Company Registration No. 09067468 (England and Wales)
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
PATHFINDER LEGAL SERVICES LIMITED
COMPANY INFORMATION
Directors
Mr T Kelly
Professor S Mayson
Mr A Shufflebotham
(Appointed 15 December 2023)
Mr M Coiffait
(Appointed 27 September 2024)
Company number
09067468
Registered office and
Floor 3, Pathfinder House
Huntingdon office
St. Marys Street
Huntingdon
PE29 3TN
Northampton office
1 Angel Square
Angel Street
Northampton
NN1 1ED
Shefford office
Priory House
Monks Walk
Chicksands
Shefford
SG17 5TQ
Auditor
Ensors Accountants LLP
Incubator 2
The Boulevard, Enterprise Campus
Alconbury Weald
Huntingdon
PE28 4XA
PATHFINDER LEGAL SERVICES LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Directors' responsibilities statement
5
Independent auditor's report
6 - 8
Profit and loss account
9
Statement of comprehensive income
10
Balance sheet
11
Statement of changes in equity
12
Statement of cash flows
13
Notes to the financial statements
14 - 32
PATHFINDER LEGAL SERVICES LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 1 -

Executive Director foreword to the Annual Report for the year ended 31 March 2024

Business model

The business model of the firm remains the same as it has been in previous years.

 

Pathfinder Legal Services Limited (‘the company’) provides expert legal advice tailored to the public and not-for-profit sectors. The company aims to charge lower legal fees than other private sector options and to recruit high-quality lawyers by providing a rewarding work environment, in terms of quality of work, operational efficiencies, working benefits and remuneration.

 

Owned by two local authorities, the company aims to provide cost-effectiveness to its clients through increased specialisation, capacity, and economies of scale - enabling high productivity and greater employee skills.

 

The key challenge

As in previous years, local authority budgets continue to be very strained, with enormous pressure on local authorities and public sector bodies to make significant savings and to work within reduced budgets. In addition, the employment market continues to be hugely challenging, especially within the local government and the legal sectors - there remains a limited pool of talent which drives ever increasing costs. As a result, local authorities are seeking to derive better value for money from their legal advisors - in simple terms better legal services for the same or lower cost. The model developed by the company continues to draw on elements of a commercial “private practice” model in its performance management and business-like culture/processes, but retains key elements of an in-house legal team, such as client ownership and overall, although not operational, control. The ability to call on the company’s services on an “as-needed” basis provides comfort to public sector organisations who may sometimes need additional legal capacity but cannot justify further permanent or locum staff.

 

Management and governance

The company operates on a hybrid working pattern, with not less than two days in office attendance per week, one of which involves a weekly team meeting, and a successful mixture of in-person and virtual board, client, and management team meetings.

 

Two of the shareholders of the company, West Northamptonshire Council and North Northamptonshire Council left the company in the year. The exit was dealt with in a managed way with no adverse impact on the finances of the company.

 

The Executive Director of the business, Debbie Carter-Hughes, left the company at the end of 2023, replaced at the beginning of December 2023 by Andrew Shufflebotham.

Principal risks and uncertainties

Information technology - in October 2023, the company suffered a significant external IT issue which had an immediate and lasting impact on the ability of the fee earners to record their chargeable time properly and adequately. While the initial incident was dealt with quickly, the ongoing adverse effect on time recording, which lasted until a change of system was implemented in February 2024 (see below), caused a loss of income to the company of more than £500,000. A new, cloud based, case management system and finance software package was launched across the business in February 2024 and the company has been advised that this will avoid any repeat of a significant IT outage, as experienced in October 2023.

 

Employment Challenges - recruiting experienced local government lawyers in all service areas remains a challenge across the market. The ability for individuals to work remotely for other organisations has also limited the number of available applicants, with salaries and career progression being key factors for such candidates. The company, along with all local authority and private sector legal teams, continues to face issues with recruitment and retention of staff.

 

Revenue and costs: the company produces detailed budgets and cashflow forecasts. Management reviews actual numbers against the budget regularly.

 

Operational risks: the company maintains and regularly reviews a risk register.

PATHFINDER LEGAL SERVICES LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 2 -

Compliance with regulations and standards: the company reviews compliance with regulations regularly, investigating and taking corrective action as needed. The company is regulated by the Solicitors Regulation Authority and holds the Law Society Lexcel accreditation.

 

Client and supplier management: the company has procedures in place to manage relationships with key clients and suppliers.

 

People management: the company has extensive people management procedures, covering recruitment, retention, and development.

 

Liquidity risk: The company reviews cash balances daily and produces regular cash flow analyses.

 

Growth

The company continues to deal with large volumes of work and continues to see instructions on cases becoming more complex in nature. Instructions in the social care field in particular have continued to increase during the year. The number of staff the company employs has remained consistent, and the company has continued to invest in its staff in relation to training and development. The company has seen further instructions from new external clients and is looking to expand on that element of the business in the future, to continue to develop its client base further.

Financial results

2023/24 has seen revenue decrease slightly from £11,778,727 to £11,655,078 and a loss after tax of £446,296 compared to the previous year's profit of £205,713.

 

As stated above, the in-year loss was almost entirely caused by the loss of income resulting from the IT failure in October 2023, referred to above.

 

As the business remains busy, with no obvious drop off in work and with a settled employee population, the company expects to return to profit in 2024/25.

On behalf of the board

Mr A Shufflebotham
Director
24 March 2025
PATHFINDER LEGAL SERVICES LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 3 -

The directors present their annual report and financial statements for the year ended 31 March 2024.

Principal activities

The principal activity of the company is to deliver and supply timely, flexible and effective legal services to the public sector and not for profit clients including its shareholders.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

Mr C Warboys
(Resigned 28 June 2024)
Mr T Kelly
Mrs D Carter-Hughes
(Resigned 1 January 2024)
Professor S Mayson
Mr M Dickenson
(Resigned 3 December 2023)
Mr A Shufflebotham
(Appointed 15 December 2023)
Mr M Coiffait
(Appointed 27 September 2024)
Financial instruments
Treasury operations and financial instruments

The company's principal financial instruments include debt and loans from participating interests, the main purpose of which is to raise finance for the company's operations. The company has various other financial assets and liabilities such as trade receivables and trade payables arising directly from its operations.

Liquidity risk

The company manages its cash and borrowing requirements in order to maximise interest income and minimise interest expense, whilst ensuring the company has sufficient liquid resources to meet the operating needs of the business.

Credit risk

Investments of cash surpluses, borrowings and derivative instruments are made through banks and companies which must fulfil credit rating criteria approved by the Board.

 

All customers who wish to trade on credit terms are subject to credit verification procedures. Trade debtors are monitored on an ongoing basis and provision is made for doubtful debts where necessary.

Future developments

Our overarching objective is to deliver more financial and other benefits to shareholders and clients through exploitation of increased economies of scale and any other mechanism that we find to release benefits for our owners and our clients.

Auditor

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

PATHFINDER LEGAL SERVICES LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 4 -
Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

This report has been prepared in accordance with the provisions applicable to companies entitled to the small companies exemption.

On behalf of the board
Mr A Shufflebotham
Director
24 March 2025
PATHFINDER LEGAL SERVICES LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MARCH 2024
- 5 -

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law, the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period.

In preparing these financial statements, the directors are required to:

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

PATHFINDER LEGAL SERVICES LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF PATHFINDER LEGAL SERVICES LIMITED
- 6 -
Opinion

We have audited the financial statements of Pathfinder Legal Services Limited (the 'company') for the year ended 31 March 2024 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity, 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 company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

 

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

PATHFINDER LEGAL SERVICES LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF PATHFINDER LEGAL SERVICES LIMITED (CONTINUED)
- 7 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report and 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:

 

Responsibilities of directors

As explained more fully in the Directors' Responsibilities Statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

Our audit was designed to include tests of detail together with an assessment of the control environment to enable us to obtain reasonable assurance about whether the financial statements are free from material misstatement due to fraud.

In planning and designing our audit procedures we assessed the risks of material misstatement due to fraud. Our assessment concluded that the areas of highest risk are non-compliance with laws and regulations and management override of controls.

We obtained an understanding of the legal and regulatory frameworks that the company operates in through discussions with management, and from our commercial knowledge and experience of the sector in which the company operates. This enabled us to identify the key laws and regulations applicable to the company. We focussed on specific laws and regulations which we considered may have a direct impact on the financial statements including the Companies Act 2006, taxation legislation, data protection, anti-bribery and employment laws.

All team members were informed of the relevant laws and regulations and potential fraud risks at the planning stage and reminded to remain alert to any indications of fraud or non-compliance.

In addressing the risk of fraud through management override of controls we have tested the appropriateness of journal entries and other adjustments, assessing whether the judgements made in making accounting estimates are indicative of potential bias and evaluating the rationale of any significant transactions that appear unusual or outside the normal course of business.

Material misstatements that arise due to fraud can be harder to detect then those that arise from error as they are likely in involve deliberate concealment or collusion.

PATHFINDER LEGAL SERVICES LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF PATHFINDER LEGAL SERVICES LIMITED (CONTINUED)
- 8 -

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 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.

Barry Gostling (Senior Statutory Auditor)
For and on behalf of Ensors Accountants LLP, Statutory Auditor
Chartered Accountants
Incubator 2
The Boulevard, Enterprise Campus
Alconbury Weald
Huntingdon
PE28 4XA
25 March 2025
PATHFINDER LEGAL SERVICES LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 MARCH 2024
- 9 -
2024
2023
Notes
£
£
Turnover
3
11,655,078
11,778,727
Cost of sales
(9,241,806)
(8,799,248)
Gross profit
2,413,272
2,979,479
Administrative expenses
(3,006,191)
(2,687,430)
Operating (loss)/profit
4
(592,919)
292,049
Interest receivable and similar income
7
56,210
-
Interest payable and similar expenses
8
(39,442)
(38,373)
(Loss)/profit before taxation
(576,151)
253,676
Tax on (loss)/profit
9
129,855
(47,963)
(Loss)/profit for the financial year
(446,296)
205,713

The profit and loss account has been prepared on the basis that all operations are continuing operations.

PATHFINDER LEGAL SERVICES LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2024
- 10 -
2024
2023
£
£
(Loss)/profit for the year
(446,296)
205,713
Other comprehensive income
-
-
Total comprehensive income for the year
(446,296)
205,713
PATHFINDER LEGAL SERVICES LIMITED
BALANCE SHEET
AS AT 31 MARCH 2024
31 March 2024
- 11 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
10
8,690
56,189
Current assets
Debtors
11
4,796,602
3,833,938
Cash at bank and in hand
339,698
710,694
5,136,300
4,544,632
Creditors: amounts falling due within one year
12
(2,908,781)
(1,680,816)
Net current assets
2,227,519
2,863,816
Total assets less current liabilities
2,236,209
2,920,005
Creditors: amounts falling due after more than one year
13
(812,500)
(1,050,000)
Net assets
1,423,709
1,870,005
Capital and reserves
Called up share capital
17
950,000
1,425,000
Capital redemption reserve
18
475,000
-
0
Profit and loss reserves
(1,291)
445,005
Total equity
1,423,709
1,870,005
The financial statements were approved by the board of directors and authorised for issue on 24 March 2025 and are signed on its behalf by:
Mr A Shufflebotham
Director
Company Registration No. 09067468
PATHFINDER LEGAL SERVICES LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2024
- 12 -
Share capital
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 April 2022
1,425,000
-
0
239,292
1,664,292
Year ended 31 March 2023:
Profit and total comprehensive income
-
-
205,713
205,713
Balance at 31 March 2023
1,425,000
-
0
445,005
1,870,005
Year ended 31 March 2024:
Loss and total comprehensive income
-
-
(446,296)
(446,296)
Redemption of shares
17
(475,000)
475,000
-
0
-
0
Balance at 31 March 2024
950,000
475,000
(1,291)
1,423,709
PATHFINDER LEGAL SERVICES LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2024
- 13 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash absorbed by operations
22
(343,298)
(339,680)
Interest paid
(39,442)
(38,373)
Income taxes paid
(35,318)
(74,666)
Net cash outflow from operating activities
(418,058)
(452,719)
Investing activities
Purchase of tangible fixed assets
(9,148)
(57,850)
Interest received
56,210
-
0
Net cash generated from/(used in) investing activities
47,062
(57,850)
Net decrease in cash and cash equivalents
(370,996)
(510,569)
Cash and cash equivalents at beginning of year
710,694
1,221,263
Cash and cash equivalents at end of year
339,698
710,694
PATHFINDER LEGAL SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
- 14 -
1
Accounting policies
Company information

Pathfinder Legal Services Limited is a private company limited by shares incorporated in England and Wales. The registered office is Floor 3, Pathfinder House, St Marys Street, Huntingdon, PE29 3TN. The company registration number is 09067468.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

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

1.2
Going concern

At 31 March 2024, the company’s balance sheet showed an overall net assets position. The company's shareholders have also confirmed that they intend to support the company for a period of at least 12 months from the approval of the financial statements and have agreed to subordinate all existing loans, overdrafts and other amounts payable.true

This combined with forecasts of profitability gives the Directors no reason to doubt that the company will continue in operational existence for the foreseeable future. Thus, the Directors continue to adopt the going concern basis of accounting in preparing the financial statements.

1.3
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for services provided in the normal course of business, and is shown net of VAT and other sales related taxes.

 

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

Revenue from contracts for the provision of professional services is recognised to the extent that it is probable that the economic benefits will flow to the company 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:

 

Recognition occurs when the right to consideration has been obtained through performance under each contract. Consideration accrues as activity progresses by reference to the value of the work performed. Unbilled revenue is included in work-in-progress. Revenue is not recognised where the right to receive payment is contingent on· events outside the control of the company.

1.4
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

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

Fixtures, fittings & equipment
Straight line over 4 years
Computer equipment
Straight line over 4 years
PATHFINDER LEGAL SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 15 -

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

1.5
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.6
Cash and cash equivalents

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

1.7
Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

 

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

Basic financial assets

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

PATHFINDER LEGAL SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 16 -
Classification of financial liabilities

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

Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from participating interests 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.

1.8
Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

1.9
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

PATHFINDER LEGAL SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 17 -
1.10
Employee benefits

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

 

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

 

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

 

The company’s employees are members of a number of group wide defined benefit pension plans administered by the relevant authorities Pension Services and a part of the Local Government Pension Fund. The net defined benefit cost of the plan is charged to participating entities on the following basis: Actuarial valuation of the liability as at the year end.

 

Up until 31 March 2014 the pension scheme provided benefits based on final salary and length of service on retirement. Changes came into effect from 1 April 2014 and any benefits accrued from this date are based on career average revalued salary, with various protections in place for those members in the scheme before the changes take effect. The assets of the scheme are held separately from those of the company in an independently administered fund. Pension scheme assets are measured using fair values. Pension scheme liabilities are measured using a projected unit method and discounted at the current rate of return on a high quality corporate bond of equivalent term and currency to the liability. The pension scheme surplus (to the extent that it is recoverable) or deficit is recognised in full.

 

If the scheme is in deficit, this will be recognised as a liability on the Balance Sheet. A pension scheme asset will only be recognised to the extent that it is deemed to be recoverable.

 

It has been agreed with Cambridgeshire County Council that they will provide an indemnity in respect of the pension obligations of the company. The Admission Agreement between the company, the Bedford Pension Fund and Central Bedfordshire Council contains a similar undertaking from Central Bedfordshire Council.

 

The indemnity provided by the Councils will be recognised as an asset on the Balance Sheet. his asset will always be equal and opposite to the pension liability and is presented within other debtors.

 

The reimbursement asset is treated similarly to a plan asset, interest income is calculated by multiplying the asset at the start of the period with the market yield on high quality corporate bonds and recognised in interest receivable.

 

The Councils’ indemnity of the pension deficits supports the preparation of the financial statements on a going concern basis.

1.11
Leases

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

PATHFINDER LEGAL SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 18 -
2
Judgements and key sources of estimation uncertainty

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

 

Bad debt provision

The company makes an estimate of the recoverable value of trade and other debtors. When assessing impairment of trade and other debtors, management considers factors including the current credit rating of the debtor, the aging profile of debtors, whether covered by insurance and historical experience.

 

Depreciation

The company estimates the rates of depreciation used to write down the different classes of assets the company owns. This is based on prior experience of asset lives while taking into account any additional circumstances. Once fully depreciated over its useful life the asset should be stated at its residual value or £nil if there is no residual value.

 

Revenue and accrued income

Revenue is recognised at the point of billing or for matters that have not yet been billed, where there is a right to consideration. Where there is a right to consideration, income is accrued at the carrying value of time recorded less deductions for recovery rate and bad debt provision.

 

Final salary pension scheme indemnity

The company benefits from indemnities against any pension scheme deficits arising from their participation in various local government pension schemes which are of a final salary nature. These indemnities are provided by various local authorities and arise either from the terms of the company’s admission agreement into the pension scheme or from specific indemnities provided by the local authorities to the company. The nature of these arrangements are such that the company is exposed to a credit risk in the event that any particular local authority is unable to honour the indemnity provided. Due to the nature of the guarantors the directors do not consider that this risk is significant.

 

 

3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by class of business
Fee Income
11,655,078
11,778,727
2024
2023
£
£
Other revenue
Interest income
56,210
-

All of the company's turnover arises within the United Kingdom.

PATHFINDER LEGAL SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 19 -
4
Operating (loss)/profit
2024
2023
Operating (loss)/profit for the year is stated after charging:
£
£
Depreciation of owned tangible fixed assets
17,456
7,097
Loss on disposal of tangible fixed assets
39,191
-
Operating lease charges
226,685
222,344
5
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2024
2023
Number
Number
Directors
6
6
Administrative
157
160
Total
163
166

Their aggregate remuneration comprised:

2024
2023
£
£
Wages and salaries
8,956,425
8,389,459
Social security costs
621,363
617,182
Pension costs
1,160,220
1,237,940
10,738,008
10,244,581
6
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
184,000
165,443
Company pension contributions
25,038
25,858
209,038
191,301

As total directors' remuneration was less than £200,000 in the current year, no disclosure is provided for that year.

7
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
56,210
-
0
PATHFINDER LEGAL SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
7
Interest receivable and similar income
(Continued)
- 20 -
2024
2023
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
56,210
-
0
8
Interest payable and similar expenses
2024
2023
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
39,442
38,373
9
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
-
0
35,209
Adjustments in respect of prior periods
(32,169)
-
0
Total current tax
(32,169)
35,209
Deferred tax
Losses and other deductions
(97,686)
12,754
Total tax (credit)/charge
(129,855)
47,963

The actual (credit)/charge for the year can be reconciled to the expected (credit)/charge for the year based on the profit or loss and the standard rate of tax as follows:

2024
2023
£
£
(Loss)/profit before taxation
(576,151)
253,676
Expected tax (credit)/charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 19.00%)
(144,038)
48,198
Tax effect of expenses that are not deductible in determining taxable profit
26
3,040
Adjustments in respect of prior years
(32,170)
(4,000)
Effect of change in corporation tax rate
-
0
4,021
Fixed asset differences
-
0
(3,296)
Losses carried back
46,327
-
0
Taxation (credit)/charge for the year
(129,855)
47,963
PATHFINDER LEGAL SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 21 -
10
Tangible fixed assets
Fixtures, fittings & equipment
Computer equipment
Total
£
£
£
Cost
At 1 April 2023
19,606
114,091
133,697
Additions
-
0
9,148
9,148
Disposals
-
0
(114,091)
(114,091)
At 31 March 2024
19,606
9,148
28,754
Depreciation and impairment
At 1 April 2023
19,606
57,902
77,508
Depreciation charged in the year
-
0
17,456
17,456
Eliminated in respect of disposals
-
0
(74,900)
(74,900)
At 31 March 2024
19,606
458
20,064
Carrying amount
At 31 March 2024
-
0
8,690
8,690
At 31 March 2023
-
0
56,189
56,189
11
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
65,563
19,601
Corporation tax recoverable
35,209
-
0
Amounts owed by participating interests
1,016,267
749,312
Other debtors
72,962
21,928
Prepayments and accrued income
3,495,784
3,029,966
4,685,785
3,820,807
Deferred tax asset (note 15)
110,817
13,131
4,796,602
3,833,938
PATHFINDER LEGAL SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 22 -
12
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Other borrowings
14
237,500
-
0
Trade creditors
1,200,235
475,073
Amounts owed to participating interests
798,732
371,680
Corporation tax
-
0
32,278
Other taxation and social security
355,308
493,908
Other creditors
131,902
141,366
Accruals and deferred income
185,104
166,511
2,908,781
1,680,816
13
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Other borrowings
14
812,500
1,050,000
14
Loans and overdrafts
2024
2023
£
£
Loans from participating interests
1,050,000
1,050,000
Payable within one year
237,500
-
0
Payable after one year
812,500
1,050,000

The company has benefitted from loan facilities with West Northamptonshire Council, North Northamptonshire Council, Cambridgeshire County Council and Central Bedfordshire Council at 3.75% pa.

 

The total available facility is £1,050,000, the full amount of which has been drawn down.

 

Since the year end, West Northamptonshire Council and North Northamptonshire Council have served written notice for repayment of their loan facilities which total £475,000, half of which is due within one year.

 

PATHFINDER LEGAL SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 23 -
15
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

Assets
Assets
2024
2023
Balances:
£
£
Accelerated capital allowances
(626)
12,161
Tax losses
87,053
-
Retirement benefit obligations
24,390
4,970
Provisions
-
(4,000)
110,817
13,131
2024
Movements in the year:
£
Asset at 1 April 2023
(13,131)
Credit to profit or loss
(97,686)
Asset at 31 March 2024
(110,817)

The deferred tax asset set out above is expected to reverse within 12 months and relates to short term timing differences and fixed asset timing differences.

16
Retirement benefit schemes
2024
2023
£
£
Charge to profit or loss in respect of retirement benefit schemes
1,160,220
1,237,940
17
Share capital
2024
2023
£
£
Ordinary share capital
Authorised
1,425,000 Ordinary shares of £1 each
1,425,000
1,425,000
Issued and fully paid
1,425,000 Ordinary shares of £1 each
950,000
1,425,000

The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company.

PATHFINDER LEGAL SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 24 -
18
Capital redemption reserve

Represents the nominal value of the redeemed shares in the current and prior years.

19
Operating lease commitments
Lessee

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

2024
2023
£
£
Within one year
147,418
147,418
Between two and five years
-
0
81,901
147,418
229,319
20
Related party transactions
Remuneration of key management personnel

The remuneration of key management personnel is as follows.

2024
2023
£
£
Aggregate compensation
209,038
191,302
PATHFINDER LEGAL SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
20
Related party transactions
(Continued)
- 25 -
Other information

The related parties involved include the councils who jointly operate Pathfinder Legal Services Limited; Cambridgeshire County Council, North Northamptonshire Council, West Northamptonshire Council and Central Bedfordshire Council.

 

North Northamptonshire Council and West Northamptonshire Council have exited as shareholders during the year. Only transactions up to the exit date have been disclosed as related party transactions.

 

The transactions were as follows:

 

During the year, the total sales amounted to £11,264,062 (2023: £11,321,540) At the year end, the total debtors amounted to £979,493 (2023: £749,312).

 

During the year, the total purchases amounted to £995,147 (2023: £606,466) which included rent of £189,839 (2023: £205,259). At the year end, total creditors amounted to £617,933 (2023: £371,680).

 

During the year, the company incurred recharges from its shareholders totalling £173,062 (2023: £261,872). The recharges from the individual shareholders amounted to £136,097 from Cambridgeshire County Council and £36,965 from West Northamptonshire Council.

 

The Company has unsecured loan facilities from its owners: Cambridgeshire County Council provide £325,000 and Central Bedfordshire Council provide £250,000.

21
Analysis of changes in net debt
1 April 2023
Cash flows
31 March 2024
£
£
£
Cash at bank and in hand
710,694
(370,996)
339,698
Borrowings excluding overdrafts
(1,050,000)
-
(1,050,000)
(339,306)
(370,996)
(710,302)
PATHFINDER LEGAL SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 26 -
22
Cash absorbed by operations
2024
2023
£
£
(Loss)/profit after taxation
(446,296)
205,713
Adjustments for:
Taxation (credited)/charged
(129,855)
47,963
Finance costs
39,442
38,373
Investment income
(56,210)
-
0
Loss on disposal of tangible fixed assets
39,191
-
Depreciation and impairment of tangible fixed assets
17,456
7,097
Decrease in provisions
-
0
(7,448,000)
Movements in working capital:
(Increase)/decrease in debtors
(829,769)
6,577,906
Increase in creditors
1,022,743
231,268
Cash absorbed by operations
(343,298)
(339,680)
PATHFINDER LEGAL SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 27 -
23
Retirement Benefits

Retirement Benefit Schemes

Pathfinder Legal Services Limited staff are entitled to join the Local Government Pension Scheme (LGPS) which is a defined benefit plan.

Former employees of Northamptonshire County Council are members of the Northamptonshire LGPS. Former employees of the Central Bedfordshire Council are members of the Bedfordshire LGPS. Former employees of Cambridgeshire County Council are members of the Cambridgeshire County Council LGPS. All new employees of the firm are joined to the pension pot connected to their base office.

Any Net Pension Liability is guaranteed by the respective Local Authorities and not the company.

Details of the funds and their treatments in these financial statements are as follows:

Cambridgeshire Pension Fund

The major assumptions used by the actuary to calculate scheme liabilities under FRS 102 Section 28 “Employee Benefits” are best estimates chosen from a range of possible actuarial assumptions which, due to the timescales covered, may not necessarily be borne out in practice. The key assumptions (expressed as weighted averages) at the year end were as follows:

 

2024

2023

 

Discount rate

4.85%

4.75%

Salary increase rate

3.25%

3.45%

Pension increase rate

2.75%

2.95%

The last full actuarial valuation was performed on 31 March 2024.

In valuing the liabilities of the pension fund at 31 March 2024, mortality assumptions have been made as indicated below.

The assumptions relating to longevity underlying the pension liabilities at the balance sheet date are based on standard actuarial mortality tables and include an allowance for future improvements in longevity. The assumptions are equivalent to expecting a 65 year old to live for a number of years as follows:

Amounts recognised in the profit and loss account

2024

£’000

2023

£’000

 

Current service cost

(524)

(1,044)

Net interest on defined benefit liability

(373)

(393)

Net interest on local authority guarantee

373

393

 

(524)

(1,044)

 

PATHFINDER LEGAL SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 28 -

Amounts taken to other comprehensive income

2024

£’000

2023

£’000

 

Return on scheme assets excluding interest income

628

(534)

Actuarial changes related to pension scheme

688

6,058

Actuarial changes related to local authority guarantee

(1,316)

(5,524)

Actuarial loss / (gain)

-

-

 

The amounts included in the balance sheet arising from the company’s obligations in respect of this defined benefit pension plan are as follows:

 

2024

£’000

2023

£’000

 

Present value of defined benefit obligations

(8,094)

(7,562)

Fair value of plan assets

11,073

9,314

Restriction on scheme assets

(2,979)

(1,752)

Fair value of local authority guarantee

-

-

 

-

-

The fair value of the pension assets at 31 March 2024 is in excess of the present value of the defined benefit scheme obligations at that date. This gives rise to a surplus of £2,979,000. The surplus is recognised in the financial statements only the extent that the company can recover that surplus, either through a reduction in future contributions or a refund to the company.

 

Movement in the present value of defined benefit obligations

 

2024

£’000

2023

£’000

 

Liability at 1 April

(7,562)

(13,751)

Current service cost

(524)

(1,044)

Interest expense

(373)

(393)

Changes in financial assumptions

444

7,725

Contributions by member

(187)

(157)

Benefits paid

108

58

Liability at 31 March

(8,094)

(7,562)

The defined benefit obligations arise from plans which are wholly or partly funded.

Movement in the fair value of plan assets

2024

£’000

2023

£’000

 

Fair value of assets at 1 April

9,314

9,926

Interest income

458

281

Return on plan assets (excluding amounts included in net interest)

628

(1,482)

Contributions by employer

594

490

Contributions by members

187

157

Benefits paid

(108)

(58)

At 31 March

11,073

9,314

 

PATHFINDER LEGAL SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 29 -

Northamptonshire Pension Fund

The major assumptions used by the actuary to calculate scheme liabilities under FRS 102 Section 28 “Employee Benefits” are best estimates chosen from a range of possible actuarial assumptions which, due to the timescales covered, may not necessarily be borne out in practice. The key assumptions (expressed as weighted averages) at the year end were as follows:

 

2024

2023

 

Discount rate

5.10%

4.75%

Salary increase rate

3.40%

3.45%

Pension increase rate

2.90%

2.95%

The last full actuarial valuation was performed on 31 March 2024.

In valuing the liabilities of the pension fund at 31 March 2024, mortality assumptions have been made as indicated below.

The assumptions relating to longevity underlying the pension liabilities at the balance sheet date are based on standard actuarial mortality tables and include an allowance for future improvements in longevity. The assumptions are equivalent to expecting a 65 year old to live for a number of years as follows:

Amounts recognised in the profit and loss account

2024

£’000

2023

£’000

 

Current service cost

(84)

(797)

Net interest on defined benefit liability

(51)

(211)

Net interest on local authority guarantee

51

211

 

(84)

(797)

 

Amounts taken to other comprehensive income

2024

£’000

2023

£’000

 

Return on scheme assets excluding interest income

17

(471)

Actuarial changes related to pension scheme

485

3,847

Actuarial changes related to local authority guarantee

(502)

(3,376)

Actuarial loss / (gain)

-

-

 

PATHFINDER LEGAL SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 30 -

The amounts included in the balance sheet arising from the company’s obligations in respect of this defined benefit pension plan are as follows:

 

2024

£’000

2023

£’000

 

Present value of defined benefit obligations

-

(4,338)

Fair value of plan assets

-

6,377

Restriction on scheme assets

-

(2,039)

 

 

 

 

-

-

 

Movement in the present value of defined benefit obligations

 

2024

£’000

2023

£’000

 

Liability at 1 April

(4,338)

(7,211)

Current service cost

(84)

(797)

Interest expense

(51)

(211)

Changes in financial assumptions

485

3,995

Contributions by member

(31)

(123)

Benefits paid

2

9

Liability extinguished after leaving scheme

4,017

-

Liability at 31 March

-

(4,338)

 

The defined benefit obligations arise from plans which are wholly or partly funded.

Movement in the fair value of plan assets

2024

£’000

2023

£’000

 

Fair value of assets at 1 April

6,377

6,195

Interest income

74

178

Return on plan assets (excluding amounts included in net interest)

17

(534)

Contributions by employer

100

424

Contributions by members

31

123

Benefits paid

(2)

(9)

Asset extinguished after leaving scheme

(6,597)

 

Asset at 31 March

-

6,377

 

 

PATHFINDER LEGAL SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 31 -

Central Bedfordshire Pension Fund

The major assumptions used by the actuary to calculate scheme liabilities under FRS 102 Section 28 “Employee Benefits” are best estimates chosen from a range of possible actuarial assumptions which, due to the timescales covered, may not necessarily be borne out in practice. The key assumptions (expressed as weighted averages) at the year end were as follows:

 

2024

2023

 

Discount rate

4.95%

4.80%

Salary increase rate

3.85%

3.90%

Pension increase rate

2.85%

2.90%

The last full actuarial valuation was performed on 31 March 2024.

In valuing the liabilities of the pension fund at 31 March 2024, mortality assumptions have been made as indicated below.

The assumptions relating to longevity underlying the pension liabilities at the balance sheet date are based on standard actuarial mortality tables and include an allowance for future improvements in longevity. The assumptions are equivalent to expecting a 65 year old to live for a number of years as follows:

Amounts recognised in the profit and loss account

2024

£’000

2023

£’000

 

Current service cost

(269)

(747)

Net interest on defined benefit liability

(29)

(179)

Net interest on local authority guarantee

29

179

 

(269)

(747)

 

Amounts taken to other comprehensive income

2024

£’000

2023

£’000

 

Return on scheme assets excluding interest income

476

(158)

Actuarial changes related to pension scheme

221

4,147

Actuarial changes related to local authority guarantee

(697)

(3,989)

Actuarial loss / (gain)

-

-

PATHFINDER LEGAL SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 32 -

The amounts included in the balance sheet arising from the company’s obligations in respect of this defined benefit pension plan are as follows:

 

2024

£’000

2023

£’000

 

Present value of defined benefit obligations

(4,699)

(4,445)

Fair value of plan assets

5,930

4,899

Restriction on scheme assets

(1,231)

(454)

Fair value of local authority guarantee

-

-

 

-

-

 

The fair value of the pension assets at 31 March 2024 is in excess of the present value of the defined benefit scheme obligations at that date. This gives rise to a surplus of £1,231,000. The surplus is recognised in the financial statements only the extent that the company can recover that surplus, either through a reduction in future contributions or a refund to the company.

 

Movement in the present value of defined benefit obligations

 

2024

£’000

2023

£’000

 

Liability at 1 April

(4,445)

(6,781)

Current service cost

(269)

(747)

Interest expense

(214)

(179)

Changes in financial assumptions

252

3,490

Contributions by member

(123)

(114)

Benefits paid

100

(114)

Liability at 31 March

(4,699)

(4,445)

The defined benefit obligations arise from plans which are wholly or partly funded.

Movement in the fair value of plan assets

2024

£’000

2023

£’000

 

Fair value of assets at 1 April

4,899

4,174

Interest income

243

116

Return on plan assets (excluding amounts included in net interest)

476

60

Administration expenses

(6)

(3)

Contributions by employer

295

324

Contributions by members

123

114

Benefits paid

(100)

114

At 31 March

5,930

4,899

 

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