SDA_CONSULTING_LLP - Accounts

The members present their annual report and financial statements for the year ended 31 March 2020.

SDA Consulting LLP are a leading independent construction consultancy and chartered surveying practice delivering Project Management, Quantity Surveying/Cost Management, Building Surveying Principal Designer, Clerk of Works and NEC Supervisor services to a range of public and private sector clients. Based in Manchester we focus on service delivery in Education, Housing and Healthcare sectors in the north-west England region.

The Partners are delighted to report that the year to 31 March 2020 has proven to be another year of sustained excellent performance from the SDA Consulting LLP team. The higher activity levels following two years of significant growth in 2019 (+15%) and 2018 (+17%) have been sustained and once again healthy profitability was maintained with no external borrowings. We remain financially strong, paying all our suppliers to agreed payment terms and we operate well within our working capital arrangements, with our financial resilience proving a key factor as we navigate through the disruption caused by the COVID-19 outbreak without any external borrowings.

The financial year has seen us deliver some of our client’s most important developments with key projects completed including:

• £90m Unsworth Park student accommodation development on the Fallowfield campus of the University of Manchester with all 1,122 student bedrooms handed over as programmed.

• The new sector leading multi-million pound state-of-the-art Denise Coates Foundation Building, comprising a Smart Innovation Hub at Keele University.

• A state-of-the-art Central Science Laboratories building at Keele University. The new laboratories have provided Keele with additional world-class facilities that underpin ambitious growth plans in science teaching and research.

• A new extension to the Sports Centre at Lancaster University containing a Conditioning Suite and Performance Laboratory providing high quality space for research into health and elite sports performance.

• A Student Hubs Project for Manchester Metropolitan University centralising student hubs to three main locations with each space transformed to deliver the new Student Journey Transformation Programme service model with ICT at its heart.

• A new specialist Centre of Excellence in Engineering & Construction based at the Pagefield campus of Wigan and Leigh College.

• Redevelopment of schools for Bury Council.

• We saw the tower block demolitions at Crib Lane, Halifax, a project for Together Housing, feature as a best practice case study at the Efficiency North Annual Event and have been working with other housing clients recladding tower blocks following the Grenfell Tower tragedy.

• Lancaster University’s major investment in a new Health Innovation Campus progresses with Phase 1 nearing completion providing a new landmark building to house the Medical School and Division of Health Research and offering space for external organisations to co-locate on site and work with the University on significant health challenges.

• A new multi-million pound sports hall for Lancaster University also nears completion together with the first phase of a redevelopment of Lancaster University’s management school creating a 5 storey development which will feature state-of-the-art technology and innovative study space that reflects the University's status as a globally-leading Management School.

• Phases three and four have commenced of the 160 home redevelopment for Salix Homes of the Beechfarm estate in Swinton a mix of social housing and for sale or shared ownership homes.

• We have been working with several private developer clients refurbishing a listed office and retail building and delivering various housing schemes in the Greater Manchester region.

• We are working on a demolition contract for NHS Property Service in Lancashire and our local authority client base has expanded to include Stockport Council where we are working on school redevelopment projects.

Our building surveying team have been involved in quality control inspections to the Unsworth Park Halls of Residence Redevelopment and two of the largest projects carried out at the University of Manchester, the new MECD and Henry Royce engineering buildings. They are also providing building surveying advice to Manchester Metropolitan University on external repairs to the Grade II listed Ormond Building and have once again been reappointed on repair and restoration works at Jodrell Bank Observatory. The team have also carried out condition surveys and maintenance plans on a variety of buildings including FE colleges high schools, university buildings, offices, large private houses and an independent college in the Isle of Man. We are also working with the University of Manchester on the conversion of Chancellors Hotel into student residences and have also continued to provide project management and contract administration duties on a wide range of refurbishment, extension and repair projects to schools and University buildings. We are working with Caritas Diocese of Salford on a phased refurbishment of Cornerstone and Morning Star Hostel and Day Centres in Manchester to provide improved facilities for single homeless men sleeping rough and/or with alcohol issues and vulnerable/disadvantaged adults.

We have recently appointed a new Partner who has brought a substantial volume of new business to the practice in a sector that we have not traditionally operated in. This will add an additional revenue stream allowing us to diversify our traditional client base and act as a catalyst for further business development. We have an established senior team and continue to invest in the development of our up and coming project and graduate surveyors

As a RICS Regulated Practice, we continue to operate to the highest standards of business conduct and professional ethics and maintained our ISO 9001:2015 and CHAS accreditations and are currently working with Avieco as one of the first organisations to progress their newly launched Smart Sustainability Certification having previously retained our Carbon Smart Gold certification for many years.

Although the coronavirus outbreak has rattled the construction sector, our financial resilience is enabling us to adapt as we move through restart, reset and reinvent phases following COVIID-19 and we are confident that despite the current uncertainty we are well placed to realise the opportunities ahead. We have been reappointed to provide both quantity surveying and building surveying services on the University of Manchester’s consultant framework and have gained places on Clarion Housing and Procurement Assist’s Dynamic Purchasing Systems. We have also recently won a place on Innovation Chain North’s new £750m framework to deliver Employer’s Agent and Clerk of Works services to support delivery of new homes across the North of England. These are in addition to our on-going appointments on frameworks with Lancaster University, Reallies, Fusion 21, NHS SBS, For Viva and Manchester City Council and on Dynamic Purchasing Systems with the Placemaking Hub and Procurement for All.

Capital paid into the LLP is determined by approved amendments to the Membership Agreement, with reference to each member's profit sharing ratio. The Membership Agreement provides for sufficient working capital to be held in the LLP through a combination of capital introduced and long term member's loans. Members' capital and loans are repayable on retirement. The apportionment of annual profits is based on profit sharing ratios as determined by the Membership Agreement and accordingly all members' interests are classified as a debt of the LLP.

Details of changes in members' capital in the year ended 31 March 2020 are set out in the financial statements.

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

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;

• 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.

This report has been prepared in accordance with the special provisions relating to small companies within Part 15 of the Companies Act 2006.

The members of the limited liability partnership have elected not to include a copy of the profit and loss account within the financial statements.

For the financial year ended 31 March 2020 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.

SDA Consulting LLP is a limited liability partnership incorporated in England and Wales. The registered office is Edward House, Deva City Office Park, Trinity Way, Manchester, M3 7BE.

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. The principal accounting policies adopted are set out below.

At the time of approving the financial statements, the members have a reasonable expectation that the limited liability partnership has adequate resources to continue in operational existence for the foreseeable future. Thus the members continue to adopt the going concern basis of accounting in preparing the financial statements.

In forming this conclusion, the members have fully considered the potential impact of COVID-19 on the limited liability partnership, its trading operations, and its ability to continue to meet its obligations as they fall due.

Turnover represents the amounts recoverable for the services provided to clients, excluding value added tax, under contractual obligations which are performed gradually over time.

Turnover from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:

• the amount of turnover can be measured reliably;

• it is probable that the LLP will receive the consideration due under the contract;

• the stage of completion of the contract at the end of the reporting period can be measured reliably; and

• the costs incurred and the costs to complete the contract can be measured reliably.

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:

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.

Work in progress represents the fair value of work undertaken on contracts to provide professional services which have not been completed and are unbilled at the balance sheet date.

Cash at bank and in hand are basic financial assets and include cash in hand and deposits held at call with banks.

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 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. Financial assets classified as receivable within one year are not amortised.

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the limited liability partnership transfers the financial asset and substantially all the risks and rewards of ownership to another entity.

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 creditors 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.

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. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Financial liabilities are derecognised when the limited liability partnership’s obligations expire or are discharged or cancelled.

The taxation payable on the profits of the LLP is the personal liability of the members and therefore no provision is made in the financial statements for such taxation or deferred taxation.

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.

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.

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

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

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