JB LEITCH LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
Company Registration No. 06722257 (England and Wales)
JB LEITCH LTD
COMPANY INFORMATION
Directors
Mr J B J Leitch
Mrs M A Leitch
Company number
06722257
Registered office
10 Duke Street
Liverpool
L1 5AS
Auditor
DSG Audit
Castle Chambers
43 Castle Street
Liverpool
L2 9TL
JB LEITCH LTD
CONTENTS
Page
Strategic report
1
Directors' report
2
Directors' responsibilities statement
3
Independent auditor's report
4 - 6
Statement of income and retained earnings
7
Balance sheet
8
Statement of cash flows
9
Notes to the financial statements
10 - 21
JB LEITCH LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 1 -
The directors present the strategic report for the year ended 31 March 2024.
Review of the business
In performance terms 2023/2024 was a year of significant growth for the business with turnover up by 16 % year on year. Expenditure in the year rose by 13%, mainly attributable to staff costs, which accounts for c.75% of total expenditure.
As the growth of turnover exceeded the increase of overheads, the profit margin of the business improved although the margin has not returned to pre-covid levels.
For 2024/2025 the business is currently exceeding performance targets with the number of instructions and fee income continuing to grow.
The 5-year plan, started in 2022/23, to improve resilience and security by migrating all key IT systems to the cloud has continued apace and all of the key milestones set for 2023/24 were achieved.
As noted in last year’s report, legislative change is ongoing in the residential leasehold property market where JB Leitch provides the majority of its legal services. The Leasehold and Freehold Reform Bill (“LAFRA”) was incepted in late 2023 and enacted in May 2024. Most of the changes contained within the Act will require secondary legislation before becoming operative.
The new Government has recently confirmed that such secondary legislation will be extremely complex and likely to require further reforms. As such further consultations are planned with an indicated timescale of the whole of the current parliament before the final landscape is known.
In depth analysis of current workstreams within the firm indicates that significant proportions of our instructions relate to buildings owned or controlled by the leaseholders (up to 50% in some areas). What this information demonstrates is that many of the issues that arise where there is a communal element to a property are eternal and will require legal services whatever the eventual ownership structure and legislative framework.
However, the directors do not underestimate the upheaval during any transition and are working to ensure the structure of the business and its management are robust and agile enough to adapt and thrive in this changing environment.
Mr J B J Leitch
Director
31 October 2024
JB LEITCH LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 2 -
The directors present their annual report and financial statements for the year ended 31 March 2024.
Principal activities
The principal activity of the company continued to be that of providing legal services.
Results and dividends
The results for the year are set out on page 7.
Ordinary dividends were paid amounting to £750,000. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr J B J Leitch
Mrs M A Leitch
Qualifying third party indemnity provisions
The company has made qualifying third party indemnity provisions for the benefit of its directors during the year. These provisions remain in force at the reporting date.
Financial instruments
Liquidity risk
The company manages its cash and borrowing requirements in order to maximise interest income and minimise interest expense, whilst ensuring the company has sufficient liquid resources to meet the operating needs of the business.
Auditor
DSG resigned as auditor on 11 September 2024. DSG Audit were appointed on 11 September 2024 as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
On behalf of the board
Mr J B J Leitch
Director
31 October 2024
JB LEITCH LTD
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MARCH 2024
- 3 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors 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 company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
JB LEITCH LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF JB LEITCH LTD
- 4 -
Opinion
We have audited the financial statements of JB Leitch Ltd (the 'company') for the year ended 31 March 2024 which comprise the statement of income and retained earnings, the balance sheet, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 March 2024 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.
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 company 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 directors' 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 company'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 directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. 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. 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 course of 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 this gives rise to a material misstatement in the financial statements themselves. 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.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
JB LEITCH LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF JB LEITCH LTD (CONTINUED)
- 5 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
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
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors 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 directors 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 directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
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.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Discussions with and enquiries of management and those charged with governance were held with a view to identifying those laws and regulations that could be expected to have a material impact on the financial statements. During the engagement team briefing, the outcomes of these discussions and enquiries were shared with the team, as well as consideration as to where and how fraud may occur in the entity.
The following laws and regulations were identified as being of significance to the entity:
Those laws and regulations considered to have a direct effect on the financial statements including UK financial reporting standards, the Solicitors Regulation Authority rules, company law, tax and pensions legislation, and distributable profits legislation.
Those laws and regulations for which non-compliance may have a direct effect on the operating aspects of the business and therefore may have a material effect on the financial statements include the Solicitors Regulation Authority rules, health and safety regulations, anti-bribery and anti-corruption laws and compliance with tax legislation.
JB LEITCH LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF JB LEITCH LTD (CONTINUED)
- 6 -
Audit procedures undertaken in response to the potential risk relating to irregularities (which include fraud and non-compliance with laws and regulations) comprised of: inquiries of management and those charged with governance as to whether the entity complies with such laws and regulations; enquiries with the same concerning any actual or potential litigation or claims; inspection of relevant legal correspondence; review of board minutes; testing the appropriateness of entries in the nominal ledger, including journal entries which may be indicative of fraud; and the performance of analytical review to identify unexpected movements in account balances which may be indicative of fraud.
No instances of material non-compliance were identified. However, the likelihood of detecting irregularities, including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the entity’s controls, the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. As explained above, there is an unavoidable risk that material misstatements may not be detected, even though the audit has been planned and performed in accordance with ISAs (UK).
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Angela Harrison BA FCA
Senior Statutory Auditor
For and on behalf of DSG Audit
31 October 2024
Chartered Accountants
Statutory Auditor
Castle Chambers
43 Castle Street
Liverpool
L2 9TL
JB LEITCH LTD
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 MARCH 2024
- 7 -
2024
2023
Notes
£
£
Turnover
3
9,886,428
8,520,930
Cost of sales
(226,160)
(199,055)
Gross profit
9,660,268
8,321,875
Administrative expenses
(6,863,310)
(6,079,001)
Other operating income
2,500
15,500
Operating profit
4
2,799,458
2,258,374
Interest receivable and similar income
7
59,737
(15,748)
Interest payable and similar expenses
8
(16,902)
(3,425)
Profit before taxation
2,842,293
2,239,201
Tax on profit
9
(730,181)
(429,244)
Profit for the financial year
2,112,112
1,809,957
Retained earnings brought forward
8,929,960
7,870,003
Dividends
10
(750,000)
(750,000)
Retained earnings carried forward
10,292,072
8,929,960
The profit and loss account has been prepared on the basis that all operations are continuing operations.
JB LEITCH LTD
BALANCE SHEET
AS AT 31 MARCH 2024
31 March 2024
- 8 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
11
336,102
283,490
Current assets
Debtors
12
8,086,436
7,983,382
Cash at bank and in hand
3,705,693
2,516,022
11,792,129
10,499,404
Creditors: amounts falling due within one year
13
(1,819,966)
(1,831,871)
Net current assets
9,972,163
8,667,533
Total assets less current liabilities
10,308,265
8,951,023
Creditors: amounts falling due after more than one year
14
(11,417)
Provisions for liabilities
Deferred tax liability
15
15,193
8,646
(15,193)
(8,646)
Net assets
10,293,072
8,930,960
Capital and reserves
Called up share capital
17
1,000
1,000
Profit and loss reserves
10,292,072
8,929,960
Total equity
10,293,072
8,930,960
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved by the board of directors and authorised for issue on 31 October 2024 and are signed on its behalf by:
Mr J B J Leitch
Director
Company registration number 06722257 (England and Wales)
JB LEITCH LTD
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2024
- 9 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
22
3,056,502
2,305,076
Interest paid
(16,902)
(3,425)
Income taxes paid
(788,866)
(480,834)
Net cash inflow from operating activities
2,250,734
1,820,817
Investing activities
Purchase of tangible fixed assets
(294,890)
(111,568)
Proceeds on disposal of tangible fixed assets
600
Other loans made /(receipts) arising from loans made
(25,248)
(4,148)
Interest received
59,737
(15,748)
Net cash used in investing activities
(260,401)
(130,864)
Financing activities
Repayment of bank loans
(833,333)
Net proceeds from new hire purchase agreements
(50,662)
(42,814)
Dividends paid
(750,000)
(750,000)
Net cash used in financing activities
(800,662)
(1,626,147)
Net increase in cash and cash equivalents
1,189,671
63,806
Cash and cash equivalents at beginning of year
2,516,022
2,452,216
Cash and cash equivalents at end of year
3,705,693
2,516,022
JB LEITCH LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
- 10 -
1
Accounting policies
Company information
JB Leitch Ltd is a private company limited by shares incorporated in England and Wales. The registered office is 10 Duke Street, Liverpool, L1 5AS.
1.1
Accounting convention
These financial statements have been prepared in accordance 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 company. 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
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
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 materials, 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 it is probable will be recovered.
The nature of the contracts undertaken by the company is deemed to be contingent, and as a result of this revenue is not recognised until such time as the contingency is satisfied.
1.4
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:
Land and buildings Leasehold
over the term of the lease
Fixtures, fittings & equipment
25% straight-line
Computer equipment
25% 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 credited or charged to profit or loss.
JB LEITCH LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 11 -
1.5
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible 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).
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 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.
1.6
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.
1.7
Financial instruments
The company 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 company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with 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 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 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.
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 company after deducting all of its liabilities.
JB LEITCH LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 12 -
Basic financial liabilities
Basic financial liabilities, including creditors 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.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
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 company’s contractual obligations expire or are discharged or cancelled.
1.8
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.9
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
JB LEITCH LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 13 -
1.10
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 fixed 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 company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.11
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.12
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
1.13
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
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors 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.
JB LEITCH LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
2
Judgements and key sources of estimation uncertainty
(Continued)
- 14 -
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Unbilled revenue
The value of unbilled revenue (amounts recoverable on contracts) involves significant judgement and affects the amount of revenue recognised. Management review matter balances as at the year end. The valuation is based on an estimate of the amount expected to be recoverable from clients on unbilled items based on such factors as time spent and expertise provided. Provision is made for contingencies including any matters whereby the value of time incurred has exceeded the level of a previously agreed fee. No revenue is recorded if the work is contingent upon factors outside the company's control.
3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by class of business
Legal services
9,886,428
8,520,930
2024
2023
£
£
Other revenue
Interest income
59,737
(15,748)
4
Operating profit
2024
2023
Operating profit for the year is stated after charging/(crediting):
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
11,000
8,675
Depreciation of owned tangible fixed assets
212,844
196,344
Depreciation of tangible fixed assets held under finance leases
29,434
32,110
Profit on disposal of tangible fixed assets
-
(600)
Operating lease charges
576,128
607,074
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Fee earners
76
73
Support staff
57
53
Total
133
126
JB LEITCH LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
5
Employees
(Continued)
- 15 -
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
4,139,677
3,858,036
Social security costs
396,374
385,245
Pension costs
488,674
397,295
5,024,725
4,640,576
6
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
24,000
24,000
7
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
59,737
9,311
Other interest income
(25,059)
Total income
59,737
(15,748)
2024
2023
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
59,737
9,311
8
Interest payable and similar expenses
2024
2023
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
731
-
Other finance costs:
Interest on finance leases and hire purchase contracts
1,998
3,425
Other interest
14,173
16,902
3,425
JB LEITCH LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 16 -
9
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
724,579
448,478
Adjustments in respect of prior periods
(945)
258
Total current tax
723,634
448,736
Deferred tax
Origination and reversal of timing differences
6,547
(19,492)
Total tax charge
730,181
429,244
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2024
2023
£
£
Profit before taxation
2,842,293
2,239,201
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 19.00%)
710,573
425,448
Tax effect of expenses that are not deductible in determining taxable profit
14,056
8,893
Under/(over) provided in prior years
(945)
254
Deferred tax adjustments in respect of prior years
6,497
(5,351)
Taxation charge for the year
730,181
429,244
10
Dividends
2024
2023
2024
2023
Per share
Per share
Total
Total
£
£
£
£
A ordinary shares
Interim paid
375.00
375.00
375,000
375,000
B ordinary shares
Interim paid
375.00
375.00
375,000
375,000
Total dividends
Interim paid
750,000
750,000
JB LEITCH LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 17 -
11
Tangible fixed assets
Land and buildings Leasehold
Fixtures, fittings & equipment
Computer equipment
Total
£
£
£
£
Cost
At 1 April 2023
835,218
39,233
391,855
1,266,306
Additions
180,611
13,289
100,990
294,890
Disposals
(6,234)
(102,144)
(108,378)
At 31 March 2024
1,015,829
46,288
390,701
1,452,818
Depreciation and impairment
At 1 April 2023
689,097
17,790
275,929
982,816
Depreciation charged in the year
135,734
11,573
94,971
242,278
Eliminated in respect of disposals
(6,234)
(102,144)
(108,378)
At 31 March 2024
824,831
23,129
268,756
1,116,716
Carrying amount
At 31 March 2024
190,998
23,159
121,945
336,102
At 31 March 2023
146,121
21,443
115,926
283,490
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2024
2023
£
£
Computer equipment
29,434
JB LEITCH LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 18 -
12
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
1,302,773
1,199,322
Amounts recoverable on contracts
355,959
124,238
Other debtors
5,459,911
5,675,212
Prepayments and accrued income
494,636
519,974
7,613,279
7,518,746
2024
2023
Amounts falling due after more than one year:
£
£
Corporation tax recoverable
473,157
464,636
Total debtors
8,086,436
7,983,382
Other debtors are partially secured by way of legal charges on the other assets of those debtors.
13
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Obligations under finance leases
39,245
Trade creditors
362,689
375,536
Corporation tax
435,387
492,098
Other taxation and social security
592,004
575,246
Other creditors
101,116
169
Accruals and deferred income
328,770
349,577
1,819,966
1,831,871
Net obligations under finance lease and hire purchase contracts are secured against the assets concerned.
There is a fixed and floating charge dated 30 April 2014 held by the company's bankers.
14
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Obligations under finance leases and hire purchase contracts
11,417
Net obligations under finance lease and hire purchase contracts are secured against the assets concerned.
There is a fixed and floating charge dated 30 April 2014 held by the company's bankers.
JB LEITCH LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 19 -
15
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2024
2023
Balances:
£
£
Accelerated capital allowances
15,193
8,646
2024
Movements in the year:
£
Liability at 1 April 2023
8,646
Charge to profit or loss
6,547
Liability at 31 March 2024
15,193
16
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
488,674
397,295
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
JB LEITCH LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 20 -
17
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
A ordinary shares of £1 each
900
900
900
900
B ordinary shares of £1 each
100
100
100
100
1,000
1,000
1,000
1,000
18
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2024
2023
£
£
Within one year
303,870
310,085
Between two and five years
1,120,663
53,038
In over five years
1,113,722
2,538,255
363,123
19
Related party transactions
Transactions with related parties
During the year the company entered into the following transactions with related parties:
During the year a management fee of £1,326,304 (2023: £1,400,058) was charged to an associated company (J B Leitch Real Estate Limited). There was a net balance owed to the associated company as at 31 March 2024 of £101,116 (2023: £329,380 owed from).
The company occupies premises owned by an associated company and a pension scheme, of which the directors are beneficiaries, and rent of £336,537 (2023: £336,704) was paid during the year
The following amounts were outstanding at the reporting end date:
Hastenhome Property Limited £524,586 (2023: £484,586)
Tiny Pig Lettings Limited £798,225 (2023: £798,225)
Tiny Pig SL 3 Limited £637,820 (2023: £597,820)
Tiny Pig Developments Limited £400,000 (2023: £400,000)
Stiles Developments Limited £1,554,143 (2023: £1,554,143)
10 Duke Street Limited £71,250 (2023: £71,250)
No interest has been received in respect of these advances.
There are no set repayment terms in respect of these balances.
The above are related parties through common directors and shareholders.
JB LEITCH LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 21 -
20
Ultimate controlling party
The company is controlled by the directors by virtue of their shareholdings in the company
21
Directors' transactions
Dividends totalling £750,000 (2023 - £750,000) were paid in the year in respect of shares held by the company's directors.
As at 31 March 2024 amounts owed by the directors to the company totalled £1,454,735 (2023: £1,429,486). No interest or repayment terms have been agreed on these loans.
22
Cash generated from operations
2024
2023
£
£
Profit for the year after tax
2,112,112
1,809,957
Adjustments for:
Taxation charged
730,181
429,244
Finance costs
16,902
3,425
Investment income
(59,737)
15,748
Gain on disposal of tangible fixed assets
-
(600)
Depreciation and impairment of tangible fixed assets
242,278
228,454
Movements in working capital:
Increase in debtors
(69,285)
(338,350)
Increase in creditors
84,051
157,198
Cash generated from operations
3,056,502
2,305,076
23
Analysis of changes in net funds
1 April 2023
Cash flows
31 March 2024
£
£
£
Cash at bank and in hand
2,516,022
1,189,671
3,705,693
Obligations under finance leases
(50,662)
50,662
-
2,465,360
1,240,333
3,705,693
JB LEITCH LTD
MANAGEMENT INFORMATION
FOR THE YEAR ENDED 31 MARCH 2024
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