Registration number:
Hottinger Private Office Limited
for the Year Ended 31 December 2019
Hottinger Private Office Limited
Contents
Company Information |
|
Strategic Report |
|
Director's Report |
|
Statement of Director's Responsibilities |
|
Independent Auditor's Report |
|
Consolidated Profit and Loss Account |
|
Consolidated Balance Sheet |
|
Balance Sheet |
|
Consolidated Statement of Changes in Equity |
|
Statement of Changes in Equity |
|
Consolidated Statement of Cash Flows |
|
Notes to the Financial Statements |
Hottinger Private Office Limited
Company Information
Director |
M J Robertson |
Registered office |
|
Bankers |
|
Auditors |
|
Page 1 |
Hottinger Private Office Limited
Strategic Report for the Year Ended 31 December 2019
The strategic report for the year ended 31 December 2019.
Fair review of the business
In 2019 we saw the business develop its client base as the Group’s core investment proposition continued to build on a successful 2018. Income increased, by 5.5%, over 2019 leading to higher profitability.
Service Offering
The company and group continued to offer its broad range of investment services to ensure the short-term financial needs of its families and clients were met and that their long-term requirements were planned for. These services included the prudent management and analysis of client portfolios and planning for the efficient intergenerational passing of family wealth.
In 2019, the group continued to acquire new clients and the directors note that several of these new clients came via recommendations by existing clients.
The directors believe that its service structure will continue to ensure mutually beneficial outcomes for its clients, its staff and its shareholders.
Business conduct
The group maintained excellent service levels to all clients, ensuring the staff operated with integrity and probity, never conducting business that disadvantages our clients and placing sustainability at the core of its decisions.
In addition, the group proactively implemented the Financial Conduct Authority’s (“FCA”) Senior Managers and Certification Regime (“SMCR”) recommended processes and procedures in advance of the deadline.
The company’s client advisers also undertook the required annual continued professional development (“CPD”), ensuring that they remain up to date with current industry and market matters.
The group is aware of its responsibilities to the long-term sustainability of the environment and actively recycles its waste and uses power as efficiently as possible. This includes turning off all computers, lights and air conditioning units at the end of each day.
Staffing
During 2019, the company recruited an administrative assistant, whose services it shares with its sister company, Hottinger Investment Management, which also required further administrative support. It was recognised that, whilst the senior members of staff of both companies required assistance, this would not be a full-time role in each company so, in order to save costs, the new member of staff was be shared.
This action benefitted both the company’s clients in terms of enhanced service and the company’s shareholders in terms of lower expenses.
The directors were pleased to note that the company’s Client Manager passed the London Market Insurance examinations. This enables the company to build on the insurance services it offers to its clients.
The group continues to support members of staff who wish to take professional qualifications in order to increase the service to clients, although the directors recognise this may not be possible in the short term as the group adapts to the covid-19 crisis.
The group actively supports members of staff who wish to undertake charitable ventures and, indeed, supports various charities in a corporate capacity.
Page 2 |
Hottinger Private Office Limited
Strategic Report for the Year Ended 31 December 2019
Technology
The group continues to ulitise several IT systems to profitably service better its clients. These allow the group to store securely under GDPR its clients’ data in order to provide an optimal service. The group is also able to analyse fully the performance of all its clients’ portfolios thus ensuring that the investment managers are managing them in accordance with the clients’ long-term investment aims.
The group further benefits from a portfolio amalgamation service that allows the managers to have a picture of the clients’ overall wealth. The directors believe this to be an extremely useful tool that allows better long-term financial planning in a cost-effective manner.
The group continues to work collaboratively with all its service providers and maintains an ongoing dialogue with them all.
Hottinger Investment Management Merger
The Hottinger Group currently has two authorised and regulated businesses, Hottinger Private Office Limited (“HPO”) and Hottinger Investment Management Limited (“HIM”). The decision was taken to seek regulatory approval to merge the two entities in order to streamline the Group business, reduce regulation and professional costs and enhance the services provided to our existing and future potential clients. The two certificated members of HPO were already certified under the Senior Manager Certification Regime at HIM. Therefore, there was no reason to maintain a separate authorised and regulated entity. Effective 1 August 2020 HPO's trading activities were transferred to HIM and HPO cancelled its regulatory authorisations. HPO is now solely a holding company.
COVID-19
The group is actively assessing the effects of the Coronavirus pandemic. The Group’s companies hold regular, Internet-based meetings to discuss market movements and portfolio strategies.
Client advisers have been working with all clients to keep them abreast of changes in the market and how these have affected their investment portfolios. The directors believe that in such uncertain and volatile times it is vital that clients are kept fully informed of their investments. The directors further believe that this contact deepens the group’s relationship with its clients, which is a long-term benefit for both parties.
The group’s income in 2020 will almost certainly be affected adversely by the covid-19 related falls in the markets. As a result, the directors have undertaken a full review of the business and will be implementing cost cuts wherever possible. It is hoped these will have a minimal effect on client service levels.
2020 will be a challenging year, however, the directors believe the group is well placed to consolidate the existing client base and streamline all client services within a single regulated entity if and when it receives permission from the Financial Conduct Authority (“FCA”).
The challenges of running the business remotely have been well met and are a tribute to the collaborative forward planning of all staff members as well as a single purpose in providing a high-quality service to the group’s clients and other stakeholders. We have been mindful of the situation in which our clients find themselves, particularly the more senior clients, and have maintained an open dialogue in order to satisfy the needs in each case. Communication and collaboration remain the platform for providing a high quality, bespoke financial service to our clients and maintaining a clear and transparent working environment.
Key performance indicators
The Company's key financial and other performance indicators during the year were as follows:
AuM - AuM has fallen in 2019 on prior year to £278m. The Company has seen the reduction of three large clients in 2019 as a result of the deleveraging of two clients per instruction from Hottinger Private Office Limited. One of these clients is expected to return following a the sale of his private equity assets. Pipeline is very strong in for 2020 and the Company continues to add new business.
Margin - The margin remains in line with prior year and the Company is looking to drive new business in 2020 and convert its substantial pipeline.
Page 3 |
Hottinger Private Office Limited
Strategic Report for the Year Ended 31 December 2019
Section 172 statement
The directors have complied with their duty under s172 CA2006 to act in the way they consider, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole. The manner in which they have had regard to the matters set out in s172(1)(a) to (f) are set out in the business review above.
Principal risks and uncertainties
The principle risks to Hottinger Private Office Ltd are:
- fall in the markets could result in a reduction in the value of funds under advice
- The loss of any existing client policies
- The non-payment of fees owed to the company
- Affect of Covid-19 on markets and trading
The principal risks to Hottinger Investment Management Ltd are:
- A fall in markets could result in a reduction in the value of funds under management, on which the company's income is based.
- Any failures in operating controls could lead to reputational damage, withdrawal of funds, compensation, penalties and potentially the company's authorisation to carry on regulated activities being revoked.
Approved by the Board on
.........................................
M J Robertson
Director
Page 4 |
Hottinger Private Office Limited
Director's Report for the Year Ended 31 December 2019
The report and the for the year ended 31 December 2019.
Directors of the group
The directors who held office during the year were as follows:
Financial instruments
The company's principal financial instruments consist of financial assets and liabilities such as cash at bank, trade debtors and trade creditors. These arise directly from its operations.
Price risk, credit risk, liquidity risk and cash flow risk
Price risk
Price risk arises on financial instruments because of change in, for example, commodity prices or equity prices. The group does not currently have any direct risk of price exposure.
Liquidity risk
The group manages its cash to maximise interest income whilst maintaining sufficient liquid resources to meet the operating needs of its business.
Credit risk
Investments of cash surpluses are made through reputable banks with suitably high credit ratings. Receivables are monitored on an ongoing basis and provision is made for doubtful debts where necessary.
Foreign currency risk
The principal foreign currency exposure arises from revenues in foreign currencies.
Director's liabilities
During the period qualifying third party indemnity policies were in place for the benefit of directors.
Disclosure of information to the auditor
The director has taken steps that ought to have taken as a director in order to make aware of any relevant audit information and to establish that the company's auditor is aware of that information. The director confirms that there is no relevant information that of and of which the auditor is unaware.
Approved by the Board on
.........................................
M J Robertson
Director
Page 5 |
Hottinger Private Office Limited
Statement of Director's Responsibilities
The responsibilities for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.
Company law requires the director to prepare financial statements for each financial year. Under that law the director has elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the director must not approve the financial statements unless satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the director is required to:
• |
select suitable accounting policies and 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; and |
• |
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. |
The director is responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable to ensure that the financial statements comply with the Companies Act 2006. 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.
Page 6 |
Hottinger Private Office Limited
Independent Auditor's Report to the Members of Hottinger Private Office Limited
Opinion
We have audited the financial statements of Hottinger Private Office Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2019, which comprise the Consolidated Profit and Loss Account, Consolidated Balance Sheet, Balance Sheet, Consolidated Statement of Changes in Equity, Statement of Changes in Equity, Consolidated Statement of Cash Flows, 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 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 2019 and of the group's profit for the year then ended; |
• |
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and |
• |
have been prepared in accordance with the requirements of the Companies Act 2006. |
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
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 group’s or the parent 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. |
Page 7 |
Hottinger Private Office Limited
Independent Auditor's Report to the Members of Hottinger Private Office Limited
Other information
The director is 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.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
• |
the information given in the Strategic Report and Director's Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
• |
the Strategic Report and Director's Report have been prepared in accordance with applicable legal requirements. |
Matters on which we are required to report by exception
In the light of our knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report and the Director's Report.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
• |
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or |
• |
the parent company financial statements are not in agreement with the accounting records and returns; or |
• |
certain disclosures of directors’ remuneration specified by law are not made; or |
• |
we have not received all the information and explanations we require for our audit. |
Responsibilities of the director
As explained more fully in the Statement of Director's Responsibilities set out on page 6, the director is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the director determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the director is responsible for assessing the group’s and the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the director either intends to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.
Page 8 |
Hottinger Private Office Limited
Independent Auditor's Report to the Members of Hottinger Private Office Limited
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 www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Use of our report
This report is made solely to the parent 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 parent 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 parent company and the parent company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
......................................
For and on behalf of
22 Chancery Lane
WC2A 1LS
Page 9 |
Hottinger Private Office Limited
Consolidated Profit and Loss Account for the Year Ended 31 December 2019
Note |
2019 |
2018 |
|
Turnover |
|
|
|
Administrative expenses |
( |
( |
|
Other operating income |
- |
|
|
Operating profit |
|
|
|
Other interest receivable and similar income |
- |
|
|
Interest payable and similar expenses |
( |
( |
|
Profit before tax |
|
|
|
Taxation |
( |
( |
|
Profit for the financial year and total comprehensive income |
|
|
|
Attributable to: |
|||
Owners of the company |
|
|
|
Minority interests |
|
( |
|
|
|
The group has no recognised gains or losses for the year other than the results above.
Page 10 |
Hottinger Private Office Limited
(Registration number: 07078765)
Consolidated Balance Sheet as at 31 December 2019
Note |
2019 |
2018 |
|
Fixed assets |
|||
Intangible assets |
|
|
|
Tangible assets |
|
|
|
|
|
||
Current assets |
|||
Debtors |
|
|
|
Cash at bank and in hand |
|
|
|
|
|
||
Creditors: Amounts falling due within one year |
( |
( |
|
Net current assets |
|
|
|
Net assets |
|
|
|
Capital and reserves |
|||
Called up share capital |
|
|
|
Other capital contributions |
|
|
|
Profit and loss account |
|
|
|
Equity attributable to owners of the company |
|
|
|
Minority interests |
|
|
|
Total equity |
|
|
Approved and authorised by the
.........................................
M J Robertson
Director
Page 11 |
Hottinger Private Office Limited
(Registration number: 07078765)
Balance Sheet as at 31 December 2019
Note |
2019 |
2018 |
|
Fixed assets |
|||
Tangible assets |
|
|
|
Investments |
|
|
|
|
|
||
Current assets |
|||
Debtors |
|
|
|
Cash at bank and in hand |
|
|
|
|
|
||
Creditors: Amounts falling due within one year |
( |
( |
|
Net current assets |
|
|
|
Net assets |
|
|
|
Capital and reserves |
|||
Called up share capital |
|
|
|
Other capital contributions |
|
|
|
Profit and loss account |
|
|
|
Total equity |
|
|
The company made a profit after tax for the financial year of £225,172 (2018 - profit of £103,131).
Approved and authorised by the
.........................................
M J Robertson
Director
Page 12 |
Hottinger Private Office Limited
Consolidated Statement of Changes in Equity for the Year Ended 31 December 2019
Equity attributable to the parent company
Share capital |
Other capital contributions |
Profit and loss account |
Total |
Non- controlling interests |
Total equity |
|
At 1 January 2019 |
1,000 |
1,478,400 |
300,119 |
1,779,519 |
250,752 |
2,030,271 |
Profit for the year |
- |
- |
|
|
|
|
Total comprehensive income |
- |
- |
|
|
|
|
Acquisition of further interests in subsidiaries |
- |
- |
- |
- |
( |
( |
At 31 December 2019 |
|
|
|
|
|
|
Share capital |
Other capital contributions |
Profit and loss account |
Total |
Non- controlling interests |
Total equity |
|
At 1 January 2018 |
|
|
|
|
|
|
Profit/(loss) for the year |
- |
- |
|
|
( |
|
Total comprehensive income |
- |
- |
|
|
( |
|
At 31 December 2018 |
|
|
|
|
|
|
Page 13 |
Hottinger Private Office Limited
Statement of Changes in Equity for the Year Ended 31 December 2019
Share capital |
Other capital contributions |
Profit and loss account |
Total |
|
At 1 January 2019 |
|
|
|
|
Profit for the year |
- |
- |
|
|
Total comprehensive income |
- |
- |
|
|
At 31 December 2019 |
|
|
|
|
Share capital |
Other capital contributions |
Profit and loss account |
Total |
|
At 1 January 2018 |
|
|
|
|
Profit for the year |
- |
- |
|
|
Total comprehensive income |
- |
- |
|
|
At 31 December 2018 |
|
|
|
|
Page 14 |
Hottinger Private Office Limited
Consolidated Statement of Cash Flows for the Year Ended 31 December 2019
Note |
2019 |
2018 |
|
Cash flows from operating activities |
|||
Profit for the year |
|
|
|
Adjustments to cash flows from non-cash items |
|||
Depreciation and amortisation |
|
|
|
Finance income |
- |
( |
|
Finance costs |
|
|
|
Corporation tax expense |
|
|
|
|
|
||
Working capital adjustments |
|||
Increase in trade debtors |
( |
( |
|
Increase/(decrease) in trade creditors |
|
( |
|
Cash generated from operations |
|
( |
|
Income taxes paid |
( |
( |
|
Net cash flow from operating activities |
|
( |
|
Cash flows from investing activities |
|||
Interest received |
- |
|
|
Acquisitions of tangible assets |
( |
( |
|
Acquisition of additional interests in subsidiaries |
(61,472) |
- |
|
Net cash flows from investing activities |
( |
( |
|
Cash flows from financing activities |
|||
Interest paid |
( |
( |
|
Net decrease in cash and cash equivalents |
( |
( |
|
Cash and cash equivalents at 1 January |
|
|
|
Cash and cash equivalents at 31 December |
250,460 |
315,254 |
Page 15 |
Hottinger Private Office Limited
Notes to the Financial Statements for the Year Ended 31 December 2019
General information |
The company is a private company limited by share capital incorporated in England & Wales.
The address of its registered office is:
United Kingdom
Accounting policies |
Summary of significant accounting policies and key accounting estimates
The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.
Statement of compliance
These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'.
Basis of preparation
The financial statements have been prepared under the historical cost convention.
Going concern
The impact of the COVID-19 pandemic (coronavirus) on the ability of the company to continue as a going concern has been assessed by the directors. Since the outbreak, the company has experienced a fall in AUM and hence a fall in income, and has put in place measures to ensure that business operations can continue uninterrupted. The directors have also considered the impact on liquidity. After reviewing cash-flow forecasts for the next 12 months, the directors believe they should maintain an adequate cash balance.
Due to the nature of the pandemic, it is not certain how long these conditions will continue to affect the company. As at the date of approval of these financial statements, and taking into consideration the latest information published by the UK Government concerning the pandemic, the directors have prepared the financial statements on the going concern basis. In assessing whether the going concern basis is appropriate, the directors have assumed that the measures they have taken and the further measures that are available will be sufficient to ensure that liquidity levels are maintained.
Page 16 |
Hottinger Private Office Limited
Notes to the Financial Statements for the Year Ended 31 December 2019
2 |
Accounting policies (continued) |
Basis of consolidation
The group financial statements consolidate the financial statements of the company and its subsidiary undertakings drawn up to 31 December 2019.
No income statement is presented for the company as permitted by section 408 of the Companies Act 2006. The company made a profit after tax for the financial year of £225,172 (2018 - profit of £103,131).
A subsidiary is an entity controlled by the company. Control is achieved where the company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.
The purchase method of accounting is used to account for business combinations that result in the acquisition of subsidiaries by the group. The cost of a business combination is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the business combination. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Any excess of the cost of the business combination over the acquirer’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised is recorded as goodwill.
Inter-company transactions, balances and unrealised gains on transactions between the company and its subsidiaries, which are related parties, are eliminated in full. Intra-group losses are also eliminated but may indicate an impairment that requires recognition in the consolidated financial statements.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group. Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the group’s equity therein. Non-controlling interests consist of the amount of those interests at the date of the original business combination and the non-controlling shareholder’s share of changes in equity since the date of the combination.
Revenue recognition
Turnover comprises the fair value of the consideration received or receivable for the provision of financial services and related commission. Turnover is shown net of value added tax and discounts.
Turnover is recognised in the period in which services are provided.
Foreign currency transactions and balances
Non-monetary items measured in terms of historical cost in a foreign currency are not retranslated.
Page 17 |
Hottinger Private Office Limited
Notes to the Financial Statements for the Year Ended 31 December 2019
2 |
Accounting policies (continued) |
Tax
The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except that a charge attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.
The current tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the group operates and generates taxable income.
Deferred tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements and on unused tax losses or tax credits in the group. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.
The carrying amount of deferred tax assets are reviewed at each reporting date and a valuation allowance is set up against deferred tax assets so that the net carrying amount equals the highest amount that is more likely than not to be recovered based on current or future taxable profit.
Tangible assets
Tangible assets are stated at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.
The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.
Depreciation
Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:
Asset class |
Depreciation method and rate |
Furniture, Fixtures & Fittings |
25% to 33% straight line |
Goodwill
Goodwill arising on the acquisition of an entity represents the excess of the cost of acquisition over the group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the entity recognised at the date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised over its useful life, which shall not exceed ten years if a reliable estimate of the useful life cannot be made.
Amortisation
Amortisation is provided on intangible assets so as to write off the cost, less any estimated residual value, over their useful life as follows:
Asset class |
Amortisation method and rate |
Goodwill on investment in Hottinger Investment Management |
10% per annum |
Page 18 |
Hottinger Private Office Limited
Notes to the Financial Statements for the Year Ended 31 December 2019
2 |
Accounting policies (continued) |
Investments
Investments in the subsidiary in the company's individual financial statements are measured at cost less impairment.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.
Debtors
Trade debtors are amounts due from customers for services performed in the ordinary course of business.
Trade debtors are recognised initially at the transaction price. They are subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for the impairment of trade debtors is established when there is objective evidence that the group will not be able to collect all amounts due according to the original terms of the debtors.
Creditors
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade creditors are classified as current liabilities if the group does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.
Trade creditors are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method.
Borrowings
Borrowings from related parties are interest free, unsecured and payable on demand. They are measured at the transaction price.
Leases
Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.
Share capital
Ordinary shares are classified as equity. Other capital contributions received without any obligation to make repayment are also classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments.
Page 19 |
Hottinger Private Office Limited
Notes to the Financial Statements for the Year Ended 31 December 2019
Turnover |
The analysis of the group's revenue for the year from continuing operations is as follows:
2019 |
2018 |
|
Rendering of services - investment management, brokerage and related advisory and support services |
|
|
Operating profit |
Arrived at after charging/(crediting)
2019 |
2018 |
|
Depreciation expense |
|
|
Amortisation expense |
|
|
Foreign exchange losses |
|
|
Staff costs |
The aggregate payroll costs (including directors' remuneration) were as follows:
2019 |
2018 |
|
Wages and salaries |
|
|
Social security costs |
|
|
Other short-term employee benefits |
|
|
Pension costs, defined contribution scheme |
|
|
Other employee expense |
|
|
|
|
Payroll costs include an allocation of costs for staff who are employed by entities within the wider Hottinger Group that are not included within the sub-group headed by Hottinger Private Office.
The average number of persons employed by the group (including the director) during the year, analysed by category was as follows:
2019 |
2018 |
|
Administration and support |
|
|
Senior management |
|
|
|
|
Page 20 |
Hottinger Private Office Limited
Notes to the Financial Statements for the Year Ended 31 December 2019
Director's remuneration |
The director's remuneration for the year was as follows:
2019 |
2018 |
|
Remuneration |
|
|
Contributions paid to money purchase schemes |
|
|
282,136 |
310,324 |
In respect of the highest paid director:
2019 |
2018 |
|
Remuneration |
|
|
Auditors' remuneration |
2019 |
2018 |
|
Audit of these financial statements |
8,650 |
5,400 |
Audit of the financial statements of subsidiaries of the company pursuant to legislation |
10,000 |
10,500 |
|
|
|
Other fees to auditors |
||
Taxation compliance services |
|
|
All other non-audit services |
|
|
|
|
Page 21 |
Hottinger Private Office Limited
Notes to the Financial Statements for the Year Ended 31 December 2019
Taxation |
Tax charged/(credited) in the income statement
2019 |
2018 |
|
Current taxation |
||
UK corporation tax |
|
|
Deferred taxation |
||
Arising from origination and reversal of timing differences |
|
|
Tax expense in the income statement |
|
|
Reconciliation of tax charge to profit before tax multiplied by the standard rate of corporation tax for the period of
2019 |
2018 |
|
Profit before tax |
|
|
Corporation tax at standard rate |
|
|
Effect of expense not deductible in determining taxable profit |
|
|
UK deferred tax expense relating to changes in tax rates or laws |
|
|
Total tax charge |
|
|
Deferred tax assets and liabilities - Group
2019 |
£ |
Accelerated tax depreciation |
|
Tax losses |
|
Other timing differences |
|
|
2018 |
£ |
Accelerated tax depreciation |
( |
Tax losses |
|
Other timing differences |
|
|
The amount of the net reversal of deferred tax assets and deferred tax liabilities expected to occur during the year beginning after the reporting period is £
Page 22 |
Hottinger Private Office Limited
Notes to the Financial Statements for the Year Ended 31 December 2019
8 |
Taxation (continued) |
Deferred tax assets and liabilities - Company
2019 |
£ |
Accelerated tax depreciation |
( |
Other timing differences |
|
|
2018 |
£ |
Accelerated tax depreciation |
( |
Other timing differences |
|
|
Factors that may affect future tax charges
Finance (No. 2) Act 2015 set the main rate of corporate tax at 17% with effect from the financial year 2020. Deferred tax balances are calculated at this rate as required by FRS102. In March 2020 a rate of 19% was substantively enacted in place of the 17% rate for financial year 2020. Timing differences are now expected to reverse at a rate of 19%.
Intangible assets |
Group
Goodwill |
Total |
|
Cost or valuation |
||
At 1 January 2019 |
|
|
Adjustment on acquisition of further interests in subsidiary |
(3,569) |
(3,569) |
At 31 December 2019 |
|
|
Amortisation |
||
At 1 January 2019 |
|
|
Amortisation charge |
|
|
At 31 December 2019 |
|
|
Carrying amount |
||
At 31 December 2019 |
|
|
At 31 December 2018 |
|
|
During the period the group exercised an option to increase its ownership interests in Hottinger Investment Management Ltd from 80% to 85%. Cash consideration of £61,472 was given and the value of the share of identifiable net assets acquired was £65,041.
Page 23 |
Hottinger Private Office Limited
Notes to the Financial Statements for the Year Ended 31 December 2019
Tangible assets |
Group
Furniture, fittings and equipment |
Total |
|
Cost or valuation |
||
At 1 January 2019 |
|
|
Additions |
|
|
At 31 December 2019 |
|
|
Depreciation |
||
At 1 January 2019 |
|
|
Charge for the year |
|
|
At 31 December 2019 |
|
|
Carrying amount |
||
At 31 December 2019 |
|
|
At 31 December 2018 |
|
|
Company
Furniture, fittings and equipment |
Total |
|
Cost or valuation |
||
At 1 January 2019 |
|
|
Additions |
|
|
At 31 December 2019 |
|
|
Depreciation |
||
At 1 January 2019 |
|
|
Charge for the year |
|
|
At 31 December 2019 |
|
|
Carrying amount |
||
At 31 December 2019 |
|
|
At 31 December 2018 |
|
|
Page 24 |
Hottinger Private Office Limited
Notes to the Financial Statements for the Year Ended 31 December 2019
Investments |
Company
Subsidiaries |
£ |
Cost |
|
At 1 January 2019 |
|
Additions |
|
At 31 December 2019 |
|
Carrying amount |
|
At 31 December 2019 |
|
At 31 December 2018 |
|
Details of subsidiary undertakings
Undertaking |
Registered office |
Holding |
Proportion of voting rights and shares held |
|
2019 |
2018 |
|||
|
27 Queen Anne's Gate, London, SW1H 9BU |
Ordinary |
|
|
|
27 Queen Anne's Gate, London, SW1H, 9BU |
Ordinary |
|
|
The principal activity of Hottinger Investment Management Limited is investment management.
Hottinger Group Limited is a dormant entity, wholly owned by Hottinger Investment Management Limited
The Company was party to put and call options over 15% of shares in Hottinger Investment Management Limited. Notice of exercise of the options was required to be given by 31 December 2018. In December 2018 the Company gave notice that it was exercising the call options to acquire a 5% shareholding, and the acquisition completed in 2019. The options over the further 10% of shares expired.
Page 25 |
Hottinger Private Office Limited
Notes to the Financial Statements for the Year Ended 31 December 2019
Debtors |
Group |
Group |
Company |
Company |
|
2019 |
2018 |
2019 |
2018 |
|
Trade debtors |
|
|
|
|
Amounts owed by related parties |
|
|
|
|
Other debtors |
|
|
|
|
Prepayments |
|
|
|
|
Accrued income |
|
|
|
|
Deferred tax assets |
|
|
|
|
Total current trade and other debtors |
|
|
|
|
Cash and cash equivalents |
Group |
Group |
Company |
Company |
|
2019 |
2018 |
2019 |
2018 |
|
Cash on hand |
|
|
|
|
Cash at bank |
|
|
|
|
|
|
|
|
Creditors |
Group |
Group |
Company |
Company |
|
2019 |
2018 |
2019 |
2018 |
|
Due within one year |
||||
Loans and borrowings |
|
|
|
|
Trade creditors |
|
|
|
|
Amounts due to related parties |
|
|
|
|
Social security and other taxes |
|
|
|
|
Other payables |
|
|
|
|
Accrued expenses |
|
|
|
|
Corporation tax liability |
59,709 |
59,933 |
59,709 |
59,933 |
Deferred income |
|
|
|
|
|
|
|
|
Page 26 |
Hottinger Private Office Limited
Notes to the Financial Statements for the Year Ended 31 December 2019
Share capital |
Allotted, called up and fully paid shares
2019 |
2018 |
|||
No. |
£ |
No. |
£ |
|
Ordinary shares of £1 each |
1,000 |
1,000 |
1,000 |
1,000 |
Reserves |
Other capital contributions
Other capital contributions are amounts provided to the company by its parent entity without a formal issue of shares but where the company has no obligation to make repayment. The amounts were contributed to enable the company to purchase the subsidiary.
Obligations under leases |
Group
Operating leases - lessee
The total of future minimum lease payments is as follows:
2019 |
2018 |
|
Not later than one year |
- |
|
The amount of non-cancellable operating lease payments recognised as an expense during the year was £
Page 27 |
Hottinger Private Office Limited
Notes to the Financial Statements for the Year Ended 31 December 2019
Related party transactions |
Key management compensation
Key management are the directors. Remuneration is disclosed in note 6.
Summary of other related party transactions
Transactions with related parties include various expenses shared and recharged among entities under common control, including staff, office, IT and marketing expenses.
In addition loans have been made to / received from entities under the common control of the parent, Archco Limited, and a shareholder in Archco Limited. Loans are interest free, unsecured, and payable on demand.
During the previous period loans were made to Quintessentially People Limited. On 21 August 2018 Quintessentially People Limited was placed into liquidation. Amounts due from Quintessentially People Limited were provided against in full.
Group |
Company |
Group |
Company |
|
Parent entity |
||||
Amounts receivable at end of period |
150,984 |
55,984 |
147,735 |
52,735 |
Other entities under common control |
||||
Net expenses recharged |
275,292 |
139,331 |
326,830 |
187,945 |
Rent income |
- |
- |
19,416 |
19,416 |
Bad debt written off in period |
- |
- |
153,120 |
133,832 |
Loans advanced |
297,407 |
367,408 |
524,983 |
504,888 |
Loans repayments received |
129,299 |
73,299 |
- |
290,000 |
Loans received |
73,458 |
230,791 |
135,450 |
686,355 |
Balances at end of period |
||||
Amounts receivable at end of period |
1,397,013 |
1,261,602 |
859,776 |
735,587 |
Amounts payable at end of period |
(688,368) |
(1,356,029) |
(412,225) |
(923,814) |
708,645 |
(94,427) |
447,551 |
(188,227) |
Other related parties |
||||
Amounts payable at end of period |
(66,000) |
(66,000) |
(66,000) |
(66,000) |
Page 28 |
Hottinger Private Office Limited
Notes to the Financial Statements for the Year Ended 31 December 2019
Financial instruments |
Categorisation of principal financial instruments
2019 |
2018 |
|
Group |
||
Bank balances |
250,459 |
314,298 |
Financial assets that are debt instruments measured at amortised cost |
|
|
Financial liabilities measured at amortised cost |
( |
( |
2019 |
2018 |
|
Company |
||
Bank accounts |
97,099 |
93,706 |
Financial assets that are debt instruments measured at amortised cost |
|
|
Financial assets that are equity instruments measured at cost less impairment |
|
|
Financial liabilities measured at amortised cost |
( |
( |
Financial assets measured at amortised cost include trade receivables and loans to related parties.
Financial liabilities measured at amortised cost include trade payables and borrowings from related parties.
Equity instruments are the investment in the company's subsidiary.
Parent and ultimate parent undertaking |
The company's immediate and ultimate parent is
ArchCo Limited does not prepare consolidated financial statements.
Page 29 |