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Company Information
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Contents
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Director's report
For the year ended 31 December 2023
The director presents his annual report and the financial statements of Palliser Capital (UK) Limited ('the Company') and its subsidiaries (together 'the Group') for the year ended
The profit for the year, after taxation and minority interests, amounted to £2,071,783 (2022 - £2,900,658).
The director proposed and paid a dividend of £1,280,009 (2022 - £nil) during the year.
The director who served during the year was:
The director is responsible for preparing the Group strategic report, the Director's report and the consolidated 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 the Group and of the profit or loss of the Group for that year.
In preparing these financial statements, the director is required to:
∙select suitable accounting policies for the Group's financial statements 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 Group will continue in business.
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Director's report (continued)
For the year ended 31 December 2023
The Group has chosen in accordance with s.414C(11) Companies Act 2006 to set out in the Strategic report information required by Schedule 7 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 to be contained in the director's report. It has done so in respect of future developments, engagement with employees, suppliers, customers and others.
This report was approved and authorised for issue on
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Group strategic report
For the year ended 31 December 2023
The principal activity of the Group is to provide investment management services to Palliser Capital Master Fund Ltd and Palliser Capital Centenary Fund I.
The director is satisfied with the results for the year and expects growth in the future performance of the Group.
Foreign currency risk
The Group receives management fees in USD making it susceptible to foreign currency risk. The Group accepts the risk of currency movement and the impact this has on earnings volatility. Credit risk The Group is not exposed to any significant credit risk as turnover is receivable from a related party. Liquidity risk The Group is not exposed to significant liquidity risks as all major costs are recharged to a related party in line with an agreement. Interest rate risk The Group has interest bearing assets. Interest bearing assets include only cash balances, which earn interest at the existing market rate.
Given the nature of the business, the director is of the opinion that analysis using KPIs is not necessary for an understanding of the development, performance or position of the business.
Palliser Capital (UK) Limited was founded by James Smith on 14 January 2021, and the Group continues to be controlled and run by Mr Smith.
In a particularly competitive environment for financial advisory companies, looking for new investment opportunities remains one of the key criteria for success. We are proud to benefit from a strong pipeline of opportunities, attributable to the Group’s established and growing network. Our skilled staff boast more than 100 years of combined expertise in the financial industry, and are well equipped to select the best investments for our clients. This allows Palliser Capital (UK) Limited to provide a high value service, establishing a solid foundation for new clients, while continuing to build on relationships with existing clients.
In a highly competitive environment for asset management firms, retention of staff remains critical. The Group ensures it offers a competitive remuneration package, in line with market standards. Furthermore, personnel are encouraged to participate in and contribute to all management meetings and investor presentations, as well as being consulted on all major business decisions.
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Group strategic report (continued)
For the year ended 31 December 2023
At present, the Group earns all turnover from two customers, Palliser Capital Master Fund Limited and Palliser Capital Centenary Fund I, therefore customer engagement remains a top priority within the Group. The Group ensures that the customers are constantly updated on the performance of the assets through regular communication. Palliser Capital Master Fund Limited and Palliser Capital Centenary Fund I value the high degree of interaction and expertise offered by the Group, from the sourcing of new investment opportunities, to the reporting it has access to.
This report was approved and authorised for issue on 22 April 2024 by:
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Independent auditor's report to the members of Palliser Capital (UK) Limited
For the year ended 31 December 2023
We have audited the financial statements of Palliser Capital (UK) Limited (the 'Parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2023, which comprise the Consolidated statement of comprehensive income, the Consolidated and Company statements of financial position, the Consolidated and Company statements of changes in equity 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 Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
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 Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council'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.
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 Group's or the Parent 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.
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Independent auditor's report to the members of Palliser Capital (UK) Limited (continued)
For the year ended 31 December 2023
The other information comprises the information included in the Annual Report other than the financial statements and our Auditor's report thereon. The director is responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Group 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 Group 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 Group and the Parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group strategic report or the Director's report.
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Independent auditor's report to the members of Palliser Capital (UK) Limited (continued)
For the year ended 31 December 2023
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 Group 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 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 Group and Company through discussions with directors 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; and
∙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 Group and Company including the Companies Act 2006, The Financial Service and Markets Act 2000, employment legislation and taxation legislation.
We assessed the extent of compliance with the laws and regulations identified above through:
∙making enquiries of management;
∙inspecting legal expenditure 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.
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Independent auditor's report to the members of Palliser Capital (UK) Limited (continued)
For the year ended 31 December 2023
Auditor's responsibilities for the audit of the financial statements (continued)
To address the risk of fraud through management bias and override of controls, we:
∙determined the susceptibility of the Group and Company to management override of controls by checking the implementation of controls and enquiring of individuals involved in the financial reporting process during the year;
∙reviewed journal entries to identify unusual transactions;
∙performed analytical procedures to identify any large, unusual or unexpected transactions and investigated any large variances from the prior year;
∙reviewed accounting estimates and evaluated where judgements or decisions made by management indicated bias on the part of the Group and Company's management;
∙tested turnover by agreement to confirmations from third party administrators; and
∙carried out substantive testing 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.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
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.
In the previous accounting period the director of the Parent Company took advantage of the exemption from the requirement to prepare group accounts under Section 400 of the Companies Act 2006. Therefore, the prior period consolidated financial statements were not subject to audit.
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Independent auditor's report to the members of Palliser Capital (UK) Limited (continued)
For the year ended 31 December 2023
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.
for and on behalf of
Statutory Auditor
130 Wood Street
EC2V 6DL
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Consolidated statement of comprehensive income
For the year ended 31 December 2023
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Consolidated statement of financial position
As at
The financial statements were approved and authorised for issue on its behalf on 22 April 2024 by:
The notes on pages 15 to 27 form part of these financial statements.
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Company statement of financial position
As at
The financial statements were approved and authorised on
The notes on pages 15 to 27 form part of these financial statements.
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Consolidated statement of changes in equity
For the year ended 31 December 2023
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Company statement of changes in equity
For the year ended 31 December 2023
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Notes to the financial statements
For the year ended 31 December 2023
Palliser Capital (UK) Limited is a private company limited by shares, that was incorporated in England and Wales. The registered office address and principal place of business is Palliser House, Palliser Road, London, England, W14 9EQ. The company registration number is 13135419.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, 'The Financial Reporting Standard Applicable in the UK and Republic of Ireland' ('FRS 102'), and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgement in applying the Group's accounting policies (see note 3). The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of comprehensive income in these financial statements.
The parent Company and Group has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by FRS 102:
∙the requirements of Section 7 Statement of Cash Flows;
∙the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d).
This information is included in the consolidated financial statements of Pensive Dragon Limited as at 31 December 2023 and these financial statements may be obtained from Companies House, Crown Way, Cardiff, CF14 3UZ.
The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between Group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Statement of financial position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated statement of comprehensive income from the date on which control is obtained. They are deconsolidated from the date control ceases.
Functional and presentation currency
Transactions and balances
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Notes to the financial statements
For the year ended 31 December 2023
2.Accounting policies (continued)
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges. Turnover is recognised to the extent that it is probable that the economic benefits will flow to the Company and the turnover can be reliably measured. Turnover is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before turnover is recognised: Turnover from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
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Notes to the financial statements
For the year ended 31 December 2023
2.Accounting policies (continued)
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
The estimated useful lives range as follows:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Current asset investments are measured at amortised cost less accumulated impairment.
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Notes to the financial statements
For the year ended 31 December 2023
2.Accounting policies (continued)
The whole of the turnover is attributable to the Company's principal activity.
All turnover arose within the United Kingdom.
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Notes to the financial statements
For the year ended 31 December 2023
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Notes to the financial statements
For the year ended 31 December 2023
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Notes to the financial statements
For the year ended 31 December 2023
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Notes to the financial statements
For the year ended 31 December 2023
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Notes to the financial statements
For the year ended 31 December 2023
14.Tangible fixed assets (continued)
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Notes to the financial statements
For the year ended 31 December 2023
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Notes to the financial statements
For the year ended 31 December 2023
Share premium account
Foreign exchange reserve
Profit and loss account
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Notes to the financial statements
For the year ended 31 December 2023
There were no contingent liabilities at 31 December 2023 or 31 December 2022.
The Company had no capital commitments at 31 December 2023 or 31 December 2022.
The Company operates a defined contribution pension scheme. The assets of the scheme are held separately from
those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £
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Notes to the financial statements
For the year ended 31 December 2023
Pensive Dragon Limited, a company incorporated in England and Wales and registered at Griffin House, 135 High Street, Crawley, West Sussex, RH10 1DQ, is the immediate parent undertaking.
The largest group in which the results of the Company are consolidated is that headed by Pensive Dragon Limited. The consolidated financial statements are available to the public and may be obtained from Companies House, Crown Way, Cardiff, CF14 3UZ. The ultimate controlling party is
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