Strategic report Governance Financial statements Other information SECTION 6: COMPANY FINANCIAL STATEMENTS NOTES TO THE COMPANY FINANCIAL STATEMENTS CONTINUED 6.11 Related party transactions 6.13 Financial risk management The key management personnel of the Group and the Company are the same. The relevant Note 5.7 to the consolidated financial statements includes the Group’s policy on capital management, disclosures are given in note 5.6 to the consolidated financial statements. These are the only staff its exposure to financial risks and its policies and processes to manage those risks. There are financial costs incurred by the Company in the year. The Company has two employees (2020: two), being the instruments in the Company made up of amounts receivable from subsidiaries and the Employee Executive Directors. The cost of providing share scheme benefits to the employees of the subsidiaries Benefit Trust and amounts payable to subsidiaries. The nature and extent of risks arising from these is not charged directly to the subsidiaries. Instead, the Company provides a capital contribution to its financial instruments are as follows: subsidiaries in respect of these schemes. Liquidity risk The Company entered into the following transactions with subsidiaries and the Employee Benefit The Company is exposed to liquidity risk, namely the risk that it may be unable to meet its payment Trust, which are related parties. obligations as they fall due. Year ended Year ended The payment obligations primarily relate to amounts payable to subsidiaries which are more than 30 June 2021 30 June 2020 offset by the amounts owed from subsidiaries. In addition, the Company holds significant cash £m £m balances on short term deposit to ensure that it has sufficient available funds to meet its obligations Dividends received from subsidiaries 215.0 172.0 and fund its operations. Management charges to subsidiaries – 0.5 Capital contribution to subsidiaries 4.5 9.6 At the end of the reporting period, none of the liabilities of the Company are past due or represent Amounts owed by related parties at 30 June 155.2 162.2 a significant long term liability. Amounts owed to related parties at 30 June 198.6 247.2 Credit risk Any amounts outstanding with related parties are unsecured and will be settled in cash. No guarantees Credit risk is the risk that a counterparty fails to perform its financial obligations, resulting in financial have been given or received in respect of amounts outstanding. No provisions have been made for loss; however, the amounts owed to the Company are primarily from its own subsidiaries. Given the doubtful debts in respect of the amounts owed by the related parties. profitability and net assets of the majority of subsidiaries, credit risk is considered minimal. As per the wider Group, cash is held with UK licensed banks. The credit risk on liquid funds is minimised because 6.12 Events after the reporting period the counterparties are banks with strong credit ratings assigned by international credit rating agencies. The Group takes a conservative approach to treasury management and selection of Events after the reporting period are shown in note 5.5 of the consolidated financial statements banking counterparties, and carries out regular reviews of all its banks’ and custodians’ credit ratings. on page 164. As at the end of the reporting period, no financial assets were individually determined to be impaired. The balance of assets past due is immaterial. The following table discloses the Company’s maximum exposure to credit risk on financial assets. At 30 June At 30 June 2021 2020 £m £m Financial assets at amortised cost Cash and cash equivalents 155.9 86.1 Included within trade and other receivables: Term deposits 60.0 230.0 Amounts receivable from subsidiaries and EBT 155.2 162.2 371.1 478.3 177 Hargreaves Lansdown Report and Financial Statements 2021