The members present their annual report and financial statements for the year ended 31 December 2024.
The principal activity of VR Advisory Services (UK) LLP (the "limited liability partnership") is the provision of advisory services to VR Advisory Services Limited. The limited liability partnership is authorised and regulated by the Financial Conduct Authority (the "FCA").
The members' drawing policy allows each member to draw a proportion of their profit share, subject to the cash requirements of the business.
A member's capital requirement is linked to their share of profit and the financing requirement of the limited liability partnership. Capital contributed by members representing a Regulatory Capital Reserve for the purposes of the limited liability partnership being authorised and regulated by the FCA is shown as equity capital and for as long as it is FCA authorised and regulated this capital is only repayable to members at the discretion of the limited liability partnership and subject to any necessary FCA approval. Other capital contributed by members can only be repaid in restricted circumstances, subject to the terms of the partnership agreement and with the approval of the Management Committee and is shown as equity capital. There is no opportunity for appreciation of the capital subscribed. Just as incoming members introduce their capital at "par", so any repayment of capital is at "par".
During the year discretionary profits of £325,182 (2023: £1,874,407) were allocated to members.
The designated members who held office during the year and up to the date of signature of the financial statements were as follows:
The auditor, Moore Kingston Smith LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
The members are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law (as applied by The Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008) requires the members to prepare financial statements for each financial year. Under that law the members have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice. Under company law (as applied by The Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008) the members must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the limited liability partnership and of the profit or loss of the limited liability partnership for that period. In preparing these financial statements, the members are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the limited liability partnership will continue in business.
The members are responsible for keeping adequate accounting records that are sufficient to show and explain the limited liability partnership’s transactions and disclose with reasonable accuracy at any time the financial position of the limited liability partnership and enable them to ensure that the financial statements comply with the Companies Act 2006 (as applied by The Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008). They are also responsible for safeguarding the assets of the limited liability partnership and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
We have audited the financial statements of VR Advisory Services (UK) LLP (the 'limited liability partnership') for the year ended 31 December 2024 which comprise the Statement of Comprehensive Income, the Balance Sheet, the Reconciliation of Members' Interests, the Statement of Cash Flows and notes to the financial statements, including 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).
Basis for opinion
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the members' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the limited liability partnership’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the members with respect to going concern are described in the relevant sections of this report.
Other information
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
The objectives of our audit in respect of fraud, are; to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses to those assessed risks; and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the limited liability partnership.
Our approach was as follows:
We obtained an understanding of the legal and regulatory requirements applicable to the company and considered that the most significant are the Companies Act 2006 as applied to limited liability partnerships by the Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008, the Limited Liability Partnerships SORP, UK financial reporting standards as issued by the Financial Reporting Council, UK taxation legislation and regulations applicable to companies regulated by the Financial Conduct Authority.
We obtained an understanding of how the limited liability partnership complies with these requirements by discussions with management and those charged with governance.
We assessed the risk of material misstatement of the financial statements, including the risk of material misstatement due to fraud and how it might occur, by holding discussions with management and those charged with governance.
We inquired of management and those charged with governance as to any known instances of non-compliance or suspected non-compliance with laws and regulations.
Based on this understanding, we designed specific appropriate audit procedures to identify instances of non-compliance with laws and regulations. This included making enquiries of management and those charged with governance and obtaining additional corroborative evidence as required.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
Use of our report
This report is made solely to the limited liability partnership’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006 (as applied by the Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008). Our audit work has been undertaken so that we might state to the limited liability partnership’s members those matters which 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 any party other than the limited liability partnership and the limited liability partnership’s members as a body, for our work, for this report, or for the opinions we have formed.
As permitted by the Statement of Recommended Practice (SORP), Accounting by Limited Liability Partnerships issued in December 2021, the limited liability partnership has taken the option of presenting the above Reconciliation of Members' Interests as a primary statement instead of the Statement of Changes in Equity.
There are no existing restrictions or limitations which impact the ability of the members of the partnership to reduce the amount of members' other interests.
The notes on pages 13 to 21 form part of these financial statements.
VR Advisory Services (UK) LLP is a limited liability partnership incorporated and domiciled in England and Wales. The registered office is 6th Floor, 9 Appold Street, London, EC2A 2AP. The principal place of business is The Kensington Building, 1 Wrights Lane, 4th Floor, London, United Kingdom, W8 5RY.
The limited liability partnership's principal activities are disclosed in the Members' Report.
These financial statements have been prepared in accordance with the Statement of Recommended Practice "Accounting by Limited Liability Partnerships" issued in December 2021, together with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the limited liability partnership. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements, which are those of VR Advisory Services (UK) LLP as an individual entity, have been prepared on the historical cost convention. The principal accounting policies adopted are set out below.
The limited liability partnership made a profit of £325,182 (2023: £1,874,407) in the year ended 31 December 2024.
The limited liability partnership provides services to a related undertaking and at the time of approving the financial statements it has obtained a letter of ongoing support from that entity covering a period of at least one year from the date of approval of these financial statements. Thus the members continue to adopt the going concern basis of accounting in preparing the financial statements.
Turnover represents the fair value of services provided during the period. The limited liability partnership earns fees under a sub advisory agreement based on management fees. Turnover is recognised as contract activity progresses and the right to consideration is earned. Fair value reflects the amount expected to be recoverable and is based on services provided and expenses incurred, but excludes VAT.
Members' participation rights are the rights of a member against the limited liability partnership that arise under the members' agreement (for example, in respect of amounts subscribed or otherwise contributed remuneration and profits).
Members' participation rights in the earnings or assets of the limited liability partnership are analysed between those that are, from the limited liability partnership's perspective, either a financial liability or equity, in accordance with section 22 of FRS 102. A member's participation rights including amounts subscribed or otherwise contributed by members, for example members' capital, are classed as liabilities unless the limited liability partnership has an unconditional right to refuse payment to members, in which case they are classified as equity.
All amounts due to members that are classified as liabilities are presented within 'Loans and other debts due to members' and, where such an amount relates to current year profits, they are recognised within ‘Members' remuneration charged as an expense’ in arriving at the relevant year’s result. Undivided amounts that are classified as equity are shown within ‘Members' other interests’. Amounts recoverable from members are presented as debtors and shown as amounts due from members within members’ interests.
Where there exists an asset and liability component in respect of an individual member’s participation rights, they are presented on a gross basis unless the limited liability partnership has both a legally enforceable right to set off the recognised amounts, and it intends either to settle on a net basis or to settle and realise these amounts simultaneously, in which case they are presented net.
The limited liability partnership classifies automatic or discretionary profit distributions as operating cash flows, because they are in substance paid for services rendered to the limited liability partnership as part of its revenue generating activities.
Members’ capital is classified as equity only when the limited liability partnership has the right not to return the capital to the member except on dissolution of the limited liability partnership, otherwise it is classified as a financial liability.
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:
Other assets were previously recorded initially at cost and subsequently fair value. The above policy represents a change in accounting policy as it was felt by management to provide a more reliable and relevant basis for presenting information to users of the financial statements. This change in policy has had no impact on the current or prior year figures reported in the financial statements.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.
At each reporting date fixed assets are reviewed to determine whether there is any indication that those assets have suffered an impairment loss, If there is an indication of possible impairment, the recoverable amount of any affected asset is estimated and compared with its carrying amount. If estimated recoverable amount is lower, the carrying amount is reduced to its estimated recoverable amount, and an impairment loss is recognised immediately in profit or loss.
If an impairment loss subsequently reverses, the carry amount of the asset is increased to the revised estimated of its recoverable amount, but not in excess of the amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised immediately in profit or loss.
Basic financial instruments are measured at amortised cost. The limited liability partnership has no other financial instruments or basic financial instruments measured at fair value. The limited liability partnership has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Debtors
Short term debtors are measured at transaction price, less any impairment. Loans and other debtors receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
Creditors
Short term trade creditors and other current creditors payable on demand 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.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the limited liability partnership is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
Members' remuneration and equity
The profits in respect of a financial year are allocated between members by the Management Committee following the end of the financial year. Capital contributed by members representing a Regulatory Capital Reserve for the purposes of the limited liability partnership being authorised and regulated by the FCA is shown as equity capital and for as long as it is FCA authorised and regulated this capital is only repayable to members at the discretion of the limited liability partnership and subject to any necessary FCA approval. Other capital contributed by members can only be repaid in restricted circumstances, subject to the terms of the partnership agreement and with the approval of the Management Committee and is shown as equity capital. Other amounts contributed by members or owing to members are classified as financial assets or liabilities.
Taxation
The taxation payable on the partnership profits is solely the personal liability of the individual members consequently neither partnership taxation nor related deferred taxation arising in respect of the partnership are accounted for in these financial statements.
In the application of the limited liability partnership’s accounting policies, the members are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The members do not consider there to be any key estimates or judgements applicable to the company in the current or prior period.
An analysis of the limited liability partnership's turnover is as follows:
The average number of persons (excluding members) employed by the limited liability partnership during the year was:
Their aggregate remuneration comprised:
The limited liability partnership operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the limited liability partnership in an independently administered fund.
In the event of a winding up the amounts included in "Loans and other debts due to members" will rank equally with unsecured creditors.
At the reporting end date the limited liability partnership had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
Sales of £17,192,239 (2023: £28,651,508) were made during the year with an entity associated through common ownership. At the year end VR Advisory Services (UK) LLP was owed £8,151,834 (2023: £20,844,933) by the aforementioned related party, which is interest free and repayable on demand. In addition, pass through costs of £4,488,886 (2023: £nil) were incurred on behalf of an entity under common control and their re-imbursement is included in the sales figure mentioned above.
The total remuneration of the employees of the limited liability partnership who are considered to be the key management personnel of the limited liability partnership was £345,879 (2023: £3,903,854).
The limited liability partnership undertakes transactions with its members in the ordinary course of business including the subscription of capital and the payment of drawings. The transactions are all governed by and made in compliance with the Members' Agreement.