Registered number:
FOR THE YEAR ENDED 31 JANUARY 2024
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PARUS FINANCE (UK) LTD
CONTENTS
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PARUS FINANCE (UK) LTD
COMPANY INFORMATION
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PARUS FINANCE (UK) LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 31 JANUARY 2024
The Company is an authorized investment fund management company. It provides investment management services to four funds. Three funds deploy the same long / short investment strategy, namely Parus Fund PLC (an Irish Qualifying Investor Alternative Investment Fund), Parus Fund LLC (a US qualified Investor Fund) and InRIS Parus, formerly R Parus Fund, (a sub-fund of InRIS UCITS PLC, an Irish UCITS umbrella fund). The fourth fund, Parus Global Opportunities Fund (a sub-fund or Parus ICAV PLC, an Irish UCITS umbrella fund was launched on January 4th 2021 and deploys a long only investment strategy.
The Parus long / short funds are global equity investment funds investing primarily in North American and European listed equities in large companies. The investment objective is to generate absolute returns on each individual investment by targeting, on the long side, mainly growth stocks with a competitive advantage and on the short side, structurally declining companies with operating or financial leverage. Some of the trading strategies may involve the use of leverage. The Parus long only fund strategy is a relative value, fully invested strategy that focuses on investments primarily in North American and European equities. The objective is to generate outperformance to the MSCI World index taking a fundamental three to five year view on investments. The strategy targets quality, high growth companies with a competitive advantage. A portion of the portfolio is also invested in value companies, either defensive or cyclical. Stocks included in the portfolios of both strategies are the result of a pure bottom-up, fundamental stock-picking methodology supported by the use of primary data.
The process of risk identification and risk management is addressed through a framework of policies, procedures and internal controls. This framework identifies the risks that the company is exposed to and their impact on economic capital. This process is risk based and uses Individual Capital Assessment principles manage our capital requirements and to ensure we have the financial strength and capital adequacy to support the growth or decline of the business.
The principal risk arising from our investment management business is a reduction in the receipt of investment management fees, be it through a reduction in funds under management or negative performance of the funds themselves.
The Company's directors consider the profit for the year as main performance indicator of the Company's position.
Other key indicators considered are the value of the total assets under management of the funds and the performance of those funds. Assets under management at 31 January 2024 was $475m. For the 2023 calendar year, performance was as follows: Parus Fund PLC 6.6%, Parus Fund LLC 7.0%, R Parus Fund +6.6% and Parus Global Opportunities Fund +21.66%.
The results of the Company for the year, as set out on page 9, show a loss on ordinary activities before tax of €1,869,991 (2023 profit - €65,350). The shareholders' funds of the Company total €16,972,874 (2023 €26,486,553).
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PARUS FINANCE (UK) LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
In compliance with s172(1) of the Companies Act. 2006; the Directors maintain transparent communication with the Company's stakeholders including: its employees and suppliers taking the interests of all into account, without bias, when committing to long term corporate decisions. The Company has a small workforce and a small number of suppliers and therefore the Directors are able to foster strong business relationships and through personal involvement and to consider the impacts of decisions on stakeholders on an individual basis. The maintenance of high standards in every aspect of operations, including stakeholder transparency and business conduct, is considered a priority by the Directors of the Company.
Investment management continues to be a challenging business. However given the depth of experience the Directors have; they continue to be cautiously optimistic.
This report was approved by the board on 24 May 2024 and signed on its behalf.
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PARUS FINANCE (UK) LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 JANUARY 2024
The directors present their report and the financial statements for the year ended 31 January 2024.
The loss for the year, after taxation, amounted to €1,431,743 (2023 - loss €381,097).
A dividend of €8,000,000 (2023 - €8,000,000) was declared and paid during the year.
The directors who served during the year were:
The Company has documented the disclosures required by the FCA under MIFIDPRU 8 and MIFIDPRU TP12. These can be found on our website.
The directors are responsible for preparing the Strategic report, the Directors' report and the financial statements in accordance with applicable law and regulations.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Company's financial statements and then apply them consistently;
∙make judgments 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 to 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.
Information on engagement with suppliers, customers and others are included in the Strategic Report.
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PARUS FINANCE (UK) LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
The auditor, Blick Rothenberg Audit LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board on 24 May 2024 and signed on its behalf.
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PARUS FINANCE (UK) LTD
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF PARUS FINANCE (UK) LTD
FOR THE YEAR ENDED 31 JANUARY 2024
We have audited the financial statements of Parus Finance (UK) Ltd (the 'Company') for the year ended 31 January 2024, which comprise the Statement of income and retained earnings, the Balance sheet, the Statement of cash flows, the Statement 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 Company 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 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.
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PARUS FINANCE (UK) LTD
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF PARUS FINANCE (UK) LTD (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
In our opinion, based on the work undertaken in the course of the 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 or the Directors' report.
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:
We identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and then design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion.
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud, and non- compliance with laws and regulations, our procedures included the following: enquiring of management concerning the Company's policies with regards identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance; enquiring of management concerning the Company's policies detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud; enquiring of management concerning the Company's policies in relation to the internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations; discussing among the engagement team where fraud might occur in the financial statements and any potential indicators of fraud; and obtaining an understanding of the legal and regulatory framework that the Company
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PARUS FINANCE (UK) LTD
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF PARUS FINANCE (UK) LTD (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
operates in and focusing on those laws and regulations that had a direct effect on the financial statements or that had a fundamental effect on the operations of the Company. The key laws and regulations we considered in this context included the UK Companies Act 2006, the Financial Services and Markets Act 2000 and applicable tax legislation.
One particular focus area was the risk of fraud through management override of controls. Our procedures to respond to risks identified included the following: performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud; reviewing the bank statements of the Company for evidence of any large or unusual activity which may be indicative of fraud; enquiring of management in relation to any potential litigation and claims; and testing the appropriateness of journal entries and other adjustments. Another focus area was non-compliance with the rules of the Financial Conduct Authority ('the FCA'). The Company was authorised and regulated by the FCA throughout the period. Our procedures to respond to risks identified included the following: reviewing correspondence between the Company and the FCA, performing analytical review to detect receipts of client money and remaining alert to the possibility of accidental receipt of client monies; and discussion of regulatory matters with the appointed officers of the Company. There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any. Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
A further description of our responsibilities 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.
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
Chartered Accountants &
Statutory Auditor
16 Great Queen Street
Covent Garden
WC2B 5AH
Date: 24 May 2024
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PARUS FINANCE (UK) LTD
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 JANUARY 2024
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PARUS FINANCE (UK) LTD
BALANCE SHEET
AS AT 31 JANUARY 2024
The financial statements were approved and authorised for issue by the board and were signed on its behalf on 24 May 2024.
The notes on pages 13 to 23 form part of these financial statements.
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PARUS FINANCE (UK) LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JANUARY 2024
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PARUS FINANCE (UK) LTD
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 JANUARY 2024
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PARUS FINANCE (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
Parus Finance (UK) Ltd is a private limited company incorporated in England and Wales, registration number 08260823. The registered office is 100 Pall Mall, London, SW1Y 5NQ.
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 the Republic of Ireland 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 management to exercise judgment in applying the Company's accounting policies.
The directors do not consider there are any key accounting estimates or assumptions made that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year.
The following principal accounting policies have been applied:
The Company has a satisfactory capital position and as a consequence the directors believe that the Company is well placed to manage its business risks successfully. The directors have considered the operating profits and cash flows for the twelve month period from the date of signing these accounts and based on this have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Accordingly, they have adopted the going concern basis in preparing the financial statements.
Functional and presentation currency
Transactions and balances
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PARUS FINANCE (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
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.
Depreciation is provided on the following basis:
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.
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PARUS FINANCE (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
2.Accounting policies (continued)
The company has elected to apply Sections 11 and 12 of FRS 102 in respect of financial instruments.
Financial assets and financial liabilities are recognised when the company becomes party to the contractual provisions of the instrument. Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities. The company’s policies for its major classes of financial assets and financial liabilities are set out below. Financial assets Basic financial assets, including trade and other debtors and cash and bank balances are initially recognised at transaction price, 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 for a similar debt instrument. Financing transactions are those in which payment is deferred beyond normal business terms or is financed at a rate of interest that is not a market rate. Such assets are subsequently carried at amortised cost using the effective interest method, less any impairment. Financial liabilities Basic financial liabilities, including trade and other creditors, bank loans and loans from fellow group companies 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 for a similar debt instrument. Financing transactions are those in which payment is deferred beyond normal business terms or is financed at a rate of interest that is not a market rate. Debt instruments are subsequently carried at amortised cost, using the effective interest rate method. Impairment of financial assets Financial assets measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the profit and loss account. For financial assets measured at cost less impairment, the impairment loss is measured as the difference between the asset's carrying amount and the best estimate of the amount the company would receive for the asset if it were to be sold at the reporting date. For financial assets measured at amortised cost, the impairment loss is measured as the difference between the asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If the financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract. 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.
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PARUS FINANCE (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
2.Accounting policies (continued)
Derecognition of financial assets and financial liabilities Financial assets are derecognised when (a) the contractual rights to the cash flows from the asset expire or are settled, or (b) substantially all the risks and rewards of the ownership of the asset are transferred to another party or (c) despite having retained some significant risks and rewards of ownership, control of the asset has been transferred to another party who has the practical ability to unilaterally sell the asset to an unrelated third party without imposing additional restrictions. Financial liabilities are derecognised when the liability is extinguished, that is when the contractual obligation is discharged, cancelled or expires. Offsetting of financial assets and financial liabilities Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is an 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.
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PARUS FINANCE (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
2.Accounting policies (continued)
As a wholly owned subsidiary the company is exempt under Section 33 of FRS 102 from the requirement to disclose transactions with its parent and other wholly owned subsidiaries of the Parus Finance Holding Limited group
The whole of the turnover is attributable to management and performance fees.
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PARUS FINANCE (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
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PARUS FINANCE (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
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PARUS FINANCE (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
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PARUS FINANCE (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
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PARUS FINANCE (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
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PARUS FINANCE (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
The Company's immediate and ultimate parent undertaking is
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