HILLFORD_DAWDON_V_DEVELOP - Accounts

The members of the limited liability partnership have elected not to include a copy of the income statement within the financial statements in accordance with Section 444 5(A) of the Companies Act 2006.

For the financial year ended 5 April 2019 the limited liability partnership was entitled to exemption from audit under section 477 of the Companies Act 2006 (as applied by the Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008) relating to small limited liability partnerships.

The members acknowledge their responsibilities for complying with the requirements of the Act (as applied to limited liability partnerships) with respect to accounting records and the preparation of accounts.

These financial statements have been prepared and delivered in accordance with the provisions applicable to limited liability partnerships subject to the small limited liability partnerships regime.

Hillford Dawdon V Development Partners LLP is a limited liability partnership incorporated in England and Wales. The registered office is 20 Gloucester Place, London, W1U 8HA.

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 January 2017, 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 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.

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

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

Profit is recognised on long- term contracts, if the final income can be assessed with reasonable certainty, by including in the profit and loss account turnover and related costs as contract activity progresses. Turnover is calculated as that proportion of total contract value which costs to date bear to total expected costs for that contract. Losses on long term contracts are recognised immediately in full. Turnover also includes amounts receivable for property development profit share, which is spread over the term of the property lease, once construction has ceased.

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.

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

Financial instruments are recognised in the limited liability partnership's statement of financial position when the limited liability partnership becomes party to the contractual provisions of the instrument.

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

Basic financial assets, which include trade and other receivables 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.

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

Basic financial liabilities, including trade and other payables, bank loans, loans from fellow group companies 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 payables 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 payables are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Provisions are recognised when the limited liability partnership has a legal or constructive present obligation as a result of a past event, it is probable that the limited liability partnership will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.

Rentals payable under operating leases are charged against income on a straight line basis over the lease term.

Members' participation rights

Members' participation rights are the rights of a member against the LLP 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 LLP are analysed between those that are, from the LLP's perspective, either a financial liability or equity, in accordance with FRS 25 (lAS 32) Financial Instruments: Disclosure and Presentation and UITF abstract 39 Members' shares in co-operative entities and similar instruments. A member's participation right results in a liability unless the right to any payment is discretionary on the part of the LLP.

Amounts subscribed or otherwise contributed by members, for example members' capital, are classed as equity if the LLP has an unconditional right to refuse payment to members. If the LLP does not have such an unconditional right, such amounts are classified as liabilities.

Where profits are automatically divided as they arise, so the LLP does not have an unconditional right to refuse payment, the amounts arising that are due to members are in the nature of liabilities. They are therefore treated as an expense in the Profit and Loss Account in the relevant year. To the extent that they remain unpaid at the year end, they are shown as liabilities in the Balance Sheet.

Conversely, where profits are divided only after a decision by the LLP or its representative, so that the LLP has an unconditional right to refuse payment, such profits are classed as an appropriation of equity rather than as an expense. They are therefore shown as a residual amount available for discretionary division among members in the Profit and Loss Account and are equity appropriations in the Balance Sheet.

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

All amounts due to members that are classified as liabilities are presented in the Balance Sheet within 'Loans and other debts due to members' and are charged to the Profit and Loss Account within 'Members' remuneration charged as an expense'. Amounts due to members that are classified as equity are shown in the Balance Sheet within 'Members' other interests'.

Licence fee bank account and loan receivable

The annual increase in the license fee bank account and the interest on the loans receivable, which are accounted for within investment income, are provided for as a charge to cost of sales, with the cumulative charge shown within provision for liabilities. The partnership cannot make withdrawals from this account other than for legally contracted rent payments. Once cumulative rental payments made exceeds the initial amount put on deposit this provision is released to the profit and loss account.

There were no employees during the year apart from the members.

Included within other debtors is a licence fee deposit account with a balance of £3,552,445    

(2018: £3,967,887).

The partnership purchased an annuity deposit from HSBC Bank plc for £6,987,517 on 22 December 2006 to meet the LLP's liabilities for rent and business rates for a period of 22 years. The payments to be made by HSBC Bank plc total £11,104,698. The LLP cannot make withdrawals from this account, other than for legally contracted rent and rates payments, however it can, under very specific circumstances based on a series of future events, be closed and the outstanding balance recouped. As the LLP cannot make withdrawals from this account, the annual increase in value which has been accounted for within investment income has been provided for as a charge to cost of sales. The cumulative charges are shown within provisions for liabilities and will be released to the profit and loss account at a future date to meet rent liabilities.

During the 2017 financial year, this annuity deposit was partly sold and refinanced and is now recognised as a financial asset held at amortised cost. The cost of this annuity was £4,370,834 and the payments to be made totalled £4,744,287. The receivable is operated under the same terms as the original deposit account.

Included in other payables is deferred income are amounts totalling £3,518,552 (2018: £3,916,475) to be released after more than one year.

The LLP provides against interest received on its licence fee deposit account as detailed in note 5.

In the event of a winding up the amounts included in "Loans and other debts due to members" will rank equally with unsecured creditors.

The members estimate that the LLP may be liable to business rates totalling £280,000. This liability would only crystallise if the relevant authorities amend the current rates exemptions with Enterprise Zone developments.

At the reporting end date the limited liability partnership had outstanding commitments for future minimum lease payments under non-cancellable operating leases, as follows: