Winckworth Sherwood LLP
Annual Report and Financial Statements
For the year ended 31 March 2023
Limited Liability Partnership Registration No. OC334359 (England and Wales)
Winckworth Sherwood LLP
Limited Liability Partnership Information
Designated members
R M Tinham
J Keddie
A Kinsey
Limited liability partnership number
OC334359
Registered office
Arbor
255 Blackfriars Road
London
SE1 9AX
Auditor
Moore Kingston Smith LLP
6th Floor
9 Appold Street
London
EC2A 2AP
Bankers
HSBC UK Bank Plc
69 Pall Mall
London
SW1Y 5EY
Winckworth Sherwood LLP
Contents
Page
Members' report
1 - 3
Members' responsibilities statement
4
Independent auditor's report
5 - 9
Statement of comprehensive income
10
Balance sheet
11 - 12
Reconciliation of members' interests
13 - 14
Statement of cash flows
15
Notes to the financial statements
16 - 29
Winckworth Sherwood LLP
Members' Report
For the year ended 31 March 2023
Page 1
The members present their annual report and financial statements for the year ended 31 March 2023.
Principal activities
The principal activity of the limited liability partnership during the year continued to be that of solicitors and parliamentary agents.
The results for the year and the financial position at the year end were considered satisfactory by the members.
Designated members
The designated members who held office during the year and up to the date of signature of the financial statements were as follows:
R M Tinham
J Keddie
A Kinsey
(Appointed 1 April 2022)
Branches outside the United Kingdom
The LLP does not operate any branches outside of the UK.
Members' drawings, contributions and repayments
All members participate in the provision of the LLP's working capital requirement (Capital) in accordance with the membership agreement. New members subscribe to Capital on admission and on progression. The Capital is repaid in full on retirement. The level of Capital subscription is determined from time to time depending on the financing requirements of the business. All members draw a proportion of their profit share in periodic instalments during the year, with the balance of their profit, net of tax retention, paid in instalments after the year end. On retirement any undrawn profit share is repaid in accordance with the membership agreement. Tax retentions are paid to HMRC on behalf of members with any excess being returned to members as appropriate.
Disabled persons
Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the limited liability partnership continues and that the appropriate training is arranged. It is the policy of the limited liability partnership that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.
Employee involvement
The limited liability partnership's policy is to consult and discuss with employees matters likely to affect their interests at team and firmwide meetings.
Information on matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the limited liability partnership's performance.
Auditor
The auditors, Moore Kingston Smith LLP, are deemed to be reappointed under section 487(2) of the Companies Act 2006, as applied to limited liability partnerships.
Winckworth Sherwood LLP
Members' Report (Continued)
For the year ended 31 March 2023
Page 2
Energy and carbon report
The information and data results provided below have been produced in a format which meet the mandatory requirements for Streamlined Energy and Carbon Reporting (SECR). Under the Companies (Directors' report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018 we are required to disclose our UK energy use and associated greenhouse gas (GHG) emissions. Specifically, we are required to report these GHG emissions relating to natural gas, electricity and transport fuel, as well as an intensification ratio under the regulations.
Methodology
This report has been compiled in accordance with the requirements set out in the HM Government document Environmental Reporting Guidelines: Including streamlined energy and carbon reporting guidance March 2019 and utilising the UK Government GHG conversion factors for company reporting, June 2019. The above was in conjunction with the ESOS methodology (Energy Savings Opportunity Scheme version 6, October 2019).
To ensure that we achieve and deliver effective emissions control and management, we are utilising recognised and robust methods. Accordingly whilst no prescribed methodology is detailed in the regulations, we collect our data sets annually, and measure and calculate our carbon footprint using the relevant conversion factors issued by DEFRA (Department for Environment, Food, and Rural Affairs) / BEIS (Department for Business, Energy and Industrial Strategy) in June 2019.
The Streamlined Energy and Carbon reporting included in this report covers the period of 1 April 2022 to 31 March 2023.
2023
2022
Energy consumption
kWh
kWh
Aggregate of energy consumption in the year
- Heat purchased
277,999
611,520
- Electricity purchased
791,867
2,297,838
1,069,866
2,909,358
2023
2022
Emissions of CO2 equivalent
metric tonnes
metric tonnes
Scope 2 - indirect emissions
- Heat purchased
50.04
112.00
- Electricity purchased
153.13
488.00
Total gross emissions
203.17
600.00
Intensity ratio
Tonnes CO2e per full-time headcount
0.598
2.09
Winckworth Sherwood LLP
Members' Report (Continued)
For the year ended 31 March 2023
Page 3
Measures taken to improve energy efficiency
The firm is committed to achieving Net Zero emissions by 2035, and to a target of 50% emissions reduction by 2030 against a baseline set in 2019-20. This reduction is consistent with the Global Goal of 45% reduction in global emissions by 2030 as recommended by the IPCC. By adopting a 50% target by 2030 the firm is aligned to the Paris Agreement target of being on a trajectory to keep global heating at 1.5°C or below, as agreed in 2015 at COP21. Net Zero is based on the firm making a commitment to reduce emissions as far as possible, with the gap between actual emissions and zero accounting for the ‘net’. This remaining portion will be offset using a credible, verified offset scheme.
Since 2020 we have significantly reduced business travel and commuting emissions by promoting hybrid working arrangements and investing in videoconferencing software.
We will continue to focus on reducing business travel by air and encouraging use of more sustainable modes of travel as well as ensuring we have a more accurate measure of the carbon associated with our people working from home and commuting (currently estimated).
We have for many years used PIR lighting controls throughout our offices and we use 100% green energy supplies for our offices. In October 2023 we will be moving to new low carbon premises.
We require all providers of data services (e.g. data centres and cloud storage) to provide us with a carbon total (tCO2e) in relation to the service they provide to us (a Scope 3 emission) and will continue to monitor this in order to reduce as far as possible.
We will identify sustainable carbon offsetting projects which follow the guidance given by the Oxford Principles and deliver long-term carbon reductions by removing carbon rather than just avoiding further release.
Approved by the members on 13 October 2023 and signed on their behalf by:
R M Tinham
Designated Member
Winckworth Sherwood LLP
Members' Responsibilities Statement
For the year ended 31 March 2023
Page 4
The members are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law (as applied by The Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008) requires the members to prepare financial statements for each financial year. Under that law the members have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice. Under company law (as applied by The Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008) the members 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 limited liability partnership and of the profit or loss of the limited liability partnership for that period. In preparing these financial statements, the members are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the limited liability partnership will continue in business.
The members are responsible for keeping adequate accounting records that are sufficient to show and explain the limited liability partnership’s transactions and disclose with reasonable accuracy at any time the financial position of the limited liability partnership and enable them to ensure that the financial statements comply with the Companies Act 2006 (as applied by The Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008). They are also responsible for safeguarding the assets of the limited liability partnership and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Winckworth Sherwood LLP
Independent Auditor's Report
To the Members of Winckworth Sherwood LLP
Page 5
Opinion
We have audited the financial statements of Winckworth Sherwood LLP (the 'limited liability partnership') for the year ended 31 March 2023 which comprise the Statement of Comprehensive Income, the Balance Sheet, the Reconciliation of Members’ Interests, the 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 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 limited liability partnership's affairs as at 31 March 2023 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 as applied to limited liability partnerships by the Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008.
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 limited liability partnership in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the members' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the limited liability partnership’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the members with respect to going concern are described in the relevant sections of this report.
Winckworth Sherwood LLP
Independent Auditor's Report (Continued)
To the Members of Winckworth Sherwood LLP
Page 6
The members 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.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006 as applied to limited liability partnerships requires us to report to you if, in our opinion:true
• 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
• we have not received all the information and explanations we require for our audit.
Responsibilities of members
As explained more fully in the Members' Responsibilities Statement on page 4, the members 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 members 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 members are responsible for assessing the limited liability partnership’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 members either intend to liquidate the limited liability partnership or to cease operations, or have no realistic alternative but to do so.
Winckworth Sherwood LLP
Independent Auditor's Report (Continued)
To the Members of Winckworth Sherwood LLP
Page 7
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.
As part of an audit in accordance with ISAs (UK) we exercise professional judgement and maintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purposes of expressing an opinion on the effectiveness of the limited liability partnership’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the members.
Conclude on the appropriateness of the members’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the limited liability partnership’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the limited liability partnership to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
Winckworth Sherwood LLP
Independent Auditor's Report (Continued)
To the Members of Winckworth Sherwood LLP
Page 8
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
The objectives of our audit in respect of fraud, are; to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses to those assessed risks; and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the limited liability partnership.
Our approach was as follows:
We obtained an understanding of the legal and regulatory requirements applicable to the limited liability partnership and considered that the most significant are the Companies Act 2006 as applied to limited liability partnerships by the Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008, the Limited Liability Partnerships SORP, UK financial reporting standards as issued by the Financial Reporting Council, and the regulations of the Solicitors Regulation Authority.
We obtained an understanding of how the limited liability partnership complies with these requirements by discussions with management and those charged with governance.
We assessed the risk of material misstatement of the financial statements, including the risk of material misstatement due to fraud and how it might occur, by holding discussions with management and those charged with governance.
We inquired of management and those charged with governance as to any known instances of non-compliance or suspected non-compliance with laws and regulations.
Based on this understanding, we designed specific appropriate audit procedures to identify instances of non-compliance with laws and regulations. This included making enquiries of management and those charged with governance and obtaining additional corroborative evidence as required.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
Winckworth Sherwood LLP
Independent Auditor's Report (Continued)
To the Members of Winckworth Sherwood LLP
Page 9
This report is made solely to the Limited Liability Partnership’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006 (as applied by the Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008). Our audit work has been undertaken so that we might state to the Limited Liability Partnership’s members those matters which 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 any party other than the Limited Liability Partnership and the Limited Liability Partnership’s members as a body, for our work, for this report, or for the opinions we have formed.
John Staniforth (Senior Statutory Auditor)
for and on behalf of Moore Kingston Smith LLP
19 October 2023
Chartered Accountants
Statutory Auditor
6th Floor
9 Appold Street
London
EC2A 2AP
Winckworth Sherwood LLP
Statement of Comprehensive Income
For the year ended 31 March 2023
Page 10
2023
2022
Notes
£
£
Turnover
3
42,623,569
39,509,573
Cost of sales
(18,746,571)
(18,279,386)
Gross profit
23,876,998
21,230,187
Administrative expenses
(11,709,625)
(8,781,776)
Other operating income
3
401,728
559,478
Operating profit
4
12,569,101
13,007,889
Interest receivable and similar income
8
3,386,173
-
Interest payable and similar expenses
9
(121,157)
(39,375)
Profit for the financial year before members' remuneration and profit shares
4
15,834,117
12,968,514
Members' remuneration charged as an expense
7
(13,683,487)
(14,027,272)
Profit/(loss) for the financial year available for discretionary division amongst members
2,150,630
(1,058,758)
The Statement of Comprehensive Income has been prepared on the basis that all operations are continuing operations. The LLP had no items of other comprehensive income in either the current or prior year.
Winckworth Sherwood LLP
Balance Sheet
As at 31 March 2023
Page 11
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
10
1,080,225
1,012,362
Tangible assets
11
397,238
403,478
1,477,463
1,415,840
Current assets
Debtors
13
20,949,295
19,723,843
Cash and cash equivalents
2,665,538
9,597
23,614,833
19,733,440
Creditors: amounts falling due within one year
14
(6,582,650)
(7,188,927)
Net current assets
17,032,183
12,544,513
Total assets less current liabilities
18,509,646
13,960,353
Creditors: amounts falling due after more than one year
15
(366,663)
(499,983)
Provisions for liabilities
17
(268,915)
(777,410)
Net assets attributable to members
17,874,068
12,682,960
Represented by:
Loans and other debts due to members within one year
Members' capital classified as a liability
18
2,343,500
195,250
Other amounts
18
8,548,566
7,925,867
10,892,066
8,121,117
Members' other interests
Other reserves classified as equity
6,982,002
4,561,843
17,874,068
12,682,960
Total members' interests
Loans and other debts due to members
10,892,066
8,121,117
Members' other interests
6,982,002
4,561,843
17,874,068
12,682,960
Winckworth Sherwood LLP
Balance Sheet (Continued)
As at 31 March 2023
Page 12
The financial statements were approved by the members and authorised for issue on 13 October 2023 and are signed on their behalf by:
R M Tinham
Designated member
Limited Liability Partnership Registration No. OC334359
Winckworth Sherwood LLP
Reconciliation of Members' Interests
For the year ended 31 March 2023
Page 13
Current financial year
Other reserves classified as equity
Total
Members' capital (classified as debt)
Other amounts
Total
Total
2023
£
£
£
£
£
Amounts due to members
7,925,867
Members' interests at 1 April 2022
4,561,843
4,561,843
195,250
7,925,867
8,121,117
12,682,960
Members' remuneration charged as an expense, including employment costs and retirement benefit costs
-
-
-
13,683,487
13,683,487
13,683,487
Profit for the financial year available for discretionary division among members
2,150,630
2,150,630
-
-
-
2,150,630
Members' interests after profit and remuneration for the year
6,712,473
6,712,473
195,250
21,609,354
21,804,604
28,517,077
Capital introduced
-
-
2,161,250
-
2,161,250
2,161,250
Repayment of capital
-
-
(13,000)
-
(13,000)
(13,000)
Drawings
-
-
-
(13,060,788)
(13,060,788)
(13,060,788)
Other movements
269,529
269,529
-
-
-
269,529
Members' interests at 31 March 2023
6,982,002
6,982,002
2,343,500
8,548,566
10,892,066
17,874,068
8,548,566
As permitted by the Statement of Recommended Practice (SORP), Accounting by Limited Liability Partnerships, issued in December 2021, the LLP has taken the option of presenting the above Reconciliation of Members' Interests as a primary statement instead of a Statement of Changes in Equity.
Winckworth Sherwood LLP
Reconciliation of Members' Interests (Continued)
For the year ended 31 March 2023
Page 14
Prior financial year
Other reserves classified as equity
Total
Members' capital (classified as debt)
Other amounts
Total
Total
2022
£
£
£
£
£
Amounts due to members
9,778,834
Members' interests at 1 April 2021
5,620,676
5,620,676
183,760
9,778,834
9,962,594
15,583,270
Members' remuneration charged as an expense, including employment costs and retirement benefit costs
-
-
-
14,027,272
14,027,272
14,027,272
Loss for the financial year available for discretionary division among members
(1,058,758)
(1,058,758)
-
-
-
(1,058,758)
Members' interests after loss and remuneration for the year
4,561,918
4,561,918
183,760
23,806,106
23,989,866
28,551,784
Capital introduced
-
-
33,490
-
33,490
33,490
Repayment of capital
-
-
(22,000)
-
(22,000)
(22,000)
Drawings
-
-
-
(15,880,239)
(15,880,239)
(15,880,239)
Other movements
(75)
(75)
-
-
-
(75)
Members' interests at 31 March 2022
4,561,843
4,561,843
195,250
7,925,867
8,121,117
12,682,960
7,925,867
Winckworth Sherwood LLP
Statement of Cash Flows
For the year ended 31 March 2023
Page 15
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
22
11,382,100
8,525,343
Interest paid
(121,157)
(39,375)
Net cash inflow from operating activities
11,260,943
8,485,968
Investing activities
Purchase of intangible assets
(385,786)
(494,306)
Purchase of tangible fixed assets
(193,354)
(92,288)
Other income
1,520,000
-
Investment income
401,728
559,478
Interest received
1,866,173
-
Net cash generated from/(used in) investing activities
3,208,761
(27,116)
Financing activities
Capital introduced by members (classified as debt or equity)
2,161,250
33,490
Repayment of capital or debt to members
(13,000)
(22,000)
Payments to members that represent a return on amounts subscribed or otherwise contributed
(13,060,788)
(15,880,314)
Movement in capital reserve
269,530
-
Proceeds of new bank loans
1,953,432
756,000
Repayment of bank loans
(1,336,887)
(578,010)
Net cash used in financing activities
(10,026,463)
(15,690,834)
Net increase/(decrease) in cash and cash equivalents
4,443,241
(7,231,982)
Cash and cash equivalents at beginning of year
(1,777,703)
5,454,279
Cash and cash equivalents at end of year
2,665,538
(1,777,703)
Relating to:
Cash at bank and in hand
2,665,538
9,597
Bank overdrafts included in creditors payable within one year
-
(1,787,300)
2,665,538
(1,777,703)
Winckworth Sherwood LLP
Notes to the Financial Statements
For the year ended 31 March 2023
Page 16
1
Accounting policies
Limited liability partnership information
Winckworth Sherwood LLP is a limited liability partnership incorporated in England and Wales. The registered office is Arbor, 255 Blackfriars Road, London, SE1 9AX. The registered partnership number is OC334359.
The limited liability partnership's principal activities are disclosed in the Members' Report.
1.1
Accounting convention
These financial statements have been prepared in accordance with the Statement of Recommended Practice "Accounting by Limited Liability Partnerships" issued in December 2021, together 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 limited liability partnership. Monetary amounts in these financial statements are rounded to the nearest pound.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
1.2
Going concern
At the time of approving the financial statements, the members have a reasonable expectation that the limited liability partnership has adequate resources to continue in operational existence for the foreseeable future. The members have assessed the truepartnership’s financial position, budgets and cash flow forecasts for the period up to 30 September 2024 in considering whether the partnership has adequate resources. This assessment has factored in both the post reporting date drawdown of £3.6m on a new bank loan to fund the fit-out of a new London office (see note 16) and the monthly loan repayments. Thus the members continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover represents the amounts receivable for the services provided to clients, excluding value added tax.
Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and direct expenses, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that are recoverable.
Fee income that is contingent on events outside the control of the firm is recognised when the contingent event occurs.
1.4
Intangible fixed assets
Intangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of amortisation and any impairment losses.
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:
Computer Software
4 years straight line
Winckworth Sherwood LLP
Notes to the Financial Statements (Continued)
For the year ended 31 March 2023
1
Accounting policies
(Continued)
Page 17
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:
Computer equipment
4 years straight line
Other equipment
5 years straight line
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.
1.6
Fixed asset investments
Interests in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the limited liability partnership. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
1.7
Impairment of fixed assets
At each reporting period end date, the limited liability partnership 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 limited liability partnership 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.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years.
1.8
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand and deposits held at call with banks.
Winckworth Sherwood LLP
Notes to the Financial Statements (Continued)
For the year ended 31 March 2023
1
Accounting policies
(Continued)
Page 18
1.9
Financial instruments
The limited liability partnership has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the limited liability partnership's statement of financial position when the limited liability partnership becomes party to the contractual provisions of the instrument.
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.
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 the Income Statement.
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 limited liability partnership transfers the financial asset and substantially all the risks and rewards of ownership to another entity.
Classification of financial liabilities
Financial liabilities are classified according to the substance of the contractual arrangements entered into.
Basic financial liabilities
Basic financial liabilities, including trade and other payables, are initially recognised at transaction price. Financial liabilities classified as payable within one year are not amortised.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Derecognition of financial liabilities
Financial liabilities are derecognised when the limited liability partnership’s obligations expire or are discharged or cancelled.
1.10
Taxation
The taxation payable on the partnership profits is solely the personal liability of the individual members, consequently neither partnership taxation nor related deferred taxation arising in respect of the partnership are accounted for in these financial statements.
Winckworth Sherwood LLP
Notes to the Financial Statements (Continued)
For the year ended 31 March 2023
1
Accounting policies
(Continued)
Page 19
1.11
Provisions
Provisions are recognised when the limited liability partnership has a legal or constructive present obligation as a result of a past event, it is probable that the limited liability partnership will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.
1.12
Employee benefits
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 limited liability partnership is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.13
Retirement benefits and post retirement payments to members
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
The retirement benefits of former partners are determined annually by reference to the profits of the LLP. Provision is made for the estimated net present value of future payment commitments. The amount of the provision is assessed annually with any adjustment being reflected in the Income Statement. Annuities paid which are not subject to future commitment are reflected in the Income Statement.
1.14
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
1.15
Reserves
Profits are retained as unallocated to members to the extent considered appropriate to meet the funding requirements of the LLP. The movement is recognised as profit available for discretionary division amongst members shown in other reserves classified as equity.
1.16
Members remuneration and profits
Members are entitled to defined shares of profit under the LLP agreement, after allocation to reserves and to the extent that profit is distributable. They are not otherwise entitled to remuneration.
Winckworth Sherwood LLP
Notes to the Financial Statements (Continued)
For the year ended 31 March 2023
1
Accounting policies
(Continued)
Page 20
1.17
Distributable profit
Distributable profit is realised profit, which in the case of professional services occurs when invoiced, to the extent it is settled within three months of the year end. Changes in levels of work in progress are disregarded. Other income is recognised when receivable.
1.18
Group accounts
The financial statements present information about the LLP as an individual undertaking and not about its group. The LLP has taken advantage of the exemptions provided by section 405 of the Companies Act 2006, whereby group accounts are not required as the subsidiaries are dormant and are not material for the purpose of giving a true and fair view.
2
Judgements and key sources of estimation uncertainty
In the application of the limited liability partnership’s accounting policies, the members 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 judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Revenue from contracts to provide services is assessed on an individual basis with revenue earned being ascertained based on the stage of completion of the contract which is estimated using a combination of the milestones in the contract and the time spent to date compared to the total time expected to be required to undertake the contract. Estimates of the total time required to undertake the contracts are made on a regular basis and subject to management review. These estimates may differ from the actual results due to a variety of factors such as efficiency of working, accuracy of assessment of progress to date and client decision making.
The LLP makes an estimate of the recoverable value of trade and other debtors. When assessing impairment of trade and other debtors, management considers factors including the current credit rating of the debtor, the ageing profile of debtors and historical experience.
Provisions have been made for dilapidations, professional indemnity claims and annuities. These provisions are estimates and the actual costs and timing of future cash flows are dependent on future events. The difference between expectations and the actual future liability will be accounted for in the period when such determination is made.
Winckworth Sherwood LLP
Notes to the Financial Statements (Continued)
For the year ended 31 March 2023
Page 21
3
Turnover
An analysis of the limited liability partnership's turnover is as follows:
2023
2022
£
£
Turnover analysed by class of business
Rendering of legal services
42,623,569
39,509,573
2023
2022
£
£
Other significant revenue
Interest income
1,866,173
-
Grants received
-
79,818
Statutory compensation income
1,520,000
-
Other income
123,047
69,862
Rental income
278,681
409,798
Total other income
3,787,901
559,478
2023
2022
£
£
Turnover analysed by geographical market
UK and Ireland
40,222,588
38,305,364
Rest of Europe
152,820
90,133
Rest of the World
2,248,161
1,114,076
42,623,569
39,509,573
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Government grants
-
(79,818)
Depreciation of owned tangible fixed assets
199,594
17,764
Amortisation of intangible assets
317,923
144,025
Operating lease rentals - land & buildings
2,305,673
2,667,385
Winckworth Sherwood LLP
Notes to the Financial Statements (Continued)
For the year ended 31 March 2023
Page 22
5
Auditor's remuneration
2023
2022
Fees payable to the LLP's auditor and associates:
£
£
For audit services
Audit of the financial statements of the LLP
40,000
27,400
For other services
Taxation compliance services
6,000
4,700
All other non-audit services
18,000
13,400
24,000
18,100
6
Employees
The average number of persons (excluding members) employed by the partnership during the year was:
2023
2022
Number
Number
Professional
162
159
Administrative
145
152
307
311
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
15,317,596
14,985,834
Social security costs
1,828,691
1,741,752
Pension costs
1,600,284
1,551,800
18,746,571
18,279,386
Winckworth Sherwood LLP
Notes to the Financial Statements (Continued)
For the year ended 31 March 2023
Page 23
7
Members' remuneration
2023
2022
Number
Number
Average number of members during the year
69
69
2023
2022
£
£
Profit attributable to the member with the highest entitlement
411,597
570,627
Average members' remuneration
198,311
203,294
2023
2022
£
£
Remuneration to members charged as an expense
13,683,487
14,027,272
8
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
1,866,173
-
Other income
Statutory compensation income
1,520,000
-
Total income
3,386,173
-
9
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
121,157
39,375
Winckworth Sherwood LLP
Notes to the Financial Statements (Continued)
For the year ended 31 March 2023
Page 24
10
Intangible fixed assets
Computer Software
£
Cost
At 1 April 2022
1,180,246
Additions
385,786
At 31 March 2023
1,566,032
Amortisation and impairment
At 1 April 2022
167,884
Amortisation charged for the year
317,923
At 31 March 2023
485,807
Carrying amount
At 31 March 2023
1,080,225
At 31 March 2022
1,012,362
11
Tangible fixed assets
Computer equipment
Other equipment
Total
£
£
£
Cost
At 1 April 2022
1,536,122
1,049,917
2,586,039
Additions
176,637
16,717
193,354
At 31 March 2023
1,712,759
1,066,634
2,779,393
Depreciation and impairment
At 1 April 2022
1,282,823
899,738
2,182,561
Depreciation charged in the year
121,636
77,958
199,594
At 31 March 2023
1,404,459
977,696
2,382,155
Carrying amount
At 31 March 2023
308,300
88,938
397,238
At 31 March 2022
253,299
150,179
403,478
Winckworth Sherwood LLP
Notes to the Financial Statements (Continued)
For the year ended 31 March 2023
Page 25
12
Investments in subsidiaries
Details of the limited liability partnership's subsidiaries at 31 March 2023 are as follows:
Name of undertaking
Registered
Nature of business
Class of
% Held
office
shares held
Direct
Indirect
Winckworth & Pemberton Limited
Arbor, 255 Blackfriars Road, London, SE1 9AX
Dormant
Ordinary
100
-
Winckworth & Pemberton Services
Arbor, 255 Blackfriars Road, London, SE1 9AX
Dormant
Ordinary
100
-
Winckworth Sherwood Services Limited
Arbor, 255 Blackfriars Road, London, SE1 9AX
Dormant
Ordinary
100
-
The investment holdings are valued at £nil. The aggregate amount of capital and reserves were as follows:
Capital and Reserves
Profit/(Loss)
£
£
All subsidaries
11,108
-
13
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
13,119,654
14,104,005
Other debtors
2,024,542
14,534
Prepayments and accrued income
5,805,099
5,605,304
20,949,295
19,723,843
Trade debtors are stated net of bad debt provision amounting to £1,146,115 (2022: £1,001,656 ).
Winckworth Sherwood LLP
Notes to the Financial Statements (Continued)
For the year ended 31 March 2023
Page 26
14
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans and overdrafts
16
1,327,864
2,365,299
Trade creditors
1,802,579
1,516,145
Other taxation and social security
2,554,918
2,337,863
Other creditors
21,280
238,480
Accruals and deferred income
876,009
731,140
6,582,650
7,188,927
Included within other creditors are unpaid pension contributions amounting to £Nil (2022: £Nil).
15
Creditors: amounts falling due after more than one year
2023
2022
£
£
Bank loans and overdrafts
16
366,663
499,983
16
Loans and overdrafts
2023
2022
£
£
Bank loans
1,694,527
1,077,982
Bank overdrafts
-
1,787,300
1,694,527
2,865,282
Payable within one year
1,327,864
2,365,299
Payable after one year
366,663
499,983
Winckworth Sherwood LLP
Notes to the Financial Statements (Continued)
For the year ended 31 March 2023
16
Loans and overdrafts
(Continued)
Page 27
Included in loans are two unsecured loans outstanding at the reporting date:
Loan 1 was granted by HSBC amounting to £566,667 at the reporting date (2022: £nil), repayable in monthly instalments for 3 years from the date of drawdown. Monthly instalments will continue until 17 January 2026, with interest charged at 2% + Bank of England base rate.
Loan 2 was granted by HSBC amounting to £1,127,860 at the reporting date (2022: £nil), repayable in monthly instalments for 1 year from the date of drawdown. Monthly instalments will continue until 17 January 2024, with interest charged at 2% + Bank of England base rate.
Included in the prior year loans were two unsecured loans repaid by the reporting date:
Loan 3 was granted by Lloyds amounting to £Nil at the reporting date (2022: £699,982), repayable in monthly instalments for 5 years from the date of drawdown. Monthly instalments were to continue until 14 September 2025, with interest charged at 2.05% + Bank of England base rate, however the loan was repaid in full during the year.
Loan 4 was granted by Close Brothers amounting to £Nil at the reporting date (2022: £378,000), repayable in monthly instalments for 1 year from the date of drawdown. Monthly instalments were to continue until 15 July 2022, with interest charged at 4.15%.
Subsequent to the year end the partnership drew down £3.6m on a banking facility repayable by monthly instalments over 18 months with interest charged at 2.0% + Bank of England base rate. The bank loan is unsecured.
17
Provisions for liabilities
2023
2022
£
£
Dilapidations
21,815
226,410
Professional Indemnity
230,000
340,000
Retirement Benefits
17,100
211,000
268,915
777,410
Movements on provisions:
Dilapidations
Professional Indemnity
Retirement Benefits
Total
£
£
£
£
At 1 April 2022
226,410
340,000
211,000
777,410
Increase/ (decrease) in the year
(204,595)
(110,000)
(193,900)
(508,495)
At 31 March 2023
21,815
230,000
17,100
268,915
Winckworth Sherwood LLP
Notes to the Financial Statements (Continued)
For the year ended 31 March 2023
Page 28
18
Loans and other debts due to members
2023
2022
£
£
Analysis of loans
Amounts falling due within one year
10,892,066
8,121,117
In the event of a winding up the amounts included in "Loans and other debts due to members" will rank equally with unsecured creditors.
19
Contingent Liabilities
There is a contingent liability in respect of pension obligations to some staff, which amounted to
£304,480 at 31 March 2023 (2022: £354,200) based on an actuarial valuation. This contingent liability was under-funded at that date by £18,920 (2022: fully funded). This liability would only arise if the value of the pension fund was insufficient to meet the minimum payment due to staff.
20
Operating lease commitments
Lessee
At the reporting end date the limited liability partnership had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2022
£
£
Within one year
1,026,037
2,493,063
Between two and five years
3,966
50,015
1,030,003
2,543,078
21
Related party transactions
The LLP is ultimately controlled by its members and therefore there is no single controlling party.
There is no difference between members’ remuneration charged as an expense and the remuneration received by the key management personnel.true
Winckworth Sherwood LLP
Notes to the Financial Statements (Continued)
For the year ended 31 March 2023
Page 29
22
Cash generated from operations
2023
2022
£
£
Profit for the year
15,834,117
12,968,514
Adjustments for:
Investment income
(401,728)
(559,478)
Finance costs recognised in profit or loss
121,157
39,375
Interest received recognised in profit or loss
(1,866,173)
-
Other income recognised in profit or loss
(1,520,000)
-
Amortisation and impairment of intangible assets
317,923
144,025
Depreciation and impairment of tangible fixed assets
199,594
17,764
Decrease in provisions
(508,495)
(1,105,324)
Movements in working capital:
(Increase)/decrease in debtors
(1,247,843)
395,848
Increase/(decrease) in creditors
453,548
(3,375,381)
Cash generated from operations
11,382,100
8,525,343
23
Analysis of changes in net funds/(debt)
1 April 2022
Cash flows
31 March 2023
£
£
£
Cash at bank and in hand
9,597
2,655,941
2,665,538
Bank overdrafts
(1,787,300)
1,787,300
-
(1,777,703)
4,443,241
2,665,538
Borrowings excluding overdrafts
(1,077,982)
(616,545)
(1,694,527)
Balances before members' debt
(2,855,685)
3,826,696
971,011
Loans and other debts due to members:
- Members' capital
(195,250)
(2,148,250)
(2,343,500)
- Other amounts due to members
(7,925,867)
(622,699)
(8,548,566)
Balances including members' debt
(10,976,802)
1,055,747
(9,921,055)
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