Clarion Solicitors Limited
Registered number: 07185479
Annual report and
consolidated financial statements
For the year ended 31 May 2024
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CLARION SOLICITORS LIMITED
COMPANY INFORMATION
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Chartered Accountants & Statutory Auditor
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CLARION SOLICITORS LIMITED
CONTENTS
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Independent Auditors' Report
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Consolidated Statement of Comprehensive Income
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Consolidated Statement of Financial Position
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Company Statement of Financial Position
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Consolidated Statement of Changes in Equity
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Company Statement of Changes in Equity
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Consolidated Statement of Cash Flows
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Notes to the Financial Statements
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CLARION SOLICITORS LIMITED
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 MAY 2024
The directors present their strategic report for Clarion Solicitors Limited ("Clarion" "Group") for the year ended 31 May 2024.
During the year the principal activity of Clarion continued to be the provision of legal services.
In a competitive marketplace Clarion continues to invest in its brand, people, systems/processes and client base.
The main elements of this investment plan were put in place previously but are continuously reviewed and enhanced. Additional investments have been made during the year in IT and other technology to ensure Clarion continues to be at the forefront of these opportunities. These, along with a continued client centric approach and financial control, have enabled Clarion to record healthy levels of activity and profitability.
Clarion believes that these investments will continue to add value in the future. Clarion, through this process, has been able to enhance profitability which means it is well placed to deal with both sector and macro- economic challenges.
Principal risks and uncertainties
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As with all professional service businesses Clarion is focused on ensuring high levels of client service standards. It also recognises the need to ensure a broad portfolio of clients and sectors and continually monitors this data. Clarion is not reliant on any one sector or client and through its many service lines believes that it is in the optimal position to react positively to any changes in the UK economy.
Clarion produces a number of daily, weekly and monthly reports that enable the Management Board to make well informed and timely decisions on the future of the Group. Financial accounts are prepared monthly and form the basis for a detailed review by the Management Board.
As a result of its predominantly UK client base Clarion is not exposed to any significant foreign currency uncertainties and continues to be vigilant in light of the economic environment.
Clarion’s principal trading assets are Work In Progress ('WIP') and debtors. These are reviewed monthly to ensure that the WIP remains billable and the debt collectable. There is a documented process for valuing WIP and debt and these assets are valued in the balance sheet after provisions for WIP write downs and bad debt provisions. These provisions are based around management and lawyers assessment of collectability.
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CLARION SOLICITORS LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
Price risk
Clarion has a number of key suppliers all of whom are regularly monitored to ensure adequate provision of the service being supplied and that their offering is still competitive.
Credit risk
All new clients are credit profiled. Fee earners and credit risk staff monitor and review all outstanding credit and where appropriate issues are escalated to senior management. Outstanding and overdue debts are regularly monitored and there are clear procedures for raising early warning signs. Bad debt provisions are reviewed for adequacy on a monthly basis.
Liquidity and cashflow risk
Clarion manages its cashflow on a very frequent basis and cashflow forecasts are prepared in detail for the remainder of any financial year and then liquidity overviews are prepared for the 5 subsequent years thereafter. This regular, scheduled forecasting allows Clarion to detect pressure points or areas of commercial growth that may require subsequent additional banking support.
Financial key performance indicators
Clarion continually and closely monitors a number of key data items on a daily, weekly and monthly basis. Profitability remains the key focus of the Board, with the principal indicator being a notional version of operating profit. The Board also monitor lock up levels closely, which remain under careful and successful management, and largely remain in line with previous periods.
The business continues to grow, and the Board are delighted to report increased turnover and underlying profitability in the year under review, which is anticipated to continue in future years. As such, and as outlined above, the business continues with its planned and ongoing investment in its infrastructure, capability and people, to enable it to maintain its high standards of client service, a leading employer committed to the development of its people, but to also maximise the ongoing growth opportunity the Firm undoubtedly faces. Whilst this has temporarily impacted on the business’ profitability in the year under review, the Board believe this planned investment remains strategically essential for Clarion’s continued growth and future success.
Other key performance indicators
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Whilst reviewing the profitable impact of work already done Clarion also reviews not only the number of new clients and matters introduced to the business but also how it continues to engage with current clients. This data allows Clarion to build a picture of its future revenues.
In addition to this Clarion continues to review the market for key talent and ensures its recruitment and employee retention policies are fit for purpose.
This report was approved by the board on 31 January 2025 and signed on its behalf.
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CLARION SOLICITORS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MAY 2024
The directors present their report and the financial statements for the year ended 31 May 2024.
Directors' responsibilities statement
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The directors are responsible for preparing the Group Strategic Report, the Directors' Report and the consolidated 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 the Group and of the profit or loss of the Group for that period.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Group's financial statements and then apply them consistently;
∙make judgments 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 Group 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 the Group and to 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 the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The principal activity of the Group continued to be the provision of legal services.
The profit for the year, after taxation, amounted to £4,400,091 (2023 - £5,143,511).
During the year, the Group declared dividends of £5,753,365 (2023 - £3,542,500).
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CLARION SOLICITORS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
The directors who served during the year were:
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J M Osmotherley (resigned 31 May 2024)
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Clarion remains focused on delivering the highest levels of service and experience to its clients whilst ensuring continued improvements in processes, performance and efficiency.
Clarion has made a strong start to the current financial year, given the current economic environment, with activity significantly ahead of last year, which alongside strict control of lock up levels provides a sound base to continue to pursue the growth strategy of the business.
In the opinion of the directors Clarion has sufficient financial resources together with clearly defined performance objectives. It has the strong support of its bankers, shareholders and other providers of funds in working towards meeting its financial objectives. As a consequence, the directors believe that Clarion is well placed to manage its business risks and opportunities successfully.
The directors have a reasonable expectation that Clarion has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt a going concern basis of accounting in preparing the annual financial statements.
On 31 May 2024, the Group underwent a restructure, resulting in a new parent company, Never Ordinary Limited. The directors are satisfied that the restructure will not affect the ongoing operations of the group and therefore their assessment of going concern remains unchanged.
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CLARION SOLICITORS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
Engagement with employees
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For Clarion, employee engagement and creating an exceptional employee experience is a critical part of the business’s continued success both in terms of attracting and retaining talent and ensuring that the strong people-focused culture is maintained as it grows.
Clarion has well thought-out strategies around various employee engagement factors such as leadership, internal communication, learning and development, reward and recognition, well-being and ESG. It aims to ensure that all employees have a voice and have the opportunity to share their thoughts in a variety of ways throughout the year.
Clarion continues to maintain our award-winning culture, which was externally accredited in May 2024 with Clarion achieving a Top 10 position in the prestigious Sunday Times Best Places to Work (Big Organisations) and winning a special award with The Sunday Times for being the Best Place to Work for Young People.
Clarion maintains a keen focus on employee well-being and development. We also have a greater emphasis on diversity and inclusion within the business, with the creation of many internal initiatives which support a culture where each of our people can thrive and be their authentic selves. Diversity and inclusion has mattered to Clarion for a long time and we have made real progress in many areas, particularly with regard to gender and the high proportion of female employees. This has included ensuring we retain many talented women in the workplace through maternity returner coaching, the introduction of extensive menopause support and the joining of the Fertility Matters at work initiative.
Our commitment to diversity and inclusion extends beyond the firm with a number of external initiatives including working in a local school with the aim of increasing opportunities for social mobility in the future, which also provides volunteering opportunities for our team. We have also developed our work experience program to have a real focus on social mobility and providing opportunities for people who may otherwise not have the same opportunities to access careers in law.
Clarion is committed to ensuring that a culture free from discrimination and harassment is embedded in our culture and actively promote equality and diversity. Clarion provides equality of opportunity for all employees, irrespective of ethnic origin, religion, gender, marital status, disability, age or sexual orientation.
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CLARION SOLICITORS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
We are committed to driving the business forward for the benefit of our people, clients, and community while ensuring our actions align with our environmental and social responsibilities.
Our ESG activities and Net-Zero plan are important not only to our business but also to the expectations of our employees, prospective legal talent, and clients. Increasingly, businesses are seeking legal suppliers and supply chains that actively prioritise sustainability and have a clear Net-Zero strategy. This is a responsibility we take seriously and is firmly on our management agenda.
By empowering our people to contribute to initiatives that reduce our environmental footprint and create positive community impact, we embed sustainability into the business.
Environmental
Flotilla continue as our Net Zero Partner, their carbon accounting platform provides high level and granular visibility over our carbon usage.
In 2024 we have completed our Energy Savings Opportunity Scheme (ESOS) assessment.
Baseline footprint:
Clarion's carbon footprint for the year ended 31 May 2024 has been 're-baselined' to 764 tCO2e, or 3.6 tCO2e per FTE. This compares to the average of 5.1 tCO2e for an office-based SME. Re-baselining adjustments were made due to changes in calculation methodology by Flotilla. Over 90% of Clarion's baseline emissions were Scope 3, which continues to be the case in the most recent year.
Footprint by Scope:
91% of Clarion's baseline emissions were Scope 3 (value chain) emissions, rising to 93% in the most recent year. Scope 1 emissions (gas heating at Elizabeth House and Clarion's space within Coronet House) are now less than 1% of total emissions and have fallen in the most recent year given more accurate usage data becoming available. Scope 2 emissions from non-renewable electricity accounted for 7% of total emissions and have increased in the most recent year due to the inclusion of electricity data for Clarion's space within Coronet House.
Year on Year:
In the most recent year, there has been a 3% decrease in total emissions compared to the previous year (to 31 May 2023). This decrease is predominantly due to a fall in both Scope 1 (heating) emissions, possibly due to data improvements, and those relating to spend on technology. This was partly offset by increased emissions related to Clarion's use of restaurants/subsistence and commuting.
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CLARION SOLICITORS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
Social - our people and our community
Our people and our community are incredibly important to us. These are just some of the ways we show our commitment to both during the last financial year:
∙We remain the lead sponsor for Run For All Leeds 10k Team Challenge, and have been for over 16 year, and are the proud sponsors of the Rob Burrow Leeds Marathon to support Motor Neurone Disease. 2025 will be the third year we have supported this event;
∙We took part in the UK Corporate Games that took part in Leeds
∙Charity of employee choice is Candlelighters and over £14,852.61 has been raised to date by employees;
∙For over three years we have partnered with Dixons Trinity Chapletown school in Leeds delivering a bespoke programme of activities designed to help enable students to fulfil their potential
∙Following our commitment to become Menopause Friendly employers, we continue to enhance our access to information, guidance and support to all colleagues; and
∙Colleagues continue to take part in a wide range of volunteering activities for our charities and third parties we support and are associated with
Governance
We maintain strong corporate governance practices promoting strong leadership, transparency and proactive risk management. We are building a resilient business with high ethical standards that promotes a culture of integrity.
Points of note for 2023/2024:
∙Clarion is proud to be a Real Living Wage employer and has been for a number of years now. There are now 15,000 Living Wage Employers in the UK who are choosing to pay the Real Living Wage to provide employees and their families with greater security and stability
∙We maintain our Cyber Essentials Plus accreditation; and
∙We maintain a comprehensive programme of compliance training for everyone and continue to invest in our internal risk and compliance team.
Disclosure of information to auditors
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Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
∙so far as the director is aware, there is no relevant audit information of which the Company and the Group's auditors are unaware, and
∙the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company and the Group's auditors are aware of that information.
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CLARION SOLICITORS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
Post balance sheet events
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There have been no significant events affecting the Group since the year end.
The auditors, Forvis Mazars LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board on 31 January 2025 and signed on its behalf.
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CLARION SOLICITORS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CLARION SOLICITORS LIMITED
Opinion
We have audited the financial statements of Clarion Solicitors Limited (the ‘Parent Company’) and its subsidiaries (the ‘Group’) for the year ended 31 May 2024 which comprise Consolidated Statement of Comprehensive Income, the Consolidated and Company Statement of Financial Position, the Consolidated and Company Statement of Changes in Equity, the Consolidated Statement of Cash Flows and notes to the financial statements, including a summary of significant accounting policies.
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (United Kingdom Generally Accepted Accounting Practice).
In our opinion, the financial statements:
∙give a true and fair view of the state of the Group's and of the Parent Company’s affairs as at 31 May 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.
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 Group and the Parent 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 Group's nor Parent 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.
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 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.
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CLARION SOLICITORS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CLARION SOLICITORS LIMITED
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 the audit:
∙the information given in the Group 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 Group Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In light of the knowledge and understanding of the Group and the Parent Company and their environment obtained in the course of the audit, we have not identified material misstatements in the Group 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 by the Parent Company, or returns adequate for our audit have not been received from branches not visited by us; or
∙the Parent Company financial statements are not in agreement with the accounting records and returns; or
∙certain disclosures of directors' remuneration specified by law are not made; or
∙we have not received all the information and explanations we require for our audit.
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CLARION SOLICITORS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CLARION SOLICITORS LIMITED
Responsibilities of Directors
As explained more fully in the Directors' Responsibilities Statement set out on page 3, 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 Group's and the Parent 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 intend either to liquidate the Group or the Parent 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.
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.
Based on our understanding of the Group and the Parent Company and their industry, we considered that noncompliance with the following laws and regulations might have a material effect on the financial statements: employment regulation, health and safety regulation and non compliance with anti-money laundering regulation.
To help us identify instances of non-compliance with these laws and regulations, and in identifying and assessing the risks of material misstatement in respect to non-compliance, our procedures included, but were not limited to:
∙Inquiring of management and, where appropriate, those charged with governance, as to whether the Group and Parent Company is in compliance with laws and regulations, and discussing their policies and procedures regarding compliance with laws and regulations;
∙Inspecting correspondence, if any, with relevant licensing or regulatory authorities;
∙Communicating identified laws and regulations to the engagement team and remaining alert to any indications of non-compliance throughout our audit; and
∙Considering the risk of acts by the Group and the Parent Company which were contrary to applicable laws and regulations, including fraud.
We also considered those laws and regulations that have a direct effect on the preparation of the financial
statements, such as tax legislation, pension legislation and the Companies Act 2006.
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CLARION SOLICITORS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CLARION SOLICITORS LIMITED
In addition we evaluated the directors' and management’s incentives and opportunities for fraudulent manipulation of the financial statements including the risk of management override of controls and determined that the principal risks related to the posting of manual journal entries to manipulate financial performance, management bias through judgements and assumptions in significant accounting estimates, revenue recognition (which we pinpointed to the cut-off assertion) and significant one-off or unusual transactions.
Our audit procedures in relation to fraud included but were not limited to:
∙Making enquiries of the directors and management on whether they had knowledge of any actual, suspected or alleged fraud;
∙Gaining an understanding of the internal controls established to mitigate risks related to fraud;
∙Discussing amongst the engagement team the risks of fraud; and
∙Addressing the risks of fraud through management override of controls by performing journal entry testing.
There are inherent limitations in the audit procedures described above and the primary responsibility for the prevention and detection of irregularities including fraud rests with management. As with any audit, there remained a risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal controls.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Use of the audit 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.
Stephen English (Senior Statutory Auditor)
for and on behalf of
Forvis Mazars LLP
Chartered Accountants and Statutory Auditor
6 Dominus Way
Meridian Business Park
Leicester
LE19 1RP
31 January 2025
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CLARION SOLICITORS LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MAY 2024
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Interest receivable and similar income
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Interest payable and similar expenses
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Profit for the financial year
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There were no recognised gains and losses for 2024 or 2023 other than those included in the consolidated statement of comprehensive income.
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There was no other comprehensive income for 2024 (2023:£NIL).
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The notes on pages 21 to 40 form part of these financial statements.
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CLARION SOLICITORS LIMITED
REGISTERED NUMBER: 07185479
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 MAY 2024
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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Provisions for liabilities
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Capital redemption reserve
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The financial statements were approved and authorised for issue by the board and were signed on its behalf on 31 January 2025.
The notes on pages 21 to 40 form part of these financial statements.
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CLARION SOLICITORS LIMITED
REGISTERED NUMBER: 07185479
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 MAY 2024
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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Provisions for liabilities
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Capital redemption reserve
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Profit and loss account carried forward
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CLARION SOLICITORS LIMITED
REGISTERED NUMBER: 07185479
COMPANY STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 MAY 2024
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements. The profit after tax of the Company for the year was £4,423,232 (2023: £5,144,354).
The financial statements were approved and authorised for issue by the board and were signed on its behalf on 31 January 2025.
The notes on pages 21 to 40 form part of these financial statements.
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CLARION SOLICITORS LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MAY 2024
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Capital redemption reserve
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Comprehensive income for the year
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Total comprehensive income for the year
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Contributions by and distributions to owners
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Dividends: Equity capital
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Comprehensive income for the year
|
|
|
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|
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|
Total comprehensive income for the year
|
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|
|
Contributions by and distributions to owners
|
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|
Dividends: Equity capital
|
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The notes on pages 21 to 40 form part of these financial statements.
|
- 17 -
|
CLARION SOLICITORS LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MAY 2024
|
|
Capital redemption reserve
|
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|
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|
|
Comprehensive income for the year
|
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|
|
|
|
Total comprehensive income for the year
|
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|
Contributions by and distributions to owners
|
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|
Dividends: Equity capital
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Comprehensive income for the year
|
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|
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|
Total comprehensive income for the year
|
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|
|
|
Contributions by and distributions to owners
|
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|
|
|
Dividends: Equity capital
|
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The notes on pages 21 to 40 form part of these financial statements.
|
- 18 -
|
CLARION SOLICITORS LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MAY 2024
Cash flows from operating activities
|
|
|
Profit for the financial year
|
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|
|
|
Amortisation of intangible assets
|
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Depreciation of tangible assets
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Increase/(decrease) in creditors
|
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(Decrease)/increase in provisions
|
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Net cash generated from operating activities
|
|
|
- 19 -
|
CLARION SOLICITORS LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
|
|
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|
Cash flows from investing activities
|
|
|
Purchase of intangible fixed assets
|
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|
Purchase of tangible fixed assets
|
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Sale of tangible fixed assets
|
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Net cash used in investing activities
|
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Cash flows from financing activities
|
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|
Net cash used in financing activities
|
|
|
Net increase/(decrease) in cash and cash equivalents
|
|
|
Cash and cash equivalents at beginning of year
|
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|
Cash and cash equivalents at the end of year
|
|
|
|
|
|
Cash and cash equivalents at the end of year comprise:
|
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|
- 20 -
|
CLARION SOLICITORS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
Clarion Solicitors Limited is a private company, limited by shares, registered in England and Wales, registration number 07185479. The company is incorporated in the United Kingdom. The registered office is Elizabeth House, 13-19 Queen Street, Leeds, West Yorkshire, LS1 2TW.
2.Accounting policies
|
|
Basis of preparation of financial statements
|
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgment in applying the Group's accounting policies (see note 3).
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements.
The following principal accounting policies have been applied:
The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Statement of Financial Position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Statement of Comprehensive Income from the date on which control is obtained. They are deconsolidated from the date control ceases.
|
|
Financial Reporting Standard 102 - reduced disclosure exemptions
|
The Parent Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
∙the requirements of Section 7 Statement of Cash Flows;
∙the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
∙the requirements of Section 33 Related Party Disclosures paragraph 33.7.
- 21 -
|
CLARION SOLICITORS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
2.Accounting policies (continued)
In the opinion of the directors Clarion has sufficient financial resources together with clearly defined performance objectives. It has the strong support of its bankers, shareholders and other providers of funds in working towards meeting its financial objectives. As a consequence, the directors believe that Clarion is well placed to manage its business risks and opportunities successfully.
The directors have a reasonable expectation that Clarion has adequate resources to continue in operational existence for the foreseeable future. Thus they continue to adopt a going concern basis of accounting in preparing the annual financial statements.
On 31 May 2024, the Group underwent a restructure, resulting in a new parent company, Never Ordinary Limited. The directors are satisfied that the restructure will not affect the ongoing operations of the group and therefore their assessment of going concern remains unchanged.
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:
Rendering of services
Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
∙the amount of revenue can be measured reliably;
∙it is probable that the Group will receive the consideration due under the contract;
∙the stage of completion of the contract at the end of the reporting period can be measured reliably; and
∙the costs incurred and the costs to complete the contract can be measured reliably.
- 22 -
|
CLARION SOLICITORS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
2.Accounting policies (continued)
Goodwill
Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, Goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight line basis over its useful economic life. Amortisation charges are expensed to administrative expenses within the Statement of Comprehensive Income.
Goodwill is amortised over a period of between five and fifteen years.
Other intangible assets
Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
Development expenditure is considered to have a useful economic life of 5 years and is amortised on a straigth line basis.
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
At each reporting date the Group assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
- 23 -
|
CLARION SOLICITORS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
2.Accounting policies (continued)
Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.
Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.
Investments in subsidiaries are measured at cost less accumulated impairment.
Work in progress is valued at the net realisable value of unbilled time after considering the stage of completion of matters and after making due provision where there is sufficient uncertainty about whether amounts will be recovered.
Short term debtors are measured at transaction price, less any impairment
|
|
Cash and cash equivalents
|
Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours.
The Group only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, and loans to/from related parties.
Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
- 24 -
|
CLARION SOLICITORS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
2.Accounting policies (continued)
|
|
Foreign currency translation
|
Functional and presentation currency
The Group's functional and presentational currency is GBP.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.
Defined contribution pension plan
The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payments obligations.
The contributions are recognised as an expense in the Statement of Comprehensive Income when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of Financial Position. The assets of the plan are held separately from the Group in independently administered funds.
Interest income is recognised in profit or loss using the effective interest method.
All borrowing costs are recognised in profit or loss in the year in which they are incurred.
- 25 -
|
CLARION SOLICITORS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
2.Accounting policies (continued)
|
|
Provisions for liabilities
|
Provisions are recognised when an event has taken place that gives rise to a legal or constructive obligation, a transfer of economic benefits is probable and a reliable estimate can be made.
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
Increases in provisions are generally charged as an expense to profit or loss.
|
|
Current and deferred taxation
|
The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company and the Group operate and generate income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the reporting date, except that:
∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits;
∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met; and
∙Where they relate to timing differences in respect of interests in subsidiaries, associates, branches and joint ventures and the Group can control the reversal of the timing differences and such reversal is not considered probable in the foreseeable future.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.
- 26 -
|
CLARION SOLICITORS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
2.Accounting policies (continued)
In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research shall be recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured. The capitalised development costs are subsequently amortised on a straight-line basis over their useful economic lives, which range from 3 to 6 years.
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.
|
Judgements in applying accounting policies and key sources of estimation uncertainty
|
Critical judgements in applying the Group’s accounting policies
The critical judgements that the directors have made in the process of applying the Group’s accounting policies that have the most significant effect on the amounts recognised in the statutory financial statements are discussed below.
(i) Assessing indicators of impairment
In assessing whether there have been any indicators of impairment assets, the directors have considered both external and internal sources of information such as market conditions, counterparty credit ratings and experience of recoverability and where applicable, the ability of the asset to be operated as planned. There have been no indicators of impairments identified during the current financial year.
Key sources of estimation uncertainty
The key assumptions concerning the future, and other key sources of estimation uncertainty, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
(ii) Recoverability of debtors and work in progress
The Group establishes a provision for all debtors and work in progress amounts that are estimated not to be recoverable either in full or in part. When assessing recoverability the directors have considered factors such as the aging of the receivables, past experience of recoverability, and the credit profile of individual or groups of clients.
|
All turnover arose within the United Kingdom and is applicable to the principal activity of the Group.
|
- 27 -
|
CLARION SOLICITORS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
|
|
|
The operating profit is stated after charging:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation of tangible fixed assets
|
|
|
|
Amortisation of intangible assets including goodwill
|
|
|
|
Other operating lease rentals
|
|
|
|
|
|
During the year, the Group obtained the following services from the Company's auditors:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fees payable to the Company's auditors for the audit of the consolidated and parent Company's financial statements
|
|
|
|
|
|
Staff costs, including directors' remuneration, were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Defined contribution pension cost - support staff
|
|
|
|
Defined contribution pension scheme - fee earners
|
|
|
|
|
|
|
|
|
|
|
|
The average monthly number of employees, including the directors, during the year was as follows:
|
- 28 -
|
CLARION SOLICITORS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
|
During the year retirement benefits were accruing to no directors (2023 - 3) in respect of defined contribution pension schemes.
|
|
The highest paid director received remuneration, excluding pension contributions, of £124,186 (2023 - £141,291) during the year.
|
|
The value of the Group's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £NIL (2023 - £500) during the year.
|
|
Interest payable and similar expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other loan interest payable
|
|
|
|
|
|
|
- 29 -
|
CLARION SOLICITORS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
|
|
|
|
|
Current tax on profits for the year
|
|
|
|
Adjustments in respect of previous periods
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Origination and reversal of timing differences
|
|
|
|
Effect of tax rate changes on opening balances
|
|
|
|
|
|
|
|
|
|
|
|
Taxation on profit on ordinary activities
|
|
|
|
Factors affecting tax charge for the year
|
|
The tax assessed for the year is higher than (2023 - higher than) the standard rate of corporation tax in the UK of25% (2023 -20%). The differences are explained below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit on ordinary activities before tax
|
|
|
|
Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2023 - 20%)
|
|
|
|
|
|
|
|
Expenses not deductible for tax purposes
|
|
|
|
|
|
|
|
Adjustments to tax charge in respect of prior periods
|
|
|
|
Adjustments to tax charge in respect of prior periods - deferred tax
|
|
|
|
Remeasurement of deferred tax for changes in tax rates
|
|
|
|
|
|
|
|
Total tax charge for the year
|
|
|
- 30 -
|
CLARION SOLICITORS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
|
Dividends paid to Ordinary 1 shareholders
|
|
|
|
Dividends paid to Ordinary A shareholders
|
|
|
|
Dividends paid to Ordinary 2 shareholders
|
|
|
|
Dividends paid to Ordinary 3 shareholders
|
|
|
|
|
|
|
- 31 -
|
CLARION SOLICITORS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
13.Intangible assets (continued)
- 32 -
|
CLARION SOLICITORS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
- 33 -
|
CLARION SOLICITORS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
14.Tangible fixed assets (continued)
- 34 -
|
CLARION SOLICITORS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
|
|
Investments in subsidiary undertakings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subsidiaries undertakings
|
|
The following were subsidiary undertakings of the Company:
|
|
|
|
|
|
|
Clarion Trust Corporation Limited
|
Elizabeth House, 13-19 Queen Street, Leeds West Yorkshire, LS1 2TW
|
|
|
|
|
Elizabeth House, 13-19 Queen Street, Leeds West Yorkshire, LS1 2TW
|
|
|
- 35 -
|
CLARION SOLICITORS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts owed by group undertakings
|
|
|
|
|
|
|
|
|
|
|
|
Prepayments and accrued income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The balances owed by group undertakings are interest free and repayable on demand.
|
|
Cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- 36 -
|
CLARION SOLICITORS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
|
Creditors: Amounts falling due within one year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments received on account
|
|
|
|
|
|
|
|
|
|
|
|
Amounts owed to group undertakings
|
|
|
|
|
|
Amounts owed to other participating interests
|
|
|
|
|
|
|
|
|
|
|
|
Other taxation and social security
|
|
|
|
|
|
|
|
|
|
|
|
Accruals and deferred income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The balances owed to group undertakings are interest free and repayable on demand.
Included within other loans is a balance of £1,049,999 relating to a trade finance loan which is repayable in installements and accrues interest at a rate of 5%.
The Company has an available bank overdraft facility with HSBC Bank Plc who hold a fixed and floating charge over all the of the present and future assets of the Company.
|
|
Creditors: Amounts falling due after more than one year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accruals and deferred income
|
|
|
|
|
|
|
|
|
|
|
- 37 -
|
CLARION SOLICITORS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charged to profit or loss
|
|
|
|
|
|
|
|
Fixed asset timing differences
|
|
|
|
|
|
Short term timing differences
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charged to profit or loss
|
|
|
|
|
- 38 -
|
CLARION SOLICITORS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
|
|
Authorised, allotted, called up and fully paid
|
|
|
|
|
|
|
|
|
|
440 (2023 - 440) Ordinary 1 shares of £1.00 each
|
|
|
|
|
Nil (2023 - 44) Ordinary A shares of £1.00 each
|
|
|
|
|
60 (2023 - 60) Ordinary 2 shares of £1.00 each
|
|
|
|
|
50 (2023 - 100) Ordinary 3 shares of £1.00 each
|
|
|
|
|
Nil (2023 - 100) Ordinary B shares of £1.00 each
|
|
|
|
|
50 (2023 - Nil) Ordinary 4 shares of £1.00 each
|
|
|
|
|
|
|
|
|
|
|
|
|
|
On 3 April 2024 the Company subdivided the 100 Ordinary 3 shares of £1.00 each into 50 Ordinary 3 shares of £1.00 each and 50 Ordinary 4 shares of £1.00 each.
On 31 May 2024 the Company repurchased 44 Ordinary A shares at their nominal value of £44 and 100 Ordinary B shares at their nominal value of £100.
The holders of the Ordinary 1, Ordinary 2, Ordinary 3 and Ordinary 4 shares are entitled to attend and vote at general meetings, receive dividends and participate in a distribution in the event of the winding up of the Company. The shares are not redeemable.
|
Capital redemption reserve
The balance of the capital redemption reserve represents the cumulative repurchase of Ordinary A shares.
Profit and loss account
This reserve represents cumulative profits and losses less dividends paid. The full reserve is available for distribution.
- 39 -
|
CLARION SOLICITORS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
The Group operates a defined contributions pension scheme. The assets of the scheme are held separate from those of the Group in an independently administered fund. The pension cost charge represents contributions payable by the Group to the fund and amounted to £1,826,600 (2023 - £1,280,493). Contributions totalling £161,805 (2023 - £119,975) were payable to the fund at the balance sheet date and are included in creditors.
|
Commitments under operating leases
|
|
At 31 May 2024 the Group and the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Later than 1 year and not later than 5 years
|
|
|
|
|
|
|
|
Post balance sheet events
|
There have been no significant events affecting the Group since year end.
|
Related party transactions
|
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During the year, Clarion Solicitors Limited paid dividends of £5,753,365 (2023 - £3,542,500) including £5,603,365 (2023 - £3,392,500) paid to the directors of the Company.
The Group has received loans from the directors and shareholders of the Company. Amounts totalling £2,359,684 (2023 - £2,268,629) were owed to the shareholders at the balance sheet date which includes £2,093,076 (2023 - £2,041,176) owed to the directors of the Group.
At the balance sheet date the Group is owed £Nil (2023 - £699,517) by directors by virtue of their loan accounts.
During the year the Group entered into transactions with related parties by virtue of a common directorship. During the year the Group paid £10,250 (2023 - £10,133) in quarterly partnership fees. There were no amounts outstanding in respect of these sales or purchases in the current or prior year.
The Group has taken advantage of the exemption conferred by FRS 102 Section 33 not to disclose transactions with wholly owned members of the Group.
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Immediate and ultimate parent undertaking and controlling party
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The Company's immediate parent undertaking is Never Ordinary Limited, a company registered in England and Wales. The Directors are of the opinion there is no ultimate controlling party.
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