Company registration number 06426478 (England and Wales)
HARBOUR LITIGATION FUNDING LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
HARBOUR LITIGATION FUNDING LTD
COMPANY INFORMATION
Directors
P K M Tonnby
S J Dunn
J K M Bark-Jones
E Macpherson
G N B Bennett
Company number
06426478
Registered office
8 Waterloo Place
4th Floor
London
SW1Y 4BE
Auditor
Gravita II LLP
Aldgate Tower
2 Leman Street
London
E1 8FA
HARBOUR LITIGATION FUNDING LTD
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 7
Profit and loss account
8
Group statement of comprehensive income
9
Group balance sheet
10
Company balance sheet
11
Group statement of changes in equity
12
Company statement of changes in equity
13
Group statement of cash flows
14
Company statement of cash flows
15
Notes to the financial statements
16 - 29
HARBOUR LITIGATION FUNDING LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
- 1 -
The directors present the strategic report for the year ended 31 December 2024.
Review of the business
The results for the year and the financial position were considered satisfactory by the directors who expect a return to profit in the next year.
The Company is authorised and regulated by the UK Financial Conduct Authority.
The turnover of the Company consists of advisory fees receivable which are generated in accordance with sub-advisory agreements. For the year under review, the Company continued to receive fees from its existing customer, and its expenses remained at a consistent level and the directors kept these under close review.
The Company's principal financial instruments comprise cash, which provides finance for the Company's operations, along with retained profits.
HLF GmbH
HLF GmbH is an exclusive sub-advisor to HLF providing local (German) sub-advisory services. HLF GmbH did not generate any revenue for the group.
HLF GmbH was disposed of on 20th December 2024 as detailed in Note 20.
The key financial highlights are as follows:
2024
2023
£
£
Turnover
7,983,595
8,804,125
Operating profit percentage
-2.29%
2.12%
(Loss)/Profit before tax
(227,741)
222,578
Promoting the success of the company
The following disclosures describe how the directors have had regard to the matters set out in section 172(I)(a)-(f) and forms the directors’ statement required under section 414CZA of the Companies Act 2006.
Engagement with employees
The Directors recognise the success of our business depends on attracting, retaining and motivating employees. The Company is committed to ensuring that they remain a responsible employer, from pay and benefits to promoting health and safety in the workplace environment.
Company reputation
The Company’s reputation is vitally important both for attracting and maintaining its business relationships as well as ensuring we can hire the best employees. A strong controls environment is operated with regular reports made and actions to ensure standards are maintained at a high level.
Long-term decision making
The Directors consider the likely consequences of any decision in the long-term, and any significant decisions are made with due thought to long term growth targets set within the Company.
HARBOUR LITIGATION FUNDING LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 2 -
P K M Tonnby
Director
23 April 2025
HARBOUR LITIGATION FUNDING LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
- 3 -
The directors present their annual report and financial statements for the year ended 31 December 2024.
Principal activities
The principal activity of the company and group continued to be that of investment sub-advisory services.
Results and dividends
The results for the year are set out on page 8.
No dividends were paid out in the year. The directors do not recommend payment of a dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
P K M Tonnby
S J Dunn
J K M Bark-Jones
E Macpherson
G N B Bennett
Statement of directors' responsibilities
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 group and company, 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;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group and company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Strategic report
The truegroup has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the group'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.
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 auditor of the company 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 auditor of the company is aware of that information.
HARBOUR LITIGATION FUNDING LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 4 -
On behalf of the board
P K M Tonnby
Director
23 April 2025
HARBOUR LITIGATION FUNDING LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF HARBOUR LITIGATION FUNDING LTD
- 5 -
Opinion
We have audited the financial statements of Harbour Litigation Funding Ltd (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2024 which comprise the group profit and loss account, the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows, the company statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the group's and the parent company's affairs as at 31 December 2024 and of the group's loss 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 group and parent 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 group's and 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.
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.
HARBOUR LITIGATION FUNDING LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF HARBOUR LITIGATION FUNDING LTD
- 6 -
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 their 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 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.
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 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 parent 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.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
The extent to which the audit was considered capable of detecting irregularities including fraud
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the industry;
we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006 and taxation legislation;
we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and
identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
HARBOUR LITIGATION FUNDING LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF HARBOUR LITIGATION FUNDING LTD
- 7 -
We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
understanding the business model as part of the control and business environment;
making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
To address the risk of fraud through management bias and override of controls, we:
performed analytical procedures to identify any unusual or unexpected relationships;
tested journal entries to identify unusual transactions;
assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and
investigated the rationale behind significant or unusual transactions
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
agreeing financial statement disclosures to underlying supporting documentation;
enquiring of management as to actual and potential litigation and claims; and
reviewing correspondence and enquiring with the company of actual and potential non-compliance with laws and regulations.
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment by for example forgery, or intentional misrepresentation or through collusion. Our audit procedures are designed to detect material misstatement. We are not responsible for preventing non-compliance or fraud and cannot be expected to detect non-compliance with all laws and regulations.
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.
Sarah Wilson FCA (Senior Statutory Auditor)
For and on behalf of Gravita II LLP, Statutory Auditor
Chartered Accountants
Aldgate Tower
2 Leman Street
London
E1 8FA
23 April 2025
HARBOUR LITIGATION FUNDING LTD
GROUP PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2024
- 8 -
2024
2023
Notes
£
£
Turnover
3
7,983,595
8,808,897
Administrative expenses
(8,573,731)
(8,539,884)
Other operating income
382,336
357,842
Operating (loss)/profit
4
(207,800)
626,855
Interest receivable and similar income
97
98
Loss on disposal of investment
19
(20,039)
-
(Loss)/profit before taxation
(227,742)
626,953
Tax on (loss)/profit
9
78,510
(218,118)
(Loss)/profit for the financial year
18
(149,232)
408,835
(Loss)/profit for the financial year is all attributable to the owners of the parent company.
HARBOUR LITIGATION FUNDING LTD
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024
- 9 -
2024
2023
£
£
(Loss)/profit for the year
(149,232)
408,835
Other comprehensive income
-
-
Cash flow hedges gain arising in the year
Total comprehensive income for the year
(149,232)
408,835
Total comprehensive income for the year is all attributable to the owners of the parent company.
HARBOUR LITIGATION FUNDING LTD
GROUP BALANCE SHEET
AS AT
31 DECEMBER 2024
31 December 2024
- 10 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
10
62,756
129,272
Current assets
Debtors falling due after more than one year
12
256,377
256,377
Debtors falling due within one year
12
2,522,647
2,966,067
Cash at bank and in hand
716,303
956,166
3,495,327
4,178,610
Creditors: amounts falling due within one year
13
(2,560,786)
(3,161,353)
Net current assets
934,541
1,017,257
Net assets
997,297
1,146,529
Capital and reserves
Called up share capital
15
1,800
1,800
Share premium account
16
48,000
48,000
Capital redemption reserve
17
200
200
Profit and loss reserves
18
947,297
1,096,529
Total equity
997,297
1,146,529
The financial statements were approved by the board of directors and authorised for issue on 23 April 2025 and are signed on its behalf by:
23 April 2025
P K M Tonnby
Director
Company registration number 06426478 (England and Wales)
HARBOUR LITIGATION FUNDING LTD
COMPANY BALANCE SHEET
AS AT 31 DECEMBER 2024
31 December 2024
- 11 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
10
62,756
129,272
Investments
11
22,613
62,756
151,885
Current assets
Debtors falling due after more than one year
12
256,377
256,377
Debtors falling due within one year
12
2,522,606
2,965,279
Cash at bank and in hand
716,303
921,797
3,495,286
4,143,453
Creditors: amounts falling due within one year
13
(2,560,745)
(3,172,074)
Net current assets
934,541
971,379
Net assets
997,297
1,123,264
Capital and reserves
Called up share capital
15
1,800
1,800
Share premium account
16
48,000
48,000
Capital redemption reserve
17
200
200
Profit and loss reserves
18
947,297
1,073,264
Total equity
997,297
1,123,264
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £125,967 (2023 - £422,975 profit).
The financial statements were approved by the board of directors and authorised for issue on 23 April 2025 and are signed on its behalf by:
23 April 2025
P K M Tonnby
Director
Company registration number 06426478 (England and Wales)
HARBOUR LITIGATION FUNDING LTD
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
- 12 -
Share capital
Share premium account
Capital redemption reserve
Profit and loss reserves
Total
£
£
£
£
£
Balance at 1 January 2023
1,800
48,000
200
687,694
737,694
Year ended 31 December 2023:
Profit and total comprehensive income
-
-
-
408,835
408,835
Balance at 31 December 2023
1,800
48,000
200
1,096,529
1,146,529
Year ended 31 December 2024:
Loss and total comprehensive income
-
-
-
(149,232)
(149,232)
Balance at 31 December 2024
1,800
48,000
200
947,297
997,297
HARBOUR LITIGATION FUNDING LTD
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
- 13 -
Share capital
Share premium account
Capital redemption reserve
Profit and loss reserves
Total
£
£
£
£
£
Balance at 1 January 2023
1,800
48,000
200
650,289
700,289
Year ended 31 December 2023:
Profit and total comprehensive income for the year
-
-
-
422,975
422,975
Balance at 31 December 2023
1,800
48,000
200
1,073,264
1,123,264
Year ended 31 December 2024:
Profit and total comprehensive income
-
-
-
(125,967)
(125,967)
Balance at 31 December 2024
1,800
48,000
200
947,297
997,297
HARBOUR LITIGATION FUNDING LTD
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2024
- 14 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash absorbed by operations
22
(95,300)
(664,789)
Income taxes paid
(128,593)
(65,544)
Net cash outflow from operating activities
(223,893)
(730,333)
Investing activities
Purchase of tangible fixed assets
-
(85,709)
Proceeds from disposal of subsidiaries net of cash disposed
(16,068)
-
Interest received
97
98
Net cash used in investing activities
(15,971)
(85,611)
Net decrease in cash and cash equivalents
(239,863)
(815,944)
Cash and cash equivalents at beginning of year
956,166
1,772,109
Cash and cash equivalents at end of year
716,303
956,166
HARBOUR LITIGATION FUNDING LTD
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2024
- 15 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash absorbed by operations
23
(112,100)
(649,088)
Income taxes paid
(128,592)
(60,001)
Net cash outflow from operating activities
(240,692)
(709,089)
Investing activities
Purchase of tangible fixed assets
(85,709)
Proceeds from disposal of subsidiaries
35,197
Net cash generated from/(used in) investing activities
35,197
(85,709)
Net decrease in cash and cash equivalents
(205,494)
(794,798)
Cash and cash equivalents at beginning of year
921,797
1,716,595
Cash and cash equivalents at end of year
716,303
921,797
HARBOUR LITIGATION FUNDING LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
- 16 -
1
Accounting policies
Company information
Harbour Litigation Funding Ltd is a private company limited by shares incorporated in England and Wales. The registered office and principal place of business is 8 Waterloo Place, 4th Floor, London, SE1Y 4BE.
The group consists of Harbour Litigation Funding Ltd and all of its subsidiaries.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
1.2
Business combinations
In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.
Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.
1.3
Basis of consolidation
The consolidated group financial statements consist of the financial statements of the parent company Harbour Litigation Funding Ltd together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.
All financial statements are made up to 31 December 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
HARBOUR LITIGATION FUNDING LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 17 -
1.4
Going concern
During the year the company has generated a loss of £149k and closed the year with £997k of total assets less liabilities. The directors have prepared up to the end of December 2026, forecasts which demonstrate an expectation that total assets less liabilities will improve over this period. Therefore 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. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.5
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for services provided in the normal course of business, and is shown net of VAT and other sales related taxes.
Turnover represents amounts receivable for sub-advisory services and shared service charges. Fees are charged on a cost plus basis and are recognised in the period to which they relate.
1.6
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Land and buildings short leasehold
20% Straight line
Plant and machinery
33% Straight line
Fixtures, fittings and equipment
50% Straight line
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 recognised in the profit and loss account.
1.7
Fixed asset investments
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
1.8
Impairment of fixed assets
At each reporting period end date, the group 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 (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
HARBOUR LITIGATION FUNDING LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 18 -
Recoverable amount is the higher of fair value less costs to sell and value in use. 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 for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.9
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand.
1.10
Financial instruments
The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ to all of its financial instruments.
Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets are classified into specified categories. The classification depends on the nature and purpose of the financial assets and is determined at the time of recognition.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Loans and receivables
Trade debtors, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as 'loans and receivables'. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment.
Interest is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial. The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating the interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the debt instrument to the net carrying amount on initial recognition.
HARBOUR LITIGATION FUNDING LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 19 -
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, loans from fellow group companies are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Derecognition of financial liabilities
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
1.11
Equity instruments
Equity instruments issued by the group 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 group.
1.12
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
1.13
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
HARBOUR LITIGATION FUNDING LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 20 -
1.14
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
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 leased asset are consumed.
1.16
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
2
Judgements and key sources of estimation uncertainty
In the application of the group’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.
Accruals
The company makes estimates around certain accruals balances, principally bonuses and other commission-related payments. When assessing the likely final value, management considers various factors including the likely ultimate value of the payment, the profile of the underlying model and historical experience.
Provision for dilapidations
The company makes estimates around the provision for dilapidations. When assessing the likely final value, management considers the last quote received from building suppliers which is based on the square footage of similar buildings within London and adjusts for labour costs and inflationary measures.
3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by class of business
Fees receivable
7,983,595
8,808,897
2024
2023
£
£
Other revenue
Interest income
97
98
HARBOUR LITIGATION FUNDING LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
3
Turnover and other revenue
(Continued)
- 21 -
The total turnover of the company for the year has been derived from its principal activity wholly undertaken in the United Kingdom.
4
Operating (loss)/profit
2024
2023
£
£
Operating (loss)/profit for the year is stated after charging:
Exchange losses
2,396
410
Depreciation of owned tangible fixed assets
63,668
127,105
Loss on disposal of tangible fixed assets
2,849
4,295
Operating lease charges
293,953
390,427
5
Auditor's remuneration
2024
2023
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
27,675
24,410
For other services
Taxation compliance services
7,350
28,170
6
Employees
The average monthly number of persons (including directors) employed by the group and company during the year was 29 (2023: 30)
Group
Company
2024
2023
2024
2023
Number
Number
Number
Number
Directors
5
5
5
5
Administrative staff
24
25
24
25
Total
29
30
29
30
HARBOUR LITIGATION FUNDING LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
6
Employees
(Continued)
- 22 -
Their aggregate remuneration comprised:
Group
Company
2024
2023
2024
2023
£
£
£
£
Wages and salaries
5,151,600
5,451,418
5,151,600
5,451,418
Social security costs
660,935
705,542
660,935
705,777
Pension costs
200,275
176,401
200,275
176,401
6,012,810
6,333,361
6,012,810
6,333,596
7
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
1,268,664
996,978
Company pension contributions to defined contribution schemes
34,375
28,000
1,303,039
1,024,978
Remuneration disclosed above includes the following amounts paid to the highest paid director:
2024
2023
£
£
Remuneration for qualifying services
640,632
607,364
Company pension contributions to defined contribution schemes
10,000
8,833
8
Amounts written off investments
2024
2023
£
£
Other gains and losses
(20,039)
-
9
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
(85,041)
185,797
Adjustments in respect of prior periods
6,531
32,321
Total current tax
(78,510)
218,118
From April 2023 the Corporation Tax rate changed from 23.5% to 25%.
HARBOUR LITIGATION FUNDING LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
9
Taxation
(Continued)
- 23 -
The actual (credit)/charge for the year can be reconciled to the expected (credit)/charge for the year based on the profit or loss and the standard rate of tax as follows:
2024
2023
£
£
(Loss)/profit before taxation
(227,742)
626,953
Expected tax (credit)/charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 23.50%)
(56,936)
147,334
Tax effect of expenses that are not deductible in determining taxable profit
(13,379)
98,981
Adjustments in respect of prior years
6,531
(3,802)
Permanent capital allowances in excess of depreciation
(12,439)
(23,105)
Loss on Disposal of Fixed Asset
670
1,009
Provisions Adjustment
(2,299)
Profit on disposal of subsidiary
(2,957)
Taxation (credit)/charge
(78,510)
218,118
10
Tangible fixed assets
Group and company
Land and buildings short leasehold
Plant and machinery
Fixtures, fittings and equipment
Total
£
£
£
£
Cost
At 1 January 2024
500,761
145,340
262,425
908,526
Disposals
(5,761)
(5,761)
At 31 December 2024
500,761
139,579
262,425
902,765
Depreciation and impairment
At 1 January 2024
431,607
89,040
258,607
779,254
Depreciation charged in the year
33,228
27,660
2,780
63,668
Eliminated in respect of disposals
(2,913)
(2,913)
At 31 December 2024
464,835
113,787
261,387
840,009
Carrying amount
At 31 December 2024
35,926
25,792
1,038
62,756
At 31 December 2023
69,154
56,300
3,818
129,272
The total group tangible assets are equal to that of the total company tangible assets.
HARBOUR LITIGATION FUNDING LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 24 -
11
Fixed asset investments
Group
Company
2024
2023
2024
2023
Notes
£
£
£
£
Investments in subsidiaries
22,613
On 20th December 2024, Harbour Litigation Funding Limited disposed of its 100% shareholding in subsidiary Harbour Litigation Funding GmbH.
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 1 January 2024
22,613
Disposals
(22,613)
At 31 December 2024
-
Carrying amount
At 31 December 2024
-
At 31 December 2023
22,613
12
Debtors
Group
Company
2024
2023
2024
2023
Amounts falling due within one year:
£
£
£
£
Trade debtors
1,959,167
2,689,806
1,959,167
2,689,806
Corporation tax recoverable
109,259
109,259
Other debtors
185,688
154,232
185,647
154,232
Prepayments and accrued income
268,533
122,029
268,533
121,241
2,522,647
2,966,067
2,522,606
2,965,279
Amounts falling due after more than one year:
Other debtors
256,377
256,377
256,377
256,377
Total debtors
2,779,024
3,222,444
2,778,983
3,221,656
HARBOUR LITIGATION FUNDING LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 25 -
13
Creditors: amounts falling due within one year
Group
Company
2024
2023
2024
2023
£
£
£
£
Trade creditors
48,212
75,136
48,212
74,820
Amounts owed to group undertakings
12,977
Corporation tax payable
97,844
97,843
Other taxation and social security
234,308
156,607
234,267
154,668
Other creditors
368,475
506,075
368,475
506,075
Accruals and deferred income
1,909,791
2,325,691
1,909,791
2,325,691
2,560,786
3,161,353
2,560,745
3,172,074
14
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
200,275
176,401
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
15
Share capital
Group and company
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary of £1 each
1,800
1,800
1,800
1,800
16
Share premium account
This reserve records the amount above the nominal value received for shares sold, less transaction costs.
17
Capital redemption reserve
This reserve records the nominal value of shares repurchased by the company.
18
Profit and loss reserves
Retained earnings representing accumulated comprehensive income for the year and prior periods less dividends paid.
HARBOUR LITIGATION FUNDING LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 26 -
19
Disposals
On 20 December 2024 the group disposed of its 100% holding in Harbour Litigation Funding GmbH. Included in these financial statements are profits of £9,358 arising from the company's interests in Harbour Litigation Funding GmbH up to the date of its disposal.
Net assets disposed of
£
Cash and cash equivalents
51,265
Trade and other receivables
5,778
Trade and other payables
(1,807)
55,236
Loss on disposal
(20,039)
Total consideration
35,197
The consideration was satisfied by:
£
Cash
35,197
-
20
Operating lease commitments
Lessee
Operating lease payments represent rentals payable by the company for office premises, rentals payable for accommodation and two photocopiers.
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
Group
Company
2024
2023
2024
2023
£
£
£
£
Within one year
439,620
435,547
439,620
435,547
Between two and five years
1,108,575
1,531,139
1,108,575
1,531,139
1,548,195
1,966,686
1,548,195
1,966,686
HARBOUR LITIGATION FUNDING LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 27 -
21
Related party transactions
Transactions with related parties
During the year the group entered into the following transactions with related parties:
Purchases
Purchases
2024
2023
£
£
Company
Entities with control, joint control or significant influence over the company
-
5,059
Services provided
2024
2023
£
£
Company
Other related parties
8,365,930
9,155,782
The following amounts were outstanding at the reporting end date:
Amounts due to related parties
2024
2023
£
£
Company
Entities with control, joint control or significant influence over the company
-
12,797
The following amounts were outstanding at the reporting end date:
Amounts due from related parties
2024
2023
Balance
Balance
£
£
Company
Other related parties
2,066,348
2,832,839
HARBOUR LITIGATION FUNDING LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 28 -
22
Cash absorbed by group operations
2024
2023
£
£
(Loss)/profit for the year after tax
(149,232)
408,835
Adjustments for:
Taxation (credited)/charged
(78,510)
218,118
Investment income
(97)
(98)
Loss on disposal of tangible fixed assets
2,849
4,295
Depreciation and impairment of tangible fixed assets
63,668
127,105
Other gains and losses
20,039
-
Movements in working capital:
Decrease/(increase) in debtors
546,901
(1,792,214)
(Decrease)/increase in creditors
(500,916)
369,170
Cash absorbed by operations
(95,298)
(664,789)
23
Cash absorbed by operations - company
2024
2023
£
£
(Loss)/profit for the year after tax
(125,967)
422,975
Adjustments for:
Taxation (credited)/charged
(78,510)
216,510
Loss on disposal of tangible fixed assets
2,849
4,295
Depreciation and impairment of tangible fixed assets
63,668
127,105
Other gains and losses
(12,584)
-
Movements in working capital:
Decrease/(increase) in debtors
551,932
(1,792,282)
(Decrease)/increase in creditors
(513,486)
372,308
Cash absorbed by operations
(112,097)
(649,089)
24
Analysis of changes in net funds - group
1 January 2024
Cash flows
31 December 2024
£
£
£
Cash at bank and in hand
956,166
(239,863)
716,303
HARBOUR LITIGATION FUNDING LTD
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 29 -
25
Analysis of changes in net funds - company
1 January 2024
Cash flows
31 December 2024
£
£
£
Cash at bank and in hand
921,797
(205,494)
716,303
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