LONDON BONDS 2 LTD
PREVIOUSLY NAMED 'LONDON INVESTMENT BONDS 2 PLC'
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 29 APRIL 2023
LONDON BONDS 2 LTD
PREVIOUSLY NAMED 'LONDON INVESTMENT BONDS 2 PLC'
COMPANY INFORMATION
Director
Mr Y Singh
Secretary
SGH Company Secretaries Limited
Company number
12456947
Registered office
6th Floor
60 Gracechurch Street
London
EC3V OHR
Auditor
Simpson Wreford LLP
Wellesley House
Duke of Wellington Avenue
Royal Arsenal
London
SE18 6SS
LONDON BONDS 2 LTD
PREVIOUSLY NAMED 'LONDON INVESTMENT BONDS 2 PLC'
CONTENTS
Page
Strategic report
1 - 2
Director's report
3 - 4
Director's responsibilities statement
5
Independent auditor report
6 - 9
Profit and loss account
10
Statement of comprehensive income
11
Balance sheet
12
Statement of changes in equity
13
Statement of cash flows
14
Notes to the financial statements
15 - 23
LONDON BONDS 2 LTD
PREVIOUSLY NAMED 'LONDON INVESTMENT BONDS 2 PLC'
STRATEGIC REPORT
FOR THE YEAR ENDED 29 APRIL 2023
- 1 -
The director presents the strategic report for the year ended 29 April 2023.
Review of the business
London Bonds 2 Ltd was incorporated in February 2020. The principal activity of the company is that of securing investment by issuing loan notes and using those funds to buy and refurbish properties and then either sell them for a profit or retain them to achieve rental income and long-term capital growth. The Company aims to build up strong and loyal relations with core clients, clearly understand their business needs and be flexible to develop unique solutions to satisfy their needs and expectations in timely manner. The focus of the business remains to achieve the right balance between the needs and expectations of its customers, shareholders and other stakeholders, by controlling costs and managing cash efficiently while making sufficient profits to support growth plans.
Principal risks and uncertainties
The directors identified several risks which may affect the Company's ability to deliver its strategic goals. The list of such identified risks is given below.
The company seeks to minimise its exposure to external financial risks. The Company is exposed to various financial risks, including currency exchange rate fluctuations as the company operates internationally. Another major risk of adverse AML deficiencies in operations is adequately mitigated by comprehensive measures including an external audit which the Company has undergone successfully. In order to properly mitigate operational risks, company has a combination of various controls in place, both internal and external, aimed at the elimination of possible threats to operations. Company directors manage these risks and have a reasonable expectation that company maintains adequate resources to minimise the negative impact on its financials.
Regulatory and Compliance Risk
The company accepts customers from different countries and faces some uncertainty in regard to changing regulatory requirements in those countries. As part of its legal and regulatory compliance, the company faces the challenge of reacting and quickly implementing different legal and regulatory changes. The company and its clients must comply with all applicable money-laundering rules and legislation.
The company as a whole has a risk appetite set down, documented and agreed by the board. To ensure that this appetite is adhered to in terms of customer risk, the company is responsible for assessing each area of the business to ensure that the AML policies are appropriate to mitigate any risk posed by, but not limited to, the following: new customers, new jurisdictions, new services, existing customers, existing jurisdictions, existing services. All of the company's clients undergo rigorous KYC processes in line with regulatory requirements.
Liquidity Risk
The company does not consider it has a high level of liquidity risk in view of the level of capitalisation required and the policy of the Directors not to take on obligations unless there is a source of finance to satisfy those obligations.
Foreign Currency Risk
The company's principal foreign currency exposures arise from trading with overseas clients.
Section 172 statement - promting the success of the business
Customers
Our customers are the reason we exist. They have near limitless choice, so it is essential to our future that we can consistently and continuously design and offer attractive and high quality services to new and existing customers at an accessible price. In doing so, we build our brand value and loyalty.
Regulators
We seek to enjoy a constructive and cooperative relationship with the bodies that authorise and regulate our business activities. This helps us maintain a reputation for high standards of business conduct. They expect us to comply with applicable laws and regulations.
Communities and the environmnet
Communities and the wider public expect us to act as a responsible company and neighbour, and to minimise any adverse impact we might have on local communities and the environment.
LONDON BONDS 2 LTD
PREVIOUSLY NAMED 'LONDON INVESTMENT BONDS 2 PLC'
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 29 APRIL 2023
- 2 -
Investors
We rely on our shareholder as essential sources of capital to further our business objectives. They rely on us to protect and manage their investments in a responsible and sustainable way that generates value for them.
Mr Y Singh
Director
29 April 2024
LONDON BONDS 2 LTD
PREVIOUSLY NAMED 'LONDON INVESTMENT BONDS 2 PLC'
DIRECTOR'S REPORT
FOR THE YEAR ENDED 29 APRIL 2023
- 3 -
The director presents his annual report and financial statements for the year ended 29 April 2023.
Principal activities
The principal activity of the company continued to be that of securing investment by issuing loan notes and using those funds to either buy and refurbish properties to sell at profit or buy properties to be held for investment income and growth.
Results and dividends
The results for the year are set out on page 10.
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:
Mr C Lynn
(Resigned 29 April 2023)
Mr Y Singh
Auditor
The auditor, Simpson Wreford LLP, 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.
Strategic report
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of:
i) Review of the business
ii) Risk and uncertainty
iii) Analysis of development and performance
iv) Future developments
v) Key Performance Indicators
vi) Non Key Performance Indicators
vii) Additional information.
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.
Change of name
The company simultaneously re-registered its articles of association on 15 August 2022 in light of reverting to a private Limited company whilst also changing the name to London Bonds 2 Ltd. The company was previously known as London Investment Bonds 2 Plc.
LONDON BONDS 2 LTD
PREVIOUSLY NAMED 'LONDON INVESTMENT BONDS 2 PLC'
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 29 APRIL 2023
- 4 -
On behalf of the board
Mr Y Singh
Director
29 April 2024
LONDON BONDS 2 LTD
PREVIOUSLY NAMED 'LONDON INVESTMENT BONDS 2 PLC'
DIRECTOR'S RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 29 APRIL 2023
- 5 -
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.
LONDON BONDS 2 LTD
PREVIOUSLY NAMED 'LONDON INVESTMENT BONDS 2 PLC'
INDEPENDENT AUDITOR REPORT
TO THE MEMBER OF LONDON BONDS 2 LTD
- 6 -
Opinion
We have audited the financial statements of London Bonds 2 Ltd (the 'company') for the year ended 29 April 2023 which comprise the profit and loss account, 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 29 April 2023 and of its loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
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 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.
We draw attention to Note 1 to the financial statements which explains that the directors of the company believe the company has fulfilled its objectives in developing the final property held by the business. Once the final property has been sold and all investors have been repaid, the directors intend to liquidate the company in 2024. The directors therefore do 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.
Our opinion is not modified in respect of this matter.
Material uncertainty relating to going concern
We draw attention to profit and loss account in the financial statements, which indicates that the company incurred a net loss of £489,370 during the year ended 29 April 2023 (2022 - loss of £618,502)
As stated in Note 1, the directors intend to liquidate the company once it has fulfilled its purpose and the final property is sold. These accounts are not prepared on the going concern basis. Our opinion is not modified in respect of this matter.
In auditing the financial statements, we have concluded that the directors' use not applying going concern in respect of accounting in the preparation of the financial statements, is appropriate.
Our responsibilities and the responsibilities of the director with respect to going concern are described in the relevant sections of this report.
LONDON BONDS 2 LTD
PREVIOUSLY NAMED 'LONDON INVESTMENT BONDS 2 PLC'
INDEPENDENT AUDITOR REPORT
TO THE MEMBER OF LONDON BONDS 2 LTD (CONTINUED)
- 7 -
The other information comprises the information included in the annual report other than the financial statements and our auditor 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.
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 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 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 our procedures are capable of detecting irregularities, including fraud, is detailed below.
LONDON BONDS 2 LTD
PREVIOUSLY NAMED 'LONDON INVESTMENT BONDS 2 PLC'
INDEPENDENT AUDITOR REPORT
TO THE MEMBER OF LONDON BONDS 2 LTD (CONTINUED)
- 8 -
Extent to which the audit was considered capable of detecting irregularities, including fraud
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 Companies Act 2006, data protection and FCA regulation;
Audit response to risks identified
We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
To address the risk of fraud through management bias and override of controls, we:
performed analytical procedures to identify any unusual or unexpected relationships;
tested journal entries to identify unusual transactions;
assessed whether judgements and assumptions made in determining the accounting estimates set out in Note 1 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 and;
enquiring of management as to actual and potential litigation and claims.
enquiring if there was any correspondence with the FCA, of which there was none.
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor report.
This report is made solely to the company's member 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 member those matters we are required to state to the member in an auditor 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 member, for our audit work, for this report, or for the opinions we have formed.
LONDON BONDS 2 LTD
PREVIOUSLY NAMED 'LONDON INVESTMENT BONDS 2 PLC'
INDEPENDENT AUDITOR REPORT
TO THE MEMBER OF LONDON BONDS 2 LTD (CONTINUED)
- 9 -
Kate Taylor FCA
Senior Statutory Auditor
For and on behalf of Simpson Wreford LLP
29 April 2024
Chartered Accountants
Statutory Auditor
Wellesley House
Duke of Wellington Avenue
Royal Arsenal
London
SE18 6SS
LONDON BONDS 2 LTD
PREVIOUSLY NAMED 'LONDON INVESTMENT BONDS 2 PLC'
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 29 APRIL 2023
- 10 -
2023
2022
Notes
£
£
Turnover
3
1,353
-
Administrative expenses
(533,958)
(516,369)
Operating loss
4
(532,605)
(516,369)
Interest payable and similar expenses
7
(2,487)
(272,092)
Fair value gains and losses on investment properties
8
(10,931)
226,612
Loss before taxation
(546,023)
(561,849)
Tax on loss
9
56,653
(56,653)
Loss for the financial year
(489,370)
(618,502)
The profit and loss account has been prepared on the basis that all operations are continuing operations.
LONDON BONDS 2 LTD
PREVIOUSLY NAMED 'LONDON INVESTMENT BONDS 2 PLC'
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 29 APRIL 2023
- 11 -
2023
2022
£
£
Loss for the year
(489,370)
(618,502)
Other comprehensive income
-
-
Total comprehensive income for the year
(489,370)
(618,502)
LONDON BONDS 2 LTD
PREVIOUSLY NAMED 'LONDON INVESTMENT BONDS 2 PLC'
BALANCE SHEET
AS AT
29 APRIL 2023
29 April 2023
- 12 -
2023
2022
Notes
£
£
£
£
Fixed assets
Investment property
10
1,000,000
1,670,000
Current assets
Debtors
12
700,601
586,169
Cash at bank and in hand
48
48
700,649
586,217
Creditors: amounts falling due within one year
13
(2,896,830)
(151,324)
Net current (liabilities)/assets
(2,196,181)
434,893
Total assets less current liabilities
(1,196,181)
2,104,893
Creditors: amounts falling due after more than one year
14
(2,755,051)
Provisions for liabilities
Deferred tax liability
16
56,653
-
(56,653)
Net liabilities
(1,196,181)
(706,811)
Capital and reserves
Called up share capital
17
50,000
50,000
Revaluation reserve
169,959
Profit and loss reserves
(1,246,181)
(926,770)
Total equity
(1,196,181)
(706,811)
The financial statements were approved by the board of directors and authorised for issue on 29 April 2024 and are signed on its behalf by:
Mr Y Singh
Director
Company registration number 12456947 (England and Wales)
LONDON BONDS 2 LTD
PREVIOUSLY NAMED 'LONDON INVESTMENT BONDS 2 PLC'
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 29 APRIL 2023
- 13 -
Share capital
Revaluation reserve
Profit and loss reserves
Total
£
£
£
£
Balance at 1 May 2021
50,000
(138,309)
(88,309)
Year ended 29 April 2022:
Loss and total comprehensive income
-
-
(618,502)
(618,502)
Transfers
-
169,959
(169,959)
-
Balance at 29 April 2022
50,000
169,959
(926,770)
(706,811)
Year ended 29 April 2023:
Loss and total comprehensive income
-
-
(489,370)
(489,370)
Transfers
-
(169,959)
169,959
-
Balance at 29 April 2023
50,000
(1,246,181)
(1,196,181)
LONDON BONDS 2 LTD
PREVIOUSLY NAMED 'LONDON INVESTMENT BONDS 2 PLC'
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 29 APRIL 2023
- 14 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash (absorbed by)/generated from operations
21
(508,332)
329,659
Interest paid
(2,487)
(272,092)
Net cash (outflow)/inflow from operating activities
(510,819)
57,567
Investing activities
Purchase of investment property
(1,010,931)
(890,708)
Proceeds from disposal of investment property
1,604,783
Net cash generated from/(used in) investing activities
593,852
(890,708)
Financing activities
Repayment of loan notes
(83,033)
833,189
Net cash (used in)/generated from financing activities
(83,033)
833,189
Net increase in cash and cash equivalents
48
Cash and cash equivalents at beginning of year
48
Cash and cash equivalents at end of year
48
48
LONDON BONDS 2 LTD
PREVIOUSLY NAMED 'LONDON INVESTMENT BONDS 2 PLC'
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 29 APRIL 2023
- 15 -
1
Accounting policies
Company information
London Bonds 2 Ltd is a private company limited by shares incorporated in England and Wales. The registered office is 6th Floor, 60 Gracechurch Street, London, EC3V OHR.
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, modified to include the revaluation of investment properties and certain financial instruments at fair value]. The principal accounting policies adopted are set out below.
1.2
Going concern
These financial statements have not been prepared on the going concern basis. All financial assets and liabilities are current. The director has a reasonable expectation that once the final property owned by the company is sold during 2024, the loan note holders will have been repaid and the company would have fulfilled its objectives. At this current stage, the Director plans to liquidate the company. The only outstanding debts will be those relating to connected companies, which will be written off by mutual agreement.
1.3
Turnover
Turnover represents rental income received from investment properties held.
1.4
Investment property
Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the reporting end date. Changes in fair value are recognised in 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.
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.
LONDON BONDS 2 LTD
PREVIOUSLY NAMED 'LONDON INVESTMENT BONDS 2 PLC'
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 APRIL 2023
1
Accounting policies
(Continued)
- 16 -
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.
LONDON BONDS 2 LTD
PREVIOUSLY NAMED 'LONDON INVESTMENT BONDS 2 PLC'
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 APRIL 2023
1
Accounting policies
(Continued)
- 17 -
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
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
1.9
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.
1.10
Capital raising costs paid to secure loan notes are initially held within other debtors and recognised in the profit and loss account over the duration of the loan note. The balance at the end of the year is split between capital raising costs due to be recognised within one year and recognition after one year.
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.
LONDON BONDS 2 LTD
PREVIOUSLY NAMED 'LONDON INVESTMENT BONDS 2 PLC'
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 APRIL 2023
- 18 -
3
Turnover
2023
2022
£
£
Turnover analysed by class of business
Rental income
1,353
-
2023
2022
£
£
Turnover analysed by geographical market
UK
1,353
-
4
Operating loss
2023
2022
Operating loss for the year is stated after charging/(crediting):
£
£
Exchange (gains)/losses
(198,674)
189,561
Loss on disposal of investment property
65,217
Operating lease charges
-
15,416
5
Auditor remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
5,280
5,040
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Total
7
Interest payable and similar expenses
2023
2022
£
£
Other finance costs:
Other interest
2,487
272,092
LONDON BONDS 2 LTD
PREVIOUSLY NAMED 'LONDON INVESTMENT BONDS 2 PLC'
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 APRIL 2023
- 19 -
8
Amounts written off investments
2023
2022
£
£
Changes in the fair value of investment properties
(10,931)
226,612
9
Taxation
2023
2022
£
£
Deferred tax
Origination and reversal of timing differences
(56,653)
56,653
The actual (credit)/charge for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Loss before taxation
(546,023)
(561,849)
Expected tax credit based on the standard rate of corporation tax in the UK of 19.00% (2022: 19.00%)
(103,744)
(106,751)
Change in unrecognised deferred tax assets
103,744
106,751
Effect of revaluations of investments
(56,653)
56,653
Taxation (credit)/charge for the year
(56,653)
56,653
10
Investment property
2023
£
Fair value
At 30 April 2022
1,670,000
Additions through external acquisition
1,010,931
Disposals
(1,670,000)
Net gains or losses through fair value adjustments
(10,931)
At 29 April 2023
1,000,000
Investment property comprises of UK residential property. The fair value of the investment property has been arrived at on the basis of a valuation of similar properties in the area at 29 April 2023. In December 2023 the property was valued by Whitman & Co at £1,000,000, who are not connected with the company. The valuation was made on an open market value basis by reference to market evidence of transaction prices for similar properties.
LONDON BONDS 2 LTD
PREVIOUSLY NAMED 'LONDON INVESTMENT BONDS 2 PLC'
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 APRIL 2023
- 20 -
11
Financial instruments
2023
2022
£
£
Carrying amount of financial assets
Instruments measured at fair value through profit or loss
700,649
152,917
Carrying amount of financial liabilities
Measured at fair value through profit or loss
- Other financial liabilities
2,672,018
2,881,565
12
Debtors
2023
2022
Amounts falling due within one year:
£
£
Other debtors
700,601
218,832
2023
2022
Amounts falling due after more than one year:
£
£
Other debtors
367,337
Total debtors
700,601
586,169
13
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Loan notes
15
2,672,018
Other creditors
197,852
126,515
Accruals and deferred income
26,960
24,809
2,896,830
151,324
Loan notes were secured on behalf of loan note holders, by a security Trustee, who acts as an intermediary on behalf of all loan note holders. The charge is secured by a fixed charge over the property held within Note 10.
14
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Loan notes and interest payable
15
2,755,051
LONDON BONDS 2 LTD
PREVIOUSLY NAMED 'LONDON INVESTMENT BONDS 2 PLC'
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 APRIL 2023
- 21 -
15
Loans and overdrafts
2023
2022
£
£
Loan notes and interest payable
2,672,018
2,755,051
Payable within one year
2,672,018
Payable after one year
2,755,051
Loan notes issued are for a period of three years. Loan notes holders have the option to receive a 10% interest payment on a quarterly basis throughout the period of three years or to receive an accruing interest rate of 12% which is added to the loan balance throughout the period. The interest element due payable at the end of the period is included with loan notes and interest payable after 1 year.
16
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Revaluations
-
56,653
2023
Movements in the year:
£
Liability at 30 April 2022
56,653
Credit to profit or loss
(56,653)
Liability at 29 April 2023
-
17
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary of 1p each
5,000,000
5,000,000
50,000
50,000
LONDON BONDS 2 LTD
PREVIOUSLY NAMED 'LONDON INVESTMENT BONDS 2 PLC'
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 APRIL 2023
- 22 -
18
Events after the reporting date
On 18 July 2023, the company signed contracts with all loan notes holders, to settle all outstanding liabilities. In part this is being settled with a share issue from London Richmond Limited, a connected company, that Yadwinder Singh is a director and shareholder.
On 1 April 2024, the company agreed the sale of the investment property, with its parent company, based on a market value of £1,000,000 Contracts have not yet been exchanged.
19
Related party transactions
Transactions with related parties
During the year, there have been a number of related party transactions with connected companies and related parties.
London Richmond Ltd (LRL), a company in which Yadwinder Singh is a shareholder and director paid for a number of expenses on behalf of London Bonds 2 Ltd (LB2), for which it has been directly reimbursed the aggregate expenses totalled £116,363. LRL also received net rent received on behalf of LB2 of £1,353.
LRL also charged the following fees to LB2 during the year:
Property sale management Fees - £16,700
Property finders fee - £7,250
Loan settlement fees charge (not at arms length) - £143,058
London Richmond Construction Ltd (LRCL) also directly recharged LB2 for property refurbishment works for £143,354. LRCL, is a subsidiary of LRL.
The balances outstanding as at 29 April 2023 are as follows:
The balance owed to London Bonds 1 Ltd, a company Yadwinder Singh is a director, was £28,765 (2022 - £28,765)
The balance owed to London Bonds 3 Ltd, a company Yadwinder Singh is a director, was £25,250 (2022 - £25,250)
The balance owed to LRL was £3,659
The balance owed to LRCL was £140,174
20
Ultimate controlling party
The company was a subsidiary of London Bonds Ltd (previously named London Chelsea Group Ltd), a company registered in England & Wales, company number 13220711, registered office at 6th Floor, Gracechurch Street, London, EC3V 0HR, until 29 April 2023, when the company came under the sole ownership of Yadwinder Singh, the Director.
On the 26 March 2024 the company then became a 100% subsidiary of Mayfair House Ltd (previously named Tealco Homes Ltd) , a company registered in England & Wales, company number 14344584, registered office at 6th Floor, Gracechurch Street, London, EC3V 0HR.
LONDON BONDS 2 LTD
PREVIOUSLY NAMED 'LONDON INVESTMENT BONDS 2 PLC'
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 APRIL 2023
- 23 -
21
Cash (absorbed by)/generated from operations
2023
2022
£
£
Loss for the year after tax
(489,370)
(618,502)
Adjustments for:
Taxation (credited)/charged
(56,653)
56,653
Finance costs
2,487
272,092
Loss on disposal of investment property
65,217
Fair value loss/(gain) on investment properties
10,931
(226,612)
Movements in working capital:
(Increase)/decrease in debtors
(114,432)
761,397
Increase in creditors
73,488
84,631
Cash (absorbed by)/generated from operations
(508,332)
329,659
22
Analysis of changes in net debt
30 April 2022
Cash flows
29 April 2023
£
£
£
Cash at bank and in hand
48
-
48
Borrowings excluding overdrafts
(2,755,051)
83,033
(2,672,018)
(2,755,003)
83,033
(2,671,970)
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