Registered number: 11374200
IGNITION LAW SERVICES LIMITED
UNAUDITED
FINANCIAL STATEMENTS
INFORMATION FOR FILING WITH THE REGISTRAR
FOR THE YEAR ENDED 31 MARCH 2022
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IGNITION LAW SERVICES LIMITED
REGISTERED NUMBER:11374200
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BALANCE SHEET
AS AT 31 MARCH 2022
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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Provisions for liabilities
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IGNITION LAW SERVICES LIMITED
REGISTERED NUMBER:11374200
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BALANCE SHEET (CONTINUED)
AS AT 31 MARCH 2022
The director considers that the Company is entitled to exemption from audit under section 477 of the Companies Act 2006 and members have not required the Company to obtain an audit for the year in question in accordance with section 476 of the Companies Act 2006.
The director acknowledges his responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.
The Company's financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The Company has opted not to file the statement of comprehensive income in accordance with provisions applicable to companies subject to the small companies' regime.
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 4 to 14 form part of these financial statements.
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IGNITION LAW SERVICES LIMITED
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STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2022
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At 1 April 2020 (as restated)
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Dividends paid during the year
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At 1 April 2021 (as restated)
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Dividends paid during the year
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The notes on pages 4 to 14 form part of these financial statements.
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IGNITION LAW SERVICES LIMITED
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
Ignition Law Services Limited is a private company, limited by shares, incorporated in England and Wales. The company number is 11374200 and the registered office is 1 Sans Walk, London, EC1R 0LT.
2.Accounting policies
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Basis of preparation of financial statements
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These financial statements are prepared in accordance with FRS 102 “The Financial Reporting
Standard applicable in the UK and Republic of Ireland” as applied in the context of the small entities
regime.
The accounts have been prepared under the going concern basis.
The following principal accounting policies have been applied:
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Foreign currency translation
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Functional and presentation currency
The Company's functional and presentational currency is GBP.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.
Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Statement of Comprehensive Income within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.
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IGNITION LAW SERVICES LIMITED
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
2.Accounting policies (continued)
Legal and advisory services revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Legal and advisory services revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:
Rendering of services
Legal and advisory services revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
∙the amount of revenue can be measured reliably;
∙it is probable that the Company will receive the consideration due under the contract;
∙the stage of completion of the contract at the end of the reporting period can be measured reliably; and
∙the costs incurred and the costs to complete the contract can be measured reliably.
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Operating leases: the Company as lessee
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Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.
Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.
Grants are accounted under the accruals model as permitted by FRS 102. Grants relating to expenditure on tangible fixed assets are credited to profit or loss at the same rate as the depreciation on the assets to which the grant relates. The deferred element of grants is included in creditors as deferred income.
Grants of a revenue nature are recognised in the Statement of Comprehensive Income in the same period as the related expenditure.
Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
All borrowing costs are recognised in profit or loss in the year in which they are incurred.
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IGNITION LAW SERVICES LIMITED
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
2.Accounting policies (continued)
Defined contribution pension plan
The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.
The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance Sheet. The assets of the plan are held separately from the Company in independently administered funds.
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Current and deferred taxation
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The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
Exceptional items are transactions that fall within the ordinary activities of the Company but are presented separately due to their size or incidence.
Please see note 4 and 12 for further information.
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IGNITION LAW SERVICES LIMITED
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
2.Accounting policies (continued)
Goodwill
Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight-line basis to the Statement of Comprehensive Income over its useful economic life.
Other intangible assets
Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
The estimated useful lives range as follows:
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Work in progress at the year end relates to the cost of unbilled time for legal services. Work in progress is valued at the lower of cost and net realisable value being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a weighted average basis.
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IGNITION LAW SERVICES LIMITED
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
2.Accounting policies (continued)
Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
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Cash and cash equivalents
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Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
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Provisions for liabilities
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Provisions are made where an event has taken place that gives the Company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to profit or loss in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the balance sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Balance Sheet.
The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.
Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan.
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IGNITION LAW SERVICES LIMITED
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
2.Accounting policies (continued)
Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.
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The average monthly number of employees, including the director, during the year was as follows:
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Charge for the year on owned assets
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IGNITION LAW SERVICES LIMITED
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
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Charge for the year on owned assets
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IGNITION LAW SERVICES LIMITED
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
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Creditors: Amounts falling due within one year
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Taxation and social security
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Included within 'Bank loans' is a loan advanced to the company from its director. At year end, the company owed the director £16,052 (2021 - £16,052) via a Director's Loan ISA which is unsecured, repayable on demand and subject to interest at 14% per annum. Interest of £2,247 (2021 - £770) was paid to the director during the year.
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Taxation and social security
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IGNITION LAW SERVICES LIMITED
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
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Creditors: Amounts falling due after more than one year
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Bank loans due within 1-2 years
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Bank loans due within 2-5 years
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The Coutts Bounce Back Loan is denominated in sterling with a nominal interest rate of 2.5%, and the final instalment is due on 27 August 2026. The carrying amount at year end is £43,333 (2021 - £50,000).
There was a 12 month capital repayment holiday for the first year of the loan with the UK Government paying the interest for this period. The first capital repayment was on 27 August 2021 and interest started
accruing at 2.5% from this date, which will be paid by Ignition Law Services Limited. This loan is unsecured.
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Allotted, called up and fully paid
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100 (2021 -100) Ordinary shares of £0.001- each
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96 (2021 -96) Ordinary B shares of £0.1 each
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On 21 May 2018, 20 Ordinary shares of £0.001 were issued with a nominal value of £0.001 each for proceeds of £0.02.
On 27 September 2018, 80 Ordinary shares of £0.001 were issued with a nominal value of £0.001 each for proceeds of £0.08.
On 20 June 2019, 96 Ordinary shares of £0.1 were issued with a nominal value of £0.1 each for proceeds of £9.6.
On 18 May 2020, the company purchased 50 £0.001 Ordinary and 48 £0.1 Ordinary B shares into treasury for proceeds of £77,383.34 paid via distributable reserves. At year end, the company holds 50 (2021 - 50) Ordinary and 48 (2021 - 48) Ordinary B shares in treasury.
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IGNITION LAW SERVICES LIMITED
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
During the year, the Directors reviewed and considered their accounting policies as well as reviewing prior year transactional data and treatment.
The Directors identified that share capital issued in prior years had not been accounted for and have restated the prior year share capital to account for shares issued in 2018 and 2019 as detailed in note 11. The effect of this is to increase share capital at 31 March 2021 by £9 and increase other debtors by £9.
In addition, the Directors have corrected the accounting for the purchase of own shares into Treasury out of distributable reserves in 2021. Previously, the consideration paid of £77,383 was recorded in the Statement of Comprehensive Income. To correct this, the Directors have recognised the purchase by reducing retained earnings by £77,383 with resulting exceptional income of the same amount in the Statement of Comprehensive Income. The overall movement in retained earnings at 31 March 2021 is £Nil.
The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £47,036 (2021 - £79,433). Contributions totalling £6,535 (2021 - £4,929) were payable to the fund at the balance sheet date and are included in creditors.
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Commitments under operating leases
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At 31 March 2022 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
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Later than 1 year and not later than 5 years
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IGNITION LAW SERVICES LIMITED
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
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Related party transactions
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During the year an LLP, in which one of the designated members is a director of this company, recharged £3,000 (2021 - £103,779) to the company. The balance due from the LLP at the balance sheet date was £10,766 (2021 - £7,766). This loan is interest free and repayable on demand.
During the year, services totalling £69,297 (2021 - £3,247 was recharged) were received from a company under common control. The balance due from the company under common control at the balance sheet date was £7,060 (2021 - £16,258). This loan is interest free and repayable on demand.
During the year services totalling £6,305 (2021 - £49,838) were received from a company under common control, and £Nil (2021 - £7,500) of services re-charged to the company under common control. The balance due to the company under common control at the balance sheet date was £Nil (2021 - £6,305). This loan is interest free and repayable on demand.
During the year, the director repaid the company £14,076 (2021 - £Nil). At year end, the director owed the company £Nil (2021 - £14,672). This loan is included within "Other Debtors", is interest free and repayable on demand.
During the year dividends paid to the director totalled £275,500 (2021 - £3,846).
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