Company registration number 05011722 (England and Wales)
HL PARTNERSHIP LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
HL PARTNERSHIP LIMITED
COMPANY INFORMATION
Directors
Mr C M Tanner
Mr R J Haselip
Mr P R Cobley
Mrs K Leslie
Mr D Edwards
(Appointed 1 March 2024)
Mr D Steele
(Appointed 23 May 2024)
Mr A Smith
(Appointed 23 May 2024)
Secretary
Mr R J Haselip
Company number
05011722
Registered office
6 Merus Court
Meridian Business Park
Leicester
LE19 1RJ
Auditor
Sumer Audit
Amelia House
Crescent Road
Worthing
West Sussex
BN11 1RL
HL PARTNERSHIP LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Directors' responsibilities statement
5
Independent auditor's report
6 - 8
Statement of comprehensive income
9
Statement of financial position
10
Statement of changes in equity
11
Notes to the financial statements
12 - 22
HL PARTNERSHIP LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The directors present the strategic report for the year ended 31 December 2023.
Business review and key performance indicators
Revenue for the year was £59.5 million (2022 - £63.6 million) and the profit before tax for the year was £5.0 million (2022 - £5.3 million).
The 6% decrease in revenue (2022 - 14% increase) reflected the slow-down in UK mortgage lending, offset by a 3% increase in adviser numbers during the period and productivity improvements arising from ongoing technology development.
Gross profit margin remained broadly consistent with prior years at 19% (2022 - 18%).
Administrative costs grew by 15% (2022 - 11%) primarily in relation to staff costs, professional services costs, and increased provisions. The staff and professional services cost increases are mainly in Compliance and Training, to ensure the company continues to meet its regulatory obligations.
During the year, the company acquired the operations and majority of the advisers of AFP Partnership.
Principle risks and uncertainties
Market risk
The company is subject to political and economic risks affecting its primary market of mortgage intermediation.
Investment in technology and diversification into related but counter-cyclical markets are the main tools adopted by the company to mitigate market risks.
Regulatory risk
The company operates within the UK financial services market which is regulated by the Financial Conduct Authority (“FCA”).
The company continues to enjoy a strong and professional relationship with the FCA and has strong lines of communication that allow the board to make decisions based on delivering good customer outcomes.
During 2023, the company’s groundwork ensured it had the governance in place to meet the requirements of the Senior Managers and Certification Regime, and the board believes it has the knowledge and experience to continue to meet its regulatory obligations as set out by the FCA now and in the future.
Credit risk
Investments of cash surpluses are made through banks and companies which must fulfil credit rating criteria approved by the board.
All adviser borrowers are subject to due diligence and sign-off at board level and tracking of all loans are reported regularly to the board.
Commission clawback, whereby insurance policies cancel after indemnity commission has been paid out to advisers, is mitigated by robust risk assessment procedures coupled with active monitoring.
Liquidity and cash flow risk
The company holds a certain level of capital in order to meet FCA minimum capital adequacy requirements. This capital resource requirement is met by holding balances in cash. Cash and borrowing requirements are managed to maximise interest income and minimise interest expense, whilst ensuring that the company has sufficient liquid resources to meet the operating needs of the business.
HL PARTNERSHIP LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Promoting the success of the company
Section 172(1) Statement
The directors have regard to the matters set out in section 172(1) (a) to (f) Companies Act 2006 in exercising their duty to promote the success of the company for the benefit of its members.
Those matters were addressed as follows: -
The directors prepare forecasts based on the company’s long-term strategy, including three-year plans.
The company is committed to continuing professional development of staff members at all levels.
The company periodically issues a staff survey which traces employees’ satisfaction and views about the business. The results from the employee surveys are reviewed at board level, forming the basis of proposals and actions.
The company’s impact on the community and environment is limited due to the nature of operations. The directors are committed to reducing the environmental impact of the business wherever feasible.
The Board is committed to achieving and maintaining high standards of business conduct, corporate governance, integrity and business ethics.
Central to maintaining this reputation for high standards is endeavouring to treat our customers, partners and employees fairly and the company’s approach to conducting business is focused on this outcome.
The directors continue to foster a strong and professional relationship with the Financial Conduct Authority and ensure compliance with regulatory requirements.
Mr C M Tanner
Director
22 July 2024
HL PARTNERSHIP LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
The directors present their annual report and financial statements for the year ended 31 December 2023.
Principal activities
The principal activity of the company is as a network of authorised mortgage, protection and general insurance brokers. The company is authorised and regulated by the Financial Conduct Authority.
Results and dividends
The results for the year are set out on page 9.
Ordinary dividends were paid amounting to £4,471,343 (2022: Nil). The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr C M Tanner
Mr N D Hoare
(Resigned 2 May 2024)
Mr R J Haselip
Mr S D Almond
(Resigned 2 May 2024)
Mr P R Cobley
Mrs K Leslie
Mr D Edwards
(Appointed 1 March 2024)
Mr D Steele
(Appointed 23 May 2024)
Mr A Smith
(Appointed 23 May 2024)
Financial instruments
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of all financial instruments.
Business relationships
The S172(1) statement in the strategic report details how the directors have had regard to the need to foster business relationships with suppliers, customers and other stakeholders during the year.
Future developments
The directors believe that there are no future developments that require disclosure.
Auditor
Sumer Audit were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
Energy and carbon report
The Company is part of a wider group and the parent company, Josewin Limited, discloses details of energy and emissions on behalf of the group and therefore the Company has taken the exemption not to disclose this information.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
HL PARTNERSHIP LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
On behalf of the board
Mr C M Tanner
Director
22 July 2024
HL PARTNERSHIP LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 5 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
HL PARTNERSHIP LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF HL PARTNERSHIP LIMITED
- 6 -
Opinion
We have audited the financial statements of HL Partnership Limited (the 'company') for the year ended 31 December 2023 which comprise the statement of comprehensive income, the statement of financial position, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 December 2023 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
HL PARTNERSHIP LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF HL PARTNERSHIP LIMITED
- 7 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, our procedures included the following:
Obtaining an understanding of the legal and FCA regulatory framework that the company operates in, focusing on those laws and regulations that had a direct effect on the financial statements and operations;
Obtaining an understanding of the company’s policies and procedures on fraud risks, including knowledge of any actual, suspected or alleged fraud; and
Discussing among the engagement team how and where fraud might occur in the financial statements and any potential indicators of fraud through our knowledge and understanding of the company and our sector-specific experience.
As a result of these procedures, we considered the opportunities and incentives that may exist within the company for fraud. We are also required to perform specific procedures to respond to the risk of management override. As a result of performing the above, we identified the following areas as those most likely to have an impact on the financial statements: employment law, and compliance with the UK Companies Act.
HL PARTNERSHIP LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF HL PARTNERSHIP LIMITED
- 8 -
In addition to the above, our procedures to respond to risks identified included the following:
Making enquiries of management, about any known or suspected instances of non-compliance with laws and regulations and fraud;
Reviewing minutes of meetings of the board and senior management;
Reviewing correspondence with regulators;
Challenging assumptions and judgements made by management in their significant accounting estimates; in particular in relation to accrued income, clawback provisions, bad debt provisions; and
Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness.
Due to the inherent limitations of an audit, there is an unavoidable risk that some material misstatements in the financial statements may not be detected, even though the audit is properly planned and performed in accordance with the ISAs (UK). For instance, the further removed non-compliance is from the events and transactions reflected in the financial statements, the less likely the auditor is to become aware of it or to recognise the non-compliance.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
This report is made solely to the company's 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.
Robin Evans BA FCA CTA (Senior Statutory Auditor)
For and on behalf of Sumer Audit
21 August 2024
Chartered Accountants
Statutory Auditor
Worthing
Sumer Audit is the trading name of Sumer Auditco Limited
HL PARTNERSHIP LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
2023
2022
as restated
Notes
£
£
Revenue
3
59,481,778
63,601,902
Cost of sales
(47,558,041)
(52,078,870)
Gross profit
11,923,737
11,523,032
Administrative expenses
(7,378,075)
(6,401,580)
Other operating income
4
66,787
Operating profit
6
4,545,662
5,188,239
Investment income
9
499,372
110,278
Profit before taxation
5,045,034
5,298,517
Tax on profit
10
(1,220,000)
(862,895)
Profit for the financial year
3,825,034
4,435,622
The Statement of Comprehensive Income has been prepared on the basis that all operations are continuing operations.
HL PARTNERSHIP LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2023
31 December 2023
- 10 -
2023
2022
Notes
£
£
£
£
Non-current assets
Goodwill
12
1,278,965
Property, plant and equipment
13
85,797
89,479
1,364,762
89,479
Current assets
Trade and other receivables
14
6,957,087
7,641,977
Cash and cash equivalents
12,429,761
12,572,343
19,386,848
20,214,320
Current liabilities
15
(13,179,811)
(12,266,732)
Net current assets
6,207,037
7,947,588
Total assets less current liabilities
7,571,799
8,037,067
Provisions for liabilities
Provisions
16
827,157
646,116
(827,157)
(646,116)
Net assets
6,744,642
7,390,951
Equity
Called up share capital
19
56,500
56,500
Retained earnings
6,688,142
7,334,451
Total equity
6,744,642
7,390,951
The financial statements were approved by the board of directors and authorised for issue on 22 July 2024 and are signed on its behalf by:
Mr C M Tanner
Director
Company registration number 05011722 (England and Wales)
HL PARTNERSHIP LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
Share capital
Retained earnings
Total
Notes
£
£
£
Balance at 1 January 2022
56,500
2,898,829
2,955,329
Year ended 31 December 2022:
Profit and total comprehensive income
-
4,435,622
4,435,622
Balance at 31 December 2022
56,500
7,334,451
7,390,951
Year ended 31 December 2023:
Profit and total comprehensive income
-
3,825,034
3,825,034
Dividends
11
-
(4,471,343)
(4,471,343)
Balance at 31 December 2023
56,500
6,688,142
6,744,642
HL PARTNERSHIP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
1
Accounting policies
Company information
HL Partnership Limited is a private company limited by shares incorporated in England and Wales. The registered office is 6 Merus Court, Meridian Business Park, Leicester, LE19 1RJ.
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 £1.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
1.2
Going concern
At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future, The directors have considered relevant information, including the company's principal risks and uncertainties, the annual budget, forecast future cash flows and the impact of subsequent events in making their assessment. Based on these assessments and having regard to the resources available to the entity, the directors have concluded that there is no material uncertainty and that they can continue to adopt the going concern basis in preparing the annual report and financial statements.true
1.3
Revenue
Revenue is recognised in respect of commission receivable, and services rendered, to the company's network and is shown net of VAT and other sales related taxes. Commission receivable is recognised on approval of a broker's loan application.
1.4
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is ten years.
For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.
1.5
Property, plant and equipment
Property, plant and equipment are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
HL PARTNERSHIP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Leasehold land and buildings
25% per annum on diminishing balance basis
Fixtures and fittings
25% per annum on diminishing balance basis
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
Impairment of non-current assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss.
1.7
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include deposits held at call with banks.
1.8
Financial assets and liabilities
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
The company enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities like trade and other receivables and payables and loans from fellow group undertakings.
Debt instruments like loans from fellow group undertakings and other receivables and payables are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Debt instruments that are payable or receivable within one year are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received.
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.
HL PARTNERSHIP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
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 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
Taxation
The tax expense represents the sum of the tax currently payable and is based on taxable profit for the year.
1.11
Provisions
Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.
Clawback provision
The provision for the clawback of commission represents a modelled estimate of the value of commissions reclaimable by product providers in respect of policies cancelled either from the outset or which lapsed, based on the past experience of such claims.
1.12
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.14
Share-based payments
Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted.
1.15
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
HL PARTNERSHIP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 15 -
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Provision for indemnity commission
See note 1.11 for details of how the clawback provision is estimated.
Bad debt provision
Provisions of bad debt primarily relate to management's estimate on the recovery of commission claw backs on older balances.
Accrued income
Accrued income is recognised for all commissions received after the year end that relate to commissions approved by lenders before the year end. The approval date is based on entries by brokers into the company's internal systems.
HL PARTNERSHIP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 16 -
3
Revenue
The company operates in one principal area of activity, that of the rendering of services, which is undertaken wholly in the United Kingdom. Revenue is therefore made up 100% by the fees receivable in relation to the rendering of these services.
4
Exceptional item
2023
2022
£
£
Income
Amounts due to group undertakings written back
-
66,787
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
19,750
15,000
For other services
Audit-related assurance services
10,000
2,600
Taxation compliance services
9,615
1,400
19,615
4,000
6
Operating profit
2023
2022
Operating profit for the year is stated after charging:
£
£
Depreciation of owned property, plant and equipment
24,196
15,323
Amortisation of intangible assets
67,314
-
Operating lease charges
90,605
111,583
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
911,792
928,807
Company pension contributions to defined contribution schemes
67,244
18,546
979,036
947,353
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 5 (2022 - 5).
HL PARTNERSHIP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
7
Directors' remuneration
(Continued)
- 17 -
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
240,000
239,998
Company pension contributions to defined contribution schemes
1,321
1,321
8
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Directors
6
6
Compliance
40
30
Finance and commissions
7
8
Training
4
2
Support
7
8
Membership
5
4
Recruitment
3
3
Marketing
3
3
IT
6
5
HR
1
1
Total
82
70
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
3,486,302
3,219,572
Social security costs
370,868
362,669
Pension costs
141,404
69,686
3,998,574
3,651,927
9
Investment income
2023
2022
£
£
Interest income
Interest on bank deposits
499,372
110,278
HL PARTNERSHIP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
10
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
1,220,000
1,000,000
Adjustments in respect of prior periods
(137,105)
Total current tax
1,220,000
862,895
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
5,045,034
5,298,517
Expected tax charge based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
1,186,592
1,006,718
Tax effect of expenses that are not deductible in determining taxable profit
1,343
2,617
Adjustments in respect of prior years
(137,105)
Group relief
(21,884)
(26,631)
Permanent capital allowances in excess of depreciation
(5,037)
(4,042)
Depreciation on assets not qualifying for tax allowances
21,523
2,911
Timing differences
37,463
18,427
Taxation charge for the year
1,220,000
862,895
11
Dividends
2023
2022
£
£
Interim paid
4,471,343
HL PARTNERSHIP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
12
Intangible fixed assets
Goodwill
£
Cost
At 1 January 2023
Additions
1,346,279
At 31 December 2023
1,346,279
Amortisation and impairment
At 1 January 2023
Amortisation charged for the year
67,314
At 31 December 2023
67,314
Carrying amount
At 31 December 2023
1,278,965
At 31 December 2022
On 30 June 2023 the company acquired the trade and assets of AFP Partnership.
13
Property, plant and equipment
Leasehold land and buildings
Fixtures and fittings
Total
£
£
£
Cost
At 1 January 2023
4,122
227,903
232,025
Additions
20,514
20,514
At 31 December 2023
4,122
248,417
252,539
Depreciation and impairment
At 1 January 2023
142,546
142,546
Depreciation charged in the year
24,196
24,196
At 31 December 2023
166,742
166,742
Carrying amount
At 31 December 2023
4,122
81,675
85,797
At 31 December 2022
4,122
85,357
89,479
HL PARTNERSHIP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
14
Trade and other receivables
2023
2022
Amounts falling due within one year:
£
£
Trade receivables
156,743
Corporation tax recoverable
114,709
Amounts owed by group undertakings
214,120
162,749
Other receivables
198,231
185,015
Prepayments and accrued income
6,330,386
6,768,202
6,742,737
7,387,418
2023
2022
Amounts falling due after more than one year:
£
£
Other receivables
214,350
254,559
Total debtors
6,957,087
7,641,977
Amounts owed by group undertakings have no terms and are therefore repayable on demand. Whilst the classification as current debtors reflect the contractual nature of the loans, the company does not seek repayment of these loans until the group undertaking is financially able to do so. This may be more than 12 months from the reporting date, as part of the company's ongoing financial support of its group.
15
Current liabilities
2023
2022
£
£
Trade payables
2,312,226
3,017,325
Amounts owed to group undertakings
1,525,899
1,410
Corporation tax
167,383
Other taxation and social security
102,113
114,450
Other payables
16,211
16,041
Accruals and deferred income
9,055,979
9,117,506
13,179,811
12,266,732
16
Provisions for liabilities
2023
2022
£
£
Clawback provision
827,157
646,116
HL PARTNERSHIP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
16
Provisions for liabilities
(Continued)
- 21 -
Movements on provisions:
Clawback provision
£
At 1 January 2023
646,116
Additional provisions in the year
181,041
At 31 December 2023
827,157
17
Share-based payment transactions
During the year to 31 December 2023, the company's parent company had a share option plan in operation.
During prior years 2,958 options were granted to employees within the company. Of these options, 700 £1 ordinary share options were still in place as at 31 December 2023 with all other options having lapsed or been cancelled during previous years. These options were granted in two tranches of 2,208 and 750 each, at an exercise price of £39.50 and £252.00 respectively. The remaining options relate to the second tranche.
The options can only be exercised if a share or asset sale occurs in the parent company. If the options remain unexercised after a period of ten years from the date of the grant or if the option holder ceases employment the options expire. The directors have recorded no charge within the income statement on the grounds of immateriality.
18
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
141,404
69,686
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
19
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary A shares of £1 each
500
500
500
500
Ordinary shares of £1 each
56,000
56,000
56,000
56,000
56,500
56,500
56,500
56,500
Ordinary and Ordinary A shares have full voting, dividend and capital distribution (including on winding up) rights attached to them.
HL PARTNERSHIP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
20
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2022
£
£
Within one year
76,534
85,633
Between two and five years
175,000
251,534
251,534
337,167
21
Related party transactions
During the year, gross commissions totalling £992,731 (2022 - £1,036,008) has been paid to Custom Mortgage Solutions Limited, a related party where HL Partnership Limited is the majority shareholder. At the balance sheet date, £nil (2022 - £11,180) was owed to the related party.
22
Ultimate controlling party
The immediate and ultimate parent company is Josewin Limited, a company incorporated in England and Wales. The registered office is 6 Merus Court, Meridian Business Park, Leicester, LE19 1RJ.
Josewin Limited prepares consolidated financial statements and copies can be obtained from Companies House.
23
Prior period adjustment
Revenue and Cost of Sales in the comparative period have been restated as follows:
Both revenue and Cost of Sales have decreased by £1,298,150 as a result of a prior period error whereby deductions from cost of sales were classified as income. There is a net £nil effect on gross margin
2023-12-312023-01-01falseCCH SoftwareCCH Accounts Production 2024.200Mr C M TannerMr N D HoareMr S D AlmondMr P R CobleyMrs K LeslieMr D EdwardsMr D SteeleMr A SmithSmithMr R J Haselipfalsefalse050117222023-01-012023-12-3105011722bus:Director12023-01-012023-12-3105011722bus:CompanySecretaryDirector12023-01-012023-12-3105011722bus:Director42023-01-012023-12-3105011722bus:Director52023-01-012023-12-3105011722bus:Director62023-01-012023-12-3105011722bus:Director72023-01-012023-12-3105011722bus:Director82023-01-012023-12-3105011722bus:CompanySecretary12023-01-012023-12-3105011722bus:Director22023-01-012023-12-3105011722bus:Director32023-01-012023-12-3105011722bus:Director92023-01-012023-12-3105011722bus:RegisteredOffice2023-01-012023-12-31050117222023-12-31050117222022-01-012022-12-3105011722core:RetainedEarningsAccumulatedLosses2022-01-012022-12-3105011722core:RetainedEarningsAccumulatedLosses2023-01-012023-12-3105011722core:Goodwill2023-12-3105011722core:Goodwill2022-12-31050117222022-12-3105011722core:LandBuildingscore:LeasedAssetsHeldAsLessee2023-12-3105011722core:FurnitureFittings2023-12-3105011722core:LandBuildingscore:LeasedAssetsHeldAsLessee2022-12-3105011722core:FurnitureFittings2022-12-3105011722core:CurrentFinancialInstrumentscore:WithinOneYear2023-12-3105011722core:CurrentFinancialInstrumentscore:WithinOneYear2022-12-3105011722core:CurrentFinancialInstruments2023-12-3105011722core:CurrentFinancialInstruments2022-12-3105011722core:ShareCapital2023-12-3105011722core:ShareCapital2022-12-3105011722core:RetainedEarningsAccumulatedLosses2023-12-3105011722core:RetainedEarningsAccumulatedLosses2022-12-3105011722core:ShareCapital2021-12-3105011722core:RetainedEarningsAccumulatedLosses2021-12-3105011722core:ShareCapitalOrdinaryShares2023-12-3105011722core:ShareCapitalOrdinaryShares2022-12-3105011722core:Goodwill2023-01-012023-12-3105011722core:LandBuildingscore:LeasedAssetsHeldAsLessee2023-01-012023-12-3105011722core:FurnitureFittings2023-01-012023-12-3105011722core:UKTax2023-01-012023-12-3105011722core:UKTax2022-01-012022-12-310501172212023-01-012023-12-310501172212022-01-012022-12-310501172222023-01-012023-12-310501172222022-01-012022-12-3105011722core:Goodwill2022-12-3105011722core:Goodwillcore:ExternallyAcquiredIntangibleAssets2023-01-012023-12-3105011722core:LandBuildingscore:LeasedAssetsHeldAsLessee2022-12-3105011722core:FurnitureFittings2022-12-31050117222022-12-3105011722core:Non-currentFinancialInstruments2023-12-3105011722core:Non-currentFinancialInstruments2022-12-3105011722core:WithinOneYear2023-12-3105011722core:WithinOneYear2022-12-3105011722core:BetweenTwoFiveYears2023-12-3105011722core:BetweenTwoFiveYears2022-12-3105011722bus:PrivateLimitedCompanyLtd2023-01-012023-12-3105011722bus:FRS1022023-01-012023-12-3105011722bus:Audited2023-01-012023-12-3105011722bus:FullAccounts2023-01-012023-12-31xbrli:purexbrli:sharesiso4217:GBP