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REGISTERED NUMBER: 00525612 (England and Wales)















Family Finance Limited

Group Strategic Report, Report of the Directors and

Consolidated Financial Statements for the Year Ended 31 December 2023






Family Finance Limited (Registered number: 00525612)






Contents of the Consolidated Financial Statements
for the Year Ended 31 December 2023




Page

Company Information 1

Group Strategic Report 2

Report of the Directors 3

Report of the Independent Auditors 5

Consolidated Statement of Comprehensive Income 7

Consolidated Balance Sheet 8

Company Balance Sheet 9

Consolidated Statement of Changes in Equity 10

Company Statement of Changes in Equity 11

Consolidated Cash Flow Statement 12

Notes to the Consolidated Cash Flow Statement 13

Notes to the Consolidated Financial Statements 14


Family Finance Limited

Company Information
for the Year Ended 31 December 2023







Directors: W H Harvey
R Hopkins
D J Martin
C L Monk
J R Phillips
D G Phillips
A M Wilkins
H Phillips





Registered office: 93 Commercial St
Tredegar
Gwent
NP22 3DN





Registered number: 00525612 (England and Wales)





Auditors: Haines Watts Wales LLP, Statutory Auditors
7 Neptune Court
Vanguard Way
Cardiff
CF24 5PJ

Family Finance Limited (Registered number: 00525612)

Group Strategic Report
for the Year Ended 31 December 2023

The directors present their strategic report of the company and the group for the year ended 31 December 2023.

The group continues its strategy of developing its loan book across a balanced range of product types.

Principal activities
The principal activities of the group are the provision of instalment credit finance, provision of bridging loan finance and the retailing of electrical and other goods.

Review of business
The group made a profit before tax of £2,139,584 (2022: £2,525,203). This was a satisfactory result in what has been a difficult trading environment given the Cost-of-Living crisis. Income has increased by £0.2m to £9.4m for the year ended 31 December 2023.

Despite the ongoing macroeconomic uncertainties, the loan book overall grew in size. Similar to the prior financial period however, the loan book saw a shrinkage in size across its Hire Purchase (HP) products on motor and retail goods, as well as its unsecured lending product. The secured lending product was the only element of the loan book which saw growth in 2023, largely resulting from continued growth of its Bridging loan product, introduced in the 2021 financial period. Secured lending balances (Gross) grew by £2.9m, or 24% to £15.0m.

The directors have also taken a cautious approach regarding retail goods on HP as well as unsecured lending, in light of the ongoing regulatory uncertainty. Total HP agreements have decreased by 1,894, or 18.1% to 8,582 and unsecured lending agreements have decreased by 196, or 21.1% to 733 as at the balance sheet date.

The group continues to be supervised by the Financial Conduct Authority (FCA) since full authorisation was received, and continues to apply enhanced and embedded procedures, systems and controls.


Objectives and strategy
The group's Mission Statement is to successfully respond to challenges, and opportunities to deliver profitability in our market during our seventh decade of trading. This has been achieved by ensuring our staff are trained, skilled, motivated and able to deliver outstanding customer outcomes. As a result of this exceptional customer service the company protects its long-term customer relationships whilst continuing to attract new customers. Vigorous vetting procedures with particular emphasis on affordability has resulted in a positive effect on arrears management and provisions. This is encapsulated by our ongoing commitment to Treating Customers Fairly.

Principal risks and uncertainties
The group's financial instruments result in the group's expose to liquidity, credit and cash flow risk. The exposure of the group to the various elements of financial risk are as follows;

Credit risk
The directors consider the main financial risk to the business to be the credit risk of customers defaulting on loans. However, this risk is mitigated by the company's strong cash collection and credit control procedures, and through the checking of customers credit rating and affordability. In addition, a significant number of loans are secured against the underlying asset.

Liquidity and cashflow risk
Liquidity risk is the risk that the group will have insufficient resources available to meet its financial obligations as they fall due. This risk is managed periodically through monitoring of expected cashflows and is enhanced by the significant cashflows generated by the business. As detailed within the creditors more than 1 year note, the terms of the current facilities provide adequate liquidity for the group to continue as a going concern. We have retained the same level of facilities at Siemens, Aldermore and Hampshire Trust.

On behalf of the board:





R Hopkins - Director


4 April 2024

Family Finance Limited (Registered number: 00525612)

Report of the Directors
for the Year Ended 31 December 2023

The directors present their report with the financial statements of the company and the group for the year ended 31 December 2023.

Dividends
Dividends proposed in the 2023 financial year amounted to £NIL (2022: £1,754,280)

Directors
The directors shown below have held office during the whole of the period from 1 January 2023 to the date of this report.

W H Harvey
R Hopkins
D J Martin
C L Monk
J R Phillips
D G Phillips
A M Wilkins

Other changes in directors holding office are as follows:

J Shepherd - resigned 9 June 2023
H Phillips - appointed 20 June 2023

Political donations and expenditure
There have been no political donations made during the year.

Statement of directors' responsibilities
The directors are responsible for preparing the Group Strategic Report, the Report of the Directors 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), including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 the group and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

- select suitable accounting policies and then apply them consistently;
- make judgements and accounting estimates that are reasonable and prudent;
- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group 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 the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Statement as to disclosure of information to auditors
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the group's auditors are aware of that information.

Family Finance Limited (Registered number: 00525612)

Report of the Directors
for the Year Ended 31 December 2023


Auditors
The auditors, Haines Watts Wales LLP, Statutory Auditors, will be proposed for re-appointment at the forthcoming Annual General Meeting.

On behalf of the board:





R Hopkins - Director


4 April 2024

Report of the Independent Auditors to the Members of
Family Finance Limited

Opinion
We have audited the financial statements of Family Finance Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2023 which comprise the Consolidated Statement of Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Consolidated Cash Flow Statement, Notes to the Financial Statements, including a summary of 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 group's and of the parent company affairs as at 31 December 2023 and of the group's 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.

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 Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the group 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 group's and the parent 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.

Other information
The directors are responsible for the other information. The other information comprises the information in the Group Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

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.

In connection with our audit of the financial statements, 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 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 the audit:
- the information given in the Group Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and
- the Group Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Report of the Directors.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
- adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
- the parent company financial statements are not in agreement with the accounting records and returns; or
- certain disclosures of directors' remuneration specified by law are not made; or
- we have not received all the information and explanations we require for our audit.

Report of the Independent Auditors to the Members of
Family Finance Limited


Responsibilities of directors
As explained more fully in the Statement of Directors' Responsibilities set out on page three, 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 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 group's and the parent 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 group or the parent company or to cease operations, or have no realistic alternative but to do so.

Auditors' 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 a Report of the Auditors 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:

Our planning procedures identify the legal and regulatory frameworks applicable to the operations and financial
statements of the company. These are reviewed internally with the audit team including relevant industry experience
and expectations as well as externally with the client management. The key laws and regulations we considered in this context were the UK Companies Act 2006, UK GAAP (FRS 102) and relevant tax legislation.

Once identified, we assess the risks of material misstatements in relation to the laws and regulations, irregularities,
including fraud and adjust our testing accordingly. Our audit procedures include:

- Discussing with Directors and management which areas of the business they believe to be more susceptible to
fraud, and whether they have any knowledge or suspicion of fraudulent activities.
- Discussing with Directors and management the legal and regulatory obligations of the business and whether they
have any knowledge or suspicion of non-compliance.
- Obtaining an understanding of the key controls put in place by the company to address risks identified,
assessing the effectiveness of those and discussing how these are maintained and monitored internally.
- Assessing the risk of management override and review and testing of journal entries made into the accounting
system.
- Challenging assumptions and judgements made by the company in relation to the significant accounting
estimates employed in the preparation of the financial statements.

Despite the audit being planned and conducted in accordance with ISAs (UK) there remains an unavoidable risk that material misstatements in the financial statements may not be detected owing to inherent limitations of the audit, and that by their very nature, any such instances of fraud or irregularities likely involve collusion, forgery, intentional
misrepresentation, or the override of internal controls.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

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 a Report of the Auditors 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.




Victoria Carter (Senior Statutory Auditor)
for and on behalf of Haines Watts Wales LLP, Statutory Auditors
7 Neptune Court
Vanguard Way
Cardiff
CF24 5PJ

5 April 2024

Family Finance Limited (Registered number: 00525612)

Consolidated
Statement of Comprehensive
Income
for the Year Ended 31 December 2023

2023 2022
Notes £    £   

Turnover 3 9,439,112 9,254,745

Cost of sales (1,164,309 ) (996,441 )
Gross profit 8,274,803 8,258,304

Distribution costs (311,528 ) (403,928 )
Administrative expenses (5,838,832 ) (5,427,510 )
2,124,443 2,426,866

Other operating income 15,141 98,334
Operating profit 2,139,584 2,525,200
Profit before taxation 5 2,139,584 2,525,200

Tax on profit 6 (517,311 ) (487,293 )
Profit for the financial year 1,622,273 2,037,907

Other comprehensive income - -
Total comprehensive income for the year 1,622,273 2,037,907

Profit attributable to:
Owners of the parent 1,622,273 2,037,907

Total comprehensive income attributable to:
Owners of the parent 1,622,273 2,037,907

Family Finance Limited (Registered number: 00525612)

Consolidated Balance Sheet
31 December 2023

2023 2022
Notes £    £   
Fixed assets
Intangible assets 9 46,777 58,408
Tangible assets 10 201,003 288,208
Investments 11 1,390 1,390
249,170 348,006

Current assets
Stocks 12 125,232 135,946
Debtors: amounts falling due within one year 13 16,786,107 12,168,014
Debtors: amounts falling due after more than
one year

13

20,069,678

21,721,006
Cash at bank and in hand 209,726 729,100
37,190,743 34,754,066
Creditors
Amounts falling due within one year 14 (7,366,458 ) (9,399,167 )
Net current assets 29,824,285 25,354,899
Total assets less current liabilities 30,073,455 25,702,905

Creditors
Amounts falling due after more than one
year

15

(11,228,933

)

(8,223,562

)
Net assets 18,844,522 17,479,343

Capital and reserves
Called up share capital 21 507,319 522,107
Share premium 65,000 65,000
Capital redemption reserve 92,681 77,893
Retained earnings 18,179,522 16,814,343
Shareholders' funds 18,844,522 17,479,343

The financial statements were approved by the Board of Directors and authorised for issue on 4 April 2024 and were signed on its behalf by:





R Hopkins - Director


Family Finance Limited (Registered number: 00525612)

Company Balance Sheet
31 December 2023

2023 2022
Notes £    £   
Fixed assets
Intangible assets 9 46,777 58,408
Tangible assets 10 156,016 233,472
Investments 11 1,002 1,002
203,795 292,882

Current assets
Debtors: amounts falling due within one year 13 16,758,819 12,143,056
Debtors: amounts falling due after more than
one year

13

20,069,678

21,721,006
Cash at bank and in hand 145,303 690,965
36,973,800 34,555,027
Creditors
Amounts falling due within one year 14 (13,631,211 ) (15,642,352 )
Net current assets 23,342,589 18,912,675
Total assets less current liabilities 23,546,384 19,205,557

Creditors
Amounts falling due after more than one
year

15

(11,189,043

)

(8,188,340

)
Net assets 12,357,341 11,017,217

Capital and reserves
Called up share capital 21 507,319 522,107
Share premium 65,000 65,000
Capital redemption reserve 92,681 77,893
Retained earnings 11,692,341 10,352,217
Shareholders' funds 12,357,341 11,017,217

Company's profit for the financial year 1,597,218 1,996,756

The financial statements were approved by the Board of Directors and authorised for issue on 4 April 2024 and were signed on its behalf by:





R Hopkins - Director


Family Finance Limited (Registered number: 00525612)

Consolidated Statement of Changes in Equity
for the Year Ended 31 December 2023

Called up Capital
share Retained Share redemption Total
capital earnings premium reserve equity
£    £    £    £    £   
Balance at 1 January 2022 522,107 16,530,716 65,000 77,893 17,195,716

Changes in equity
Dividends - (1,754,280 ) - - (1,754,280 )
Total comprehensive income - 2,037,907 - - 2,037,907
Balance at 31 December 2022 522,107 16,814,343 65,000 77,893 17,479,343

Changes in equity
Reduction in share capital (14,788 ) - - - (14,788 )
Total comprehensive income - 1,365,179 - 14,788 1,379,967
Balance at 31 December 2023 507,319 18,179,522 65,000 92,681 18,844,522

Family Finance Limited (Registered number: 00525612)

Company Statement of Changes in Equity
for the Year Ended 31 December 2023

Called up Capital
share Retained Share redemption Total
capital earnings premium reserve equity
£    £    £    £    £   
Balance at 1 January 2022 522,107 10,109,741 65,000 77,893 10,774,741

Changes in equity
Profit for the year - 1,996,756 - - 1,996,756
Total comprehensive income - 1,996,756 - - 1,996,756
Dividends - (1,754,280 ) - - (1,754,280 )
Balance at 31 December 2022 522,107 10,352,217 65,000 77,893 11,017,217

Changes in equity
Profit for the year - 1,597,218 - - 1,597,218
Other comprehensive income - (257,094 ) - 14,788 (242,306 )
Total comprehensive income - 1,340,124 - 14,788 1,354,912
Reduction in share capital (14,788 ) - - - (14,788 )
Balance at 31 December 2023 507,319 11,692,341 65,000 92,681 12,357,341

Family Finance Limited (Registered number: 00525612)

Consolidated Cash Flow Statement
for the Year Ended 31 December 2023

2023 2022
Notes £    £   
Cash flows from operating activities
Cash generated from operations 1 (1,040,802 ) (1,394,611 )
Tax paid (550,983 ) (366,799 )
Net cash from operating activities (1,591,785 ) (1,761,410 )

Cash flows from investing activities
Purchase of intangible fixed assets (10,680 ) (58,688 )
Purchase of tangible fixed assets (22,854 ) (205,735 )
Sale of tangible fixed assets 18,780 134,716
Net cash from investing activities (14,754 ) (129,707 )

Cash flows from financing activities
New loans in year 9,977,016 8,282,759
Loan repayments in year (6,305,794 ) (6,174,354 )
Capital repayments in year (79,280 ) 74,052
Amount introduced by directors - 1,997,469
Amount withdrawn by directors (2,247,683 ) -
Equity dividends paid - (1,754,280 )
Purchase of own shares (257,094 ) -
Net cash from financing activities 1,087,165 2,425,646

(Decrease)/increase in cash and cash equivalents (519,374 ) 534,529
Cash and cash equivalents at beginning
of year

2

729,100

194,571

Cash and cash equivalents at end of year 2 209,726 729,100

Family Finance Limited (Registered number: 00525612)

Notes to the Consolidated Cash Flow Statement
for the Year Ended 31 December 2023

1. Reconciliation of profit before taxation to cash generated from operations
2023 2022
£    £   
Profit before taxation 2,139,584 2,525,200
Depreciation charges 128,166 128,730
Profit on disposal of fixed assets (14,577 ) (98,334 )
2,253,173 2,555,596
Decrease/(increase) in stocks 10,714 (7,840 )
Increase in trade and other debtors (2,962,290 ) (3,338,977 )
Decrease in trade and other creditors (342,399 ) (603,390 )
Cash generated from operations (1,040,802 ) (1,394,611 )

2. Cash and cash equivalents

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 31 December 2023
31.12.23 1.1.23
£    £   
Cash and cash equivalents 209,726 729,100
Year ended 31 December 2022
31.12.22 1.1.22
£    £   
Cash and cash equivalents 729,100 194,571


3. Analysis of changes in net debt

At 1.1.23 Cash flow At 31.12.23
£    £    £   
Net cash
Cash at bank and in hand 729,100 (519,374 ) 209,726
729,100 (519,374 ) 209,726
Debt
Finance leases (200,794 ) 79,280 (121,514 )
Debts falling due within 1 year (2,627,454 ) (617,666 ) (3,245,120 )
Debts falling due after 1 year (8,107,732 ) (3,053,556 ) (11,161,288 )
(10,935,980 ) (3,591,942 ) (14,527,922 )
Total (10,206,880 ) (4,111,316 ) (14,318,196 )

Family Finance Limited (Registered number: 00525612)

Notes to the Consolidated Financial Statements
for the Year Ended 31 December 2023

1. Statutory information

Family Finance Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the General Information page.

2. Accounting policies

Basis of preparing the financial statements
These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

The group has taken advantage of the following disclosure exemption in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":

the requirement of paragraph 33.7.

Critical accounting judgements and key sources of estimation uncertainty
Amounts receivable under hire purchase and instalment credit agreements are stated after deduction of the sum which in the opinion of the directors is required as a provision for bad and doubtful debts, taking account of age, cash movements and security value.

The provision uses a standard calculation, which provides a fixed percentage of arrears based on the amount of instalments overdue. Management will also manually make specific provisions to cover known risks.

Turnover
Turnover represents interest earned on loans and advances and amounts (excluding value added tax) derived from the provision of goods and services to customers during the year.

Income arising on hire purchase agreements and credit instalment sales is credited to the profit and loss each year.

The effective interest rate is the rate that discounts estimated future cash payments or receipts through the expected life of the financial instrument (or a shorter period where appropriate) to the net carrying value of the financial asset or financial liability. The calculation takes into account all contractual terms of the financial instrument.

Income relating to the sale of goods is recognised when substantially all of the risks and rewards of ownership have passed to the customer, generally being at the point of sale.

Income relating to maintenance of goods sold is treated as deferred income and released to the profit and loss account over the period of the maintenance obligation.

Intangible assets
Intangible Assets represent software development costs aquired by the Company and are stated at cost less accumulated amortisation and less accumulated impairment losses. Amortisation is charged to the profit and loss account one straight-line basis over the estimated useful economic life of the asset being 3 to 5 years

Tangible fixed assets
Depreciation is provided at the following annual rates in order to write off the cost less estimated residual value of each asset over its estimated useful life.
Fixtures and fittings - Straight line over 10 years
Motor vehicles - Straight line over 4 years
Computer equipment - Straight line over 3 to 5 years

Family Vision Limited policy is to capitalise individual assets over £2,400
Family Finance Limited policy is to capitalise individual assets over £5,000.

Investments in subsidiaries
These investments comprise the cost of 100% of the ordinary share capital of the following subsidiary undertakings both of which are registered in England and Wales at the registered office Of 93 Commercial Street, Tredegar, Gwent, NP22 3DN, and have been consolidated within the group financial statements:'

Family Vision Limited - trading as an electrical and other goods retailer
Family Leasing Limited - dormant

Family Finance Limited (Registered number: 00525612)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 December 2023

2. Accounting policies - continued

Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to sell. Cost is based on the weighted average principle and includes expenditure incurred in acquiring the stocks and costs incurred in bringing them to their existing location and condition.

Stock is assessed at each reporting date by management to determine whether there is objective evidence that it is impaired. Stock is impaired if objective evidence indicated that a loss event has occUrred after the initial recognition of the asset and that the loss event had a negative effect on the estimated future cash flow of that asset that can be estimated reliably.

Taxation
Taxation for the year comprises current and deferred tax. Tax is recognised in the Consolidated Statement of Comprehensive Income, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Hire purchase and leasing commitments
Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease.

Pension costs and other post-retirement benefits
A defined contribution pension is a post-employment benefit plan under which the company pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution pension plans are recognised as an expense in the profit and loss account for the period during which services are rendered by employees.

Family Finance Limited (Registered number: 00525612)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 December 2023

2. Accounting policies - continued

Going concern
At 31 December 2023, the group had net assets of £18,844,522 (2022: £17,479,343) and net current assets (excluding debtors due after more than one year) of £9,749,939 (2022: £3,633,893) and reported a profit for the year then ended of £1,622,273 (£2022: £2,037,907). The financial statements have been prepared on a going concern basis, which the directors consider to be appropriate for the following reasons.

Similar to the prior financial year, throughout the 2023 financial year the business continued to be impacted by the Cost-of-Living crisis, whereby our customers faced the highest levels of inflation in recent history, alongside increasing interest rates due to the Bank of England increasing the Base Rate in order to combat inflation. Despite inflation levels steadily falling throughout the financial year and the Base Rate being held from August 2023, customers have continued face greater levels of financial difficulty.

The business has however, always aimed to provide high levels of forbearance to its customers through positive engagement. As such the business' collections have not been significantly impacted and remain strong, with the large majority of its customers continuing to meet their repayment obligations.

As a result of these external factors, the business’ Motor HP book, as expected, shrank during the financial period, albeit only modestly (less than 1%). The shrinkage in this area of the business however allowed the business to redirect its funds to continue its diversification into the Bridging Loan market, where the gross loan book grew by over £2.1m gross.

The macroeconomic picture for the 2024 financial period looks more positive, with an opening level of inflation being less than half that at January 2023, alongside second-hand car prices appearing to have peaked and reduced slightly. The business therefore expects that the Motor HP book will stabilise for the forthcoming financial period, but has the potential to grow.

As at the date of this report, despite the operational and financial impact of the Cost-of-Living crisis, the group has maintained a positive level of trading and profitability for 2023 and the directors expect that the group will continue to be profitable and cash generative in the forecast period as explained below.

The directors have prepared a cashflow forecast for at least 12 months from the date of approval of these financial statements. These forecasts take account of the potential impact of the macroeconomic stresses caused by the Cost-of-Living crisis. Severe but plausible downside scenarios have been modelled, which include the assumption that there is no growth in 2024 over 2023 and that collections reduce by up to 20% over the forecast period.

Under these scenarios, lending levels are expected to remain stable, with expected falls in Motor HP lending being offset against by Secured lending. Other forms of lending (HP on retail goods and unsecured lending) are expected to remain stable in their own right. Collection levels in the base case are expected to be in line with the value of the gross loan book as was the case in prior financial periods. With continued pressures on household incomes expected for the majority of the year ahead however, the company will continue to offer its high levels of forbearance to customers and as such, the potential impacts of this have been reflected in the relevant downside scenarios.

The forecasts prepared, as well as the assessment of ongoing funding requirements, indicate that the company will have sufficient funds, through its cash resources, available facilities and ongoing profitable trading, to meet its liabilities as they fall due for that period, whilst also maintaining its planned levels of new business lending.

The company retains significant headroom on the block discount loan facilities. The facilities renew on an annual basis and whilst the directors acknowledge that there can be no certainty that the facilities will extend beyond their renewal dates, at the date of approval of these financial statements, they have no reason to believe they will not do so. Indeed, should any facility expire, each drawdown will continue to be repaid over the predetermined schedule period which are aligned to the collection of the loans and advances which they are secured against.

On the basis of their assessment as discussed above, the directors are confident that the group and company will have sufficient funds to continue to its liabilities as they fall due for at least 12 months from the date of the approval of the financial statements, and therefore continue to adopt the going concern basis in preparing the financial statements.

Family Finance Limited (Registered number: 00525612)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 December 2023

2. Accounting policies - continued

Impairment
Loans and advances
Amounts receivable under hire purchase and instalment credit agreements are stated after deduction of the sum which in the opinion of the directors is required as a provision for bad and doubtful debts, taking account of age, cash movements and security value.

Other financial assets (including trade and other debtors)

Financial assets are assessed at each reporting date to determine whether there is objective evidence that it is impaired. A financial asset.is impaired if objective evidence indicated that a loss event has occurred after the initial recognition of the asset and that the loss event had a negative effect on the estimated future cash flow of that asset that can be estimated reliably.

Non-financial assets
The carrying amounts of the entity's non-financial assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset's recoverable amount is estimated. The recoverable amount of an asset is the greater of its value in use and its fair value less costs to sell. 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.

Reversing an impairment
An impairment loss is reversed if and only if the reasons for.the impairment have ceased to apply.
Impairment losses recognised in prior periods are assessed at each reporting date for any indication that the loss has decreased or no longer exists. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

Basic financial instruments
Loans and advances
Loans and advances are recognised initially at the nominal value of future cash flows net of unearned interest and bad debt provisions. The loan asset and unearned interested are measured subsequently at amortized cost using the effective interest rate method, less any impairment.

Trade and other debtors
Trade and other debtors are recognised initially at transaction price less attributable costs. Subsequent to initial recognition they are measured at amortised cost, less any impairment losses in the case of trade debtors.

Investments in ordinary shares.
Investments in equity instruments are measured initially at fair value. Subsequent to initial recognition investments are measured at cost less impairment in the profit or loss.

Cash and cash equivalents
Cash and cash equivalents comprise cash balances at the bank and cash in hand.

3. Turnover

The turnover and profit before taxation are attributable to the one principal activity of the group.

An analysis of turnover by class of business is given below:

2023 2022
£    £   
Interest on agreements 8,808,907 8,427,371
Retail sales 630,205 827,374
9,439,112 9,254,745

Family Finance Limited (Registered number: 00525612)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 December 2023

4. Employees and directors
2023 2022
£    £   
Wages and salaries 2,479,831 2,700,903
Social security costs 308,611 359,352
Other pension costs 174,841 51,074
2,963,283 3,111,329

The average number of employees during the year was as follows:
2023 2022

Sales and distribution 9 12
Administration and collections 40 39
Directors 8 9
57 60

2023 2022
£    £   
Directors' remuneration 1,051,337 1,237,121
Directors' pension contributions to money purchase schemes 6,100 5,192

The number of directors to whom retirement benefits were accruing was as follows:

Money purchase schemes 2 4

Information regarding the highest paid director is as follows:
2023 2022
£    £   
Emoluments etc 531,387 634,171

5. Profit before taxation

The profit is stated after charging/(crediting):

2023 2022
£    £   
Other operating leases 50,000 51,000
Depreciation - owned assets 105,856 122,703
Profit on disposal of fixed assets (14,577 ) (98,334 )
Computer software amortisation 22,311 6,030
Auditors' remuneration 6,390 7,660
Auditors' remuneration for non audit work 5,820 5,820
Taxation advisory services 2,400 2,400

6. Taxation

Analysis of the tax charge
The tax charge on the profit for the year was as follows:
2023 2022
£    £   
Current tax:
UK corporation tax 521,785 482,702

Deferred tax (4,474 ) 4,591
Tax on profit 517,311 487,293

Family Finance Limited (Registered number: 00525612)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 December 2023

6. Taxation - continued

Reconciliation of total tax charge included in profit and loss
The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained below:

2023 2022
£    £   
Profit before tax 2,139,584 2,525,200
Profit multiplied by the standard rate of corporation tax in the UK of 25 %
(2022 - 19 %)

534,896

479,788

Effects of:
Expenses not deductible for tax purposes 13,087 15,035
Income not taxable for tax purposes (3,644 ) (18,683 )
Depreciation in excess of capital allowances 11,041 6,561
prior periods (deferred tax)

change in tax rates
Deferred tax provided for during the year (4,474 ) 4,592
Change in tax rates (33,595 ) -
Total tax charge 517,311 487,293

7. Individual statement of comprehensive income

As permitted by Section 408 of the Companies Act 2006, the Statement of Comprehensive Income of the parent company is not presented as part of these financial statements.


8. Dividends
2023 2022
£    £   
Ordinary shares of 1 each
Interim - 1,754,280

9. Intangible fixed assets

Group
Computer
software
£   
Cost
At 1 January 2023 219,353
Additions 10,680
At 31 December 2023 230,033
Amortisation
At 1 January 2023 160,945
Amortisation for year 22,311
At 31 December 2023 183,256
Net book value
At 31 December 2023 46,777
At 31 December 2022 58,408

Family Finance Limited (Registered number: 00525612)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 December 2023

9. Intangible fixed assets - continued

Company
Computer
software
£   
Cost
At 1 January 2023 184,751
Additions 10,680
At 31 December 2023 195,431
Amortisation
At 1 January 2023 126,343
Amortisation for year 22,311
At 31 December 2023 148,654
Net book value
At 31 December 2023 46,777
At 31 December 2022 58,408

10. Tangible fixed assets

Group
Fixtures
and Motor Computer
fittings vehicles equipment Totals
£    £    £    £   
Cost
At 1 January 2023 19,147 438,689 45,460 503,296
Additions - 17,154 5,700 22,854
Disposals - (67,918 ) - (67,918 )
At 31 December 2023 19,147 387,925 51,160 458,232
Depreciation
At 1 January 2023 5,113 181,930 28,045 215,088
Charge for year 1,914 95,695 8,247 105,856
Eliminated on disposal - (63,715 ) - (63,715 )
At 31 December 2023 7,027 213,910 36,292 257,229
Net book value
At 31 December 2023 12,120 174,015 14,868 201,003
At 31 December 2022 14,034 256,759 17,415 288,208

Family Finance Limited (Registered number: 00525612)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 December 2023

10. Tangible fixed assets - continued

Company
Motor Computer
vehicles equipment Totals
£    £    £   
Cost
At 1 January 2023 382,238 27,043 409,281
Additions 17,154 - 17,154
Disposals (67,918 ) - (67,918 )
At 31 December 2023 331,474 27,043 358,517
Depreciation
At 1 January 2023 159,583 16,226 175,809
Charge for year 84,998 5,409 90,407
Eliminated on disposal (63,715 ) - (63,715 )
At 31 December 2023 180,866 21,635 202,501
Net book value
At 31 December 2023 150,608 5,408 156,016
At 31 December 2022 222,655 10,817 233,472

11. Fixed asset investments

Group
Shares in
group
undertakings
£   
Cost
At 1 January 2023
and 31 December 2023 1,390
Net book value
At 31 December 2023 1,390
At 31 December 2022 1,390
Company
Shares in
group
undertakings
£   
Cost
At 1 January 2023
and 31 December 2023 1,002
Net book value
At 31 December 2023 1,002
At 31 December 2022 1,002


12. Stocks

Group
2023 2022
£    £   
Stocks 125,232 135,946

Family Finance Limited (Registered number: 00525612)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 December 2023

13. Debtors

Group Company
2023 2022 2023 2022
£    £    £    £   
Amounts falling due within one year:
Loans and advances 16,143,758 11,495,588 16,143,758 11,495,588
Other debtors 368,372 411,370 367,080 410,111
VAT 15,494 - 15,494 -
Deferred tax asset 108,284 103,810 103,920 100,514
Prepayments 150,199 157,246 128,567 136,843
16,786,107 12,168,014 16,758,819 12,143,056

Amounts falling due after more than one year:
Loans and advances 20,069,678 21,721,006 20,069,678 21,721,006

Aggregate amounts 36,855,785 33,889,020 36,828,497 33,864,062

Deferred tax asset
Group Company
2023 2022 2023 2022
£    £    £    £   
Deferred tax 108,284 103,810 103,920 100,514

14. Creditors: amounts falling due within one year

Group Company
2023 2022 2023 2022
£    £    £    £   
Bank loans and overdrafts (see note 16) 3,245,120 2,627,454 3,245,120 2,627,454
Hire purchase contracts (see note 17) 89,091 120,186 77,321 91,960
Trade creditors 761,947 658,186 710,596 649,420
Amounts owed to group undertakings - - 6,353,113 6,354,418
Tax 274,277 303,475 265,540 294,578
Social security and other taxes 101,006 94,923 94,857 85,633
Directors' current accounts 2,381,249 4,628,932 2,381,249 4,628,932
Accrued expenses 513,768 966,011 503,415 909,957
7,366,458 9,399,167 13,631,211 15,642,352

Amounts owed to subsidiary undertaking, Family Vision Limited are repayable on demand and interest is charged at 4.5% per annum.

15. Creditors: amounts falling due after more than one year

Group Company
2023 2022 2023 2022
£    £    £    £   
Bank loans (see note 16) 11,161,288 8,107,732 11,161,288 8,107,732
Hire purchase contracts (see note 17) 32,423 80,608 27,755 80,608
Accruals and deferred income 35,222 35,222 - -
11,228,933 8,223,562 11,189,043 8,188,340

Family Finance Limited (Registered number: 00525612)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 December 2023

15. Creditors: amounts falling due after more than one year - continued

Bank loans at 31 December 2023 comprised of block discounting facilities with Siemens Financial Services, Aldermore plc and Hampshire Trust.

Amounts drawn under the facilities are repayable over a predetermined schedule with an average life of 42 months. Interest charged varies according to market rates at the point of draw down (typically 4-5% flat rate). The facilities are secured against the HP agreements subject to draw down. Should any facility expire, each drawdown will continue to be repaid over the predetermined schedule period.

16. Loans

An analysis of the maturity of loans is given below:

Group Company
2023 2022 2023 2022
£    £    £    £   
Amounts falling due within one year or on demand:
Bank loans 3,245,120 2,627,454 3,245,120 2,627,454
Amounts falling due between two and five years:
Bank loans - 2-5 years 11,161,288 8,107,732 11,161,288 8,107,732

17. Leasing agreements

Minimum lease payments fall due as follows:

Group
Hire purchase contracts
2023 2022
£    £   
Net obligations repayable:
Within one year 89,091 120,186
Between one and five years 32,423 80,608
121,514 200,794

Company
Hire purchase contracts
2023 2022
£    £   
Net obligations repayable:
Within one year 77,321 91,960
Between one and five years 27,755 80,608
105,076 172,568

Group
Non-cancellable operating leases
2023 2022
£    £   
Within one year 140,524 117,624
Between one and five years 293,641 258,236
In more than five years 200,000 240,000
634,165 615,860

Family Finance Limited (Registered number: 00525612)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 December 2023

17. Leasing agreements - continued

Company
Non-cancellable operating leases
2023 2022
£    £   
Within one year 92,310 75,770
Between one and five years 121,320 106,236
In more than five years 40,000 50,000
253,630 232,006

18. Secured debts

The bank account has the following guarantees attached to it:

1) Debenture on the banks standard form dated 24/06/2002
2) Debenture on the banks standard form dated 07/04/1997

19. Financial instruments

2023 2022
Assets measured at amortised cost £ £
Loans and Advances 36,213,436 33,216,594
Other Debtors 368,372 411,370
Cash 209,726 729,100

36,791,534 34,357,064

Liabilities measured at amortised cost
Bank Loans 14,406,408 10,735,186
Trade Creditors 761,947 685,190
Other Creditors - -
Finance Leases 121,514 200,794
Director Loan Accounts 2,381,249 4,628,932

17,671,118 16,233,102

20. Deferred tax

Group
£   
Balance at 1 January 2023 (103,810 )
Credit to Statement of Comprehensive Income during year (4,474 )
Balance at 31 December 2023 (108,284 )

Company
£   
Balance at 1 January 2023 (100,514 )
Credit to Statement of Comprehensive Income during year (3,406 )
Balance at 31 December 2023 (103,920 )

21. Called up share capital

Allotted and issued:
Number: Class: Nominal 2023 2022
value: £    £   
507,319 Share capital 1 1 507,319 522,107

During the year 14,788 shares were repurchased by Family Finance Limited and subsequently cancelled.

Family Finance Limited (Registered number: 00525612)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 31 December 2023

22. Pension commitments

The company operates a defined contribution pension scheme for certain employees of the company. The assets of the scheme are held separately from those of the company. Contributions to the scheme are determined by the directors. Contributions to the scheme for the year were £174,841 (2022:£85,685)

23. Contingent liabilities

Neither the group nor the company had any contingent liabilities as at 31 December 2023 (2022: £Nil).

24. Directors' advances, credits and guarantees

The following advances and credits to directors subsisted during the years ended 31 December 2023 and 31 December 2022:

2023 2022
£    £   
D G Phillips
Balance outstanding at start of year 1,678,991 1,002,559
Amounts advanced - 676,432
Amounts repaid (978,991 ) -
Amounts written off - -
Amounts waived - -
Balance outstanding at end of year 700,000 1,678,991

J R Phillips
Balance outstanding at start of year 2,949,941 1,628,904
Amounts advanced 160,000 1,368,160
Amounts repaid (1,428,692 ) (47,123 )
Amounts written off - -
Amounts waived - -
Balance outstanding at end of year 1,681,249 2,949,941

25. Related party disclosures

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.

Transactions between group entities which have been eliminated on consolidation are not disclosed within the financial statements.

Other related parties
2023 2022
£    £   
Recharge of payments made by Family Finance on behalf of Valleys
Finance

2,011,973

1,504,448
Family Finance Executive Pension Scheme - Property rentals payable (50,000 ) (48,000 )
Amount due from Valleys Finance Ltd 198,355 164,967
Amount due from Valleys Finance Ltd - Stocking loan 650,000 500,000

Valleys Finance is a limited company of which two of the directors of Family Finance Limited are directors. The balance outstanding above constitutes a monthly recharge balance which is interest free and a stocking loan balance for a regular cash flow funding which is repayable on demand.

26. Ultimate controlling party

The ultimate controlling party is J R Phillips.