The director presents the strategic report for the year ended 28 February 2025.
Fair Review of the Business The directors of Gulf Central Merchant Bank Ltd (GCMB) consider the February 2025 results to be a pivotal reflection of the firm's continued commitment to strategic growth. While the company achieved a turnover of £2,856,270 (an increase of 1.96% from the previous year), we had a small net profit. This result is attributed to our expansion strategy, which involved substantial investments in marketing, travel, increased personnel and consultancy expenses, as well as professional fees in connection with our endeavour to establish a presence in Riyadh, Saudi Arabia. Additionally, the financial performance was impacted by the timing of revenue recognition on certain large mission advisory mandates, where fees remained outstanding at year-end and are expected to be realised in future periods
Despite this, our gross profit margin was at 10.27%, demonstrating underlying operational efficiency and increased client engagement across our core offerings. Investment Management remains the primary revenue contributor. The Leverage Loan Business continues to show resilience, and our Investment Banking and Real Estate Divisions are advancing through their respective growth phases.
Financial Risk and Management Objectives GCMB's primary financial risk exposures continue to centre on operational risk and liquidity. Our objective remains to ensure sufficient liquidity to meet regulatory capital and working capital requirements.
Performance across GCMB’s divisions was mixed:
Investment Management continues to serve as the primary revenue driver and core contributor to overall performance.
Leverage Loan Business experienced a slower pace of activity but showed encouraging signs of recovery during the period.
Investment Banking and Real Estate Divisions are now fully operational and have already attracted initial mandates, signalling strong market interest and momentum.
Financial Risk and Management Objectives
As a provider of merchant banking services and investment management solutions, GCMB’s directors identify the primary financial risk exposure as operational risk and the need to maintain adequate liquidity. Ensuring sufficient liquidity is essential to meet both regulatory capital requirements and working capital needs.
To mitigate these risks, GCMB has implemented comprehensive financial risk management strategies, including:
Clearly Defined Terms of Business: Rigorous agreements with counterparties to minimise exposure to transactional risks.
Stringent Credit Controls: Effective oversight of credit exposure across all transactions.
Active Monitoring: Regular review of cash flow and management accounts to ensure compliance with regulatory capital requirements and to maintain sufficient working capital reserves.
The company remains committed to delivering sustainable growth while adhering to robust risk management practices and regulatory standards. Directors are confident that these measures will support continued progress and resilience in an evolving market environment.
The company is authorised and regulated by the FCA and has permission to advise on, arrange and manage investments.
The director determines the company's business strategy and risk appetite along with designing and implementing a risk management framework that recognizes the risks that the business faces. He also determines how those risks may be mitigated and assess on an ongoing basis the arrangements to manage those risks. As merchant banking services and investment management providers, the director consider that the key financial risk exposure faced by the company is related to operational risk and the need to maintain sufficient liquidity to satisfy regulatory capital requirements and working capital needs. Another important consideration by the director is the counterparty risk. In order to mitigate this, they use rigorous KYC processes and aim to work with Tier 1 counterparties mainly. The management meet on a regular basis and discuss current projections for profitability and regulatory capital management, business planning and risk management. The directors manage the firm’s risks though a framework of policy and procedures having regard to relevant laws, standards, principles and rules (including FCA principles and rules) with the aim to operate a defined and transparent risk management framework. These policies and procedures are updated as required. The firm is small with an operational infrastructure appropriate to its size. It carries no market risk, other than foreign exchange risk on its accounts receivable in foreign currency, and credit risk from management and performance fees receivable.
Dear Valued Investors,
The principal activity of the company remains focused on delivering high-quality financial services, specialising in investment management and merchant banking. As an entity authorised by the Financial Conduct Authority, we are committed to maintaining the highest standards in all aspects of our operations.
Over the past year, we have successfully completed and made substantial progress on all objectives set out in our 2024/2025 strategic roadmap. These accomplishments are a testament to the GCMB team’s dedication and the trust of our partners and stakeholders.. Key highlights include:
Established our presence in the Kingdom of Saudi Arabia (KSA): Our expansion initiative into Riyadh is now operational, serving as a strategic platform for further growth in the Gulf region.
Real Estate Transactions: We have signed key real estate mandates, taking advantage of recovering market conditions.
Investment Banking Team Expansion: We have strengthened our advisory capacity with the recruitment of experienced professionals to enhance client service.
AUM Enhancement: Family office engagement and third-party fundraising initiatives have accelerated, with targets projected to be met by Q4 2025.
Looking ahead, the board has outlined strategic priorities for 2025/2026 to drive growth and enhance value creation:
Focus on building a niche advisory leadership in North Africa, targeting high-potential frontier markets.
Develop a robust SME advisory presence in Saudi Arabia, tailored to local entrepreneurs and regional investors.
Continue enhancing our Real Estate Finance & Structuring capabilities to adapt to dynamic sector trends.
Expand our Fixed Income Strategy to broaden distribution and appeal to global institutional investors.
We extend our gratitude to our clients and business partners for the trust and confidence they place in our company. Your continued support is invaluable, and we remain committed to exceeding your expectations as we navigate the year ahead.
Information concerning the decision-making process.
Due to the size of the Firm, we do not consider it appropriate to have a separate remuneration committee. Instead this function is undertaken by the Managing Board. This will be kept under review and should the need arise, the Firm will consider amending this arrangement to provide greater independent review.
The Board of Gulf Central Merchant Bank Ltd is responsible for ensuring that the remuneration policy is developed to align with its risk tolerance. No external consultants assisted in this review. Any person with a question regarding the policy or disclosures made under this policy should refer to the Managing Board.
The director of the company has acted in a way that he considers, in good faith, would most likely promote the success of the company for the benefit of its shareholders and customers as a whole. In doing so the director has had regard to (amongst other matters):
The likely consequences of any decisions in the long term - the Board takes full responsibility for all strategic matters and meets formally on a regular basis.
The interests of the Company's employees - as a small company all personnel are viewed as key staff. There exists a clear framework of policies and procedures that accord with the legal requirements around equality and diversity, regulatory responsibilities and employment rights but perhaps more importantly the firm has fostered an atmosphere in which all personnel feel comfortable to speak openly on any matter the feel they need to.
The need to foster the Company's business relationships with supplier and others - the Company operates closely with its key sservice providers, so they are aligned with its strategic objectives ensuring that all businesses continue to run optimally. The Board operates a risk management framework including Anti-Bribery and Corruption policies. The Board retains a transparent dialogue with regulators, ensuring that they are updated as required. The company receives regular updates on developments in financial services compliance and regulation. Compliance with the rules and regulations ensure the integrity of the financial markets in which the company operates.
The desirability of the Company maintaining a reputation for high standards of business conduct - this is demonstrated in how the right culture for a client facing regulated business is fostered. The company does maintain a reputation for high standards of business conduct.
The need to act fairly between shareholders of the Company - the company shareholders and board are aligned through a high level of share ownership.
Community & Environment - the firm takes its broader responsibilities very seriously and operates a work experience programme for young individuals considering a career in finance. The firm is also committed to sustainability and demonstrates this through various eco-friendly initiatives as well as screening service providers for their carbon footprint and ESG credential.
On behalf of the board
The director presents his annual report and financial statements for the year ended 28 February 2025.
The results for the year are set out on page 9.
Ordinary dividends were paid amounting to £60,000. The director does not recommend payment of a further dividend.
The director who held office during the year and up to the date of signature of the financial statements was as follows:
The company manages its cash and borrowing requirements in order to maximise interest income and minimise interest expense, whilst ensuring the company has sufficient liquid resources to meet the operating needs of the businesses.
The company’s principal foreign currency exposures arise from trading with overseas companies.
Investments of cash surpluses, borrowings and derivative instruments are made through banks and companies which must fulfill credit rating criteria approved by the Board.
All customers who wish to trade on credit terms are subject to credit verification procedures. Trade debtors are monitored on an ongoing basis and provision is made for doubtful debts where necessary.
There are no post balance sheet events to report.
The company continues to expand its client base and is actively exploring new markets.
The auditor, Fisher, Sassoon & Marks, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
As the company has not consumed more than 40,000 kWh of energy in this reporting period, it qualifies as a low energy user under these regulations and is not required to report on its emissions, energy consumption or energy efficiency activities.
Company law requires the director to prepare financial statements for each financial year. Under that law the director has elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law, the director must not approve the financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period.
In preparing these financial statements, the director is 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; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The director is responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. He is 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.
We have audited the financial statements of Gulf Central Merchant Bank Ltd (the 'company') for the year ended 28 February 2025 which comprise the profit and loss account, 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).
Basis for opinion
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the director's 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 director with respect to going concern are described in the relevant sections of this report.
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 director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the director's report have been prepared in accordance with applicable legal requirements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud.
the 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 directors and other management, and from our commercial knowledge and experience of the financial services 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 Financial Conduct Authority (FCA), Companies Act 2006, taxation legislation, anti-bribery, anti-money-laundering, employment;
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;
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations; and
understanding the design of the company’s remuneration policies.
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 as set out in note 2 were indicative of potential bias; and
investigated the rationale behind significant or unusual transactions.
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 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.
The profit and loss account has been prepared on the basis that all operations are continuing operations.
Gulf Central Merchant Bank Ltd is a private company limited by shares incorporated in England and Wales. The registered office is 22a St. James's Square, London, England, SW1Y 4LB.
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 nature, timing of satisfaction of performance obligations and significant payment terms of the company's major sources of revenue are as follows:
Turnover from trading in trade receivable contracts are recognised on a trade date basis and represents the value of the principal contract traded. The corresponding purchase of the trade receivable contracts are recorded as a cost of sale.
Turnover earned from providing investment management services during the year, and is split between Management fees and Performance fees.
Management fees
Represent fees receivable for investment management services, exclusive of Value Added Tax, which are recognised on an accruals basis.
Management fees are recognised when the company obtains rights for consideration in exchange for its investment management services.
Performance fees
Represent fees that are payable in the event that the performance of the underlying investment exceeds a predetermined benchmark.
Performance fees receivable from funds are recognised in income when the fees crystallise.
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.
In the application of the company’s accounting policies, the director is 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 director does not consider there to be any critical judgements or key sources of estimation uncertainty involved in the preparation of the company's financial statements.
The average monthly number of persons (including directors) employed by the company during the year was:
Their aggregate remuneration comprised:
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:
The other debtors include an amount £41,775 due from the director. This amount is interest free and repayable on or before 30th November 2025.
The company has one class of ordinary shares which carry full rights in the company with respect to voting, dividends and distributions.
At the reporting end date, the company had outstanding commitments for future minimum rental licence payments under non-cancellable contact. The amount due within one year £5,000 (2024: £5,000).
There are no subsequent events to report.
The remuneration of key management personnel is as follows.