Synergy Financial Products Limited
Annual Report and Financial Statements
For the year ended 30 June 2023
Company Registration No. 01792304 (England and Wales)
Synergy Financial Products Limited
Company Information
Director
E Lyons
Secretary
S Yau
Company number
01792304
Registered office
Centrium 1
Griffiths Way
St Albans
AL1 2RD
Bankers
HSBC plc
London Corporate Banking Centre
Level 6, 71 Queen Victoria Street
London
EC4V 4AY
Solicitors
CMS Cameron McKenna Nabarro Olswang LLP
Cannon Place
78 Cannon Street
London
EC4N 6AF
Auditor
Moore Kingston Smith LLP
6th Floor
9 Appold Street
London
EC2A 2AP
Synergy Financial Products Limited
Contents
Page
Strategic report
1 - 3
Director's report
4 - 5
Independent auditor's report
6 - 9
Profit and loss account
10
Statement of comprehensive income
11
Balance sheet
12
Statement of changes in equity
13
Statement of cash flows
14
Notes to the financial statements
15 - 26
Synergy Financial Products Limited
Strategic Report
For the year ended 30 June 2023
Page 1

The director presents the strategic report for the year ended 30 June 2023.

Review of the business

The principal activity of the company is the provision of packaged protection and investment related products.

 

The company continued to generate turnover on the existing books for protection and investment products. The sustainability of profits is, to a large extent, a function of the number of customers and the assets under management.

 

Turnover for the year was £1,124,752 (2022: £1,392,177). Turnover is reducing as policies in force gradually decline in volume. Despite this, the company has managed to return to profit of £46,281 (2022: £87,623) by focusing on effective cost management.

 

The company continues to maintain a healthy balance sheet with a cash balance at 30 June 2023 of £1,404,886 (2022: £1,396,935).

Key performance indicators
30 June 2023
30 June 2022
30 June 2021
Turnover £'000
1,125
1,392
1,455
Operating profit £'000
3
83
23
Total policies in force '000
6
7
8
Operating profit / turnover %
0.3%
6.0%
1.6%
Operating profit / policies £
£0.55
£11.86
£2.91
Financial risk management objectives and policies

The company's activities expose it to a number of risks including financial risk, credit risk, liquidity risk and regulatory risk.

Financial risk

The company receives commission from insurers for the sale of protection products. Should these policies lapse within a six-year timeframe, a proportion of the commission is repayable. The company has no contractually determined cash flows and so interest rate risk is normal. The company is not exposed to currency risk. No hedging techniques are employed.

 

The company’s risk management objectives and policies aim to mitigate specific financial risks where there is a possibility that any financial risk may lead to material changes in the company’s financial performance, position or cash flow. The company has limited exposure to financial risk through its financial assets and financial liabilities.

Credit risk

Cash is held in major UK banks in an attempt to mitigate credit risk and regular reviews of the bank ratings are conducted by management. At the balance sheet date, the maximum exposure to credit risk is limited to the carrying amount of each financial asset/liability in the balance sheet. Management review the level of outstanding debt to manage credit risk effectively.

Liquidity risk

The company manages liquidity risk by maintaining sufficient funds in cash held in major UK banks to meet liabilities in a timely and orderly manner.

 

 

 

 

Synergy Financial Products Limited
Strategic Report (Continued)
For the year ended 30 June 2023
Page 2
Regulatory risk

Our business and products are regulated by the Financial Conduct Authority in the UK, and we are therefore exposed to the risk of not complying with regulatory requirements, regulatory change or regulators’ expectations. Failing to properly manage regulatory risk, including the handling of client money, may result in regulatory sanctions being imposed and could harm our reputation. We therefore monitor the regulatory environment on an on-going basis and our own internal controls have been designed to counter such risk. Management receive regular reports on compliance which include results from compliance reviews on specific topics, suggestions for improvements of systems and information on customer complaints. We also engage external specialists where appropriate to review elements of our controls in this area.

Future developments
The director expects the general level of activity of current business to remain consistent in the forthcoming year. A significant amount of efforts have been invested in the current year in controlling our costs and developing new revenue stream.
Statement by the director relating to their statutory duties under section 172(1) of the Companies Act 2006
The director, in line with his duties under s172 of the Companies Act 2006, act in the way he considers, in good faith, would be most likely to promote the success of the company for the benefit of its member, and in doing so have regard, amongst other matters, to the:
•    Likely consequences of any decision in the long term;
•    Interests of the company's employees;
•    Need to foster the company's business relationships with suppliers, customers and others;
•    Impact of the company's operations on the community and the environment;
•    Desirability of the company maintaining a reputation for high standards of business conduct;
•    Need to act fairly as between members of the company.
Stakeholders
The board understands the importance of engagement with all of its stakeholders and gives appropriate weighting to the outcome of its decisions for the relevant stakeholder in weighing up how best to promote the success of the company. The board regularly discusses issues concerning customers, suppliers, employees, community and environment, regulators and its shareholder, which it takes into account in its discussions and in its decision-making process. In addition to this, the board seeks to understand the interests and views of the company's stakeholders by engaging with them directly when required. The below summarises the key stakeholders and how we engage with each:
Customers
The board is in regular contact with existing and potential customers, to obtain feedback on matters such as product quality and customer service.  The company's customer relations team is critical to ensuring long term customer satisfaction through communication and product improvement.
Suppliers
We work with a range of suppliers and remain committed to being fair and transparent in our dealings with all of our suppliers. Suppliers are generally relevant to the whole company and the company has, where relevant, procedures in place requiring due diligence of suppliers as to their internal governance, including for example, their anti-bribery and corruption practices, data protection policies and modern slavery matters. The company has systems and processes in place to ensure suppliers are paid in a timely manner.
Employees
The company has a well-established management reporting structure which encourages employee engagement in an open working environment. The board is responsible for ensuring that this structure enables effective communication and feedback between employees and management.
Synergy Financial Products Limited
Strategic Report (Continued)
For the year ended 30 June 2023
Page 3
Community and environment
The board is aware of the impact its activities can have on the environment, and is committed to minimising our environmental footprint.
Regulators
We work with our regulators in an open and proactive manner to help develop processes and controls that meet the needs of all our stakeholders. The board's intention is to behave responsibly and to ensure that the management team operates the business in a responsible manner, acting with the high standards and good governance expected of a regulated business like ours.
Shareholder
The board also seeks to behave in a responsible manner towards our shareholders. The board frequently communicates information relevant to the shareholders, such as its financial reporting and updates on commercial activity.
Events after the balance sheet date
The director confirms that there are no post balance sheet events that need to be disclosed.
Approved by the Board and signed on its behalf by
E Lyons
Chief Executive Officer
12 October 2023
Synergy Financial Products Limited
Director's Report
For the year ended 30 June 2023
Page 4

The director presents his annual report and financial statements for the year ended 30 June 2023.

Principal activities

The principal activity of the company continued to be that of the provision of packaged protection and investment related products.

Going concern

The director has reviewed the forecasts and projections of Synergy Financial Products Limited, taking into account the existing business and the revenue generated from the new plan. The forecasts show the business is likely to generate profit in the next year. The director has a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. The director has considered the key risks and uncertainties surrounding the company in reaching this decision. Thus, the director continues to adopt the going concern basis in preparing the annual financial statements.

Results and dividends

The results for the year are set out on page 8.

No ordinary dividends were paid. The director does not recommend payment of a final dividend.

Director

The director who held office during the year and up to the date of signature of the financial statements was as follows:

E Lyons
Auditor

In accordance with the company's articles, a resolution proposing that Moore Kingston Smith LLP be reappointed as auditor of the company will be put at a General Meeting.

Energy and carbon report

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.

Synergy Financial Products Limited
Director's Report (Continued)
For the year ended 30 June 2023
Page 5
Statement of director's responsibilities

The director is responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the director to prepare financial statements for each financial year. Under that law the director has elected to prepare the financial statements in accordance with 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:

 

 

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.

Statement of disclosure to auditor

So far the 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 director has taken all the necessary steps that they ought to have taken as director in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

Results and dividends

Details of the company's unaudited Pillar 3 disclosures, required under section 11 of the Financial Services Authority's Prudential Sourcebook for Banks, Building Societies and Investment Firms (BIPRU), can be found at the following web address: www.sfpl.co.uk.

On behalf of the board
E Lyons
Director
12 October 2023
2023-10-16
Synergy Financial Products Limited
Independent Auditor's Report
To the Members of Synergy Financial Products Limited
Page 6
Opinion

We have audited the financial statements of Synergy Financial Products Limited (the 'company') for the year ended 30 June 2023 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 FRS 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:

Basis for opinion

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 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

The other information comprises the information included in the annual report, other than the financial statements and our auditor's report thereon. The director is 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.

Synergy Financial Products Limited
Independent Auditor's Report (Continued)
To the Members of Synergy Financial Products Limited
Page 7

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

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 Director's 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:

 

Responsibilities of director

As explained more fully in the Director's Responsibilities Statement, the director is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the director determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

 

In preparing the financial statements, the director is responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the director either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.

Synergy Financial Products Limited
Independent Auditor's Report (Continued)
To the Members of Synergy Financial Products Limited
Page 8
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.

 

As part of an audit in accordance with ISAs (UK) we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

 

 

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

 

 

Synergy Financial Products Limited
Independent Auditor's Report (Continued)
To the Members of Synergy Financial Products Limited
Page 9

Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.

The objectives of our audit in respect of fraud, are; to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses to those assessed risks; and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the company.

Our approach was as follows:

 

 

There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

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.

Mital Shah
Senior Statutory Auditor
for and on behalf of Moore Kingston Smith LLP
12 October 2023
Chartered Accountants
Statutory Auditor
6th Floor
9 Appold Street
London
EC2A 2AP
Synergy Financial Products Limited
Profit and Loss Account
For the year ended 30 June 2023
Page 10
2023
2022
Notes
£
£
Turnover
3
1,124,752
1,392,177
Cost of sales
(502,339)
(651,589)
Gross profit
622,413
740,588
Administrative expenses
(618,952)
(657,155)
Operating profit
4
3,461
83,433
Interest receivable and similar income
8
42,820
4,190
Profit before taxation
46,281
87,623
Tax on profit
9
-
0
-
0
Profit for the financial year
46,281
87,623

The Profit and Loss Account has been prepared on the basis that all operations are continuing operations.

Synergy Financial Products Limited
Statement of Comprehensive Income
For the year ended 30 June 2023
Page 11
2023
2022
£
£
Profit for the year
46,281
87,623
Other comprehensive income
-
-
Total comprehensive income for the year
46,281
87,623
Synergy Financial Products Limited
Balance Sheet
As at 30 June 2023
Page 12
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
10
81,607
105,667
Tangible assets
11
185
888
Investments
12
4
4
81,796
106,559
Current assets
Debtors
14
159,066
139,397
Cash at bank and in hand
1,404,886
1,396,935
1,563,952
1,536,332
Creditors: amounts falling due within one year
15
(396,389)
(439,813)
Net current assets
1,167,563
1,096,519
Net assets
1,249,359
1,203,078
Capital and reserves
Called up share capital
17
273,520
273,520
Share premium account
350,050
350,050
Capital contribution reserve
18
300,000
300,000
Profit and loss reserves
325,789
279,508
Total equity
1,249,359
1,203,078
The financial statements were approved and signed by the director and authorised for issue on 12 October 2023
E  Lyons
Director
Company Registration No. 01792304
Synergy Financial Products Limited
Statement of Changes in Equity
For the year ended 30 June 2023
Page 13
Share capital
Share premium account
Capital contribution reserve
Profit and loss reserves
Total
£
£
£
£
£
Balance at 1 July 2021
273,520
350,050
300,000
191,885
1,115,455
Year ended 30 June 2022:
Profit and total comprehensive income for the year
-
-
-
87,623
87,623
Balance at 30 June 2022
273,520
350,050
300,000
279,508
1,203,078
Year ended 30 June 2023:
Profit and total comprehensive income for the year
-
-
-
46,281
46,281
Balance at 30 June 2023
273,520
350,050
300,000
325,789
1,249,359
Synergy Financial Products Limited
Statement of Cash Flows
For the year ended 30 June 2023
Page 14
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash (absorbed by)/generated from operations
20
(34,869)
136,093
Investing activities
Interest received
42,820
4,190
Net cash generated from investing activities
42,820
4,190
Net increase in cash and cash equivalents
7,951
140,283
Cash and cash equivalents at beginning of year
1,396,935
1,256,652
Cash and cash equivalents at end of year
1,404,886
1,396,935
Synergy Financial Products Limited
Notes to the Financial Statements
For the year ended 30 June 2023
Page 15
1
Accounting policies
Company information

Synergy Financial Products Limited is a private company limited by shares incorporated in England and Wales. The registered office is Centrium 1 Griffiths Way, St. Albans, England, AL1 2RD.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

The company has not prepared consolidated accounts because the subsidiaries are immaterial in aggregate. The financial statements present information about the company as an individual entity and not about its group.

1.2
Going concern

Atruet the time of approving the financial statements, the director has a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future, based on cashflow forecasts. Thus the director continues to adopt the going concern basis of accounting in preparing the financial statements.

1.3
Turnover

Turnover represents the amounts (excluding value added tax) derived from the provision of services to customers. It is recognised as it is earned.

 

All turnover is derived from commission and fees receivable on product design, marketing, underwriting and administration of protection and investment related products.

 

The company receives commission from insurers on the sale of protection products. Should these policies lapse within a set timeframe, a proportion of commission is repayable. A provision is made for the amounts expected to be repaid, based on expected lapse rates. The company also receives fees in the form of dealing and administrative charges levied on the plan holder and commission rebates from investment managers.

 

All sales are made in the United Kingdom.

Synergy Financial Products Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2023
1
Accounting policies
(Continued)
Page 16
1.4
Intangible fixed assets other than goodwill

The purchase cost of the ISA book of business plus attributable acquisition costs has been capitalised, and is being amortised to nil by equal annual instalments over its useful life, which has been estimated at 15 years.

 

Development expenditure in respect of software is written off, except where the director is satisfied as to the technical, commercial and financial viability of the project. In this case, the expenditure is capitalised and amortised over the period during which the company is expected to benefit. The amortisation method used is the straight line method, which is amortised to nil by equal annual instalments over the period.

 

Development expenditure cost includes irrecoverable VAT. The director considers that the inclusion of irrecoverable VAT in the development expenditure on software more accurately measures the cost of the software.

Amortisation 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:

Software
5 years
ISA Business Book
15 years
1.5
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Computers and Office Equipment
5 years

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

1.6
Fixed asset investments

Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.

Entities in which the company has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.

Synergy Financial Products Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2023
1
Accounting policies
(Continued)
Page 17
1.7
Cash at bank and in hand

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.8
Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

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.

Synergy Financial Products Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2023
1
Accounting policies
(Continued)
Page 18
Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.9
Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

1.10
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.11
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

Synergy Financial Products Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2023
Page 19
2
Judgements and key sources of estimation uncertainty

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.

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Intangible assets

The annual amortisation charge for intangible assets is sensitive to changes in the estimated lives and residual values of the assets. The useful economic lives and residual values are re-assessed annually. Goodwill impairment reviews are also performed annually. These reviews require an estimation of the value in use of the cash generating units to which goodwill has been allocated. The value in use calculation requires the entity to estimate the future cash flows expected to arise for the cash generating unit and a suitable discount rate to calculate present value. See note 10 for the carrying amount of the intangible assets and note 1.4 for the useful economic lives for each class of asset.

3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Synergy Protect
454,525
502,311
Home Protection
74,362
76,384
Mortgage ISA
890,392
900,251
ASU (Accident, Sickness and Unemployment)
19,528
25,942
Investore
16,210
16,810
Commission
-
3,333
1,124,752
1,392,177
2023
2022
£
£
Other significant revenue
Interest income
42,820
4,190
Synergy Financial Products Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2023
Page 20
4
Operating profit
2023
2022
Operating profit for the year is stated after charging:
£
£
Depreciation of owned tangible fixed assets
703
825
Amortisation of intangible assets
24,060
24,060
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
21,000
17,500
For other services
Other assurance services
18,900
16,000
All other non-audit services
4,750
5,300
23,650
21,300
6
Employees

The average monthly number of persons (including the director) employed by the company during the year was:

2023
2022
Number
Number
Management
2
2

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
173,885
177,807
Social security costs
22,475
23,313
Pension costs
7,651
6,108
204,011
207,228
Synergy Financial Products Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2023
Page 21
7
Director's remuneration
2023
2022
£
£
Remuneration for qualifying services
115,300
110,000
Company pension contributions to defined contribution schemes
5,665
5,500
120,965
115,500

The director is considered to be key management personnel.

8
Interest receivable and similar income
2023
2022
£
£
Interest income
Other interest income
42,820
4,190
9
Taxation

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
46,281
87,623
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2022: 19.00%)
8,793
16,648
Tax effect of expenses that are not deductible in determining taxable profit
51
157
Tax effect of utilisation of tax losses not previously recognised
(8,724)
(16,496)
Permanent capital allowances in excess of depreciation
(120)
(309)
Taxation charge for the year
-
-
Synergy Financial Products Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2023
Page 22
10
Intangible fixed assets
Software
ISA Business Book
Total
£
£
£
Cost
At 1 July 2022 and 30 June 2023
599,398
377,746
977,144
Amortisation and impairment
At 1 July 2022
599,398
272,079
871,477
Amortisation charged for the year
-
0
24,060
24,060
At 30 June 2023
599,398
296,139
895,537
Carrying amount
At 30 June 2023
-
0
81,607
81,607
At 30 June 2022
-
0
105,667
105,667

Amortisation of intangible assets is included in the administrative expenses line in the profit and loss account.

 

The ISA Business Book has a remaining amortisation period of 3.5 years at 30 June 2023.

11
Tangible fixed assets
Computers and Office Equipment
£
Cost
At 1 July 2022 and 30 June 2023
104,678
Depreciation and impairment
At 1 July 2022
103,790
Depreciation charged in the year
703
At 30 June 2023
104,493
Carrying amount
At 30 June 2023
185
At 30 June 2022
888
Synergy Financial Products Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2023
Page 23
12
Fixed asset investments
2023
2022
Notes
£
£
Investments in subsidiaries
13
4
4
13
Subsidiaries

Details of the company's subsidiaries at 30 June 2023 are as follows:

Name of undertaking
Registered office
Class of
% Held
shares held
Direct
New Direction Finance Nominees Limited
Centrium 1, Griffiths Way, St Albans, AL1 2RD
Ordinary
100.00
Synergy Nominees Limited
Centrium 1, Griffiths Way, St Albans, AL1 2RD
Ordinary
100.00

In accordance with Companies Act 2006 s405(2), Synergy Financial Products Limited has excluded its subsidiary undertakings from consolidation. Both companies were dormant during the year and so the director does not consider the subsidiaries to be material for the purpose of giving a true and fair view of the accounts of Synergy Financial Products Limited.

 

For the financial year ended 30 June 2023 both subsidiaries are entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.

 

14
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
152,546
132,083
Prepayments and accrued income
6,520
7,314
159,066
139,397

Trade debtors includes amounts totalling £31,960 (2022: £29,961) that are fully impaired at the year end.

15
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
299,304
344,648
Corporation tax
1,107
1,107
Other taxation and social security
12,685
7,438
Accruals and deferred income
83,293
86,620
396,389
439,813
Synergy Financial Products Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2023
Page 24
16
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
7,651
6,108

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.

17
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary share capital of £1 each
273,520
273,520
273,520
273,520

The company has one class of share in issue. All shares carry equal voting, dividend and capital rights, including on wind up.

18
Capital contribution reserve

The capital contribution reserve represents contributions by shareholders to acquire the ISA Business Book that is capitalised within intangible fixed assets.

Synergy Financial Products Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2023
Page 25
19
Related party transactions
Transactions with related parties

During the year the company entered into the following transactions with related parties:

Sale of services
Purchase of services
2023
2022
2023
2022
£'000
£'000
£'000
£'000
Outsourced Professional Administration Limited
139
135
73
356
Pandora Software Solutions Limited
-
0
-
0
(30)
30

The following amounts were outstanding at the reporting end date:

2023
2022
Amounts owed to related parties
£'000
£'000
Outsourced Professional Administration Limited
27
78
Pandora Software Solutions Limited
(3)
3
2023
2022
Amounts owed by related parties
£'000
£'000
Outsourced Professional Administration Limited
12
11

Management, staff and other support services have been provided by Outsourced Professional Administration Limited and Pandora Software Solutions Limited, these constitute related parties under FRS102, Section 33 as a result of having common shareholders. The transactions with these related parties have been stated above.

Synergy Financial Products Limited
Notes to the Financial Statements (Continued)
For the year ended 30 June 2023
Page 26
20
Cash (absorbed by)/generated from operations
2023
2022
£
£
Profit for the year after tax
46,281
87,623
Adjustments for:
Investment income
(42,820)
(4,190)
Amortisation and impairment of intangible assets
24,060
24,060
Depreciation and impairment of tangible fixed assets
703
825
Movements in working capital:
(Increase)/decrease in debtors
(19,669)
35,749
Decrease in creditors
(43,424)
(7,974)
Cash (absorbed by)/generated from operations
(34,869)
136,093
21
Analysis of changes in net funds
1 July 2022
Cash flows
30 June 2023
£
£
£
Cash at bank and in hand
1,396,935
7,951
1,404,886
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