Company Registration No. 06738633 (England and Wales)
PDL FINANCE LIMITED T/A MR LENDER
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
PDL FINANCE LIMITED T/A MR LENDER
COMPANY INFORMATION
Directors
A Freeman
E Nisbet
J Grant
D Shrier
Company number
06738633
Registered office
30 City Road
London
EC1Y 2AB
Auditor
Arram Berlyn Gardner LLP
30 City Road
London
EC1Y 2AB
Business address
Freeman House
Langston Road
Loughton
IG10 3TQ
PDL FINANCE LIMITED T/A MR LENDER
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 6
Statement of comprehensive income
7
Statement of financial position
8
Statement of changes in equity
9
Notes to the financial statements
10 - 20
PDL FINANCE LIMITED T/A MR LENDER
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2019
- 1 -
The directors present the strategic report for the year ended 31 December 2019.
Principal Activities and Business Review
The principal activity of the company is the provision of short-term loans.
Fair review of the business
The net profit before taxation increased by £0.6m to £2.5m in 2019 from 2018 (2018: £1.9m).
The 2019 net profit margin increase
d
by
48
% compared to 2018, this was largely contributed by the decrease in default rates and well-balanced management of the operational costs.
The main focus in 2019 was to decrease default rates, enhance lending and steady the portfolio. This was to ensure a good standing for PDL within the HCSTC sector, therefore there was an expected decrease in the revenue and portfolio value, as below;
The directors were pleased with the 2019 performance as the operations were achieved whilst ensuring the customer services were not impacted and a smooth office relocation.
Financial Risk Management, Objectives and Policies
The company is exposed to a moderate level of price, credit, liquidity and cash flow risks. The company manages these risks by financing its operations through retained profits supplemented by borrowing where necessary to fund expansion or capital expenditure programmes.
The management objective is to retain sufficient liquid funds via retained earnings, thus enabling the company to meet its day to day funding requirements, whilst minimising the risk of fluctuating interest rates on external borrowings.
The company makes little use of financial instruments other than an operational bank account and the facility to loan from its parent company SDJ Enterprise Limited if required, therefore its exposure to price, credit, liquidity and cash flow risk is not material for the assessment of assets, liabilities, financial position and profit and loss of the company.
Regulatory, Political and Legal Risk Management and Policies
The company is regulated by the FCA, therefore has a high level of exposure to potential regulatory, political and legal risks.
If the company fail to comply with any laws, regulations, rules or codes relating to the consumer credit industry it could potentially be fined by the FCA or expose the company to negative publicity which would in turn have a negative impact on the business.
In 2019, the FCA carried out a review of the HCC sector. This was for all lenders and non-specific to PDL Finance Limited. This included a review and enhancement to some of PDL’s policies and procedures.
Controls, systems and processes have been developed to manage these risks. These include monitoring regulatory and legal changes, developing appropriate compliance policies, monitoring adherence to these policies and reporting accordingly, as well as regular monitored compliance training for all employees.
PDL FINANCE LIMITED T/A MR LENDER
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 2 -
Going Concern
The company’s cash requirements for the next twelve months
from the date of approval of these financial statements
are adequately resourced to continue operations and to meet
its
liabilities.
PDL expects that the pandemic will impact the next 12 months' revenue and profits, however management are confident that the robust system and controls already embedded within the company are fundamental to see them through these challenging times and a stronger future ahead.
Future Development
Since the financial year end the global COVID19 pandemic has governed the way in which businesses are operating and PDL is no exception. PDL have adapted to ensure that employees are able to work safely with little impact to the service it offers to customers.
PDL are constantly innovating on technology and have developed all of their code that is used to run and manage the loan portfolios and call contact centre. The development team continues to cultivate, adapt and enhance the current platform and systems.
A Freeman
Director
15 April 2021
PDL FINANCE LIMITED T/A MR LENDER
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2019
- 3 -
The directors present their annual report and financial statements for the year ended 31 December 2019.
Principal activities
The principal activity of the company continued to be the provision of short term loans.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
A Freeman
E Nisbet
J Grant
D Shrier
Results and dividends
The results for the year are set out on page 7.
Ordinary dividends were paid amounting to £
1,500,000 (2018: £2,325,000) during the year.
Research and development
The company continues to invest in the development of its website and software. The directors regard the investment in research and development as integral to the continuing success of the business and ensuring customers' needs and requirements as well as internal reporting needs are met.
Future developments
The company seeks continued growth through both marketing and enhanced service offering.
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 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;
-
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.
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.
PDL FINANCE LIMITED T/A MR LENDER
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 4 -
On behalf of the board
A Freeman
Director
15 April 2021
PDL FINANCE LIMITED T/A MR LENDER
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF PDL FINANCE LIMITED T/A MR LENDER
- 5 -
Opinion
We have audited the financial statements of PDL Finance Limited t/a Mr Lender (the 'company') for the year ended 31 December 2019 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 a summary of significant accounting policies.
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102
The Financial Reporting Standard applicable in the UK and Republic of Ireland
(United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
-
give a true and fair view of the state of the company's affairs as at 31 December 2019 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
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
-
the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
-
the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue
.
The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the
financial statements
does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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' r
eport 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.
PDL FINANCE LIMITED T/A MR LENDER
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF PDL FINANCE LIMITED T/A MR LENDER
- 6 -
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 identifie
d
material misstatements in the strategic report and the directors'
r
eport
.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
-
adequate accounting records have not been kept, 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 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'
r
esponsibilities
s
tatement, 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.
A further description of our responsibilities for the audit of the financial statements is located on the
Financial Reporting Council’s website at: http://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 Arram Berlyn Gardner LLP
15 April 2021
Chartered Accountants
Statutory Auditor
30 City Road
London
EC1Y 2AB
PDL FINANCE LIMITED T/A MR LENDER
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2019
- 7 -
2019
2018
Notes
£
£
Turnover
3
22,527,849
26,083,557
Cost of sales
(1,416,801)
(1,525,163)
Gross profit
21,111,048
24,558,394
Administrative expenses
(18,504,131)
(22,296,345)
Operating profit
4
2,606,917
2,262,049
Interest payable and similar expenses
7
(131,113)
(326,304)
Profit before taxation
2,475,804
1,935,745
Tax on profit
8
(304,473)
(209,378)
Profit for the financial year
2,171,331
1,726,367
The Statement Of Comprehensive Income has been prepared on the basis that all operations are continuing operations.
PDL FINANCE LIMITED T/A MR LENDER
STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2019
31 December 2019
- 8 -
2019
2018
Notes
£
£
£
£
Fixed assets
Intangible assets
10
8,024
3,024
Tangible assets
11
226,563
58,320
234,587
61,344
Current assets
Debtors
12
10,649,473
11,990,839
Cash at bank and in hand
4,066,472
2,964,530
14,715,945
14,955,369
Creditors: amounts falling due within one year
13
(1,875,033)
(2,185,987)
Net current assets
12,840,912
12,769,382
Total assets less current liabilities
13,075,499
12,830,726
Creditors: amounts falling due after more than one year
14
(133,684)
(560,242)
Net assets
12,941,815
12,270,484
Capital and reserves
Called up share capital
16
2,250
2,250
Share premium account
17
1,701,727
1,701,727
Profit and loss reserves
11,237,838
10,566,507
Total equity
12,941,815
12,270,484
The financial statements were approved by the board of directors and authorised for issue on 15 April 2021 and are signed on its behalf by:
A Freeman
Director
Company Registration No. 06738633
PDL FINANCE LIMITED T/A MR LENDER
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2019
- 9 -
Share capital
Share premium account
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 January 2018
2,000
201,977
11,165,140
11,369,117
Year ended 31 December 2018:
Profit and total comprehensive income for the year
-
-
1,726,367
1,726,367
Issue of share capital
16
250
-
250
Dividends
9
-
-
(2,325,000)
(2,325,000)
Other movements
-
1,499,750
-
1,499,750
Balance at 31 December 2018
2,250
1,701,727
10,566,507
12,270,484
Year ended 31 December 2019:
Profit and total comprehensive income for the year
-
-
2,171,331
2,171,331
Dividends
9
-
-
(1,500,000)
(1,500,000)
Balance at 31 December 2019
2,250
1,701,727
11,237,838
12,941,815
PDL FINANCE LIMITED T/A MR LENDER
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
- 10 -
1
Accounting policies
Company information
PDL Finance Limited t/a Mr Lender is a
private
company
limited by shares
incorporated in England and Wales.
The registered office is
30 City Road, London, EC1Y 2AB. The principal place of business is
Suite 105W, Sterling House, Langston Road
, Loughton, Essex, IG10 9EW.
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 a
mounts
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.
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
.
T
he company has
therefore
taken advantage of
e
xemptions from the following disclosure requirements:
-
Section 4 ‘Statement of Financial Position’ – Reconciliation of the opening and closing number of shares
;
-
Section 7 ‘Statement of Cash Flows’ – Presentation of a statement of cash
f
low and related notes and disclosures
;
-
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’ – Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income
;
-
Section 33 ‘Related Party Disclosures’ – Compensation for key management personnel
.
The financial statements of the company are consolidated in the financial statements of
SDJ Enterprises Limited
. These consolidated financial statements are available from its registered office,
2nd Floor Ashdon House, Moon Lane, Barnet. Herts, EN5 5YL
.
1.2
Going concern
A
true
t the time of approving the financial statements
,
t
he directors have a reasonable expectation that the
company
has adequate resources to continue in operational existence for the foreseeable future. Thus
t
he directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
The turnover shown in the profit and loss account represents interest receivable on short term loans made during the period and amounts invoiced to affiliates on the sale of debts and customer leads. Turnover is recognised on an accruals basis.
1.4
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
PDL FINANCE LIMITED T/A MR LENDER
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
1
Accounting policies
(Continued)
- 11 -
Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Website design and build
3 years on a straight line basis
Trademark
10 years on a straight line basis
1.5
Tangible fixed assets
Tangible fixed assets
are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Fixtures, fittings & equipment
33.3% on a straight line basis
Computer equipment
33.3% on a straight line 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 fixed assets
At each reporting
period
end date, the
company
reviews the carrying amounts of its tangible
and intangible 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.
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.
1.7
Cash and cash equivalents
Cash and cash equivalents
are basic financial assets
and
include cash in hand, deposits held at call with banks
.
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ 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.
PDL FINANCE LIMITED T/A MR LENDER
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
1
Accounting policies
(Continued)
- 12 -
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.
Impairment of financial assets
Financial assets are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected.
If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when
the company
transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
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 company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from
fellow group companies and preference shares that are classified as debt, are
initially recognised at transaction price unless the arrangement constitutes a
financing transaction, where the debt instrument is measured at the present value of
the future
paymen
ts 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. A
m
ounts 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 company’s contractual obligations
expire or are discharged or cancelled.
PDL FINANCE LIMITED T/A MR LENDER
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
1
Accounting policies
(Continued)
- 13 -
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 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 income statement 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
company’s
liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the
company
has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.11
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13
Leases
Rentals payable under operating leases,
including
any lease incentives received, are charged to income on a straight line basis over the term of the relevant lease
.
PDL FINANCE LIMITED T/A MR LENDER
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
1
Accounting policies
(Continued)
- 14 -
1.14
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 are included in the
statement of comprehensive income
for the period.
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.
Critical judgement
The following judgement (apart from those involving estimates) ha
s
had the most significant
effect on amounts recognised in the financial statements.
Loan capital written off
Loan capital is written off a set number of days after the missed due date. It is assumed that if a customer has not paid
by
this time the amount owing is unlikely to be paid. The directors review this in detail on a regular basis to ensure that it reasonably reflects the practical recoverability of loan capital issued.
3
Turnover and other revenue
2019
2018
£
£
Turnover analysed by class of business
Interest income on short term loans
21,264,633
24,021,831
Sale of debts and leads
1,263,216
2,061,726
22,527,849
26,083,557
4
Operating profit
2019
2018
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange differences apart from those arising on financial instruments measured at fair value through profit or loss
(28,036)
205,058
Fees payable to the company's auditor for the audit of the company's financial statements
37,500
40,920
Depreciation of owned tangible fixed assets
44,671
54,952
Operating lease charges
137,777
333,782
PDL FINANCE LIMITED T/A MR LENDER
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 15 -
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2019
2018
Operations
129
125
Administrative
27
32
156
157
Their aggregate remuneration comprised:
2019
2018
£
£
Wages and salaries
4,914,392
4,579,776
Social security costs
478,549
460,377
Pension costs
64,001
37,243
5,456,942
5,077,396
6
Directors' remuneration
2019
2018
£
£
Remuneration for qualifying services
926,567
959,741
Company pension contributions to defined contribution schemes
4,764
2,810
931,331
962,551
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 4 (2018 - 4).
Remuneration disclosed above include the following amounts paid to the highest paid director:
2019
2018
£
£
Remuneration for qualifying services
513,043
482,559
Company pension contributions to defined contribution schemes
1,191
703
PDL FINANCE LIMITED T/A MR LENDER
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 16 -
7
Interest payable and similar expenses
2019
2018
£
£
Interest payable to group undertakings
131,113
324,628
Other interest
1,676
131,113
326,304
8
Taxation
2019
2018
£
£
Current tax
UK corporation tax on profits for the current period
479,277
381,486
Adjustments in respect of prior periods
(174,804)
(172,108)
Total current tax
304,473
209,378
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:
2019
2018
£
£
Profit before taxation
2,475,804
1,935,745
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2018: 19.00%)
470,403
367,792
Tax effect of expenses that are not deductible in determining taxable profit
42,674
11,994
Capital allowances in excess of depreciation
(33,800)
1,700
Research and development tax credits claimed in respect of prior years
(174,804)
(172,108)
Taxation charge for the year
304,473
209,378
9
Dividends
2019
2018
£
£
Final paid
1,500,000
2,325,000
PDL FINANCE LIMITED T/A MR LENDER
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 17 -
10
Intangible fixed assets
Website design and build
Trademark
Total
£
£
£
Cost
At 1 January 2019
246,446
3,024
249,470
Additions - separately acquired
5,000
5,000
At 31 December 2019
246,446
8,024
254,470
Amortisation and impairment
At 1 January 2019 and 31 December 2019
246,446
246,446
Carrying amount
At 31 December 2019
8,024
8,024
At 31 December 2018
3,024
3,024
11
Tangible fixed assets
Fixtures, fittings & equipment
Computer equipment
Total
£
£
£
Cost
At 1 January 2019
449,732
422,807
872,539
Additions
148,363
64,551
212,914
At 31 December 2019
598,095
487,358
1,085,453
Depreciation and impairment
At 1 January 2019
420,555
393,664
814,219
Depreciation charged in the year
21,732
22,939
44,671
At 31 December 2019
442,287
416,603
858,890
Carrying amount
At 31 December 2019
155,808
70,755
226,563
At 31 December 2018
29,177
29,143
58,320
PDL FINANCE LIMITED T/A MR LENDER
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 18 -
12
Debtors
2019
2018
Amounts falling due within one year:
£
£
Trade debtors
8,402,071
9,720,092
Unpaid share capital
1,500,000
1,500,000
Corporation tax recoverable
33,755
Other debtors
52,002
Prepayments and accrued income
747,402
684,990
10,649,473
11,990,839
13
Creditors: amounts falling due within one year
2019
2018
£
£
Trade creditors
353,721
236,958
Amounts owed to group undertakings
576,945
1,120,483
Corporation tax
124,081
Other taxation and social security
224,424
292,569
Other creditors
23,839
15,439
Accruals and deferred income
572,023
520,538
1,875,033
2,185,987
The loan from the parent company represents amounts drawn down on a credit facility provided by the parent company. Interest is charged at 12% per annum on any outstanding balances. Repayments are to be made in equal monthly instalments. The loan is unsecured and denominated in US dollars. The loan was fully repaid in April 2021.
14
Creditors: amounts falling due after more than one year
2019
2018
£
£
Loans from group undertakings
133,684
560,242
The loan from the parent company represents amounts drawn down on a credit facility provided by the parent company. Interest is charged at 12% per annum on any outstanding balances. Repayments are to be made in equal monthly instalments. The loan is unsecured and denominated in US dollars. The loan was fully repaid in April 2021.
PDL FINANCE LIMITED T/A MR LENDER
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 19 -
15
Retirement benefit schemes
2019
2018
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
64,001
37,243
The company operates a defined contribution pension scheme for all qualifying employees.
The assets of the scheme are held separately from those of the company in an independently administered fund.
16
Share capital
2019
2018
£
£
Ordinary share capital
Issued and not fully paid
500 Ordinary A of £1 each
500
500
1,500 Ordinary B of £1 each
1,500
1,500
250 Ordinary C of £1 each
250
250
2,250
2,250
All classes of shares have full rights in respect of voting, dividend and capital distribution (including on winding up). None of the classes of shares confers any right of redemption.
On 14 March 2018 the company issued 250 Ordinary C Shares of £1 each at £6,000 per share. This remains unpaid.
17
Share premium account
Consideration received for shares issued above their nominal value net of transaction costs.
18
Financial commitments, guarantees and contingent liabilities
In 2019, the FCA carried out a review of the HCC and HCSTC Sector. This was for all lenders and non-specific to PDL Finance Limited. The review is complex due to the policies and procedures being updated over time, and until such time as the company has carried out a full and final review, it is difficult for the directors to estimate the impact of any financial effect.
PDL FINANCE LIMITED T/A MR LENDER
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 20 -
19
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:
2019
2018
£
£
Within one year
356,877
Between two and five years
1,923,439
In over five years
2,420,084
4,700,400
20
Related party transactions
During the year
,
the company received advances of £
nil
(201
8
: £
905,564
) from its parent company
and made repayments of £970,096 (2018: £1,505,964
.
)
Interest
is charged at 12% and
£
113,113
(201
8
: £
324,628
) in
interest
was
charged and
paid
in the year
.
At the year end, the company owed
£
710,629
(201
8
: £
1,680,725
) to its parent
company, all of which is unsecured.
During the year, the company paid £
141,010
(201
8
: £
138,413
) to entities in which the directors of the parent entity have an interest. At the balance sheet date, the company owed £
11,583
(201
8
:
£11,982
) to these entities.
During the year, the company made donations of £21,398 (2018: £12,540) to Lenderhand, a charity in which two of the directors are trustees.
During the year, the company paid the following dividends;
• £
423,333
(201
8
: £
465,000
) to directors and entities in which directors have an interest.
• £
1,076,667
(201
8
: £1,
668,833
) to the parent company, SDJ Enterprises Limited.
21
Ultimate controlling party
The immediate and ultimate parent company is SDJ Enterprises Limited,
whose registered office is Ashdon House, Second Floor, Moon Lane, Barnet, EN5 5YL.
T
he smallest and largest group for which consolidated accounts including the company are prepared is the one headed by SDJ Enterprises Limited; these accounts are available from
the registered office.
2019-12-31
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