NS_ASSET_MANAGEMENT_UK_LT - Accounts

The directors present their report together with the Strategic Report and the audited financial statements of NS Asset Management Ltd ("the Company") for the year ended 31 December 2022.

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.

Charitable donations of £1,000 (2021 - £3,423) were made during the year.

In accordance with the requirements of the Financial Conduct Authority, the Company has published information on its remuneration policy and practices. This information is set out in the unaudited appendix to the financial statements.

Buzzacott LLP will be retained as the Company's auditor for the current year.

The Company has chosen, in accordance with Section 414 C (11) of the Companies Act 2006, to set out information, which would otherwise be required by Schedule 7 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 to be contained in the Directors' report, in the Company's Strategic Report. It has done so in respect of future developments.

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 auditor 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 £91,251 (2021: £105,297). 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 as a result of a rise in the value of assets, when measured in pounds sterling, and the addition of new money. No dividend was paid during the year (2021 - £Nil).

The Company's scale of business and principal activities are unlikely to change materially in the immediate future.

The Company operates systems and controls to mitigate any adverse effects across the range of risks that it faces. 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 Internal Capital and Risk Assessment (ICARA) process, which was introduced by the new Investment Firms Prudential Regime and completed during the year under review. It replaced the previous ICAAP regime.

The Company's results for the year are set out in the Statement of Income and Retained Earnings on page 8. The Company continues to perform satisfactorily and has adequate financial resources, so 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 directors recognise their responsibility under Section 172 of the Companies Act 2006 to promote the success of the Company when conducting their duties. The likely long-term consequences of any action to be taken by the Company is always considered by the Board before reaching a decision.

The Company is highly dependent on its employees and their interests are always considered by the directors. The Company operates a bonus scheme to align the interests of the Company and its employees.

The business is also highly dependent on the Company maintaining first class relationships with clients, which is achieved through a high level of personal contact with them. In order to foster good relations, the directors promote the desirability of the Company maintaining its reputation for high standards of business conduct.

The nature of the Company's business means that the impact of its own operations on the community and the environment are limited. These are, however, matters that are considered by the investment policies that are applied to clients' portfolios.

The Company has only one ultimate holding company so the directors' need to act fairly between members is not felt to be a priority.

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 NS Asset Management UK Ltd for the year ended 31 December 2022 which comprise the Statement of Income and Retained Earnings, Statement of Financial Position, Statement of Cash Flows and the related notes 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 2022 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 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.

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 the 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.

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 Director's report.

We have nothing to report in respect of the following matters 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.

As explained more fully in the Statement of directors’ responsibilities, 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 material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

How the audit was considered capable of detecting irregularities including fraud

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

• the Senior Statutory Auditor ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations, including knowledge specific to auditing regulated investment management firms;

• we made enquiries of management as to where they considered there was susceptibility to fraud, and their knowledge of actual, suspected and alleged fraud;

• we identified the laws and regulations that could reasonably be expected to have a material effect on the financial statements of the company through discussions with members and other management at the planning stage, and from our knowledge and experience of regulated investment management firms;

• the audit team held a discussion to identify any particular areas that were considered to be susceptible to misstatement, including with respect to fraud and non-compliance with laws and regulations;

• we focused our planned audit work 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, The Financial Services and Markets Act 2000, employment legislation and taxation legislation.

Auditor's responsibilities for the audit of the financial statements (continued)

We assessed the extent of compliance with the laws and regulations identified above through:

• making enquiries of management;

• inspecting legal expenditure and correspondence throughout the year for any potential litigation or claims; and

• considering the internal controls in place that are designed 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:

• determined the susceptibility of the Company to management override of controls by checking the implementation of controls and enquiring of individuals involved in the financial reporting process;

• reviewed journal entries throughout the year to identify unusual transactions;

• performed analytical procedures to identify any large, unusual or unexpected transactions and investigated any large variances from the prior period;

• reviewed accounting estimates and evaluated where judgements or decisions made by management indicated bias on the part of the Company's management;

• tested the occurrence of turnover by obtaining third party confirmation from customers and reviewing the investment management agreements between the Company and its managed portfolios; and

• carried out substantive testing to check the occurrence and cut-off of expenditure.

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included:

• agreeing financial statement disclosures to underlying supporting documentation; and

• enquiring of management as to actual and potential litigation and claims.

There are inherent limitations in our audit procedures described above. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error as they may involve deliberate concealment or collusion. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the members and other management and the inspection of regulatory and legal correspondence, if any.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: 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 19 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.

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 NS Partners 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 4 (2021: 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 directors consider there to be no ultimate controlling party.

The Company has an annual commitment of £73,000 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 NS Partners 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.