The directors present the strategic report for the year ended 30 June 2023.
The directors are satisfied with the performance of the business. The company’s turnover increased by 4% compared to the previous year. The company's loss for the year increased by 62%, due to the restructuring of group debts.
The current directors were appointed during the year ending 30 June 2023. Since that time it has been necessary to address a number of historic legacy issues left by the previous management and we are pleased to note that significant progress has now been made.
The Company is exposed to liquidity risk, credit risk and interest rate risk. However, there are no external borrowings of the Company, and therefore the liquidity and interest rate risks are not considered material.
The Company’s’ principal financial assets are cash and trade receivables. Therefore, the Company’s credit risk is primarily attributable to its trade receivables. The Company’s approach to managing risk is to monitor these trade receivables and make an allowance for the impairment when there is objective evidence that the Company will not be able to collect all amounts according to the general terms of the receivables concerned.
Regulatory risk
This is the risk of non-compliance with the regulatory environment the Company operates in. The Company monitors the regulatory environment closely. The Company also holds compliance meetings regularly to ensure the Company remains compliant with existing and upcoming regulatory changes. The Company promotes transparency and openness when working with regulatory parties. During the year there were a number of complaints made to the company, the Company has been fully cooperative in respect of these matters and is working to resolve these issues.
Pillar 3 disclosure will be made available upon request to Gallium Fund Solutions Limited.
2023 2022
Operating Profit Margin (37)% (23.80)%
Net fee and commission income £191,584 £184,403
Return on capital employed (94)% (29.82)%
The key non-financial performance indicators used to determine the progress and performance of the company are set out below;
- Staff turnover
- Brand awareness
- Client service
Performance indicators are reviewed by the management team in order to assess the progress of the company and we are pleased with the overall performance presented in this report.
Directors' statement of compliance with duty to promote the success of the company
The current directors consider, both individually and collectively, that they have acted in the way that would most likely promote success for the benefit of its members as a whole in the decisions taken during the year ended 30 June 2023.
The directors engage in setting, approving and executing the agreed strategic vision and direction and related policies. Other areas are regularly reviewed during each financial year including business performance, risk and compliance, shareholder engagement, health and safety and corporate responsibility matters. This is undertaken by the consideration of reports in board meetings.
In reaching this conclusion the directors have considered their engagement with the following stakeholders and issues:
Customers: The Company seeks to build long-term trusted relationships with customers and seeks regular feedback on performance.
Employees: Employees are encouraged to participate in strategic and operational decision making where appropriate. There is regular communication in relation to short and long-term direction by way of staff meeting and informal meetings and social activities.
Community and the environment: The Company aims to minimise its impact on the environment and local community.
On behalf of the board
The directors present their annual report and financial statements for the year ended 30 June 2023.
The loss for the year, before tax, amounted to £71,015 (2022: £43,760).
No dividends will be distributed for the year ended 30 June 2023.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Information relating to events since the end of the year is given in the notes to the financial statements.
The company seeks to increase its business in its existing market segments and explore new avenues of income through acquisition or organic growth.
The auditors, Arnold Hill & Co LLP (Statutory Auditors), will be proposed for re-appointment at the forthcoming Annual General Meeting.
Basis for opinion
Material uncertainty relating to going concern
We draw attention to note 1.2 of going concern in the financial statements, which indicates that the company made a loss of £71,015 (2022: £43,760) during the year ended 30 June 2023 and, as of that date, the company’s current net assets were £75,732 (2022: £146,747). As stated in the note of going concern, these events or conditions, along with other matters as set forth in the note of going concern, indicate that a material uncertainty exists that may cast significant doubt on the Company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.
Other information
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.
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.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Discussions were held with, and enquiries made of management and those charged with governance with a view to identifying those laws and regulations that could be expected to have a material impact on the financial statements. During the engagement team briefing, the outcomes of these discussions and enquiries were shared with the team, as well as consideration as to where and how fraud may occur.
The following laws and regulations were identified as being of significance to the entity:
- Those laws and regulations to have a direct effect on the financial statements include UK financial reporting standards, Company Law, Tax and Pensions legislation, and distributable profits legislations.
- It is considered that the FCA laws and regulations for which non-compliance may be fundamental to the operating aspects of the business.
Audit procedures undertaken in response to the potential risks relating to irregularities (which include fraud and non-compliance with laws and regulations) comprised of inquiries of management and those charged with governance as to whether the entity complies with such laws and regulations; enquiries with the same concerning any actual or potential litigations or claims; inspection of relevant legal correspondence; review of board minutes; testing the appropriateness of entries in the nominal ledger, including journal entries; reviewing transactions around the end of the reporting period; and the performance of analytical procedures to identify unexpected movements in account balances which may be indicative of fraud.
However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the company. Our examination should not be relied upon to disclose all such material misstatements or frauds, errors or instances of non-compliance as may exist.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
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.
Use of our 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.
The profit and loss account has been prepared on the basis that all operations are continuing operations.
Gallium P E Depositary Limited is a private company limited by shares incorporated in England and Wales. The registered office is Gallium House, Unit 2 Station Court, Borough Green, Sevenoaks, Kent, TN15 8AD.
The principal activity of the Company is to act as a private equity depositary and is authorised by the FCA.
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 £.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Gallium Fund Solutions Group Limited. These consolidated financial statements are available from its registered office, Gallium House Unit 2, Station Court, Borough Green, Sevenoaks, Kent, TN15 8AD.
Interest income is recognised when it is probable that the economic benefits will flow to the company and the amount of revenue can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and the effective interest rate applicable.
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, 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.
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.
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, 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.
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.
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
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.
Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to the Statement of income in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the Balance sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Balance sheet.
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.
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Management recharges are decided by the management team on a periodic basis and are incurred for payroll services provided.
The company has agreed to waive intercompany balances. As a result, £116,127 has been written off to the Profit and Loss account in accordance with the internal loan waiver.
The audit fees are borne by Gallium Fund Solutions Limited.
The average monthly number of persons (including directors) employed by the company during the year was:
The corporation tax rate in the UK increased from 19% to 25% as of April 2023.
The taxable profits for the accounting period are apportioned on a time basis. The 19% rate will be applied to the pre April 2023 period, and 25% rate applied to the post April 2023 period.
For the year ended 30 June 2023, an average corporation tax rate of 21% is applied.
The actual charge for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
On the 19 August 2024, the ownership of the the ultimate parent company of the group Gallium Fund Solutions Group Limited was transferred to Peter Dooley. As a result, Peter Dooley has effective control of the group.
The company has taken advantage of the exemption provided in FRS 102 from disclosing transactions with members of the same group that are wholly owned.
Related party disclosures will be made in the group accounts, Gallium Funds Solutions Group Limited whose registered office is Gallium House, Unit 2, Station Court, Borough Green, Sevenoaks, Kent, TN15 8AD.