Company registration number 09223709 (England and Wales)
PATRONUS PARTNERS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
PATRONUS PARTNERS LIMITED
COMPANY INFORMATION
Directors
Mr P Kavanagh
Mr K Khouri
Mr J Prior
Mr J Steinson
Company number
09223709
Registered office
68 King William Street
London
EC4N 7HR
Auditor
UHY Hacker Young
Quadrant House
4 Thomas More Square
London
E1W 1YW
PATRONUS PARTNERS LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 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 - 25
PATRONUS PARTNERS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 1 -
The directors present the strategic report for the year ended 30 September 2024.
Business Review
Our two divisions, Patronus Markets and Patronus Wealth, performed strongly during the year, despite the challenging headwinds of tricky financial markets. 2024 proved once again that whilst headline returns from key asset classes were positive, significant components were driven by a select few assets and therefore the importance of financial awareness and skilled navigation becomes ever more the priority.
Patronus Wealth had an especially strong year. Our discretionary service, which offers a wide range of strategies tailored to various risk profiles, saw a substantial increase in funds under management. This, combined with excellent real returns from our managers, reinforces our confidence in the long-term appeal of this business within a highly competitive industry. We will continue to invest in financial planning resources, as this division remains a priority for the years ahead.
Patronus Markets remained active throughout the year, despite challenges in the domestic UK stock market, including concerns about its long-term viability as an attractive listing venue for UK companies. Poor relative performance and low UK asset allocations from pension funds have created a difficult funding environment, with smaller exchanges losing a significant number of businesses. Nevertheless, our clients, many of whom have weathered both good and bad times, remain active and engaged, leading to a highly satisfactory outcome for the year.
We extend our gratitude to our Operations and Compliance team for their tireless efforts behind the scenes. Their work ensures efficient client administration from onboarding to continuous monitoring. As a small firm, our client engagement remains highly personal, with someone always available to assist, even outside regular hours. This year has required extra effort from everyone as client onboarding has significantly increased.
The firm continues to invest in Compliance and Risk Management, having implemented a CRM system this financial year along with additional onboarding controls and workflows. Furthermore, the Compliance Monitoring programme has been enhanced and refined, with data from this and other sources supporting the firm’s first Consumer Duty report.
Outlook
In 2025, we will celebrate our tenth year in business, a milestone we are immensely proud of. Establishing a business in the highly regulated and competitive financial services industry is no small feat. Our team’s extensive experience has taught us that building trust with clients, counterparties, and the market is key to long-term success. At this stage in our development, we are confident in the balance of our business, with stronger earnings visibility allowing for sensible investments in new initiatives.
We thank our clients for their loyalty and the many referrals we continue to receive. We also extend our gratitude to our dedicated team at Patronus, who are central to our ongoing success. We look forward to another year of building on this momentum.
PATRONUS PARTNERS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 2 -
Principal risks and uncertainties
Several potential risks and uncertainties could impact our performance. As required by the Financial Conduct Authority (FCA), Patronus has prepared an Internal Capital Adequacy & Risk Assessment (ICARA) document, reviewing the Company’s capital resources alongside key risks to clients, markets, and the firm, ensuring adequate mitigations and capital provisions are in place. This has resulted in a more detailed Risk Assessment and a Wind-down plan. The principal risks affecting our business include:
Market Risk: The company does not deal on its own account, so market risk is minimal. The only market risks Patronus might face relate to the short-term investment of surplus cash and any potential associated currency risk, which is negligible.
Liquidity Risk: The company maintains sufficient liquid resources to cover cash flow imbalances and fluctuations in fees. Patronus maintains cash balances at its bank to manage liquidity risk.
Concentration Risk: While we have a relatively small number of clients providing a large part of our revenue, we are not overly dependent on any single customer or group of connected customers. We continue to develop new revenue streams and attract new clients, mitigating undue concentration risk.
Day-to-day oversight of operations and risks is undertaken by the Patronus Board of Directors. Patronus does not risk its own capital in financial markets and does not have regulatory permission to engage in proprietary trading. Other important risks include changes to business operations, IT security breaches, and market abuse.
Key performance indicators
In our tenth full year of operation, we are pleased to report that the business continues to thrive. Turnover reached £14.15 million, a 42% increase from the previous year. We remain committed to further developing our business model, deepening relationships with existing clients, and attracting new clients.
Future developments
The current year has started well. As we enter our eleventh year, we believe the company is well-established in our markets, with increasing recognition of our services. With a strong foundation in compliance and operational support, we are well-positioned for top-line growth and service expansion
Stakeholder Considerations - S.172 Disclsoure
The board believes it has acted in good faith to promote the Company for the benefit of its members as a whole, considering the factors set out in S172 of the Companies Act 2006. The board meets regularly to review long-term considerations of any decision. In 2021, the company introduced a policy for an annual charitable donation decided by a staff member on a rotational basis, which will continue this year. The company strives to have a positive impact on the community and environment, using local businesses and supporting local initiatives. We minimize paper use and recycle all paper and cardboard. Operating a hybrid working model has naturally reduced paper usage as staff rely more on email communication.
Patronus and its staff aim to be responsible members of the financial services community, always prioritizing fair treatment of clients. The personal welfare and development of our employees are also crucial to our success. The Directors maintain a flat hierarchical structure and encourage open communication. The company seeks to uphold high standards of business conduct, meeting the standards set by the FCA.
Mr K Khouri
Director
20 January 2025
PATRONUS PARTNERS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 3 -
The directors present their annual report and financial statements for the year ended 30 September 2024.
Principal activities
The principal activities of the company continued to be that of execution only, advisory stockbroking and investment management services for retail, professional and institutional clients.
Results and dividends
The results for the year are set out on page 9.
Dividends declared during the year amounted to £410,200 (2023: £639,800). The directors do not recommend payment of a final dividend (2023: £nil).
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr P Kavanagh
Mr K Khouri
Mr J Prior
Mr J Steinson
Auditor
The auditor, UHY Hacker Young, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of directors' responsibilities
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;
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.
PATRONUS PARTNERS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 4 -
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.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
On behalf of the board
Mr K Khouri
Director
20 January 2025
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF PATRONUS PARTNERS LIMITED
- 5 -
Opinion
We have audited the financial statements of Patronus Partners Limited (the 'company') for the year ended 30 September 2024 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 Financial Reporting Standard 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 30 September 2024 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.
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.
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF PATRONUS PARTNERS LIMITED (CONTINUED)
- 6 -
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.
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 or the directors' report.
We have nothing to report in respect of the following matters in relation 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 directors' 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.
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF PATRONUS PARTNERS LIMITED (CONTINUED)
- 7 -
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.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Based on our understanding of the Company and the industry in which it operates, we identified that the principal risks of non-compliance with laws and regulations related to the acts by the Company, which were contrary to applicable laws and regulations including fraud, and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to inflated revenue and profit.
Audit procedures performed included: review of the financial statement disclosures to underlying supporting documentation, enquiries of management and testing of journals and evaluating whether there was evidence of bias by the Directors that represented a risk of material misstatement due to fraud.
There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://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.
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF PATRONUS PARTNERS LIMITED (CONTINUED)
- 8 -
Vinodkumar Vadgama
Senior Statutory Auditor
For and on behalf of UHY Hacker Young
20 January 2025
Chartered Accountants
Statutory Auditor
PATRONUS PARTNERS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 9 -
2024
2023
Notes
£
£
Turnover
2
14,153,113
9,971,285
Cost of sales
(11,608,788)
(7,662,128)
Gross profit
2,544,325
2,309,157
Administrative expenses
(1,904,234)
(1,726,591)
Operating profit
3
640,091
582,566
Interest receivable and similar income
6
18,575
12,534
Interest payable and similar expenses
7
(1,056)
Amounts written off investments
8
6,660
(47,817)
Profit before taxation
664,270
547,283
Tax on profit
9
(159,404)
(140,490)
Profit for the financial year
504,866
406,793
The profit and loss account has been prepared on the basis that all operations are continuing operations.
PATRONUS PARTNERS LIMITED
BALANCE SHEET
AS AT
30 SEPTEMBER 2024
30 September 2024
- 10 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
11
3,805
6,820
Investments
12
14,553
3,805
21,373
Current assets
Debtors
13
440,536
348,316
Cash at bank and in hand
891,928
827,253
1,332,464
1,175,569
Creditors: amounts falling due within one year
14
(411,745)
(367,084)
Net current assets
920,719
808,485
Net assets
924,524
829,858
Capital and reserves
Called up share capital
16
80,000
80,000
Share premium account
320,001
320,001
Profit and loss reserves
524,523
429,857
Total equity
924,524
829,858
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved by the board of directors and authorised for issue on 20 January 2025 and are signed on its behalf by:
Mr K Khouri
Director
Company registration number 09223709 (England and Wales)
PATRONUS PARTNERS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 11 -
Share capital
Share premium account
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 October 2022
70,588
282,353
662,864
1,015,805
Year ended 30 September 2023:
Profit and total comprehensive income
-
-
406,793
406,793
Issue of share capital
16
9,412
37,648
-
47,060
Dividends
10
-
-
(639,800)
(639,800)
Balance at 30 September 2023
80,000
320,001
429,857
829,858
Year ended 30 September 2024:
Profit and total comprehensive income
-
-
504,866
504,866
Dividends
10
-
-
(410,200)
(410,200)
Balance at 30 September 2024
80,000
320,001
524,523
924,524
PATRONUS PARTNERS LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 12 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
21
564,032
913,628
Interest paid
(1,056)
Income taxes paid
(125,967)
(262,411)
Net cash inflow from operating activities
437,009
651,217
Investing activities
Purchase of tangible fixed assets
(1,922)
(524)
Proceeds from disposal of investments
21,213
Interest received
18,575
12,534
Net cash generated from investing activities
37,866
12,010
Financing activities
Proceeds from issue of shares
47,060
Dividends paid
(410,200)
(639,800)
Net cash used in financing activities
(410,200)
(592,740)
Net increase in cash and cash equivalents
64,675
70,487
Cash and cash equivalents at beginning of year
827,253
756,766
Cash and cash equivalents at end of year
891,928
827,253
PATRONUS PARTNERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 13 -
1
Accounting policies
Company information
Patronus Partners Limited is a private company limited by shares incorporated in England and Wales. The registered office is 68 King William Street, London, EC4N 7HR.
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 (with the exception of investments, which are measured at fair value). 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. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Revenue comprises commissions and fees received for execution only and advisory stockbroking, funding positions and discretionary investment management services.
Revenue from execution only and advisory stockbroking represents gross fees and dealing commissions, and is recognised at the point of trade execution. Commission on transactions payable to brokers and settlement agents is recognised as cost of sales.
Gross funding income, being the management fee charged on positions held open overnight, is accrued on a daily basis, calculated based upon the closing price of the underlying open position.
1.4
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Fixtures and fittings
4 years
Computers
4 years
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
PATRONUS PARTNERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
1
Accounting policies
(Continued)
- 14 -
1.5
Fixed asset investments
These relate to listed investments and are included at their market value.
1.6
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.7
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, and other short-term liquid investments with original maturities of three months or less.
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ 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.
PATRONUS PARTNERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
1
Accounting policies
(Continued)
- 15 -
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.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
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.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
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.
PATRONUS PARTNERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
1
Accounting policies
(Continued)
- 16 -
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.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
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.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.10
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
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.
PATRONUS PARTNERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
1
Accounting policies
(Continued)
- 17 -
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
1.11
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13
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
Turnover and other revenue
An analysis of the company's turnover is as follows:
2024
2023
£
£
Turnover analysed by class of business
Execution only and advisory stockbroking
13,686,030
9,394,991
Investment management
176,683
43,566
Others
290,400
532,728
14,153,113
9,971,285
2024
2023
£
£
Other revenue
Interest income
18,575
12,534
PATRONUS PARTNERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 18 -
3
Operating profit
2024
2023
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange (gains)/losses
(835)
32,090
Fees payable to the company's auditor for the audit of the company's financial statements
16,848
16,560
Depreciation of owned tangible fixed assets
3,499
5,055
Loss on disposal of tangible fixed assets
1,438
-
Exchange differences recognised in profit or loss during the year, except for those arising on financial instruments measured at fair value through profit or loss, amounted to £835 (2023 - £32,090).
4
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Directors
4
4
Administration
2
3
Broking, Operations & Compliance
6
5
Total
12
12
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
1,172,029
1,008,058
Social security costs
155,164
126,796
Pension costs
11,510
6,245
1,338,703
1,141,099
5
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
365,000
365,147
PATRONUS PARTNERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
5
Directors' remuneration
(Continued)
- 19 -
Remuneration disclosed above include the following amounts paid to the highest paid director:
2024
2023
£
£
Remuneration for qualifying services
125,000
125,000
6
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
18,575
12,534
2024
2023
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
18,575
12,534
7
Interest payable and similar expenses
2024
2023
£
£
Other finance costs:
Other interest
1,056
8
Amounts written off investments
2024
2023
£
£
Fair value gains/(losses) on financial instruments
Gain/(loss) on financial assets held at fair value through profit or loss
(47,817)
Other gains/(losses)
Gain on disposal of investments held at fair value
6,660
-
6,660
(47,817)
PATRONUS PARTNERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 20 -
9
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
167,036
133,600
Adjustments in respect of prior periods
(7,632)
6,890
Total current tax
159,404
140,490
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2024
2023
£
£
Profit before taxation
664,270
547,283
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 25.00%)
166,068
136,821
Tax effect of expenses that are not deductible in determining taxable profit
1,948
3,669
Tax effect of income not taxable in determining taxable profit
(1,665)
Adjustments in respect of prior years
(7,632)
Other tax adjustments
685
Taxation charge for the year
159,404
140,490
10
Dividends
2024
2023
£
£
Interim Dividends
410,200
639,800
PATRONUS PARTNERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 21 -
11
Tangible fixed assets
Fixtures and fittings
Computers
Total
£
£
£
Cost
At 1 October 2023
27,107
58,145
85,252
Additions
1,922
1,922
Disposals
(24,677)
(24,677)
At 30 September 2024
2,430
60,067
62,497
Depreciation and impairment
At 1 October 2023
25,115
53,317
78,432
Depreciation charged in the year
554
2,945
3,499
Eliminated in respect of disposals
(23,239)
(23,239)
At 30 September 2024
2,430
56,262
58,692
Carrying amount
At 30 September 2024
3,805
3,805
At 30 September 2023
1,992
4,828
6,820
12
Fixed asset investments
2024
2023
£
£
Listed investments
14,553
Movements in fixed asset investments
Investments
£
Cost or valuation
At 1 October 2023
14,553
Disposals
(14,553)
At 30 September 2024
-
Carrying amount
At 30 September 2024
-
At 30 September 2023
14,553
PATRONUS PARTNERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 22 -
13
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
12,000
20,100
Other debtors
16,354
21,651
Prepayments and accrued income
412,182
306,565
440,536
348,316
14
Creditors: amounts falling due within one year
2024
2023
£
£
Trade creditors
17,440
12,886
Corporation tax
167,036
133,599
Other taxation and social security
38,690
86,830
Other creditors
3,022
436
Accruals and deferred income
185,557
133,333
411,745
367,084
15
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
11,510
6,245
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.
16
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary Shares of £1 each
40,000
40,000
40,000
40,000
Class A Shares of £1 each
10,000
10,000
10,000
10,000
Class B Shares of £1 each
10,000
10,000
10,000
10,000
Class C Shares of £1 each
10,000
10,000
10,000
10,000
Class D Shares of £1 each
10,000
10,000
10,000
10,000
80,000
80,000
80,000
80,000
PATRONUS PARTNERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
16
Share capital
(Continued)
- 23 -
Ordinary shares have attached to them full voting, dividend and capital distribution (including on winding up) rights. They do not confer any rights on redemption. Class A, B, C and D shares carry no rights to receive notice of, attend or vote at general meetings. Dividends may be paid to holders of one or more classes of shares to the exclusion of the other(s) or to all classes of shares, in each case at the same or differing rates, as determined by ordinary resolution of the directors. Each shares ranks equally for any distribution of capital made on a winding up or otherwise. The shares are not redeemable.
17
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:
2024
2023
£
£
Within one year
75,990
37,712
Between two and five years
128,750
204,740
37,712
18
Related party transactions
Remuneration of key management personnel
The remuneration of key management personnel is as follows.
2024
2023
£
£
Aggregate compensation
365,000
365,147
The directors are considered to be key management personnel.
19
Ultimate controlling party
The ultimate controlling parties are the four company directors.
The immediate parent undertakings of the company are Maluta Limited, Tomarch Limited, Jessells Limited and Jezcap Limited, which are the personal companies of the four company directors. Each parent undertaking owns 25% of the issued share capital.
PATRONUS PARTNERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 24 -
20
Capital requirements
The firm is categorised as a non-SNI MIFIDPRU investment firm and its own funds requirement is therefore the higher of:
£75k
Fixed overhead requirement
K-factor requirement (which is calculated using a number of quantitative exposure and activity metrics)
The firm’s business model is such that the fixed overhead requirement is the binding requirement, although all metrics are calculated, recorded, and reported to the FCA.
As at 30 September 2024 the firm’s regulatory capital position was as follows:
Own Funds £925k
Own Funds Requirement £369k
Surplus £556k
The firm is further required to maintain core liquid assets equivalent to at least one third of the fixed overhead requirement. As at 30 September 2024, the firm held £892k of core liquid assets against a basic requirement of £369k. The firm estimates its capital and liquidity requirements through the internal capital adequacy and risk assessment (“ICARA”) process, which maps to the firm’s risk profile, business operations, and strategy.
21
Cash generated from operations
2024
2023
£
£
Profit for the year after tax
504,866
406,793
Adjustments for:
Taxation charged
159,404
140,490
Finance costs
1,056
Investment income
(18,575)
(12,534)
Loss on disposal of tangible fixed assets
1,438
-
Depreciation and impairment of tangible fixed assets
3,499
5,055
Other gains and losses
(6,660)
47,817
Movements in working capital:
(Increase)/decrease in debtors
(92,220)
399,522
Increase/(decrease) in creditors
11,224
(73,515)
Cash generated from operations
564,032
913,628
PATRONUS PARTNERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2024
- 25 -
22
Analysis of changes in net funds
1 October 2023
Cash flows
30 September 2024
£
£
£
Cash at bank and in hand
827,253
64,675
891,928
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