Company Registration No. 14088131 (England and Wales)
WALLEYE CAPITAL (UK) LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
WALLEYE CAPITAL (UK) LIMITED
COMPANY INFORMATION
Directors
W England
K Modgill
Company number
14088131
Registered office
15-16 Moss House
Floor 2
15-16 Brooks Mews
London
W1K 4DS
England
Auditor
HW Fisher LLP
Acre House
11-15 William Road
London
NW1 3ER
United Kingdom
WALLEYE CAPITAL (UK) LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4
Directors' responsibilities statement
5
Independent auditor's report
6 - 8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Statement of cash flows
12
Notes to the financial statements
13 - 20
WALLEYE CAPITAL (UK) LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The directors present the strategic report for the year ended 31 December 2023.
Fair review of the business
The principal activity of the Company is the provision of portfolio management services to Walleye Capital LLC, a related company incorporated in the U.S. which manages a number of multi strategy funds.
The Company became authorised and regulated by the Financial Conduct Authority ("FCA") on 24 October 2023, as a MIFID Portfolio Manager. The Company’s strategy is to build a diversified team of Portfolio Managers to support the provision of portfolio management services and deliver superior investment performance to our investors.
The directors are satisfied that the results of the underlying business for the year are broadly in line with their expectations.
Revenues during the period were £13,790,581 (2022: £1,428,480). The Company received management fees from Walleye Capital LLC.
The Company’s revenues increased during the year as a result of market movements in the Company’s assets under management.
Principal risks and uncertainties
Foreign exchange risk
The Company is reimbursed its expenses incurred in USD. The Company's policy is to hold only a minimum amount of currency to cover operational needs and therefore converts most foreign currency into Sterling upon receipt. Direct currency exposure is therefore limited to the short-term outstanding non-Sterling debts at any time. The Company does not hedge this risk.
Market risk
The Company operates in a competitive environment and the business is reliant on continuing demand for its investment products, demand which is influenced by several factors including investment performance of its affiliated entities and retention of key personnel. The industry is sensitive to economic, political and market factors. Taxation, legal and regulatory factors also influence the markets in which the Company operates.
Section 172(1) statement
Section 414CZA(1) of the Companies Act 2006 requires the directors to explain how they considered the matters set out in section 172(1) (a) to (f) of the Companies Act 2006 (‘S172 (1)’) when performing their duty to promote the success of the Company. When making decisions, each director ensures that they act in the way that would most likely promote the Company’s success for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to the following matters:
(a) The likely consequences of any decision in the long term
The directors understand the business and the evolving environment in which the Company operates, including the challenges of operating in a regulated sector.
(b) The interests of the Company’s employees
The directors recognise that the success of the business depends on attracting, retaining and motivating high quality employees. The directors take into account the implications of decisions which may affect their perception as a responsible employer, on determining remuneration and benefits, and on providing a healthy and safe workplace environment, where relevant.
All employees have been engaged on competitive terms in relation to reward and benefits, measured by reference to comparable roles elsewhere. The board has resolved to implement a formal annual review process for each employee in the new financial year so as create an opportunity for engagement and feedback between the directors and employees.
(c) The need to foster the Company's business relationships with stakeholders
The directors recognise the value of building strong and transparent relationships with stakeholders in promoting and achieving the long-term success of the business. In making decisions and performing its oversight role, the Board considers the views and interests of key stakeholders, including its shareholder, related companies and service providers, regulators, trading venues and suppliers. Considering the impact on a broad range of stakeholders is an important part of the decision-making process and the Board seeks to consider the interests and priorities of each stakeholder group. However, the Board acknowledges that in balancing different perspectives it is not always possible to deliver the desired outcome for all stakeholders.
WALLEYE CAPITAL (UK) LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
The Company is a wholly owned subsidiary of a privately owned group. One of the directors is the CEO of the group and will consider the interest of the shareholder and strategy of the wider group in decision making to ensure alignment.
The Company and its key service providers operate as a meritocracy and in doing so recognise the importance of hiring, developing and retaining leading professionals across each function. Robust processes are in place to attract the best talent to work in highly effective teams. Further, a culture of continual learning and development for all employees is supported to ensure they continue to remain effective and can grow in their roles.
Development and performance
All significant departments and functions are represented on the group level committees attended by the UK-based directors of the Company. This helps to ensure active feedback and engagement between employees supporting the portfolio management activities of the Company.
The Company promotes a strong compliance culture, led by its Board of directors, which is maintained through the operational risk management framework, compliance monitoring program and remuneration policy, which promotes effective risk management.
(d) The impact of the Company’s operations on the community and the environment
The Company is committed to the integrity, transparency, efficiency, competitiveness and stability of financial markets. The Company looks to engage with policymakers and regulators to ensure the successful implementation of key financial services regulations. The Board also receives regular updates on regulatory matters of relevance for the Company.
(e) The desirability of the Company maintaining a reputation for high standards of business conduct
The directors consider that management fee revenues disclosed above represent the Company’s key performance indicator in relation to the financial period under review.
There are several risks and uncertainties which could impact the performance of the portfolios the Company manage. The Company operates systems and controls to mitigate any adverse effects of the risks that arise due to revenue being linked to the performance of the portfolios it manages.
The Company’s principal risk is market risk. All portfolio management activities risk the loss of capital and a related reduction in the income generated or, loss of business, and in extreme cases insolvency or winding up of the Company. To mitigate these risks, the Company has implemented strict risk management controls which are agreed between the Company and its client including, but not limited to, detailed risk parameters, investment guidelines and regular risk meetings and assessments, which are agreed with and monitored by the Company and its client.
The Company has no significant exposure to credit, key-man, or interest rate risk. The Company has performed an annual Internal Capital Adequacy and Risk Assessment (''ICARA"), in accordance with the UK Investment Firm Prudential Regime (''IFPR").
(f) The need to act fairly as between members of the Company
The directors aim to act fairly as between the Company’s members when delivering the Company’s strategy.
The Company had seven members during the year under review. Three members had retired and one member had left since the year end date. Measures are codified in the Company’s articles of association and shareholders’ agreement to protect the interests of minority holders.
Key performance indicators
The company uses a range of financial key performance indicators to drive performance and monitor and manage the business effectively. These are reported companywide on a daily, weekly, and monthly basis against targets. The key financial performance indicators for the year were as follows:
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Gross profit (loss) margin | | | | | |
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WALLEYE CAPITAL (UK) LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
Approved by the board on .............................and signed on its behalf by:
W England
Director
24 April 2024
WALLEYE CAPITAL (UK) LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
The directors present their annual report and financial statements for the year ended 31 December 2023.
Principal activities
The principal activity of the company is that of fund management.
Price risk, credit risk, liquidity risk and cash flow risk
Refer to the Strategic Report for details of the Company's principal risks.
Results and dividends
The results for the year are set out on page 9.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
R Courtney
(Appointed 17 October 2023 and resigned 15 March 2024)
W England
K Modgill
(Appointed 17 October 2023)
Mr J Buchanan
(Appointed 17 October 2023 and resigned 31 December 2023)
R Magrath
(Appointed 17 October 2023 and resigned 31 December 2023)
A Carney
(Resigned 31 December 2023)
M Tusler
(Resigned 31 December 2023)
Auditor
In accordance with the company's articles, a resolution proposing that HW Fisher LLP be reappointed as auditor of the company will be put at a General Meeting.
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
W England
Director
24 April 2024
WALLEYE CAPITAL (UK) LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 5 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
WALLEYE CAPITAL (UK) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF WALLEYE CAPITAL (UK) LIMITED
- 6 -
Opinion
We have audited the financial statements of Walleye Capital (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 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 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's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' 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.
WALLEYE CAPITAL (UK) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF WALLEYE CAPITAL (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 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 remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
As part of our planning process:
We enquired of management the systems and controls the company has in place, the areas of the financial statements that are most susceptible to the risk of irregularities and fraud, and whether there was any known, suspected or alleged fraud. The company did not inform us of any known, suspected or alleged fraud.
We obtained an understanding of the legal and regulatory frameworks applicable to the company. We determined that the following were most relevant: FRS 102, Companies Act 2006 and the FCA’s CASS regulations.
We considered the incentives and opportunities that exist in the company, including the extent of management bias, which present a potential for irregularities and fraud to be perpetuated, and tailored our risk assessment accordingly.
Using our knowledge of the company, together with the discussions held with the company at the planning stage, we formed a conclusion on the risk of misstatement due to irregularities including fraud and tailored our procedures according to this risk assessment.
WALLEYE CAPITAL (UK) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF WALLEYE CAPITAL (UK) LIMITED
- 8 -
The key procedures we undertook to detect irregularities including fraud during the course of the audit included:
Identifying and testing journal entries and the overall accounting records, in particular those that were significant and unusual.
Reviewing the financial statement disclosures and determining whether accounting policies have been appropriately applied.
Reviewing and challenging the assumptions and judgements used by management in their significant accounting estimates, in particular in relation to staff performance related bonus.
Testing key revenue lines, in particular cut-off, for evidence of management bias.
Obtaining third-party confirmation of material bank and group balances.
Performing a physical verification of key assets.
Documenting and verifying all significant related party balances and transactions.
Reviewing documentation such as the company board minutes, for discussions of irregularities including fraud.
Assessing the extent of compliance, or lack of, with the relevant laws and regulations.
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements even though we have properly planned and performed our audit in accordance with auditing standards. The primary responsibility for the prevention and detection of irregularities and fraud rests with the directors.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditors responsibilities. 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.
Gilles Siow (Senior Statutory Auditor)
For and on behalf of HW Fisher LLP
Chartered Accountants
Statutory Auditor
Acre House
11-15 William Road
London
NW1 3ER
United Kingdom
24 April 2024
WALLEYE CAPITAL (UK) LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
Year
Period
ended
ended
31 December
31 December
2023
2022
Notes
£
£
Turnover
3
13,790,581
1,428,480
Administrative expenses
(13,701,152)
(1,429,746)
Profit/(loss) before taxation
89,429
(1,266)
Tax on profit/(loss)
8
(245,046)
(244)
Loss for the financial year
(155,617)
(1,510)
The profit and loss account has been prepared on the basis that all operations are continuing operations.
WALLEYE CAPITAL (UK) LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
9
13,239
Tangible assets
10
138,541
151,780
Current assets
Debtors
11
10,928,801
670,149
Cash at bank and in hand
343,163
189,459
11,271,964
859,608
Creditors: amounts falling due within one year
12
(9,931,587)
(861,117)
Net current assets/(liabilities)
1,340,377
(1,509)
Total assets less current liabilities
1,492,157
(1,509)
Capital and reserves
Called up share capital
14
1,500,000
1
Capital contribution
149,284
Profit and loss reserves
(157,127)
(1,510)
Total equity
1,492,157
(1,509)
The financial statements were approved by the board of directors and authorised for issue on 24 April 2024 and are signed on its behalf by:
W England
Director
Company Registration No. 14088131
WALLEYE CAPITAL (UK) LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
Share capital
Capital Contribution
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 5 May 2022
Period ended 31 December 2022:
Loss and total comprehensive income for the period
-
-
(1,510)
(1,510)
Issue of share capital
14
1
-
1
Balance at 31 December 2022
1
(1,510)
(1,509)
Year ended 31 December 2023:
Loss and total comprehensive income for the year
-
-
(155,617)
(155,617)
Issue of share capital and capital contributions
14
1,499,999
149,284
-
1,649,283
Balance at 31 December 2023
1,500,000
149,284
(157,127)
1,492,157
The capital contribution of £149,284 was made by the parent company in the year.
WALLEYE CAPITAL (UK) LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash (absorbed by)/generated from operations
17
(1,292,872)
189,458
Income taxes paid
(1,790)
Net cash (outflow)/inflow from operating activities
(1,294,662)
189,458
Investing activities
Purchase of intangible assets
(13,239)
Purchase of tangible fixed assets
(187,678)
Net cash used in investing activities
(200,917)
Financing activities
Proceeds from issue of shares and capital contributions
1,649,283
1
Net cash generated from financing activities
1,649,283
1
Net increase in cash and cash equivalents
153,704
189,459
Cash and cash equivalents at beginning of year
189,459
Cash and cash equivalents at end of year
343,163
189,459
WALLEYE CAPITAL (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 13 -
1
Accounting policies
Company information
Walleye Capital (UK) Limited is a private company limited by shares incorporated in England and Wales. The registered office is 15-16 Moss House, Floor 2, 15-16 Brooks Mews, London, England, W1K 4DS.
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 directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. This is due to a letter received from the parent confirming support of the company for a period of at least twelve months from the date of approval of these financial statements. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for services provided to the parent company in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account the transfer pricing agreement between the parent entity and its subsidiary.
1.4
Intangible fixed assets
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost
Amortisation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:
Service Contract
Amoritse over the duration of the contract
1.5
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost, net of depreciation.
Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:
Fixtures and fittings
5 years straight line
Computers
2 years straight line
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.
WALLEYE CAPITAL (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
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.
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.
Basic financial liabilities
Basic financial liabilities, including creditors are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
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.
1.7
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs.
1.8
Taxation
The tax expense represents the tax currently payable.
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.
1.9
Provisions
Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.
1.10
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.11
Leases
Rentals payable under operating leases are charged to profit or loss on a straight line basis over the term of the lease.
WALLEYE CAPITAL (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
1.12
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 directors are 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.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Holdbacks performance related pay bonus
An element of staff bonus accruals is held back for a period of 12 months. Management has made an accrual based on their best estimate of the amount that is likely to be paid, including clawbacks arising in 2024.
3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Management fee income
927,989
140,558
Reimbursement
12,862,592
1,287,922
13,790,581
1,428,480
2023
2022
£
£
Turnover analysed by geographical market
United States
13,790,581
1,428,480
4
Operating profit/(loss)
2023
2022
Operating profit/(loss) for the year is stated after charging:
£
£
Exchange differences apart from those arising on financial instruments measured at fair value through profit or loss
220,929
9,403
Depreciation of owned tangible fixed assets
49,137
-
WALLEYE CAPITAL (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 16 -
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
28,913
12,750
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Central team
6
1
Investment team
17
3
Total
23
4
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
10,809,823
586,935
Social security costs
700,371
86,505
Pension costs
256,990
33,409
11,767,184
706,849
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
130,934
Company pension contributions to defined contribution schemes
9,952
-
140,886
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2022: nil).
8
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
245,046
244
WALLEYE CAPITAL (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
8
Taxation
(Continued)
- 17 -
The actual charge 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
89,429
(1,266)
Expected tax charge/(credit) based on the standard rate of corporation tax in the UK of 22.00% (2022: 19.00%)
19,674
(241)
Tax effect of expenses that are not deductible in determining taxable profit
225,372
485
Taxation charge for the year
245,046
244
The company has potential deferred tax assets of £262,954 calculated at 25% of timing differences. The deferred tax assets have not been recognised due to uncertainties over their recoverability.
9
Intangible fixed assets
Service Contract
£
Cost
At 1 January 2023
Additions
13,239
At 31 December 2023
13,239
Amortisation and impairment
At 1 January 2023 and 31 December 2023
Carrying amount
At 31 December 2023
13,239
At 31 December 2022
WALLEYE CAPITAL (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
10
Tangible fixed assets
Fixtures and fittings
Computers
Total
£
£
£
Cost
At 1 January 2023
Additions
47,082
140,596
187,678
At 31 December 2023
47,082
140,596
187,678
Depreciation and impairment
At 1 January 2023
Depreciation charged in the year
12,624
36,513
49,137
At 31 December 2023
12,624
36,513
49,137
Carrying amount
At 31 December 2023
34,458
104,083
138,541
At 31 December 2022
11
Debtors
2023
2022
Amounts falling due within one year:
£
£
Amounts owed by group undertakings
9,497,025
652,952
Other debtors
16,812
Prepayments and accrued income
1,414,964
17,197
10,928,801
670,149
12
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
58,551
Amounts owed to group undertakings
121,475
827,462
Corporation tax
243,500
244
Other taxation and social security
1,886,879
Accruals and deferred income
7,621,182
33,411
9,931,587
861,117
WALLEYE CAPITAL (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
13
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
256,990
33,409
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
1
1
1,500,000
1
During the year, the company issued 1,499,999 ordinary shares of £1 each at par.
15
Operating lease commitments
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2022
£
£
Within one year
228,353
100,247
Between two and five years
171,265
399,618
100,247
16
Ultimate controlling party
The immediate parent company is Walleye Capital LLC and the ultimate controlling party is Fish Factory LP. The registered office address of Walleye Capital LLC and Fish Factory LP is 2800 Niagara Ln. N., Plymouth, MN 55447, United States.
WALLEYE CAPITAL (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
17
Cash (absorbed by)/generated from operations
2023
2022
£
£
Loss for the year after tax
(155,617)
(1,510)
Adjustments for:
Taxation charged
245,046
244
Depreciation and impairment of tangible fixed assets
49,137
Movements in working capital:
Increase in debtors
(10,258,652)
(670,149)
Increase in creditors
8,827,214
860,873
Cash (absorbed by)/generated from operations
(1,292,872)
189,458
18
Analysis of changes in net funds
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
189,459
153,704
343,163
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