Company registration number 10765547 (England and Wales)
GPIM LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Faulkner House
Victoria Street
Rayner Essex LLP
St Albans
Chartered Accountants
Hertfordshire
AL1 3SE
GPIM LIMITED
COMPANY INFORMATION
Directors
Mr B Palmeri
Mr G P Norton
Mr N M W Anderson
Company number
10765547
Registered office
727-729 High Road
London
N12 0BP
Auditor
Rayner Essex LLP
Faulkner House
Victoria Street
St Albans
Hertfordshire
AL1 3SE
GPIM LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4 - 5
Independent auditor's report
6 - 8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Statement of cash flows
12
Notes to the financial statements
13 - 23
GPIM LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The directors present the strategic report for the year ended 31 December 2023.
Activities and Business Strategy
The principal activity of GPIM Limited is the provision of investment management and broking services to its clients who are predominantly private individuals, utilising where appropriate tax efficient wrappers such as ISA's, SIPP’s & Unit Linked investment Bonds.
GPIM Limited is directly authorised by the Financial Conduct Authority (FCA) number 811340 and is a member of The London Stock Exchange.
The firms core strategy is to focus on giving its clients the highest levels of personal service and direct access to experienced professionals who will be knowledgeable with their circumstances and requirements always ensuring suitability of advice.
Our portfolio management service is predominantly provided on a discretionary basis for which we make ad valorem management & transactional commission fees. We aim to ensure the preservation and growth of clients invested capital in real terms over the longer term.
In the past year we have seen further consolidation within our sector as firms succumb to the cost burden of ever more invasive regulation and the need to chase economies of scale through standardisation and models. We continue to believe that as more of our competitor firms focus on cutting costs our bespoke and personalised service proposition will continue to offer value for money a key focus of the regulator’s consumer duty implementation. More importantly, Investment Managers and advisers with a like-minded approach will be attracted to GPIM Limited.
GPIM Limited has always had good visibility on its revenue by definition of its fee-based approach as well as the relatively small yet supportive client base. During the year we saw inflationary price increases across almost all areas which have been absorbed within our margin, without the need to consider any increases to customer charges. During the current year we will look to review costs further where appropriate to maintain our margins.
GPIM Limited does not offer Pensions advice, although by nature of our service and clients portfolio compositions there is clearly a greater requirement for us to ensure that our clients receive, where appropriate, the correct advice. Historically we have relied upon our network of advisers within the IFA environment to provide this specialist advice. During 2022, GPSR Limited was established as a venture incorporating an IFA with specific experience and knowledge in pensions advice to assist GPIM Limited and its clients, GPSR remains a standalone and independently regulated business. We continue to explore opportunities to add additional advisors into this business. GPIM Limited continues to provide working capital to this company.
Economic and Global Impact
The outlook for the global economy took a positive turn early in the year. Inflationary pressures began to ease, with global energy prices back at levels last seen prior to the invasion of Ukraine. In addition, effects from the rise in energy prices following the invasion are now normalizing, putting further downward pressure on inflation. Although there is concern that should the Houthis in the Red Sea not be brought under control, disruption to logistics could see a reversal back to inflation.
Prices of other commodities as well as global food prices have also eased. However, domestic inflationary pressures remain relatively elevated, in particular in those economies with tighter labour markets.
After two years of uncertainty and lockdowns that resulted in the largest drop in global GDP, the downgrades seen in 2023 seemed to pause with global growth estimated to be 3% for 2023 and falling to 2.7% in 2027, according to the OECD.
GPIM LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Disappointingly the UK economy languishes at the bottom of those projections due to domestic pressures, such as the continued adverse fallout from BREXIT or the perceived mismanagement of monetary policy from the bank of England.
Inflationary pressure is clearly retreating, and the anticipated loosening of monetary policy is well flagged in the UK Gilt market, although the tone from the MPC and the Governor of the Bank of England continues to be cautious.
Added to the economic uncertainty is the likely change of Government following the general election here in the UK and also the impact of another disputed Presidential election in the US, not to mention global conflicts.
Trading and Revenues
During the period we saw our funds under management maintain at a consistent level throughout the year with a marginal recovery in the final quarter of the year. This resulted in relatively flat fee income with commission income increasing by 4.78%. Overall turnover saw an increase of 0.96% with an increased contribution from interest received. Administrative expenses saw a marginal increase of 6.31% reflecting increased costs across the business in general operating profits declined by 11.34% to £566,658.
Whilst global markets have maintained or recovered the declines of 2022 and the impacts from Covid and the Russian invasion of Ukraine, as in 2022 the environment for UK small and mid-caps in which we tend to have a larger weighting has been materially impacted by the lack of liquidity and the UK remains underweight in terms of many global mandates. We have seen a tentative recovery in the final quarter of 2023 and the start of 2024.
We continue to keep a close eye on costs and all areas are constantly under review. The work environment post Covid has changed, and we are continuing to learn from the challenges that the Hybrid working model highlights.
It is our intention to maintain a presence in the City of London as is traditional with a business of our nature although all options will be considered to keep costs under control.
It is our intention to maintain a presence in the City of London as is traditional with a business of our nature although all options will be considered to keep costs under control.
Principal Risks and Uncertainties
GPIM Limited is exposed to several Business risks. It is the board members who are also the principal shareholders who ultimately are responsible for how these risks are managed and dealt with.
Market risk, as the market determines the value of our client's portfolio's and ultimately our revenue from the fees & commissions we charge, which can be impacted by the volatility and market sentiment and liquidity. We endeavour to combat this through diligent management of client assets trying to ensure portfolios are well positioned to mitigate any impact.
Post pandemic has seen a change in working practices and together with the impact of BREXIT, the labour markets in the UK have been impacted across all sectors. Good people are in high demand and inflationary pressure on the cost of living mean that we need to ensure we remain competitive in our remuneration & benefits policy to retain key staff.
Conduct and Regulatory risk continue to evolve, the latest implementation being that of Consumer Duty, which has been successfully implemented without incurring any additional resource cost. The compliance function of the firm is important in ensuring that we avoid, breaches, fines or censure which could have a reputational impact on GPIM Limited.
Operational risk is present in the form of employees' processes and systems on an internal basis as well as the use of certain third-party service providers from settlement and custody to IT support and infrastructure. Every effort is made to manage and mitigate these risks through appropriate training of staff and resources which are also a requirement of the ICARA report which is completed annually.
GPIM LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
Future Developments
During the year we were unsuccessful in our efforts to increase client mandates by recruiting additional Investment Managers. We continue to consider the recruitment of Investment Managers with existing business as a route to expansion but not at any cost.
Staff are a key asset of any small business and retaining the services of key staff is essential to the development of the firm and ultimately the service that our clients receive, and we will ensure that staff receive appropriate training and are able to work in a motivated environment in which they can develop.
At the start of the year John Truscott took the decision to resign from the company and as a director of GPIM Limited. I should like to take the opportunity on behalf of the Board of directors and staff, to thank him for his hard work and contribution to establish GPIM Limited and provide the framework for future growth. We wish him all the best in his future endeavours.
We continue to believe that there will be opportunities for niche, service driven business's such as GPIM Limited who are focused on providing their clients with a bespoke service with access to experienced professionals, not driven by the need to grow at any cost to achieve their objectives. We recognise that all business's benefit from economies of scale but we believe it is important to focus on the service proposition to our clients first and foremost.
Key Performance Indicators
The major key performance indicator is the performance of the funds under management, in terms of growth of funds under management and performance against relevant benchmarks. Detailed performance data is monitored monthly across several client mandates ensuring consistency and we are confident that our performance is in line with our objectives. Much of 2023 saw limited recovery and liquidity constraints across the small & mid-cap environment in which we have a material exposure, although during the final quarter there was a material recovery which served to demonstrate the potential in our asset allocation and the resultant performance.
Mr B Palmeri
Director
8 March 2024
GPIM LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
The directors present their annual report and financial statements for the year ended 31 December 2023.
Principal activities
The principal activity of the company is that of Discretionary Investment Management.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr B Palmeri
Mr G P Norton
Mr N M W Anderson
Mr J W Truscott
(Resigned 17 January 2024)
Results and dividends
The results for the year are set out on page 9.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Auditor
Rayner Essex LLP were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
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.
GPIM LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 5 -
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.
MIFIDPRU 8
In accordance with the rules of the Financial Conduct Authority ("the FCA"), the company has published information on its risk management objectives and policies on its regulatory capital requirements and resources. Full details are available on the company's website www.gpimlimited.com.
On behalf of the board
Mr B Palmeri
Director
8 March 2024
GPIM LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF GPIM LIMITED
- 6 -
Opinion
We have audited the financial statements of GPIM Limited (the 'company') for the year ended 31 December 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including 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 31 December 2023 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.
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.
GPIM LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF GPIM LIMITED
- 7 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report 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 remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which the audit was considered capable of detecting irregularities including fraud
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
we identified the laws and regulations applicable to the company through discussions with the directors and other management, and from our commercial knowledge and experience of the FCA regulatory sector;
we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006, taxation legislation and data protection, anti-bribery, employment and FCA regulations;
we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and
identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
GPIM LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF GPIM LIMITED
- 8 -
To address the risk of fraud through management bias and override of controls, we:
performed analytical procedures to identify any unusual or unexpected relationships;
tested journal entries to identify unusual transactions;
assessed whether judgements and assumptions made in determining the accounting estimates set out in note 2 were indicative of potential bias; and
investigated the rationale behind significant or unusual transactions.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
agreeing financial statement disclosures to underlying supporting documentation
reading the minutes of meetings of those charged with governance;
enquiring of management as to actual and potential litigation and claims; and
reviewing correspondence with HMRC, relevant regulators including the FCA, and the company’s FCA advisors
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
A further description of our responsibilities 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.
Antony Federer FCA FCCA CF
Senior Statutory Auditor
For and on behalf of Rayner Essex LLP
11 March 2024
Chartered Accountants
Statutory Auditor
Faulkner House
Victoria Street
St Albans
Hertfordshire
AL1 3SE
GPIM LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
2023
2022
Notes
£
£
Turnover
3
2,127,741
2,107,588
Administrative expenses
(1,561,083)
(1,468,438)
Operating profit
4
566,658
639,150
Interest receivable and similar income
8
38,966
31,863
Interest payable and similar expenses
7
(3,235)
(12,421)
Other gains and losses on investments
9
23,416
(134,851)
Profit before taxation
625,805
523,741
Tax on profit
10
(147,085)
(113,391)
Profit for the financial year
478,720
410,350
The profit and loss account has been prepared on the basis that all operations are continuing operations.
GPIM LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
12
4,942
3,290
Investments
13
430,524
159,493
435,466
162,783
Current assets
Debtors
14
1,511,275
1,399,594
Cash at bank and in hand
297,036
286,361
1,808,311
1,685,955
Creditors: amounts falling due within one year
15
(396,557)
(480,637)
Net current assets
1,411,754
1,205,318
Total assets less current liabilities
1,847,220
1,368,101
Provisions for liabilities
Deferred tax liability
17
1,236
837
(1,236)
(837)
Net assets
1,845,984
1,367,264
Capital and reserves
Called up share capital
19
71,966
71,966
Revaluation reserve
20,990
Profit and loss reserves
1,753,028
1,295,298
Total equity
1,845,984
1,367,264
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.true
The financial statements were approved by the board of directors and authorised for issue on 8 March 2024 and are signed on its behalf by:
Mr B Palmeri
Mr N M W Anderson
Director
Director
Company registration number 10765547 (England and Wales)
GPIM LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
Share capital
Investment fair value reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 January 2022
71,966
36,936
1,639,637
1,748,539
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
-
410,350
410,350
Dividends
11
-
-
(791,625)
(791,625)
Transfer of non-distributable reserves
-
(36,936)
36,936
-
Balance at 31 December 2022
71,966
1,295,298
1,367,264
Year ended 31 December 2023:
Profit and total comprehensive income for the year
-
-
478,720
478,720
Transfer of non-distributable reserves
-
20,990
(20,990)
-
Balance at 31 December 2023
71,966
20,990
1,753,028
1,845,984
The investment fair value reserve reflects the increase in fair value of the investments held, net of deferred taxation. This reserve is non-distributable.
GPIM LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
23
332,074
643,459
Interest paid
(12,421)
(12,459)
Income taxes paid
(124,262)
(195,347)
Net cash inflow from operating activities
195,391
435,653
Investing activities
Purchase of tangible fixed assets
(4,660)
(2,292)
Loans to directors
(12,056)
(318,004)
Interest received
32,318
23,218
Dividends received
6,648
1,697
Net cash generated from/(used in) investing activities
22,250
(295,381)
Financing activities
Repayment of borrowings
(206,966)
Dividends paid
(267,783)
Net cash used in financing activities
(206,966)
(267,783)
Net increase/(decrease) in cash and cash equivalents
10,675
(127,511)
Cash and cash equivalents at beginning of year
286,361
413,872
Cash and cash equivalents at end of year
297,036
286,361
GPIM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 13 -
1
Accounting policies
Company information
GPIM Limited is a private company limited by shares incorporated in England and Wales. The registered office is 727-729 High Road, London, N12 0BP. The trading address is 80 Coleman Street, London, EC2R 5BJ.
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, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments 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
Turnover represents the amounts recoverable for discretionary investment management services provided to clients, excluding value added tax, under contractual obligations which are performed gradually over time.
Management fees are recognised quarterly, and are based on a percentage of the value of the funds held.
Commission income is recognised daily, and is based on a percentage of the value of the transaction undertaken.
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:
Computers
3 years straight line
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.
1.5
Fixed asset investments
Fixed asset investments, 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.
GPIM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
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.
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, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
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.
GPIM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
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.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, 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.
GPIM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
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.
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.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
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
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
1.14
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.
GPIM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Management fees
1,437,442
1,448,634
Commission
662,406
632,212
Other
27,893
26,742
2,127,741
2,107,588
4
Operating profit
2023
2022
Operating profit for the year is stated after charging:
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
12,250
12,650
Depreciation of owned tangible fixed assets
3,008
3,505
Operating lease charges
83,567
92,395
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Directors
4
4
Staff
8
9
Total
12
13
GPIM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
5
Employees
(Continued)
- 18 -
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
702,919
697,300
Social security costs
97,309
90,651
Pension costs
56,200
52,765
856,428
840,716
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
352,500
375,000
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
127,500
150,000
7
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Other interest on financial liabilities
3,235
12,421
8
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
4,424
Other interest income
27,894
30,166
Total interest revenue
32,318
30,166
Other income from investments
Dividends received
6,648
1,697
Total income
38,966
31,863
GPIM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
9
Other gains and losses on investments
2023
2022
£
£
Fair value gains/(losses) on financial instruments
Change in value of financial assets held at fair value through profit or loss
20,990
(103,271)
Other gains/(losses)
Gain on disposal of fixed asset investments
2,426
Bad debt provision relating to other loans
-
(31,580)
23,416
(134,851)
10
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
146,686
122,074
Deferred tax
Origination and reversal of timing differences
399
(8,683)
Total tax charge
147,085
113,391
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:
2023
2022
£
£
Profit before taxation
625,805
523,741
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2022: 19.00%)
156,451
99,511
Tax effect of expenses that are not deductible in determining taxable profit
1,179
24,821
Adjustments in respect of prior years
(170)
(2,358)
Effect of change in corporation tax rate
(9,237)
Dividend income
(1,662)
Depreciation
752
666
Capital allowances
(1,234)
(566)
Deferred tax charge
399
(8,683)
Capital gains
607
Taxation charge for the year
147,085
113,391
GPIM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
11
Dividends
2023
2022
£
£
Final paid
791,625
12
Tangible fixed assets
Computers
£
Cost
At 1 January 2023
38,994
Additions
4,660
At 31 December 2023
43,654
Depreciation and impairment
At 1 January 2023
35,704
Depreciation charged in the year
3,008
At 31 December 2023
38,712
Carrying amount
At 31 December 2023
4,942
At 31 December 2022
3,290
13
Fixed asset investments
2023
2022
£
£
Listed investments
430,524
159,493
Movements in fixed asset investments
Investments
£
Cost or valuation
At 1 January 2023
159,493
Additions
275,958
Valuation changes
20,990
Disposals
(25,917)
At 31 December 2023
430,524
Carrying amount
At 31 December 2023
430,524
At 31 December 2022
159,493
GPIM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
14
Debtors
2023
2022
Amounts falling due within one year:
£
£
Corporation tax recoverable
180,181
180,181
Other debtors
1,284,727
1,177,394
Prepayments and accrued income
46,367
42,019
1,511,275
1,399,594
15
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Other borrowings
16
206,966
Trade creditors
30
Corporation tax
146,856
124,432
Other taxation and social security
77,934
75,101
Other creditors
121,285
2,089
Accruals and deferred income
50,482
72,019
396,557
480,637
16
Loans and overdrafts
2023
2022
£
£
Other loans
206,966
Payable within one year
206,966
The above loans relate to amounts owed to directors which are subordinated to all other creditors.
17
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
1,236
837
GPIM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
17
Deferred taxation
(Continued)
- 22 -
2023
Movements in the year:
£
Liability at 1 January 2023
837
Charge to profit or loss
399
Liability at 31 December 2023
1,236
The deferred tax liability set out above is expected to reverse within 3 years and relates to accelerated capital allowances that are expected to mature within the same period.
18
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
56,200
52,765
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.
19
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of 1p each
7,196,600
7,196,600
71,966
71,966
20
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2022
£
£
Within one year
57,600
80,550
Between two and five years
19,200
57,600
99,750
GPIM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
21
Related party transactions
At the year end the company was owed £63,801 (2022: £67,082) from the GPIM Pension Scheme. The loan is for 12 months with interest charged at 5% per annum.
At the year end the company was owed £95,000 (2022: £65,000) from GPSR Ltd, a company under common control.
22
Directors' transactions
At the year end, the company owed a director £nil (2022: £46,966), and another director £nil (2022: £160,000). The loans are subordinated to all other creditors.
At the year end a director owed the company £593,206 (2022: £581,150). The loan accrues interest.
23
Cash generated from operations
2023
2022
£
£
Profit for the year after tax
478,720
410,350
Adjustments for:
Taxation charged
147,085
113,391
Finance costs
3,235
12,421
Investment income
(38,966)
(31,863)
Depreciation and impairment of tangible fixed assets
3,008
3,505
Gain on sale of investments
(2,426)
-
Other gains and losses
(20,990)
134,851
Movements in working capital:
(Increase)/decrease in debtors
(349,491)
58,259
Increase/(decrease) in creditors
111,899
(57,455)
Cash generated from operations
332,074
643,459
24
Analysis of changes in net funds
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
286,361
10,675
297,036
Borrowings excluding overdrafts
(206,966)
206,966
-
79,395
217,641
297,036
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