Company registration number 08069068 (England and Wales)
GALLARDO SECURITIES LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
GALLARDO SECURITIES LIMITED
COMPANY INFORMATION
Directors
Mr G Campolieti
Mr D Brindle
Mr M I C Levy Walhain
Company number
08069068
Registered office
26-28 Mount Row
London
England
W1K 3SQ
Auditor
Grunberg & Co Ltd
5 Technology Park
Colindeep Lane
Colindale
London
United Kingdom
NW9 6BX
GALLARDO SECURITIES LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 8
Statement of comprehensive income
9
Statement of financial position
10
Statement of changes in equity
11
Statement of cash flows
12
Notes to the financial statements
13 - 26
GALLARDO SECURITIES LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MAY 2023
- 1 -
The directors present the strategic report for the year ended 31 May 2023.
Key performance indicators
The company monitors its progress with reference to a number of key performance indicators, being:
1. Sales revenue
2. Gross profit margin
During the year under review, the company has seen its revenue increase by 14% from £5,228,867 in 2022 to £5,956,475 in 2023. This increase was not as great as the prior year due to the exceptional increase in the following year as a result of the return to normality following the COVID period. The company managed to increase Revenues whilst maintaining comparable overhead costs. The company's gross profit margin was comparable with that in the prior year at 88% (87% 2022) and as a result of the maintained level of overheads and increased turnover managed to increase net profit by £623,375 compared to 2022.
The company has managed to sustain growth and control overheads despite significant global issues, including the war in Ukraine and is now looking to expand the business overseas.
GALLARDO SECURITIES LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 2 -
S172 statement
The Directors of Gallardo Securities Limited strive to promote the long term success of the business for the benefit of its members when making strategic decisions.
The Board ensures that the Company maintains a reputation for high standards of business conduct with suppliers and customers.
The Company is an equal opportunity employer and the wellbeing of employees is at the forefront of the group’s policies and procedures.
Due to the nature of the main activities of the Company, relationships with customers, suppliers and other stakeholders are managed by the Directors. The Directors liaise with the important contacts of the Company’s counterparties to understand their approach to stakeholder engagement and their policies.
Mr G Campolieti
Director
21 September 2023
GALLARDO SECURITIES LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MAY 2023
- 3 -
The directors present their annual report and financial statements for the year ended 31 May 2023.
Principal activities
The principal activity of the company continued to be that of financial intermediary services.
Results and dividends
The results for the year are set out on page 8.
Ordinary dividends were paid amounting to £150,000. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr G Campolieti
Mr D Brindle
Mr M I C Levy Walhain
Financial instruments
Liquidity risk
The objective of the company in managing liquidity risk is to ensure that it can meet its financial obligations as and when they fall due. The company expects to meet its financial obligations through operating cash flows.
Foreign exchange transactional currency exposure
The company is exposed to currency exchange rate risk due to a proportion of the direct costs being denominated in non-Sterling currencies. At present, management do not consider the exposure to be of a material concern.
Customer credit exposure
The company may offer credit terms to its customers which allow payment of the debt after delivery of services. The company is at risk to the extent that a customer may be unable to pay the debt on the specified due date. This risk is mitigated by the strong on-going customer relationships and strong internal credit control and reviews.
Going concern
The Company is profit making in 2023 and has a strong reserves position as at 31 May 2023. At 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. Accordingly, they continue to adopt the going concern basis of accounting in preparing the financial statements.
Engagement with employees and other stakeholders
Details of the number of employees and related costs can be found in Note 7 to the financial statements.
Details on how the directors have had regard to the need to foster the company's business relationships with employees, suppliers, customers and other stakeholders can be found in Section 172 of the Strategic Report.
GALLARDO SECURITIES LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 4 -
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;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and 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.
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.
On behalf of the board
Mr G Campolieti
Director
21 September 2023
GALLARDO SECURITIES LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF GALLARDO SECURITIES LIMITED
- 5 -
Opinion
We have audited the financial statements of Gallardo Securities Limited (the 'company') for the year ended 31 May 2023 which comprise the statement of comprehensive income, the statement of financial position, 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 May 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.
GALLARDO SECURITIES LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF GALLARDO SECURITIES LIMITED
- 6 -
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.
GALLARDO SECURITIES LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF GALLARDO SECURITIES LIMITED
- 7 -
Iirregularities, 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.
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following:
- the nature of the industry and sector and
whether the financial results of our client differed from the industry trends;
- the legal and regulatory framework that the Company operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements;
- the matters discussed among the audit engagement team during the planning process regarding how and where fraud might occur in the financial statement and any potential indicators of fraud.
Audit procedures performed included the reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements; discussions with the directors' on their own assessment of the risks that irregularities may occur either as a result of fraud or error, their assessment of compliance with laws and regulations and whether they were aware of any instances of non-compliance, including any potential litigation or claims; performing analytical procedures
to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud; in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias; inspection of relevant legal correspondence and board minutes; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.
As a result of our assessment, it is considered that the non-compliance of the laws and regulations with Financial Conduct Authority (FCA) may be fundamental to the operating aspects of the business. Also, laws and regulations considered to have a direct effect on the financial statements included the UK Companies Act, Employment Laws, Data Protection Acts, Tax and Pensions legislation and Health & Safety legislation.
No instances of material non-compliance were identified. However, the likelihood of detecting irregularities, including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the entity's controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. There is an unavoidable risk that material misstatements may not be detected, even though the audit has been planned and performed in accordance with ISAs (UK).
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 member 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 member those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.
GALLARDO SECURITIES LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF GALLARDO SECURITIES LIMITED
- 8 -
Herman Hang ACCA
Senior Statutory Auditor
For and on behalf of Grunberg & Co Ltd
21 September 2023
Chartered Accountants
Statutory Auditor
5 Technology Park
Colindeep Lane
Colindale
London
United Kingdom
NW9 6BX
GALLARDO SECURITIES LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MAY 2023
- 9 -
2023
2022
Notes
£
£
Turnover
5
5,956,475
5,228,867
Cost of sales
(703,305)
(675,020)
Gross profit
5,253,170
4,553,847
Administrative expenses
(2,748,058)
(2,675,144)
Other operating income
6,750
Operating profit
6
2,505,112
1,885,453
Interest receivable and similar income
9
9,017
Loss on investments measured at fair value
10
(17,097)
(11,796)
Profit before taxation
2,497,032
1,873,657
Tax on profit
11
(527,621)
(366,122)
Profit for the financial year
1,969,411
1,507,535
The income statement has been prepared on the basis that all operations are continuing operations.
GALLARDO SECURITIES LIMITED
STATEMENT OF FINANCIAL POSITION
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
13
69,359
84,461
Current assets
Debtors
14
8,085,825
5,911,857
Investments
15
525,214
453,469
Cash at bank and in hand
2,288,991
2,982,604
10,900,030
9,347,930
Creditors: amounts falling due within one year
16
(2,337,714)
(2,621,420)
Net current assets
8,562,316
6,726,510
Total assets less current liabilities
8,631,675
6,810,971
Provisions for liabilities
Deferred tax liability
17
17,340
16,047
(17,340)
(16,047)
Net assets
8,614,335
6,794,924
Capital and reserves
Called up share capital
20
400,100
400,100
Profit and loss reserves
8,214,235
6,394,824
Total equity
8,614,335
6,794,924
The financial statements were approved by the board of directors and authorised for issue on 21 September 2023 and are signed on its behalf by:
Mr G Campolieti
Director
Company Registration No. 08069068
GALLARDO SECURITIES LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MAY 2023
- 11 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 June 2021
400,100
5,037,289
5,437,389
Year ended 31 May 2022:
Profit and total comprehensive income for the year
-
1,507,535
1,507,535
Dividends
12
-
(150,000)
(150,000)
Balance at 31 May 2022
400,100
6,394,824
6,794,924
Year ended 31 May 2023:
Profit and total comprehensive income for the year
-
1,969,411
1,969,411
Dividends
12
-
(150,000)
(150,000)
Balance at 31 May 2023
400,100
8,214,235
8,614,335
GALLARDO SECURITIES LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MAY 2023
- 12 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash (absorbed by)/generated from operations
1
(89,702)
307,558
Income taxes paid
(357,362)
(246,037)
Net cash (outflow)/inflow from operating activities
(447,064)
61,521
Investing activities
Purchase of tangible fixed assets
(16,724)
(111,524)
Purchase of investments
(88,842)
(465,265)
Interest received
9,017
Net cash used in investing activities
(96,549)
(576,789)
Financing activities
Dividends paid
(150,000)
(150,000)
Net cash used in financing activities
(150,000)
(150,000)
Net decrease in cash and cash equivalents
(693,613)
(665,268)
Cash and cash equivalents at beginning of year
2,982,604
3,647,872
Cash and cash equivalents at end of year
2,288,991
2,982,604
GALLARDO SECURITIES LIMITED
STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 13 -
1
Cash (absorbed by)/generated from operations
2023
2022
£
£
Profit for the year after tax
1,969,411
1,507,535
Adjustments for:
Taxation charged
527,621
366,122
Investment income
(9,017)
(Gain)/loss on disposal of tangible fixed assets
-
24,124
Depreciation and impairment of tangible fixed assets
31,826
29,502
Other gains and losses
17,097
11,796
Movements in working capital:
Increase in debtors
(2,173,968)
(1,765,343)
(Decrease)/increase in creditors
(452,672)
133,822
Cash (absorbed by)/generated from operations
(89,702)
307,558
2
Analysis of changes in net funds
1 June 2022
Cash flows
31 May 2023
£
£
£
Cash at bank and in hand
2,982,604
(693,613)
2,288,991
GALLARDO SECURITIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
- 14 -
3
Accounting policies
Company information
Gallardo Securities Limited is a private company limited by shares incorporated in England and Wales. The registered office is 26-28 Mount Row, London, England, W1K 3SQ.
3.1
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. The principal accounting policies adopted are set out below.
3.2
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.
3.3
Turnover
Turnover represents commissions and fees receivable, excluding value added tax. Commissions and fees receivable are recognised in line with the terms of the contract which is when the company receives confirmation of revenue billed by its client.
3.4
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:
Leasehold improvements
in accordance with the lease
Fixtures and fittings
25% on cost
Computers
33.33% on cost
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.
3.5
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.
GALLARDO SECURITIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
3
Accounting policies
(Continued)
- 15 -
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
3.6
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.
3.7
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 statement of financial position 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.
Fair value measurement of financial instruments
Interests in subsidiaries, associates and jointly controlled entities are initially measured at transaction price excluding transaction costs, and are subsequently measured at fair value at each reporting date. Transaction costs are expensed to profit or loss as incurred. Changes in fair value are recognised in other comprehensive income except to the extent that a gain reverses a loss previously recognised in profit or loss, or a loss exceeds the accumulated gains recognised in equity; such gains and loss are recognised in profit or loss.
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.
GALLARDO SECURITIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
3
Accounting policies
(Continued)
- 16 -
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
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.
GALLARDO SECURITIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
3
Accounting policies
(Continued)
- 17 -
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.
3.8
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement 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 income statement, 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.
3.9
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.
3.10
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
GALLARDO SECURITIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
3
Accounting policies
(Continued)
- 18 -
3.11
Share-based payments
Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted. The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest. A corresponding adjustment is made to equity.
When the terms and conditions of equity-settled share-based payments at the time they were granted are subsequently modified, the fair value of the share-based payment under the original terms and conditions and under the modified terms and conditions are both determined at the date of the modification. Any excess of the modified fair value over the original fair value is recognised over the remaining vesting period in addition to the grant date fair value of the original share-based payment. The share-based payment expense is not adjusted if the modified fair value is less than the original fair value.
Cancellations or settlements (including those resulting from employee redundancies) are treated as an acceleration of vesting and the amount that would have been recognised over the remaining vesting period is recognised immediately.
3.12
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.
3.13
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
4
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.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Accruals
Included within accrued expenses is an estimate for a bonus payable to staff as part of a present and contractual obligation as at the reporting date. Management will estimate the accrual required using the best available information and apply the necessary judgement to reflect a reasonable estimate of the financial obligation as at the year end.
GALLARDO SECURITIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 19 -
5
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Financial intermediary services
5,956,475
5,228,867
2023
2022
£
£
Turnover analysed by geographical market
UK
2,382,590
2,352,990
Europe
3,276,061
2,875,877
Rest of world
297,824
-
5,956,475
5,228,867
2023
2022
£
£
Other revenue
Interest income
9,017
-
Grants received
-
6,750
6
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange (gains)/losses
(169,134)
5,497
Government grants
-
(6,750)
Fees payable to the company's auditor for the audit of the company's financial statements
19,652
20,377
Depreciation of owned tangible fixed assets
31,826
29,502
(Profit)/loss on disposal of tangible fixed assets
-
24,124
Operating lease charges
325,245
290,774
GALLARDO SECURITIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 20 -
7
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Employees
14
13
Directors
3
3
Total
17
16
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
1,539,641
1,473,084
Social security costs
199,831
185,610
Pension costs
81,311
8,622
1,820,783
1,667,316
8
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
384,237
419,118
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
269,475
309,119
9
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
9,017
GALLARDO SECURITIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
9
Interest receivable and similar income
(Continued)
- 21 -
2023
2022
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
9,017
10
Loss on investments measured at fair value
2023
2022
£
£
Loss on investments measured at fair value
(17,097)
(11,796)
11
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
526,329
355,122
Deferred tax
Origination and reversal of timing differences
1,292
11,000
Total tax charge
527,621
366,122
The main rate of corporation tax has increased to 25% from the previous rate of 19% from 1 April 2023. This has resulted in an effective rate of corporation tax for the year ended 31 May 2023 of 20%. The corporation tax rate of 25% has been used to calculate the deferred tax for the period.
GALLARDO SECURITIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
11
Taxation
(Continued)
- 22 -
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
2,497,032
1,873,657
Expected tax charge based on the standard rate of corporation tax in the UK of 20.00% (2022: 19.00%)
499,406
355,995
Tax effect of expenses that are not deductible in determining taxable profit
24,112
17,685
Permanent capital allowances in excess of depreciation
2,742
(18,558)
Deferred tax movement
1,292
11,000
Adjustment due to change in tax rate
69
Taxation charge for the year
527,621
366,122
12
Dividends
2023
2022
£
£
Interim paid
150,000
150,000
13
Tangible fixed assets
Leasehold improvements
Fixtures and fittings
Computers
Total
£
£
£
£
Cost
At 1 June 2022
59,430
69,908
74,605
203,943
Additions
6,819
9,905
16,724
At 31 May 2023
59,430
76,727
84,510
220,667
Depreciation and impairment
At 1 June 2022
11,885
44,889
62,708
119,482
Depreciation charged in the year
11,886
10,589
9,351
31,826
At 31 May 2023
23,771
55,478
72,059
151,308
Carrying amount
At 31 May 2023
35,659
21,249
12,451
69,359
At 31 May 2022
47,545
25,019
11,897
84,461
GALLARDO SECURITIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
13
Tangible fixed assets
(Continued)
- 23 -
During the year, no impairment provisions have been made against any class of tangible fixed assets.
14
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
2,186,952
2,442,540
Other debtors
5,798,635
3,342,829
Prepayments and accrued income
100,238
126,488
8,085,825
5,911,857
During the year, no impairment provisions have been made against any class of debtor.
15
Current asset investments
2023
2022
£
£
Listed investments
525,214
453,469
16
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
134,696
230,431
Corporation tax
524,087
355,121
Other creditors
798,214
1,265,296
Accruals and deferred income
880,717
770,572
2,337,714
2,621,420
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:
£
£
Deaccelerated capital allowances
17,340
16,047
GALLARDO SECURITIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
17
Deferred taxation
(Continued)
- 24 -
2023
Movements in the year:
£
Liability at 1 June 2022
16,047
Charge to profit or loss
1,293
Liability at 31 May 2023
17,340
The deferred tax liability set out above is expected to reverse within 12 months 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
81,311
8,622
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-based payment transactions
The company has a share option scheme for employees of the company. Options are exercisable at a price agreed with HMRC prior to the date of the grant. The options vest either on the date of the grant or upon the sale of the company. Options are forfeited if the employee leaves the company's employment before the options have fully vested.
In the opinion of the director, the fair value of the share options with vesting conditions cannot be reliably estimated due to uncertainty over the expectation of the vesting conditions being met. Additionally, the director is of the opinion that the fair value of the share options without vesting conditions are not material. Therefore, no expenses have been recognised in the financial statements with respect of the share options outstanding at the end of the year.
Number of share options
Weighted average exercise price
2023
2022
2023
2022
Number
Number
£
£
Outstanding at 1 June 2022 and 31 May 2023
8,166
8,166
2.78
2.78
Exercisable at 31 May 2023
The options outstanding at 31 May 2023 had an exercise price ranging £2.78, and a remaining contractual life of 7 years.
GALLARDO SECURITIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 25 -
20
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary of £1 each
400,100
400,100
400,100
400,100
21
Reserves
Called-up share capital represents the nominal value of shares that have been issued.
Retained earnings includes all current and prior period retained profits and losses, all of which are distributable reserves.
22
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
189,792
170,022
Between two and five years
340,044
529,836
529,836
699,858
23
Related party transactions
Remuneration of key management personnel
The remuneration of key management personnel is as follows.
2023
2022
£
£
Aggregate compensation
384,237
419,118
Other than directors, there are no key management personnel.
Other information
Included within amounts owed from the related party is an unsecured loan of £4,601,784 (2022: £2,470,835) to a company in which a director has a material interest. The amount is interest free and repayable on demand.
GALLARDO SECURITIES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 26 -
24
Directors' transactions
Dividends totalling £150,000 (2022 - £150,000) were paid in the year in respect of shares held by the company's director.
As at the year end, the company owed £798,214 (2022: £1,265,147) to a director. The amount is interest free and repayable on demand.
25
Ultimate controlling party
The ultimate controlling party is G Campolieti.
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