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Registered number: 07275915
MAKOR PARTNERS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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MAKOR PARTNERS LIMITED
COMPANY INFORMATION
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E Wolpert (resigned 9 November 2023)
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Chartered Accountants & Statutory Auditor
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MAKOR PARTNERS LIMITED
CONTENTS
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Independent Auditors' Report
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Consolidated Statement of Comprehensive Income
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Consolidated Statement of Financial Position
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Company Statement of Financial Position
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Consolidated Statement of Changes in Equity
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Company Statement of Changes in Equity
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Consolidated Statement of Cash Flows
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Notes to the Financial Statements
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MAKOR PARTNERS LIMITED
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The principal activity of the Group is that of agency broking, digital currency broking, facilitating transactions in equities, fixed income, foreign exchange, derivatives, and digital currencies for its institutional clients.
One of the UK subsidiary companies, Makor Securities London Ltd, is authorised and regulated by the Financial Conduct Authority (FCA) as well as the National Futures Association (NFA) in the US. In 2020 a new French subsidiary was established, Makor Securities Paris SAS which is regulated by the AMF.
Oscar Gruss & Son Inc, Makor Partners’ US subsidiary is regulated by FINRA and the NFA. The group also operates a branch in Gibraltar and has a representative office in Geneva, Switzerland.
Enigma Securities Limited, the Group’s digital currency research and brokerage company is an Appointed Representative of Makor Securities London Limited. In addition, Enigma Securities Limited is registered with the FCA for the purposes of adhering to UK Money Laundering Regulations as a crypto business.
Key Performance Indicators including gross profit and net profit before tax are shown on the Income Statement. These are in line with expectations.
The financial performance in 2023 remained challenging, but showed significant improvement, nearing breakeven compared to a substantial loss in the previous year. Turnover has experienced a slight decline of 2% year on year, while Gross Profit saw little movement compared to the previous year. While revenue has reduced it reduced at a much lower rate compared to the previous year.
The Group is well poised to grow on the front office side in Europe and the US and will continue to look for relevant opportunities including expanding the product offering as well as geographically. The Board remains optimistic and expects revenue and profit growth in 2024.
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MAKOR PARTNERS LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
PRINCIPAL RISKS AND UNCERTAINTIES
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Agency broking firms continue to face pressure in three main areas:
Regulation
Regulatory changes requiring significant investment in compliance and legal as well as trading technology and infrastructure.
Margin Pressure
Margins in traditional securities, for example cash equities and fixed income, continue to be under pressure requiring superior client service and ongoing product diversification.
Competition
The agency only institutional brokerage industry is very competitive. The Group will continue to improve our service offering both in terms of product and geographic location as well as enhancing our regulatory footprint.
Geo-Political risks
The political uncertainty related to Brexit has significantly subsided. Many European clients have decided to engage with our AMF regulated subsidiary, Makor Securities Paris SAS.
Operating risks
As an agency broking group only with no principal positions the risk of a trading loss remains negligible and is further mitigated by an Errors and Omissions policy held at Lloyds.
Management considers one of the key financial risks faced by the company to be the need to maintain sufficient capital resources to satisfy the ongoing increasing credit requirements of the various clearing agents. Many clients are also requesting increased capital resources reflecting their lower risk appetite. The Group and its subsidiaries maintain more than enough resources to meet their regulatory capital requirements.
Operating risks are minimised by having stringent internal controls and procedures including constant monitoring of client orders and executions and of course clear separation of sales, operations, and accounting/back office.
Management also receives a daily P&L report, revenue per person, and revenue per product which are reconciled to the various statements from clearing firms. Our flat and non-hierarchical management structure also ensures that potential issues are flagged very early on.
Regular cash flow reporting and provision of timely management information ensure that these risks are kept within parameters set by the management.
FINANCIAL KEY PERFORMANCE INDICATORS
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The key financial performance indicators are turnover ($78,196,733) and net loss before tax ($273,733).
Given the milestones set at board level, the group is satisfied with meeting the various targets set out for the year.
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MAKOR PARTNERS LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
OTHER KEY PERFORMANCE INDICATORS
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Gross Profit margins have increased slightly from 48% in the prior year to 49% due to better cost management. Revenue per producer however has increased to $1.2m remaining high relative to our peers.
SECR REPORT
The following table provides a breakdown of Makor Partners Limited / group’s greenhouse gas emissions between 1 January 2023 and 31 December 2023. We have used the GHG Protocol Corporate Accounting and Reporting Standard as the method to quantify and report greenhouse gas emissions. They have been reported in line with the UK Government’s ‘Environmental Reporting Guidelines: including streamlined energy and carbon reporting guidance’ (dated March 2019).
2023 2022
Scope 1 CO2 emissions (tonnes) 0 0
Scope 2 CO2 emissions (tonnes) 45.99 51.70
Total energy consumption in kWH 222,079 267,530
Methodology
Emissions fall within the activities for which the group has operational control. The exclusions and limitations for the data include:
• estimated kWh conversions from financial invoices from the UK landlord in respect of UK emissions;
• estimated kWh conversions for France, using UK carbon conversion factors;
• exclusions for Enigma Markets Inc, Enigma Securities Inc, Enigma Labs SASU, Enigma Securities R&D Ltd subsidiaries on the grounds that carbon emissions are expected to be minimal; and
• exclusion of all Scope 3 data on the grounds that the disclosure of such data is currently on a voluntary
basis.
DIRECTORS' STATEMENT OF COMPLIANCE WITH DUTY TO PROMOTE THE SUCCESS OF THE GROUP
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The Directors of the Group are aware of their requirement to act in the best interests of the following related stakeholders:
Shareholders
The Directors are all significant shareholders in the wider Group and so there is a clear alignment of goals between them. The directors are focussed on maximising the Group's long-term growth prospects as well as creating the opportunities for a dividend stream at Group level.
Customers
The Group's customer base is purely institutional clients. The Directors prioritise compliance with the various regulators of the subsidiary companies, whilst ensuring each client's best interests are served in accordance with their risk appetite.
Suppliers
The Group has various key supplier relationships which it maintains to ensure the smooth running of the business.
Community and the environment
The Group actively seeks to reduce its carbon footprint and aims to be a paperless business in the long term. The Directors also encourages regular attendance at industry related networking events in order to build and maintain strong relationships within the institutional brokerage community.
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MAKOR PARTNERS LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
This report was approved by the board and signed on its behalf.
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MAKOR PARTNERS LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The director presents his report and the audited financial statements for the year ended 31 December 2023.
DIRECTOR'S RESPONSIBILITIES STATEMENT
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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 period.
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.
The director is 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 the Group and to enable him to ensure that the financial statements comply with the Companies Act 2006. He is also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The principal activity of the company is that of a holding company.
Details of the principal activity of the group are given in the Group Strategic Report.
The loss for the year, after taxation, amounted to $273,733 (2022 - $11,556,108).
The directors who served during the year were:
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E Wolpert (resigned 9 November 2023)
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MAKOR PARTNERS LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
The group will continue to expand its product offering by hiring talented staff across all territories and focussing always on servicing our clients as our primary responsibility. We will continue to look for strategic acquisitions. We anticipate increasing institutional interest in digital assets.
As market dynamics continue to evolve, we continue to monitor developments in the space and assess risk management implications for our business and relevance to our client base. Our entrepreneurial culture and flat structure means we are well poised to take advantage of new opportunities as they present themselves.
DISCLOSURE OF INFORMATION TO AUDITORS
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The director at the time when this Director's Report is approved has confirmed that:
∙so far as is aware, there is no relevant audit information of which the Company and the Group's auditors are unaware, and
∙ has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company and the Group's auditors are aware of that information.
Under section 487 (2) of the Companies Act 2006, BKL Audit LLP will be deemed to have been reappointed as auditors 28 days after these financial statements were sent to members or 28 days after the latest date prescribed for filing the accounts with the registrar, whichever is earlier.
This report was approved by the board and signed on its behalf.
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MAKOR PARTNERS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MAKOR PARTNERS LIMITED
We were engaged to audit the financial statements of Makor Partners 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 Statement of Financial Position, the Company Statement of Financial Position, the Consolidated Statement of Cash Flows, the Consolidated Statement of Changes in Equity, the Company 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 do not express an opinion on the accompanying financial statements of the Group and the parent Company. Because of the significance of the matter described in the basis for disclaimer of opinion section of our report, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on these financial statements.
BASIS FOR DISCLAIMER OF OPINION
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During the year a subsidiary, Enigma Securities Ltd, transitioned between versions of their internally developed trading system. The associated data migration resulted in errors affecting revenue, trade debtors, and trade creditors. We were unable to confirm or verify by alternative means the integrity of the balances or the completeness and accuracy of revenue, trade debtors, and trade creditors in Enigma Securities Ltd.
These circumstances significantly limited our ability to obtain sufficient appropriate audit evidence. Specifically, we were unable to determine whether any adjustments might have been found necessary in respect of recorded or unrecorded revenue, trade debtors, and trade creditors, and the components of the Statement of Financial Position, Statement of Comprehensive Income and the Statement of Changes in Equity in Enigma Securities Ltd. Consequently, we issued a disclaimer of opinion in the audit report for Enigma Securities Ltd for the year ended 31 December 2023.
We also assessed the materiality of the impact on the Group. As a result, we were unable to conclude whether adjustments might be necessary in respect of balances or disclosures in the Group’s consolidated financial statements. Specifically, we are unable to determine whether any adjustments might have been found necessary in respect of recorded or unrecorded revenue, trade debtors, and trade creditors, and the components of the Consolidated Statement of Financial Position, Consolidated Statement of Comprehensive Income, the Consolidated Statement of Changes in Equity and the Consolidated Statement of Cash Flows.
Additionally, the abovementioned circumstances have resulted in us being unable to gain sufficient, appropriate evidence regarding the investment made by the Parent Company in Enigma Securities Ltd amounting to $5,611,480. Accordingly, we were unable to determine whether any impairment adjustments would be required in the Parent Company’s financial statements. Specifically, we are unable to determine whether any adjustments might have been found necessary in the components of the Company Statement of Financial Position and the Company Statement of Changes in Equity.
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MAKOR PARTNERS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MAKOR PARTNERS LIMITED (CONTINUED)
OPINION ON OTHER MATTERS PRESCRIBED BY THE COMPANIES ACT 2006
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Because of the significance of the matter described in the basis for disclaimer of opinion section of our report, we have been unable to form an opinion, whether 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 ye 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.
MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION
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Notwithstanding our disclaimer of an opinion on the financial statements, in the light of the knowledge and understanding of the Group and its environment obtained in the course of the audit performed subject to the pervasive limitation described above, we have not identified material misstatements in the Group Strategic Report and the Directors’ Report.
Arising from the limitation of our work referred to above:
• we have not obtained all the information and explanations that we considered necessary for the purpose of our audit; and
• we were unable to determine whether adequate accounting records have been kept.
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:
• 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.
RESPONSIBILITIES OF DIRECTORS
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As explained more fully in the Director's Responsibilities Statement set out on page 5, the director is 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 director determines 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 director is responsible for assessing the Group's and the parent 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 director either intends to liquidate the Group or the parent Company or to cease operations, or have no realistic alternative but to do so.
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MAKOR PARTNERS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MAKOR PARTNERS LIMITED (CONTINUED)
AUDITORS' RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS
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Our responsibility is to conduct an audit of the Group’s and parent Company’s financial statements in accordance with International Standards on Auditing as adopted in the UK (ISAs (UK)) and to issue an Auditor’s Report.
However, because of the matter described in the basis for disclaimer of opinion section of our report, we were not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on these financial statements.
We are independent of the Group 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.
OTHER MATTERS
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:
• Enquiring of management, those charged with governance and the entity’s in house counsel around actual and potential litigation and claims;
• Enquiring of entity staff in tax and compliance functions to identify any instances of non-compliance with laws and regulations;
• Reviewing minutes of meetings of those charged with governance;
• Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations; and
• Performing audit work over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for bias.
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.
As part of an audit in accordance with ISAs (UK), we exercise professional judgement and maintain professional scepticism throughout the audit. We also:
∙Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
∙Obtain an understanding of internal control relevant to the audit in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion of the effectiveness of the Group’s or parent Company's internal control.
∙Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the director.
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MAKOR PARTNERS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MAKOR PARTNERS LIMITED (CONTINUED)
∙Conclude on the appropriateness of the Director’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s or parent Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our Auditors' Report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our Auditors' Report. However, future events or conditions may cause the Group and parent Company to cease to continue as a going concern.
∙Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
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 Auditors' 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.
David Landau FCA (Senior Statutory Auditor)
for and on behalf of
BKL Audit LLP
Chartered Accountants
Statutory Auditor
35 Ballards Lane
London
N3 1XW
25 July 2025
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MAKOR PARTNERS LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
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Loss on crypto-denominated assets
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Income from participating interests
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Interest receivable and similar income
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Interest payable and similar expenses
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Profit/(loss) before taxation
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Loss for the financial year
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Revaluation of cryptocurrencies
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Other comprehensive income for the year
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Total comprehensive income for the year
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(Loss) for the year attributable to:
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Owners of the parent Company
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The notes on pages 19 to 39 form part of these financial statements.
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MAKOR PARTNERS LIMITED
REGISTERED NUMBER: 07275915
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
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Debtors: amounts falling due after more than one year
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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MAKOR PARTNERS LIMITED
REGISTERED NUMBER: 07275915
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 DECEMBER 2023
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 19 to 39 form part of these financial statements.
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MAKOR PARTNERS LIMITED
REGISTERED NUMBER: 07275915
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
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Debtors: amounts falling due after more than one year
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Net current (liabilities)/assets
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Total assets less current liabilities
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Profit and loss account brought forward
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Profit and loss account carried forward
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The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 19 to 39 form part of these financial statements.
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MAKOR PARTNERS LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
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Comprehensive income for the year
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Revaluation of cryptocurrencies
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Total comprehensive income for the year
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Contributions by and distributions to owners
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Shares issued during the year
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Total transactions with owners
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Comprehensive income for the year
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Credit relating to equity settled share based
payments
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Total comprehensive income for the year
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Total transactions with owners
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The notes on pages 19 to 39 form part of these financial statements.
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MAKOR PARTNERS LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
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Comprehensive income for the year
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Total comprehensive income for the year
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Contributions by and distributions to owners
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Shares issued during the year
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Total transactions with owners
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Comprehensive income for the year
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Total comprehensive income for the year
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Total transactions with owners
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The notes on pages 19 to 39 form part of these financial statements.
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MAKOR PARTNERS LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
Cash flows from operating activities
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Profit/(loss) for the financial year
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Amortisation of intangible assets
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Depreciation of tangible assets
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(Increase)/decrease in debtors
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Decrease/(increase) in amounts owed by groups
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Decrease/(increase) in creditors
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Movement in crypto denominated assets and liabilities
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Increase/(decrease)) in amounts owed to groups
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Corporation tax received/(paid)
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Net cash generated from operating activities
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Cash flows from investing activities
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|
|
Purchase of intangible fixed assets
|
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|
Sale of intangible assets
|
|
|
Purchase of tangible fixed assets
|
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|
Sale of tangible fixed assets
|
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|
|
Income from investment in related companies
|
|
|
Purchase of unlisted and other investments
|
|
|
Net cash from investing activities
|
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|
Cash flows from financing activities
|
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|
Net cash used in financing activities
|
|
|
Net increase/(decrease) in cash and cash equivalents
|
|
|
Cash and cash equivalents at beginning of year
|
|
|
Cash and cash equivalents at the end of year
|
|
|
|
|
|
|
Cash and cash equivalents at the end of year comprise:
|
|
|
|
|
MAKOR PARTNERS LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
The notes on pages 19 to 39 form part of these financial statements.
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MAKOR PARTNERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Makor Partners Limited is a company limited by shares incorporated in England and Wales.
The principal place of business is it's Registered Office - 30 Panton Street, London, SW1Y 4AJ.
The principal activity of the company is that of a holding company. Details of the principal activity of the group are given in the strategic report.
2.ACCOUNTING POLICIES
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BASIS OF PREPARATION OF FINANCIAL STATEMENTS
|
The financial statements have been prepared under the historical cost convention and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the United Kingdom and the 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 judgment in applying the company'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 following principal accounting policies have been applied:
The consolidated financial statements present the results of group and its own subsidiaries ("the group") as they formed 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.
The financial statements have been prepared on the going concern basis which assumes that the Group and company will continue to trade for the foreseeable future, being a period of at least twelve months from the date of approval of these financial statements, and will be able to meet its debts as they fall due.
|
|
MAKOR PARTNERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.ACCOUNTING POLICIES (CONTINUED)
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FOREIGN CURRENCY TRANSLATION
|
Functional and presentation currency
The Group's functional and presentational currency is US Dollars.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
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 the Consolidated Statement of Comprehensive Income except when deferred in other comprehensive income as qualifying cash flow hedges.
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue 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 revenue is recognised:
Rendering of services
Revenue 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:
∙the amount of revenue can be measured reliably;
∙it is probable that the Group will receive the consideration due under the contract;
∙the stage of completion of the contract at the end of the reporting period can be measured reliably; and
∙the costs incurred and the costs to complete the contract can be measured reliably.
Turnover comprises revenue recognised by the Group in respect of brokerage commissions earned for services provided. Commissions are recognised at the time the relevant trade is executed.
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|
OPERATING LEASES: THE GROUP AS LESSEE
|
Rentals paid under operating leases are charged to the Consolidated Statement of Comprehensive Income on a straight line basis over the period of the lease.
|
|
MAKOR PARTNERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.ACCOUNTING POLICIES (CONTINUED)
Interest income is recognised in the Consolidated Statement of Comprehensive Income using the effective interest method.
Finance costs are charged to the Conslidated Statement of Comprehensive Income over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
DEFINED CONTRIBUTION PENSION PLAN
The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations.
The contributions are recognised as an expense in the Consolidated Statement of Comprehensive Income when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of Financial Position. The assets of the plan are held separately from the Group in independently administered funds.
Where share options are awarded to employees, the fair value of the options at the date of grant is charged to the Consolidated Statement of Comprehensive Income over the vesting period. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each reporting date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options that eventually vest. Market vesting conditions are factored into the fair value of the options granted. The cumulative expense is not adjusted for failure to achieve a market vesting condition.
The fair value of the award also takes into account non-vesting conditions. These are either factors beyond the control of either party (such as a target based on an index) or factors which are within the control of one or other of the parties (such as the Group keeping the scheme open or the employee maintaining any contributions required by the scheme).
Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to the Consolidated Statement of Comprehensive Income over the remaining vesting period.
Where equity instruments are granted to persons other than employees, the Consolidated Statement of Comprehensive Income is charged with fair value of goods and services received.
|
|
MAKOR PARTNERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.ACCOUNTING POLICIES (CONTINUED)
|
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CURRENT AND DEFERRED TAXATION
|
The tax expense for the year comprises current and deferred tax. Tax is recognised in the consolidated Statement of Comprehensive Income except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company and the Group operate and generate income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the reporting date, except that:
∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits;
∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met; and
∙Where they relate to timing differences in respect of interests in subsidiaries, associates, branches and joint ventures and the Group can control the reversal of the timing differences and such reversal is not considered probable in the foreseeable future.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.
Exceptional items are transactions that fall within the ordinary activities of the Group but are presented separately due to their size or incidence.
GOODWILL
Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of the group's share of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, Goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight line basis to the Consolidated Statement of Comprehensive Income over its useful economic life of 10 years.
|
|
MAKOR PARTNERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.ACCOUNTING POLICIES (CONTINUED)
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
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:
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Short-term leasehold property
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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 the Consolidated Statement of Comprehensive Income.
Investments in subsidiaries are measured at cost less accumulated impairment.
Investments in unlisted investments, whose market value can be reliably determined, are remeasured to market value at each reporting date. Gains and losses on remeasurement are recognised in the Consolidated Statement of Comprehensive Income for the period. Where market value cannot be reliably determined, such investments are stated at historic cost less impairment.
|
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|
CRYPTOCURRENCIES HELD AS STOCK
|
The stock held in the Group consists of various cryptocurrencies and digital assets held at the Statement of Financial Position date.
Cryptocurrencies are held for use as part of the Group's ordinary activities and are measured at fair value through the Statement of Comprehensive Income, which provides a more relevant measure of the Group's performance. The Group operates in an active market where sales can be achieved at published prices from a number of active sources, resulting in a store of readily realisable value at the Statement of Financial Position date and fair value is, therefore, a more relevant measure.
|
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CRYPTO DENOMINATED ASSETS AND LIABILITIES
|
Assets and liabilities that are denominated in Cryptocurrencies that have prices quoted on active markets are valued at the year end at the quoted price of the underlying Cryptocurrency. The profit or loss on this revaluation is recognised in the Consolidated Statement of Comprehensive Income.
|
|
MAKOR PARTNERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.ACCOUNTING POLICIES (CONTINUED)
|
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CASH AND CASH EQUIVALENTS
|
Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
|
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|
PROVISIONS FOR LIABILITIES
|
Provisions are recognised when an event has taken place that gives rise to a legal or constructive obligation, a transfer of economic benefits is probable and a reliable estimate can be made.
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
Increases in provisions are generally charged as an expense to the Consolidated Statement of Comprehensive Income.
The Group only enters into basic financial instruments and transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties and loans to and from related parties.
(i) Financial assets
Basic financial assets, including trade and other debtors, and amounts due from related companies, 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.
Such assets are subsequently carried at amortised cost using the effective interest method. At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. 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 the Consolidated Statement of Comprehensive Income.
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) 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.
(ii) Financial liabilities
Basic financial liabilities, including trade and other creditors and accruals, 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 receipts discounted at a market rate of interest.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary
|
|
MAKOR PARTNERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.ACCOUNTING POLICIES (CONTINUED)
|
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|
FINANCIAL INSTRUMENTS (CONTINUED)
|
course of business from suppliers. Trade creditors 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.
Financial liabilities are derecognised when the liability is extinguished, that is when the contractual obligation is discharged, cancelled or expires.
(iii) Offsetting
Financial assets and liabilities are offset and 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.
Equity dividends are recognised when they become legally payable. Interim equity dividends are
recognised when paid. Final equity dividends are recognised when approved by the shareholders at
an annual general meeting.
|
|
JUDGEMENTS IN APPLYING ACCOUNTING POLICIES AND KEY SOURCES OF ESTIMATION UNCERTAINTY
|
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported for assets and liabilities as at the balance sheet date and the amounts reported for revenues and expenses during the year. However, the nature of estimation means that actual outcomes could differ from those estimates. The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements:
(i) Provisions
Judgement has been used in the calculation of the provision included in accruals in regards to the ongoing
enquiry by the French Tax Authority (see note 23).
(ii) Consideration of impairment of investments
Potential impairments of investments in subsidiary companies are key judgements and management use their knowledge and valuation techniques to assess whether any impairment is required.
There are no other judgements or estimates which materially effect the amounts in the accounts.
|
|
MAKOR PARTNERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
The whole of the turnover is attributable to brokerage services.
Analysis of turnover by country of destination:
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Profit on sale of cryptocurrencies
|
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The operating loss is stated after charging:
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Other operating lease rentals
|
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|
|
|
MAKOR PARTNERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
|
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|
During the year, the Group obtained the following services from the Company's auditors and their associates:
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Fees payable to the Company's auditors for the audit of the consolidated and parent Company's financial statements
|
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|
Fees payable to the Company's auditors and their associates in respect of:
|
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|
|
The auditing of accounts of associates of the Company
|
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|
Taxation compliance services
|
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All non-audit services not included above
|
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|
Staff costs, including director's remuneration, were as follows:
|
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Cost of defined contribution scheme
|
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|
The average monthly number of employees, including the director, during the year was as follows:
|
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|
MAKOR PARTNERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
|
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|
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|
Current tax on profits for the year
|
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|
|
Adjustments in respect of previous periods
|
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Origination and reversal of timing differences
|
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|
|
MAKOR PARTNERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
10.TAXATION (CONTINUED)
|
|
FACTORS AFFECTING TAX CHARGE FOR THE YEAR
|
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|
The tax assessed for the year is higher than (2022 - lower than) the standard rate of corporation tax in the UK of 23,52% (2022 - 19%). The differences are explained below:
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|
Profit/(loss) on ordinary activities before tax
|
|
|
|
|
Profit/(loss) on ordinary activities multiplied by standard rate of corporation tax in the UK of 23.52% (2022 - 19%)
|
|
|
|
|
|
|
|
|
|
Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
|
|
|
|
|
Capital allowances for year in excess of depreciation
|
|
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|
|
Adjustments to tax charge in respect of prior periods
|
|
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|
|
Other timing differences leading to an increase (decrease) in taxation
|
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|
|
|
|
|
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|
Unrelieved tax losses carried forward
|
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|
|
Other differences leading to an increase (decrease) in the tax charge
|
|
|
|
|
|
|
|
|
|
TOTAL TAX CHARGE FOR THE YEAR
|
|
|
|
|
FACTORS THAT MAY AFFECT FUTURE TAX CHARGES
|
There were no factors that may affect future tax charges.
|
|
MAKOR PARTNERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
|
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Charge for the year on owned assets
|
|
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|
|
|
|
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|
|
|
|
|
|
|
|
MAKOR PARTNERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
|
|
Short-term leasehold property
|
|
|
|
|
|
|
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|
|
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|
Charge for the year on owned assets
|
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|
|
|
|
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|
|
MAKOR PARTNERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
|
|
Investments in subsidiary companies
|
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|
MAKOR PARTNERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
|
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|
|
The following were subsidiary undertakings of the Company:
|
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|
|
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|
|
Makor Securities London Ltd
|
30 Panton Street, SW1Y 4AJ, London, England
|
Provision of brokerage services
|
|
|
|
|
|
430 Park Avenue 6th Floor, 10022, New York, USA
|
Provision of brokerage services
|
|
|
|
|
|
30 Panton Street, SW1Y 4AJ, London, England
|
Provision of brokerage services
|
|
|
|
|
Makor Securities Paris SAS *
|
336, rue Saint Honore - 75001 Paris, France
|
Provision of brokerage services
|
|
|
|
|
|
257 Old ChurchmansRd, New Castle, NewCastle County, DE19720, USA
|
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|
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257 Old ChurchmansRd, New Castle, NewCastle County, DE19720, USA
|
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336, rue Saint Honore - 75001 Paris, France
|
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|
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Enigma Securities R&D Ltd *
|
Derech Menachem Begin 11, Ramat Gan, Israel
|
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DUE AFTER MORE THAN ONE YEAR
|
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|
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Amounts owed by group undertakings
|
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|
|
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|
MAKOR PARTNERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
15.DEBTORS (CONTINUED)
|
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|
Amounts owed by group undertakings
|
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|
Prepayments and accrued income
|
|
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|
Crypto-denominated assets held at fair value
|
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Crypto-denominated assets held at fair value represent cryptocurrency-denominated loans and other assets which have been stated at the quoted price of the underlying cryptocurrency.
Amounts owed by group undertakings are unsecured, interest free, have no fixed date of repayment and are repayable on demand.
|
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CASH AND CASH EQUIVALENTS
|
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Included within cash at bank and in hand is $4,571,143 (2022: $4,570,756) held with the various clearers through whom the group trades.
|
|
|
MAKOR PARTNERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
|
|
CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
|
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|
Amounts owed to group undertakings
|
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|
Other taxation and social security
|
|
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|
Accruals and deferred income
|
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Amounts owed to group undertakings are unsecured, interest free, have no fixed date of repayment and are repayable on demand.
|
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Financial assets measured at fair value through profit or loss
|
|
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|
|
Financial assets measured at fair value through profit or loss comprise stock and crypto-denominated assets held at fair value in debtors.
|
|
|
MAKOR PARTNERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
|
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Charged to the profit or loss
|
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|
The deferred tax asset is made up as follows:
|
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ALLOTTED, CALLED UP AND FULLY PAID
|
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|
17,422,350 (2022 - 17,422,350) Ordinary shares of £1.00 each
|
|
|
Share premium account
Is made up of amounts paid over and above the nominal value of the share capital issued.
Other reserves
The other reserves represents the valuation of share options and participation bonds granted to
employees in the ultimate parent undertaking, Makor Holdings Pte Ltd.
Profit and loss account
Includes all current retained profits and losses.
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MAKOR PARTNERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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The ultimate parent, Makor Holdings Pte Ltd, has granted a participation bond over its non-voting C Ordinary shares to which FRS 102 Section 26 (share-based payments) is applicable. The charge was treated as an expense in this Group's figures as the relevant option holders were employees of the Group during the period.
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Outstanding at the beginning of the year
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Forfeited during the year
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OUTSTANDING AT THE END OF THE YEAR
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The fair value of the share options was determined using the Black-Scholes model with the following assumptions:
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Weighted average share price
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Weighted average contractual life (years)
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Expected dividend growth rate
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The charge for this year was $72,398 (2022: $Nil). The charge is treated as an expense in the Statement
of Comprehensive Income and as a capital contribution by the ultimate parent undertaking.
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MAKOR PARTNERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
As at 31 December 2023, the Group has an ongoing enquiry with the French Tax Authority. An amount has been included in accruals as a result of this enquiry. The Group is actively defending the position and it is the Directors' opinion that no further liability will arise. In the event that the claim by the French Tax Authority is successful, the maximum unprovided additional liability will be $355k (2022: $355k).
As at 31 December 2023 a subsidiary Company has been named as defendant in one matter. In this matter, the plaintiff represents customers related to a former business line that took place in a foreign jurisdiction. After consultation with legal counsel, management of the Company believes that there is reasonable possibility for a favorable outcome, and does not anticipate losses that would need to be accrued for.
The same Company has agreed to enter into a settlement with a Panel of the Chicago Mercantile Exchange ("CME") Business Conduct Committee Panel ("Panel") for the amount of $30,000. The CME Panel found that an employee brokered a blocked trade. The effects from this matter did not have a material effect on the Group.
During 2023, the same Company agreed to enter into a settlement with a Panel of the National Futures Association ("NFA") Business Conduct Committee Panel ("Panel") for the amount of $140,000. The NFA Panel findings included failure to keep full, complete, systematic records relating to the business dealing in commodity interests and allowing unregistered individuals to act as associated persons without being registered in that capacity with the NFA. The effects from this matter did not have a material effect on the Group.
The group operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the group in an independently administered fund. The pension cost charge represents contributions payable by the group to the fund and amounted to $193,878 (2022 - $127,575). Contributions totalling $65,215 (2022 - $71,014) were payable to the fund at the balance sheet date.
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COMMITMENTS UNDER OPERATING LEASES
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At 31 December 2023 the Group and the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
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Later than 1 year and not later than 5 years
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MAKOR PARTNERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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RELATED PARTY TRANSACTIONS
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Where possible the company has taken advantage of the exemption conferred by section 33.1A of FRS 102 from the requirement to disclose transactions with other wholly owned group undertakings.
Included within debtors is a balance of $37,011 (2022: $37,011) due from a director of a subsidiary undertaking.
This balance is unsecured and interest free, with no fixed repayment terms.
Included within other debtors are balances totalling $700,048 (2022: $199,358) due from other related parties with shareholders in common. This balance is unsecured and interest free with no repayment terms.
Included within other creditors is a balance of $92,045 (2022: $94,691) due to a related party with shareholders in common. This balance is unsecured and interest free with no fixed repayment terms.
Included within creditors are balances totalling $Nil (2022: $1,232,892) due to other related parties with shareholders in common. This balance is unsecured and interest free with no repayment terms. Other transactions with the related party includes within cost of sales are commissions payable to this related party of $6,154,181 (2022: $3,874,887), within other income are management fees of $136,500 (2022: $77,000) and within income from participating interests are profit shares of $703,356 (2022: $418,991).
The directors are considered key management and their salaries are disclosed in note 9 to the financial statements.
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The ultimate parent undertaking is Makor Holdings Pte Ltd, a company incorporated in Singapore.
There is no ultimate controlling party.
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