NOTZ_STUCKI_(LONDON)_LIMI - Accounts

The directors present the report and the audited financial statements of Notz Stucki (London) Limited ("the Company") for the year ended 31 December 2020.

The principal activity of the Company during the year was the provision of investment management services.

The Company is authorised and regulated by the Financial Conduct Authority.

No charitable donations (2019 - £500) were made during the year.

The directors review the capital adequacy of the Company regularly and carried out a review shortly before the approval of these financial statements, which concluded that the Company was well resourced and that they had no concerns about the applicability of the going concern basis to these Financial Statements.

The Company successfully implemented its business continuity plan in response to the Covid-19 pandemic, which has consequently and subsequently had little impact on its business.

In accordance with the rules of the Financial Conduct Authority, the Company has published information on its risk management objectives and policies on its regulatory capital requirements and resources. This information is set out in the unaudited appendix to the financial statements.

A resolution to re-appoint Ernst & Young LLP as the Company’s auditor will be put to the forthcoming Annual General Meeting.

So far as each person who was a director at the date of approval of this report is aware, there is no relevant information, being information needed by the auditors in connection with preparing their report, of which the auditors are unaware.

Having made appropriate enquiries of fellow directors and the Company's auditors for that purpose each director has taken all the steps that he is obliged to take as a director in order to make himself aware of any relevant audit information and to establish that the auditors are aware of that information.

The profit for the year after taxation was £32,924 (loss 2019: £72,113). The results for the period and financial position of the Company are as shown in the annexed financial statements.

Assets under management rose during the year principally as a result of a rise in the value of assets.

No dividend was paid during the year (2019 - £Nil).

Since the start of 2020 the whole of the world economy has been impacted by the Covid 19 pandemic. The Directors' Report notes that this has had little impact on the Company's business.

While the Company's scale of business and principal activities are unlikely to change materially in the immediate future the Directors have decided to place greater emphasis on business development and will focus on increasing the assets under management by the Company.

The directors review and consider the risks to which the Company may be exposed on a regular basis and have documented them and the measures designed to mitigate them, as part of the ICAAP process.

The Company's results for the year are set out in the Statement of Income and Retained Earnings on page 8. While the Company has been impacted by the ongoing Covid-19 pandemic, it continues to perform satisfactorily and has adequate financial resources, so that there is a reasonable expectation that it will continue to operate for the foreseeable future. The going concern basis has accordingly been adopted in preparing these financial statements.

The Company and its directors and officers are indemnified by a group investment management insurance.

The directors are responsible for preparing the Directors’ Report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Standards and applicable law) including Financial Reporting Standard 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland”.

Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period. In preparing these financial statements, the directors are required to:

•     select suitable accounting policies and then apply them consistently;

•     make judgements and accounting estimates that are reasonable and prudent;

•     state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

•     prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

We have audited the financial statements of Notz Stucki (London) Limited for the year ended 31 December 2020 which comprise the Statement of Income and Retained Earnings, Statement of Financial Position, Statement of Changes in Equity, Statement of Cash Flows and the related notes 1-15 including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards including FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

•     give a true and fair view of the state of the company's affairs as at 31 December 2020 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.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the company’s ability to continue as a going concern.

Other information

The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information contained within the annual report.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in this 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 there is 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 the other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

• the information given in the Strategic report and the Directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

• the Strategic report and the Directors' report have been prepared in accordance with applicable legal requirements.

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 and the Directors' report.

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

•     adequate accounting records have not been kept or returns adequate for our audit have not been received from branches not visited by us; or

•     the financial statements are not in agreement with the accounting records and returns; or

•     certain disclosures of directors' remuneration specified by law are not made; or

•     we have not received all the information and explanations we require for our audit.

As explained more fully in the Statement of directors’ responsibilities set out on page 4, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect irregularities, including fraud. The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and management.

Our approach was as follows:

• We obtained an understanding of the legal and regulatory frameworks that are applicable to the Company and determined that the most significant are those that relate to the reporting framework (FRS102), the Companies Act 2006) and the relevant direct and indirect tax compliance regulation in the United Kingdom. In addition, the Company is required to comply with relevant Financial Conduct Authority’s (FCA) rules and regulations relating to its operations.

• We understood how Notz Stucki (London) Ltd is complying with those frameworks by making enquiries of management and by seeking representation from those charged with governance. We corroborated our understanding by reviewing board meeting minutes and policy and procedures manuals. We also reviewed correspondence with relevant authorities.

• We assessed the susceptibility of the Company’s financial statements to material misstatement, including how fraud might occur by considering the risk of management override and by designating revenue recognition as a fraud risk. We performed journal entry testing by specific risk criteria, with a focus on journals indicating large or unusual transactions based on our understanding of the business. We tested a sample of invoices issued by the Company by recalculating the amounts in the invoices and agreed the fee rate, any performance conditions (including completeness of any management fee offsets) to supporting documentation.

• Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations. Our procedures involved enquiries of management and those charged with governance, review of legal and professional expenses, review of breaches and complaints register and review of board meeting minutes.

• The Company is a regulated investment manager under the supervision of the FCA. As such, the Senior statutory auditor reviewed the experience and expertise of the engagement team to ensure that the team had the appropriate competence and capabilities.

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

Use of our report

This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members, as a body, for our audit work, for this report, or for the opinions we have formed.

All income, expenses, profits and losses shown in the financial statements relate to continuing operations.

The Company has no recognised gains or losses other than the results for the current and preceding financial years, as set out above.

The Notes to the Accounts numbered 1 to 15 form part of these financial statements.

The financial statements of the Company are 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 have been prepared under the historical cost convention on a going concern basis. The principal accounting policies adopted are set out below.

The Directors have performed a Covid 19 impact analysis as part of their going concern assessment using information available to the date of issue of these financial statements. The analysis has modelled a number of adverse scenarios to assess the potential impact that the pandemic may have on the Company’s operations, liquidity, solvency and regulatory capital position. It has also considered the stresses that the Company’s financial position would have to endure before there is any likelihood of a breach of the relevant regulatory capital requirements. The analysis has included all of the factors that management considers relevant, including the value of assets under management and possible mitigating actions.

Having performed this analysis the Directors have concluded that all regulatory capital requirements will continue to be met and that the Company will have sufficient cash to meet its obligations as and when they fall due for the foreseeable future so that the going concern basis remains appropriate.

Cash and cash equivalents in the balance sheet comprise cash at banks and in hand and short term deposits with an original maturity date of three months or less.

Debtors and Creditors

Short term debtors and creditors with no stated interest rate and receivable or payable within one year are recorded at transaction price.

Deferred tax is provided in full on timing differences which result in an obligation at the balance sheet date to pay more tax, or a right to pay less tax, at a future date, at rates that are expected to apply when they crystallise based on current tax rates and law. Timing differences arise from inclusion of items of income and expenditure in taxation computations in periods different from those in which they are included in the financial statements. Deferred tax assets are recognised to the extent that it is regarded as more likely than not that they will be recovered. Deferred tax assets and liabilities are not discounted.

These financial statements are presented in pounds sterling, which is the Company’s functional and presentation currency. Assets and liabilities expressed in foreign currencies are translated into sterling at the rate of exchange ruling at the balance sheet date. Transactions in foreign currencies are converted into sterling at appropriate rates ruling during the period. All differences on exchange are dealt with in the Statement of Income and Retained Earnings.

The Company operates a defined contribution pension scheme. Contributions are charged to the profit and loss account as they become payable.

Rentals under operating leases are charged to the Statement of Income and Retained Earnings on a straight line basis over the lease term. Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight line basis over the period until the date the rent is expected to be adjusted to the prevailing market rate.

Tangible fixed assets are stated at cost less depreciation. Depreciation is provided on all tangible fixed assets at rates calculated to write off the cost of an asset, less its estimated residual value, evenly over its expected useful economic life as follows:

The turnover shown in the Statement of Income and Retained Earnings represents fees earned for services provided in the normal course of business stated net of valued added tax.

The Company’s turnover was derived from its principal activity. The Company earns investment management and advisory fees from other members of the Notz Stucki group and third party customers. Turnover attributable to the different geographical markets has not been disclosed as it is considered to be prejudicial to the Company’s interest.

The average number of people employed by the Company during the year amounted to 5 (2019: 5). All of these staff were employed within office and management. Staff costs, including directors, were:

The amounts owed by group undertakings solely comprise amounts due from parent and fellow subsidiary undertakings.

The A ordinary shares carry the right to receive or participate in any dividend or other distribution paid or made by the Company out of profits or income earned after 31 December 2000. On a return of capital, on a winding up or otherwise, they participate pari passu with the B ordinary shares up to their nominal value but thereafter are not entitled to any further right of participation in the profit or surplus assets of the Company.

The ultimate and immediate parent Company is Notz Stucki Holding Ltd, a company registered in Bermuda.

The Company has an annual commitment of £130,000 under operating leases under which the following amounts are payable:

All companies listed below are related by virtue of the ultimate parent company, apart from Notz, Stucki Europe SA, whose ultimate holding company is NS International Holding Company Pte Ltd, incorporated in Singapore.

The following transactions in connection with investment management, advisory and other fees occurred between the Company and its related parties.

The directors do not consider that there are any material Post Balance Sheet Events to be disclosed.