Limited Liability Partnership registration number OC407290 (England and Wales)
MICHAEL SPARKS ASSOCIATES LLP
ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
PAGES FOR FILING WITH REGISTRAR
MICHAEL SPARKS ASSOCIATES LLP
CONTENTS
Page
Statement of financial position
1 - 2
Reconciliation of members' interests
3 - 4
Notes to the financial statements
5 - 9
MICHAEL SPARKS ASSOCIATES LLP
STATEMENT OF FINANCIAL POSITION
AS AT
31 MARCH 2023
31 March 2023
- 1 -
2023
2022
Notes
£
£
£
£
Fixed assets
Property, plant and equipment
3
159,378
76,285
Current assets
Trade and other receivables
6,100,622
3,272,964
Cash and cash equivalents
2,516,062
1,203,283
8,616,684
4,476,247
Current liabilities
(5,110,562)
(3,286,510)
Net current assets
3,506,122
1,189,737
Total assets less current liabilities
3,665,500
1,266,022
Represented by:
Loans and other debts due to members within one year
Amounts due in respect of profits
3,535,500
1,136,022
Members' other interests
Members' capital classified as equity
130,000
130,000
3,665,500
1,266,022
Total members' interests
Loans and other debts due to members
3,535,500
1,136,022
Members' other interests
130,000
130,000
3,665,500
1,266,022

In accordance with section 444 of the Companies Act 2006 as applied by The Limited Liability Partnerships (Accounts and Audit) (Application of the Companies Act 2006) Regulations 2008, all of the members of the limited liability partnership have consented to the abridgement of the financial statements pursuant to paragraph 1A of Schedule 1 to the Small Limited Liability Partnerships (Accounts) Regulations (SI 2008/1912)(a).

The members of the limited liability partnership have elected not to include a copy of the income statement within the financial statements.

For the financial year ended 31 March 2023 the limited liability partnership was entitled to exemption from audit under section 477 of the Companies Act 2006 (as applied by the Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008) relating to small limited liability partnerships.

The members acknowledge their responsibilities for complying with the requirements of the Act (as applied to limited liability partnerships) with respect to accounting records and the preparation of accounts.

These financial statements have been prepared and delivered in accordance with the provisions applicable to limited liability partnerships subject to the small limited liability partnerships regime.

MICHAEL SPARKS ASSOCIATES LLP
STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT
31 MARCH 2023
31 March 2023
- 2 -
The financial statements were approved by the members and authorised for issue on 31 October 2023 and are signed on their behalf by:
M Sparks
A Chambers
Designated member
Designated Member
Limited Liability Partnership Registration No. OC407290
MICHAEL SPARKS ASSOCIATES LLP
RECONCILIATION OF MEMBERS' INTERESTS
FOR THE YEAR ENDED 31 MARCH 2023
- 3 -
Current financial year
EQUITY
DEBT
TOTAL
Members' other interests
Loans and other debts due to members less any amounts due from members in debtors
MEMBERS'
INTERESTS
Members' capital
Other reserves
Total
Other amounts
Total
Total
2023
£
£
£
£
£
£
Members' interests at 1 April 2022
130,000
-
130,000
1,136,022
1,136,022
1,266,022
Profit for the financial year available for discretionary division among members
-
4,557,691
4,557,691
-
-
4,557,691
Members' interests after profit for the year
130,000
4,557,691
4,687,691
1,136,022
1,136,022
5,823,713
Allocation of profit for the financial year
-
(4,557,691)
(4,557,691)
4,557,691
4,557,691
-
Drawings on account and distributions of profit
-
-
-
(2,158,213)
(2,158,213)
(2,158,213)
Members' interests at 31 March 2023
130,000
-
130,000
3,535,500
3,535,500
3,665,500
MICHAEL SPARKS ASSOCIATES LLP
RECONCILIATION OF MEMBERS' INTERESTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 4 -
Prior financial year
EQUITY
DEBT
TOTAL
Members' other interests
Loans and other debts due to members less any amounts due from members in debtors
MEMBERS'
INTERESTS
Members' capital
Other reserves
Total
Other amounts
Total
Total
2022
£
£
£
£
£
£
Members' interests at 1 April 2021
130,000
-
130,000
2,383,807
2,383,807
2,513,807
Profit for the financial year available for discretionary division among members
-
1,894,080
1,894,080
-
-
1,894,080
Members' interests after profit for the year
130,000
1,894,080
2,024,080
2,383,807
2,383,807
4,407,887
Allocation of profit for the financial year
-
(1,894,080)
(1,894,080)
1,894,080
1,894,080
-
Drawings on account and distributions of profit
-
-
-
(3,141,865)
(3,141,865)
(3,141,865)
Members' interests at 31 March 2022
130,000
-
130,000
1,136,022
1,136,022
1,266,022
MICHAEL SPARKS ASSOCIATES LLP
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
- 5 -
1
Accounting policies
Limited liability partnership information

Michael Sparks Associates LLP is a limited liability partnership incorporated in England and Wales. The registered office is 12 Plato Place, St. Dionis Road, London, SW6 4TU.

 

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 2018, 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 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.

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 £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

1.2
Revenue

Revenue represents the amounts recoverable for the services provided to clients, excluding value added tax, under contractual obligations which are performed gradually over time.

If, at the statement of financial position date, completion of contractual obligations is dependent on external factors (and thus outside the control of the Limited Liability Partnership), then revenue is recognised only when the event occurs. In such cases, costs incurred up to the statement of financial position date are carried forward as work in progress.

1.3
Members' participating interests

Members' participation rights are the rights of a member against the LLP that arise under the members' agreement (for example, in respect of amounts subscribed or otherwise contributed remuneration and profits).

 

Members' participation rights in the earnings or assets of the LLP are analysed between those that are, from the LLP's perspective, either a financial liability or equity, in accordance with section 22 of FRS 102. A member's participation rights including amounts subscribed or otherwise contributed by members, for example members' capital, are classed as liabilities unless the LLP has an unconditional right to refuse payment to members, in which case they are classified as equity.

All amounts due to members that are classified as liabilities are presented within 'Loans and other debts due to members' and, where such an amount relates to current year profits, they are recognised within ‘Members' remuneration charged as an expense’ in arriving at the relevant year’s result. Undivided amounts that are classified as equity are shown within ‘Members' other interests’. Amounts recoverable from members are presented as debtors and shown as amounts due from members within members’ interests.

 

Where there exists an asset and liability component in respect of an individual member’s participation rights, they are presented on a gross basis unless the LLP has both a legally enforceable right to set off the recognised amounts, and it intends either to settle on a net basis or to settle and realise these amounts simultaneously, in which case they are presented net.

Once an unavoidable obligation has been created in favour of members through allocation of profits or other means, any undrawn profits remaining at the reporting date are shown as ‘Loans and other debts due to members’ to the extent they exceed debts due from a specific member.

MICHAEL SPARKS ASSOCIATES LLP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 6 -
1.4
Property, plant and equipment

Property, plant and equipment are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Fixtures and fittings
20% on cost
Computers
33% on cost
Motor vehicles
25% on cost

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 income statement.

1.5
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.6
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.

 

Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include trade and other receivables and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

MICHAEL SPARKS ASSOCIATES LLP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 7 -
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, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the limited liability partnership after deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities, including trade and other payables, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

Trade payables 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 payables are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Derecognition of financial liabilities

Financial liabilities are derecognised when the limited liability partnership’s obligations expire or are discharged or cancelled.

1.7
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or non-current assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the limited liability partnership is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.8
Retirement benefits and post retirement payments to members

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

MICHAEL SPARKS ASSOCIATES LLP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 8 -
1.9
Leases

Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.

1.10
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

2
Employees

The average number of persons (excluding members) employed by the partnership during the year was:

2023
2022
Number
Number
Total
34
34
3
Property, plant and equipment
Total
£
Cost
At 1 April 2022
570,318
Additions
131,681
Disposals
(58,511)
At 31 March 2023
643,488
Depreciation and impairment
At 1 April 2022
494,033
Depreciation charged in the year
48,588
Eliminated in respect of disposals
(58,511)
At 31 March 2023
484,110
Carrying amount
At 31 March 2023
159,378
At 31 March 2022
76,285
4
Loans and other debts due to members

In the event of a winding up the amounts included in "Loans and other debts due to members" will rank equally with unsecured creditors.

MICHAEL SPARKS ASSOCIATES LLP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 9 -
5
Operating lease commitments

At the reporting end date the limited liability partnership had outstanding commitments for future minimum lease payments under non-cancellable operating leases, as follows:

2023
2022
£
£
10,575
52,875
6
Members' transactions

During the year management charges were received of £156,000 (2022: £78,000), rent was received of £52,500 (2022: 52,500) and royalty payments of £1,477,459 (2022: £1,055,436) were paid to to a connected entity controlled by a designated member of the LLP. At 31 March 2023 £726,436 was due (2022 £171,220 was owed) to the connected entity.

 

Rent payments of £150,000 (2022: £150,000) were paid to a designated member.

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