Limited Liability Partnership registration number OC437420 (England and Wales)
HODGE JONES & ALLEN LLP
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2024
Tavistock House South
Tavistock Square
Rayner Essex LLP
London
Chartered Accountants
WC1H 9LG
HODGE JONES & ALLEN LLP
LIMITED LIABILITY PARTNERSHIP INFORMATION
Designated members
Patrick Allen
Chun Wong
Members
Rajesh Chada
Julie Hardy
Jayesh Kunwardia
Agata Usewicz
Leticia Williams
LLP registration number
OC437420
Registered office
180 North Gower Street
London
NW1 2NB
Auditor
Rayner Essex LLP
Tavistock House South
Tavistock Square
London
WC1H 9LG
HODGE JONES & ALLEN LLP
CONTENTS
Page
Members' report
1 - 3
Independent auditor's report
4 - 6
Statement of comprehensive income
7
Balance sheet
8 - 9
Reconciliation of members' interests
10 - 11
Statement of cash flows
12
Notes to the financial statements
13 - 27
HODGE JONES & ALLEN LLP
MEMBERS' REPORT
FOR THE YEAR ENDED 30 APRIL 2024
- 1 -

The members present their annual report and financial statements for the year ended 30 April 2024.

Principal activities

The principal activity of the limited liability partnership is the provision of legal services.

Fair review of the business

Hodge Jones & Allen LLP was incorporated on 14 May 2021.

 

The business of Hodge Jones & Allen commenced in 1977 and has been running for nearly 50 years. The firm remains true to its founding ethos which means acting primarily for individuals who wish to defend or assert their rights against corporate opponents including government, local authorities, insurance companies and other corporate bodies.

 

The firm acts for clients involved in high profile cases, such as group actions and for clients with a wide range of other personal legal matters. Initially much of the work of the business was funded by legal aid but this has declined steadily over the years, with a significant amount of the business performed under conditional fee arrangements.

 

On 15 October 2021, Hodge Jones & Allen LLP purchased the non-legal aid business from Hodge Jones & Allen Solicitors Limited, a company under common control, and commenced trading on this date.

Members' drawings, contributions and repayments

Members are remunerated solely out of the profits of the LLP and are personally responsible for funding their pensions.  The Management Committee sets members’ profit shares and reviews allocations on an annual basis.

 

Members’ profit shares comprise interest on members’ capital accounts, a fixed profit share element and a balance based on service and performance.

 

The members’ drawing policy allows each member to draw a proportion of their profit share on a monthly basis, subject to the cash requirements of the business.

 

The taxation payable on the LLP’s profits is a personal liability of the members during the year.  Retention from profits earned up to the balance sheet date is made to fund the payment of taxation on members’ behalf.

 

Capital is subscribed by the members as agreed by them with the LLP from time to time. On exit from the LLP, capital and current accounts are repaid in 72 equal instalments.

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:

Patrick Allen
Chun Wong
Members
The members who held office during the year and up to the date of signature of the financial statements were as follows:
Rajesh Chada
Julie Hardy
Jayesh Kunwardia
Agata Usewicz
Leticia Williams
Auditor

The auditor, Rayner Essex LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

HODGE JONES & ALLEN LLP
MEMBERS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 2 -
Statement of members' responsibilities

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:

 

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.

Principal risks and uncertainties

The principal risk and uncertainties have been divided into three categories, market and regulatory risk, staff retention and recruitment and liquidity.

 

Market and regulatory risk

There have been changes over the last 12 years introduced by government to the recovery of costs in civil proceedings particularly under no-win no fee arrangements. The firm has adjusted to those changes. Further changes are expected with the raising of the small claims limit. The firm is adjusting to these changes by concentrating on multi-track personal injury work.

 

Staff retention and recruitment

The firm continues to attract and retain high quality staff and the performance of staff through the year has been exceptional. We will continue to focus on our staff to provide appropriate reward and support so they can continue to deliver a first class service to our clients.

 

Liquidity

A significant proportion of the business is undertaken under conditional fee arrangements, which results in a significant upfront investment of time with the timing of quantum of revenue on each case being unpredictable. The associated liquidity risk continues to be addressed and managed through the financial support from its bank as well as backing from Patrick Allen. Patrick Allen has confirmed he will provide continued financial support, if required, for a period of at least 12 months from the date of signing the Financial Statements, subject to no change in ownership.  The LLP are also in discussions with and reviewing offers received from various finance providers in order to ensure sufficient external financial support as required.

 

Key Performance Indicators

The key performance indicators of the LLP include the monitoring of Work in Progress along with recovery rates. Fee earners are expected to monitor their time and fee targets, the firm also continually review the type and level of cases that are taken on.

HODGE JONES & ALLEN LLP
MEMBERS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 3 -
Future developments

The directors are confident that Hodge Jones & Allen LLP will continue to deliver a strong business.

 

The firm continues to attract high-profile multi-party actions. The firm is engaged in respect of the Essex Mental Health Inquiry, the Covid Inquiry and cases from the Post Office action. The successful outcome of the Essex Mental Health Inquiry multi-party action will improve the cash position of the firm for the next two to three years.

 

The firm is expanding its private client, wills and probate, Court of Protection and family teams which provide good cashflow.

 

Towards the end of the year and post year end, the firm has undertaken an exercise to streamline costs within the business to improve both cash flow and profitability.

Approved by the members on 27 January 2025 and signed on behalf by:
27 January 2025
Patrick Allen
Designated Member
HODGE JONES & ALLEN LLP
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF HODGE JONES & ALLEN LLP
- 4 -
Opinion

We have audited the financial statements of Hodge Jones & Allen LLP (the 'limited liability partnership') for the year ended 30 April 2024 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 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:

Basis for opinion

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.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The members 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.

HODGE JONES & ALLEN LLP
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF HODGE JONES & ALLEN LLP
- 5 -
Matters on which we are required to report by exception

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 as applied to limited liability partnerships requires us to report to you if, in our opinion:

 

Responsibilities of members

As explained more fully in the members' responsibilities statement, 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.

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 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.

 

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

HODGE JONES & ALLEN LLP
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF HODGE JONES & ALLEN LLP
- 6 -

We assessed the susceptibility of the limited liability partnership's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

To address the risk of fraud through management bias and override of controls, we;

 

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

 

 

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limited the audit procedures required to identify non-compliance with laws and regulations to enquiry of the members and other management and inspection of regulatory and legal correspondence, if any.

 

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

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.

Use of our report

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 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 limited liability partnership and the limited liability partnership's members as a body, for our audit work, for this report, or for the opinions we have formed.

Lucy Kate Ghawss ACA
Senior Statutory Auditor
For and on behalf of Rayner Essex LLP
28 January 2025
Chartered Accountants
Statutory Auditor
Tavistock House South
Tavistock Square
London
WC1H 9LG
HODGE JONES & ALLEN LLP
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 APRIL 2024
- 7 -
2024
2023
as restated
Notes
£
£
Turnover
4
9,920,498
9,128,407
Administrative expenses
(9,622,461)
(9,318,905)
Other operating income
33,163
29,445
Operating profit/(loss)
5
331,200
(161,053)
Interest receivable and similar income
8
283,368
21,511
Interest payable and similar expenses
9
(636,381)
(271,458)
Loss for the financial year before members' remuneration and profit shares
(21,813)
(411,000)
Members' remuneration charged as an expense
7
21,813
411,000
Result for the financial year available for discretionary division among members
-
-

The statement of comprehensive income has been prepared on the basis that all operations are continuing operations.

HODGE JONES & ALLEN LLP
BALANCE SHEET
AS AT
30 APRIL 2024
30 April 2024
- 8 -
2024
2023
as restated
Notes
£
£
£
£
Fixed assets
Goodwill
10
8,290,278
9,401,822
Other intangible assets
10
12,077
54,750
Total intangible assets
8,302,355
9,456,572
Tangible assets
11
257,768
272,427
Investments
12
100,000
100,000
8,660,123
9,828,999
Current assets
Debtors
13
12,690,939
9,381,657
Creditors: amounts falling due within one year
14
(10,756,924)
(7,288,166)
Net current assets
1,934,015
2,093,491
Total assets less current liabilities
10,594,138
11,922,490
Creditors: amounts falling due after more than one year
15
(2,401,782)
(2,891,114)
Provisions for liabilities
Provisions
18
-
(706,250)
Net assets attributable to members
8,192,356
8,325,126
Represented by:
Loans and other debts due to members within one year
Amounts due in respect of profits
569,609
702,379
Members' other interests
Members' capital classified as equity
7,622,747
7,622,747
8,192,356
8,325,126
Total members' interests
Amounts due from members
(1,101,429)
-
Loans and other debts due to members
569,609
702,379
Members' other interests
7,622,747
7,622,747
7,090,927
8,325,126
HODGE JONES & ALLEN LLP
BALANCE SHEET (CONTINUED)
AS AT
30 APRIL 2024
30 April 2024
- 9 -
The financial statements were approved by the members and authorised for issue on 27 January 2025 and are signed on their behalf by:
27 January 2025
Patrick Allen
Designated member
Limited Liability Partnership registration number OC437420 (England and Wales)
HODGE JONES & ALLEN LLP
RECONCILIATION OF MEMBERS' INTERESTS
FOR THE YEAR ENDED 30 APRIL 2024
- 10 -
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 amounts
Total
Total
2024
£
£
£
£
Members' interests at 1 May 2023
7,622,747
702,379
702,379
8,325,126
Members' remuneration charged as an expense, including employment costs and retirement benefit costs
-
(21,813)
(21,813)
(21,813)
Result for the financial year available for discretionary division among members
-
-
-
-
Members' interests after loss and remuneration for the year
7,622,747
680,566
680,566
8,303,313
Drawings on account and distributions of profit
-
(1,212,386)
(1,212,386)
(1,212,386)
Members' interests at 30 April 2024
7,622,747
(531,820)
(531,820)
7,090,927
Amounts due to members
569,609
Amounts due from members, included in debtors
(1,101,429)
(531,820)
HODGE JONES & ALLEN LLP
RECONCILIATION OF MEMBERS' INTERESTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 11 -
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 amounts
Total
Total
2023
£
£
£
£
Members' interests at 1 May 2022
7,622,747
2,088,094
2,088,094
9,710,841
Members' remuneration charged as an expense, including employment costs and retirement benefit costs
-
(411,000)
(411,000)
(411,000)
Result for the financial year available for discretionary division among members
-
-
-
-
Members' interests after loss and remuneration for the year
7,622,747
1,677,094
1,677,094
9,299,841
Drawings on account and distributions of profit
-
(974,715)
(974,715)
(974,715)
Members' interests at 30 April 2023
7,622,747
702,379
702,379
8,325,126
HODGE JONES & ALLEN LLP
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 APRIL 2024
- 12 -
2024
2023
as restated
Notes
£
£
£
£
Cash flows from operating activities
Cash (absorbed by)/generated from operations
24
(198,349)
1,350,995
Interest paid
(636,381)
(271,458)
Net cash (outflow)/inflow from operating activities
(834,730)
1,079,537
Investing activities
Purchase of tangible fixed assets
(91,124)
(79,181)
Interest received
283,368
21,511
Net cash generated from/(used in) investing activities
192,244
(57,670)
Financing activities
Payments to members
(1,212,386)
(974,715)
Proceeds from borrowings
3,120,590
1,216,576
Repayment of borrowings
(1,411,804)
(861,871)
Proceeds from new bank loans
194,100
-
Repayment of bank loans
(500,801)
(304,874)
Payment of finance leases obligations
(16,765)
(15,254)
Net cash generated from/(used in) financing activities
172,934
(940,138)
Net (decrease)/increase in cash and cash equivalents
(469,552)
81,729
Cash and cash equivalents at beginning of year
(1,006,852)
(1,088,581)
Cash and cash equivalents at end of year
(1,476,404)
(1,006,852)
Relating to:
Bank overdrafts included in creditors payable within one year
(1,476,404)
(1,006,852)
HODGE JONES & ALLEN LLP
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2024
- 13 -
1
Accounting policies
Limited liability partnership information

Hodge Jones & Allen LLP is a limited liability partnership incorporated in England and Wales. The registered office is 180 North Gower Street, London, NW1 2NB.

 

The principal activity of the limited liability partnership is the provision of legal services.

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 £.

The financial statements have been prepared under the historical cost convention, modified to include certain financial instruments at fair value. The principal accounting policies adopted are set out below.

1.2
Going concern

Patrick Allen has confirmed he will provide continued financial support, if required, for a period of at least 12 months from the date of signing the Financial Statements, subject to no change in ownership. The LLP are also in discussions with and reviewing offers received from various finance providers in order to ensure sufficient external financial support as required.

Towards the end of the year and post year end, the firm has undertaken an exercise to streamline costs within the business to improve both cash flow and profitability.

Based on the above support and reviewing profit and cash flow forecasts, the members have concluded that the LLP has adequate available cash resources to pay its debts as they fall due for the foreseeable future and, as a result, have prepared the accounts on the going concern basis.

1.3
Turnover

Turnover represents the fair value of professional services provided to clients during the period. Turnover is recognised as contract activity progresses and the right to consideration based on time spent, and expertise provided and expenses incurred, exclusive of VAT. Any unbilled work in progress is recognised and based on actual average historical recovery rate over the past 2 years.

 

Turnover in respect of contingent fee assignments is recognised once liability has been admitted. The valuation of work in progress is based on actual average historical recovery rate over the past 2 years.

1.4
Members' participating interests

Members' participation rights are the rights of a member against the LLP that arise under the members' agreement.

 

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.

HODGE JONES & ALLEN LLP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
1
Accounting policies
(Continued)
- 14 -

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.

Other amounts applied to members, for example remuneration paid under an employment contract and interest on capital balances, are treated in the same way as all other divisions of profits, as described above, according to whether the LLP has, in each case, an unconditional right to refuse payment. Amounts payable to members under employment contracts and unavoidable interest on members' capital are charged to 'Members remuneration charged as an expense' in the relevant year.

Remuneration that is paid under a contract to provide services to the LLP, which may be referred to as a contract of employment are classified within Operating Cash Flow in the cash flow statement. In addition drawings on account and distribution of profits are also classified as operating cash flows

1.5
Intangible fixed assets - goodwill

Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 10 years.

 

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

1.6
Intangible fixed assets other than goodwill

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

 

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

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:

Software licenses
25-33% straight line
Website costs
25% straight line
1.7
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.

HODGE JONES & ALLEN LLP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
1
Accounting policies
(Continued)
- 15 -

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:

Leasehold property improvements
Over the period of the lease
Fixtures, fittings & office equipment
25% straight line
Computer equipment
20-25% 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 recognised in the profit and loss account.

1.8
Fixed asset investments

Interests in subsidiaries, associates and jointly controlled entities 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.

1.9
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.

Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment annually, and whenever there is an indication that the asset may be impaired.

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.

1.10
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.

1.11
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.

HODGE JONES & ALLEN LLP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
1
Accounting policies
(Continued)
- 16 -
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.

 

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.

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 creditors, bank loans, loans from related parties and preference shares that are classified as debt, 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.

HODGE JONES & ALLEN LLP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
1
Accounting policies
(Continued)
- 17 -
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.

1.12
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.

1.13
Retirement benefits and post retirement payments to members

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

1.14
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 leased asset are consumed.

HODGE JONES & ALLEN LLP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 18 -
2
Change in accounting policy

During the year the company adopted a change in accounting policy in relation to the valuation of work in progress for contingent fee arrangement cases.

 

In the prior year, contingent fee arrangement cases were not included in work in progress until settlement was agreed, this was because historically it was deemed too judgemental to value WIP up until this point. 

 

However, once liability has been admitted, it is probable that income will be generated, and now the company uses historical recovery rates to value WIP, the revenue can now also be estimated reliably.

 

Therefore, the change in policy is now to include contingent fee arrangement cases where liability has been admitted within work in progress using actual average recovery rates based on the past 2 years.

3
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.

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.

Work in progress and accrued income

The partnership's revenue recognition policies are central to how the business values work carried out in each financial year. These policies require estimates to be made in respect of work in progress and accrued income which require assessments and judgements. Work in progress is valued based on actual average recovery rates, this is calculated based on cases settled during the previous 2 years and excludes contingent fee arrangement cases until the point that liability has been admitted.

Provisions

Provisions are recognised at the statement of financial position date at management’s best estimate of the expenditure required to settle the present obligation. The carrying amounts of provisions are regularly reviewed and adjusted for new facts or changes in law, technology or financial markets

4
Turnover

An analysis of the limited liability partnership's turnover is as follows:

2024
2023
£
£
Turnover analysed by class of business
Legal services
9,920,498
9,128,407
HODGE JONES & ALLEN LLP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
4
Turnover
(Continued)
- 19 -
2024
2023
£
£
Turnover analysed by geographical market
United Kingdom
9,920,498
9,128,407
5
Operating profit/(loss)
2024
2023
Operating profit/(loss) for the year is stated after charging:
£
£
Fees payable to the LLP's auditor for the audit of the LLP's financial statements
25,000
20,625
Depreciation of owned tangible fixed assets
89,877
81,997
Depreciation of tangible fixed assets held under finance leases
15,906
15,906
Amortisation of intangible assets
1,154,217
1,157,572
Operating lease charges
736,890
780,118
6
Employees

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

2024
2023
Number
Number
Fee earning
76
81
Administration
56
58
Total
132
139

Their aggregate remuneration comprised:

2024
2023
£
£
Wages and salaries
5,130,163
4,743,028
Social security costs
590,841
517,519
Pension costs
128,680
124,729
5,849,684
5,385,276
7
Members' remuneration
2024
2023
Number
Number
Average number of members during the year
7
7
HODGE JONES & ALLEN LLP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
7
Members' remuneration
(Continued)
- 20 -
2024
2023
Members' remuneration comprises:
£
£
Remuneration under participation rights
(817,932)
(1,006,713)
Mandatory interest payments
796,119
595,713
(21,813)
(411,000)
8
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
283,368
21,511
9
Interest payable and similar expenses
2024
2023
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
632,626
271,458
Other interest
3,755
-
636,381
271,458
10
Intangible fixed assets
Goodwill
Software licenses
Website costs
Total
£
£
£
£
Cost
At 1 May 2023 and 30 April 2024
11,115,454
37,729
92,381
11,245,564
Amortisation and impairment
At 1 May 2023
1,713,632
25,780
49,580
1,788,992
Amortisation charged for the year
1,111,544
11,949
30,724
1,154,217
At 30 April 2024
2,825,176
37,729
80,304
2,943,209
Carrying amount
At 30 April 2024
8,290,278
-
12,077
8,302,355
At 30 April 2023
9,401,822
11,949
42,801
9,456,572

On 15 October 2021, Hodge Jones & Allen LLP purchased the non-legal aid business from Hodge Jones & Allen Solicitors Limited, a company under common control, for £12,816,691 based on an external valuation. The goodwill represents the difference between the amount paid and the net assets acquired.

HODGE JONES & ALLEN LLP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 21 -
11
Tangible fixed assets
Leasehold property improvements
Fixtures, fittings & office equipment
Computer equipment
Total
£
£
£
£
Cost
At 1 May 2023
13,807
185,138
215,282
414,227
Additions
77,226
-
13,898
91,124
At 30 April 2024
91,033
185,138
229,180
505,351
Depreciation and impairment
At 1 May 2023
10,281
72,802
58,717
141,800
Depreciation charged in the year
6,410
46,285
53,088
105,783
At 30 April 2024
16,691
119,087
111,805
247,583
Carrying amount
At 30 April 2024
74,342
66,051
117,375
257,768
At 30 April 2023
3,526
112,336
156,565
272,427

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts. The depreciation charge in respect of such assets amounted to £15,906 for the year.

2024
2023
£
£
Computer equipment
37,462
53,368
12
Fixed asset investments
2024
2023
£
£
Unlisted investments
100,000
100,000

The investment represents 100% of the share capital of a dormant subsidiary, Hodge Jones & Allen Trust Corporation Limited, a company incorporated in the United Kingdom.

HODGE JONES & ALLEN LLP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 22 -
13
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
5,723,499
4,239,606
Amounts owed by members
1,101,429
-
Other debtors
500,585
16,739
Prepayments and accrued income
5,365,426
4,830,934
12,690,939
9,087,279
2024
2023
Amounts falling due after more than one year:
£
£
Other debtors
-
294,378
Total debtors
12,690,939
9,381,657

The debtor due in greater than one year in the prior year is in relation to amounts owing from Hodge Jones & Allen Solicitors Limited representing their contribution to the dilapidations provision.

14
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Bank loans and overdrafts
16
1,837,417
1,330,656
Obligations under finance leases
17
17,422
16,765
Other borrowings
16
2,722,870
886,084
Trade creditors
3,894,946
3,498,438
Other taxation and social security
492,660
596,448
Other creditors
35,396
34,452
Accruals and deferred income
1,756,213
925,323
10,756,924
7,288,166

Included in trade creditors is £3,311,260 (2023: £2,907,299) relating to disbursements for which there is a corresponding balance included within trade debtors.

HODGE JONES & ALLEN LLP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 23 -
15
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Bank loans and overdrafts
16
654,020
997,930
Obligations under finance leases
17
21,509
38,931
Other borrowings
16
1,726,253
1,854,253
2,401,782
2,891,114

Bank loans and Partner loans are secured by fixed and floating charges over the LLP's assets.

16
Loans and overdrafts
2024
2023
£
£
Bank loans
1,015,033
1,321,734
Bank overdrafts
1,476,404
1,006,852
Other loans
4,449,123
2,740,337
6,940,560
5,068,923
Payable within one year
4,560,287
2,216,740
Payable after one year
2,380,273
2,852,183

Bank overdrafts and loans are secured by fixed and floating charges over the LLP's assets.

17
Finance lease obligations
2024
2023
Future minimum lease payments due under finance leases:
£
£
Within one year
17,422
16,765
Within two and five years
21,509
38,931
38,931
55,696

Finance lease payments represent rentals payable by the limited liability partnership for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 5 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

HODGE JONES & ALLEN LLP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 24 -
18
Provisions for liabilities
2024
2023
£
£
Dilapidation provision
-
706,250

In the prior year provisions comprised the partners estimate, based on a third party report, for dilapidations on the rented office premises that may fall due at the end of the lease term. The lease expired in December 2023. A new lease was taken on the same property that had no clauses for dilapidation.

19
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
128,680
124,729

The limited liability partnership operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the limited liability partnership in an independently administered fund.

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:

2024
2023
£
£
Within one year
143,370
652,088
Between two and five years
2,648,733
30,289
In over five years
4,125,000
-
6,917,103
682,377
HODGE JONES & ALLEN LLP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 25 -
21
Related party transactions

On 15 October 2021, Hodge Jones & Allen LLP purchased the non-legal aid business from Hodge Jones & Allen Solicitors Limited, a company under common control, for a total consideration of £12,816,691 including assets, liabilities and goodwill.

 

In the year, the limited liability partnership recharged Hodge Jones & Allen Solicitors Limited for shared costs for a net amount of £3,008,584 (2023: £3,529,567).

 

At the year end, Hodge Jones & Allen Solicitors Limited owed the limited liability partnership £985,969 (2023: £33,976) in relation to recharged expenses, and £Nil (2023: £294,378) in relation to a contribution towards dilapidations due in greater than 1 year.

 

At the year end, the limited liability partnership owed Hodge Jones & Allen Solicitors Limited £426,156 (2023: £767,250) in relation to net intercompany loans.

 

The bank holds cross guarantees with Hodge Jones & Allen Solicitors Limited.

22
Members' transactions

Members of the limited liability partnership have provided guarantees as follows:

 

P Allen         £2,300,000

R Chada        £100,000

J Kunwardia    £100,000

C Wong        £100,000

A Usewicz    £100,000

L Williams    £100,000

 

All guarantees accrue interest at 5%.

 

P Allen's guarantee contains a fixed and floating charge over the assets of the partnership.

 

Other loans outstanding of £1.6m have been guaranteed by members.

23
Ultimate controlling party

The ultimate controlling party is Patrick Allen.

HODGE JONES & ALLEN LLP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 26 -
24
Cash (absorbed by)/generated from operations
2024
2023
£
£
Loss for the year
(21,813)
(411,000)
Adjustments for:
Finance costs recognised in profit or loss
636,381
271,458
Investment income recognised in profit or loss
(283,368)
(21,511)
Amortisation and impairment of intangible assets
1,154,217
1,157,572
Depreciation and impairment of tangible fixed assets
105,783
97,903
(Decrease)/increase in provisions
(706,250)
75,000
Movements in working capital:
(Increase)/decrease in debtors
(2,207,853)
376,925
Increase/(decrease) in creditors
1,124,554
(195,352)
Cash (absorbed by)/generated from operations
(198,349)
1,350,995
25
Analysis of changes in net debt
1 May 2023
Cash flows
30 April 2024
£
£
£
Bank overdrafts
(1,006,852)
(469,552)
(1,476,404)
Borrowings excluding overdrafts
(4,062,071)
(1,402,085)
(5,464,156)
Obligations under finance leases
(55,696)
16,765
(38,931)
Balances before members' debt
(5,124,619)
(1,854,872)
(6,979,491)
Loans and other debts due to members:
- Other amounts due to members
(702,379)
132,770
(569,609)
Balances including members' debt
(5,826,998)
(1,722,102)
(7,549,100)
26
Prior period adjustment
Changes to the balance sheet
As previously reported
Adjustment at 1 May 2022
Adjustment at 30 Apr 2023
As restated at 30 Apr 2023
£
£
£
£
Current assets
Amounts owed by members
2,001,964
(2,415,619)
413,655
-
Prepayments & accrued income
2,655,995
2,415,619
(157,418)
4,914,196
Net assets
8,152,151
-
256,237
8,408,388
Total members' interests
6,150,187
2,415,619
(157,418)
8,408,388
HODGE JONES & ALLEN LLP
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
26
Prior period adjustment
(Continued)
- 27 -
Changes to the profit and loss account
As previously reported
Adjustment
As restated
Period ended 30 April 2023
£
£
£
Turnover
9,369,087
(240,680)
9,128,407
Members' remuneration charged as an expense
170,320
240,680
411,000
Profit for the financial period
-
-
-
Reconciliation of changes in equity
1 May
30 April
2022
2023
£
£
Adjustments to prior year
Change in accounting policy for work in progress
2,415,619
2,258,201
Total members' interests as previously reported
7,295,222
6,150,187
Total members' interests as adjusted
9,710,841
8,408,388
Reconciliation of changes in profit for the previous financial period
2023
£
Adjustments to prior year
Change in accounting policy for work in progress
157,418
Affect on members remuneration
(157,418)
Total adjustments
-
Notes to reconciliation
Change in valuation of work in progress

During the year the company adopted a change in accounting policy in relation to the valuation of work in progress for contingent fee arrangement cases.

 

In the prior year, contingent fee arrangement cases were not included in work in progress until settlement was agreed, this was because historically it was deemed too judgemental to value WIP up until this point. 

 

However, once liability has been admitted, it is probable that income will be generated, and now the company uses historical recovery rates to value WIP, the revenue can now also be estimated reliably.

 

Therefore, the change in policy is now to include contingent fee arrangement cases where liability has been admitted within work in progress using actual average recovery rates based on the past 2 years.

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