Company registration number 03697314 (England and Wales)
REICH INSURANCE BROKERS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
REICH INSURANCE BROKERS LIMITED
COMPANY INFORMATION
Directors
Mr S P Taylor
Mr D A Lopian
Secretary
Mr S P Taylor
Company number
03697314
Registered office
Medal House
197 Chapel Street
Manchester
M3 5EQ
Auditor
Lopian Gross Barnett & Co
1st Floor Cloister House
Riverside, New Bailey Street
Manchester
M3 5FS
Business address
Medal House
197 Chapel Street
Manchester
M3 5EQ
REICH INSURANCE BROKERS LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2
Directors' responsibilities statement
3
Independent auditor's report
4 - 6
Profit and loss account
7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Notes to the financial statements
11 - 24
REICH INSURANCE BROKERS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2022
- 1 -
The directors present the strategic report for the year ended 31 March 2022.
Fair review of the business
The directors are satisfied with the results of the business for the year under review.
The Key financial and other performance indicators for the year are:
2022 2021
Turnover £14,683,047 £13,298,004
Operating Profit £4,931,199 £4,279,956
EBITDA £5,801,216 £5,170,526
Profit and loss reserves £24,812,734 £21,495,985
Current ratio 3.80 2.91
Turnover: Total staff costs (times) 2.32 2.2
The directors are pleased to report an increase in turnover (commission income) during the year under review. The company has been able to increase both turnover and profitability against the results for 2021 with a mixture of new business, excellent retention and prudent monitoring of costs.
The current ratio above indicates that the company can pay its liabilities as they fall due over the coming year.
|
Principal risks and uncertainties
The principal risks associated with the company's business are actuarial market factors which in turn affect the optimum insurance premiums the company can secure for its clientele. In order to mitigate this, Reich Insurance Brokers Limited deal with a broad range of insurance companies from whom the best insurance cover rates can be secured for specific types of business and client. In this way the company remains fully competitive. The success is by also actively cultivating its excellent relationships in the wider insurance market.
The company is not currently undertaking a program of significant capital expenditure.
Covid-19
The nature of the company's business is not capital intensive and no impairment to its tangible fixed assets has arisen.
Following the undertaking of a thorough review of client debtor balances the directors are satisfied that no bad debts should arise for the year under review.
Investments are included at market value at the balance sheet date and the directors do not not consider that Covid 19 necessitates any provisions against these values.
Mr S P Taylor
Director
26 February 2023
REICH INSURANCE BROKERS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2022
- 2 -
The directors present their annual report and financial statements for the year ended 31 March 2022.
Principal activities
The principal activity of the company continued to be that of non-life insurance brokers.
Results and dividends
The results for the year are set out on page 10.
Ordinary dividends were paid amounting to £720,000. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr S P Taylor
Mr D A Lopian
Auditor
Lopian Gross Barnett & Co were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
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.
On behalf of the board
Mr S P Taylor
Director
26 February 2023
REICH INSURANCE BROKERS LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MARCH 2022
- 3 -
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:
-
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 company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and 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.
REICH INSURANCE BROKERS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF REICH INSURANCE BROKERS LIMITED
- 4 -
Opinion
We have audited the financial statements of Reich Insurance Brokers Limited (the 'company') for the year ended 31 March 2022 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity 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:
-
give a true and fair view of the state of the company's affairs as at 31 March 2022 and of its profit for the year then ended;
-
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-
have been prepared in accordance with the requirements of the Companies Act 2006.
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
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
-
the director's use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
-
the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the group's or the parent company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit
:
-
the information given in the strategic report and the directors'
r
eport for the financial year for which the financial statements are prepared is consistent with the financial statements
; and
-
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
REICH INSURANCE BROKERS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF REICH INSURANCE BROKERS LIMITED
- 5 -
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 identifie
d
material misstatements in the strategic report or the directors'
r
eport
.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
-
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
-
the financial statements are not in agreement with the accounting records and returns; or
-
certain disclosures of
remuneration specified by law are not made; or
-
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors'
r
esponsibilities
s
tatement, 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
.
REICH INSURANCE BROKERS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF REICH INSURANCE BROKERS LIMITED
- 6 -
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, 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:
Due to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, as with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing fraud or non-compliance with laws and regulations and cannot be expected to detect all fraud and non-compliance with laws and regulations.
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.
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.
Jason Selig BA ACA CTA DChA (Senior Statutory Auditor)
For and on behalf of Lopian Gross Barnett & Co
27 February 2023
Chartered Accountants
Statutory Auditor
1st Floor Cloister House
Riverside, New Bailey Street
Manchester
M3 5FS
REICH INSURANCE BROKERS LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 MARCH 2022
- 7 -
2022
2021
Notes
£
£
Turnover
3
14,683,047
13,298,004
Administrative expenses
(10,060,161)
(9,298,458)
Other operating income
308,313
280,410
Operating profit
4
4,931,199
4,279,956
Interest receivable and similar income
8
2,506
10,287
Interest payable and similar expenses
9
(6,669)
(8,643)
Fair value adjustments
10
(5,339)
282,631
Fair value gains and losses on investment properties
15
243,585
(82,148)
Profit before taxation
5,165,282
4,482,083
Tax on profit
11
(1,128,533)
(895,194)
Profit for the financial year
4,036,749
3,586,889
The profit and loss account has been prepared on the basis that all operations are continuing operations.
REICH INSURANCE BROKERS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2022
- 8 -
2022
2021
£
£
Profit for the year
4,036,749
3,586,889
Other comprehensive income
-
-
Total comprehensive income for the year
4,036,749
3,586,889
REICH INSURANCE BROKERS LIMITED
BALANCE SHEET
AS AT 31 MARCH 2022
31 March 2022
- 9 -
2022
2021
Notes
£
£
£
£
Fixed assets
Goodwill
13
7,274,717
7,993,460
Other intangible assets
13
30,378
51,855
Total intangible assets
7,305,095
8,045,315
Tangible assets
14
571,603
763,250
Investment properties
15
366,900
183,000
Investments
16
2,189,461
1,762,917
10,433,059
10,754,482
Current assets
Debtors
18
10,489,548
8,386,972
Cash at bank and in hand
9,560,641
8,516,582
20,050,189
16,903,554
Creditors: amounts falling due within one year
19
(5,281,469)
(5,814,095)
Net current assets
14,768,720
11,089,459
Total assets less current liabilities
25,201,779
21,843,941
Provisions for liabilities
Deferred tax liability
20
88,645
47,556
(88,645)
(47,556)
Net assets
25,113,134
21,796,385
Capital and reserves
Called up share capital
22
300,400
300,400
Profit and loss reserves
24,812,734
21,495,985
Total equity
25,113,134
21,796,385
The financial statements were approved by the board of directors and authorised for issue on 26 February 2023 and are signed on its behalf by:
Mr S P Taylor
Mr D A Lopian
Director
Director
Company Registration No. 03697314
REICH INSURANCE BROKERS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2022
- 10 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 April 2020
300,400
18,149,096
18,449,496
Year ended 31 March 2021:
Profit and total comprehensive income for the year
-
3,586,889
3,586,889
Dividends
12
-
(240,000)
(240,000)
Balance at 31 March 2021
300,400
21,495,985
21,796,385
Year ended 31 March 2022:
Profit and total comprehensive income for the year
-
4,036,749
4,036,749
Dividends
12
-
(720,000)
(720,000)
Balance at 31 March 2022
300,400
24,812,734
25,113,134
REICH INSURANCE BROKERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
- 11 -
1
Accounting policies
Company information
Reich Insurance Brokers Limited is a private company limited by shares incorporated in England and Wales. The registered office is 197 Chapel Street, Manchester, M3 5EQ.
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 a
mounts
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 investment property and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares
publicly available consolidated financial statements
, including this company,
which are
intended to give a true and fair view of the assets, liabilities,
financial position and profit or loss
of the group
.
T
he company has
therefore
taken advantage of
e
xemptions from the following disclosure requirements:
The financial statements of the company are consolidated in the financial statements of
Reich Group Limited
. These consolidated financial statements are available from its registered office,
The Copper Room, Deva City Office Park, Trinity Way, Manchester, M3 7BG.
1.2
Going concern
A
true
t the time of approving the financial statements
,
t
he directors have a reasonable expectation that the
company
has adequate resources to continue in operational existence for the foreseeable future. Thus
t
he directors continue to adopt the going concern basis of accounting in preparing the financial statements.
The Financial Statements have been drawn up on the Going Concern basis.
1.3
Turnover
Turnover comprises commissions and fees receivable from insurance brokerage based on amounts due on policies with effective dates up to the balance sheet date, net of insurance premium tax. Turnover also includes further income streams from insurance companies accounted for on a receipts basis in view of the uncertainty as to amount and eventual date of receipt.
1.4
Research and development expenditure
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated
.
1.5
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated
amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 5 - 20 years.
REICH INSURANCE BROKERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
1
Accounting policies
(Continued)
- 12 -
1.6
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date
where
it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the
fair
value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
Development costs
Evenly over 5 years
1.7
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:
Leasehold improvements
Evenly over lease term of 15 years
Fixtures and fittings
20% reducing balance
Computers
33% reducing balance
Motor vehicles
25% reducing balance
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
.
1.8
Investment properties
Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure
. Subsequently it is measured
at fair value a
t
the reporting end date.
Changes in fair value are recognised in profit or loss.
1.9
Fixed asset investments
Fixed asset investments relate to listed and unlisted investments and an Employee Benefit Trust Bond. These fixed asset investments are held at fair value at the balance sheet date with the value reviewed at each reporting period end. Any changes in fair value are recognised within the profit and loss account.
The value of any assets held by the Trust which have not been unconditionally transferred to the beneficiaries is included within current assets, subject to any provision required for a permanent diminution in their value.
1.10
Impairment of fixed assets
At each reporting
period
end date, the
company
reviews the carrying amounts of its tangible
and intangible 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.
1.11
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.
REICH INSURANCE BROKERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
1
Accounting policies
(Continued)
- 13 -
1.12
Financial instruments
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.
Impairment of financial assets
Financial assets, other than those
held
at
fair value through profit and loss
, are assessed for indicators of impairment at each reporting end date.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when
the company
transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
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
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
paymen
ts 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. A
m
ounts 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.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts,
are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are
s
ubsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in
profit
or
loss
in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as
being measured at
fair value th
r
ough profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations
expire or are discharged or cancelled.
REICH INSURANCE BROKERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
1
Accounting policies
(Continued)
- 14 -
1.13
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.
1.14
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.
1.15
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.
1.16
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.17
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 lease
s
asset are consumed.
REICH INSURANCE BROKERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
1
Accounting policies
(Continued)
- 15 -
1.18
Government grants
Grant income relates to furlough income under Coronavirus Job Retention Scheme and interest payments being covered by the government on Coronavirus Business Interruption Loan Scheme.
Under the Furlough scheme, cash payments were made to compensate for part of the wages, associated national insurance and employer contributions of employees who have been placed on furlough.
This grant income has been recognised under the performance model whereby entitlement to the grant only passes to the company when relevant employees are placed on furlough. Grant income is recognised on a straight line basis over the furlough period for each employee.
Grants received before the recognition criteria are satisfied is recognised as a liability.
There was no such income in the current year.
1.19
Foreign exchange
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.
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.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2022
2021
£
£
Turnover analysed by class of business
Insurance Brokerage
14,683,047
13,298,004
2022
2021
£
£
Turnover analysed by geographical market
United Kingdom
14,683,047
13,298,004
Included in turnover is the rectification of a bookkeeping error from 2020. The effect of the adjustment is to increase turnover in 2022 by £60,000. This amount is not considered to have a material impact on the financial statements.
REICH INSURANCE BROKERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
3
Turnover and other revenue
(Continued)
- 16 -
2022
2021
£
£
Other revenue
Interest income
-
9,782
Dividends received
2,506
505
Grants received
19,270
4
Operating profit
2022
2021
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange (gains)/losses
(1,153)
967
Research and development costs
88,138
85,196
Government grants
(19,270)
Fees payable to the company's auditor for the audit of the company's financial statements
81,940
76,200
Depreciation of owned tangible fixed assets
113,494
154,281
Profit on disposal of tangible fixed assets
(546)
(5,371)
Loss on disposal of investment property
15,049
Amortisation of intangible assets
742,020
741,660
Operating lease charges
249,291
249,291
5
Auditor's remuneration
2022
2021
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
81,940
76,200
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was 112
(2021 - 110).
Their aggregate remuneration comprised:
2022
2021
£
£
Wages and salaries
5,560,341
5,251,800
Social security costs
531,830
578,244
Pension costs
213,621
207,004
6,305,792
6,037,048
REICH INSURANCE BROKERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
- 17 -
7
Directors' remuneration
2022
2021
£
£
Remuneration for qualifying services
573,545
552,970
Company pension contributions to defined contribution schemes
19,603
19,603
593,148
572,573
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2021 - 2).
Included in rent is £33,716 paid to one of the directors self-invested personal pensions. The rent is in relation
to a property owned by the director in which the
company
occupies.
8
Interest receivable and similar income
2022
2021
£
£
Interest income
Interest on bank deposits
2,394
Other interest income
7,388
Total interest revenue
9,782
Other income from investments
Dividends received
2,506
505
Total income
2,506
10,287
9
Interest payable and similar expenses
2022
2021
£
£
Interest on finance leases and hire purchase contracts
461
Other interest
6,669
8,182
6,669
8,643
10
Amounts written off investments
2022
2021
£
£
Fair value gains/(losses) on financial instruments
Change in value of financial assets held at fair value through profit or loss
(4,393)
280,325
Other gains/(losses)
(Loss)/gain on disposal of investments held at fair value
(946)
2,306
(5,339)
282,631
REICH INSURANCE BROKERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
- 18 -
11
Taxation
2022
2021
£
£
Current tax
UK corporation tax on profits for the current period
1,087,444
852,460
Deferred tax
Origination and reversal of timing differences
41,089
42,734
Total tax charge
1,128,533
895,194
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2022
2021
£
£
Profit before taxation
5,165,282
4,482,083
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
981,404
851,596
Tax effect of expenses that are not deductible in determining taxable profit
12,945
Permanent capital allowances in excess of depreciation
(26,485)
12,365
Amortisation on assets not qualifying for tax allowances
158,125
136,561
Effect of revaluations of investments
(45,446)
(37,654)
Deferred tax adjustments in respect of prior years
41,089
42,734
Dividend income
(476)
(96)
Other adjustments
5,735
(110,312)
Chargeable gains
1,642
Taxation charge for the year
1,128,533
895,194
12
Dividends
2022
2021
£
£
Interim paid
720,000
240,000
REICH INSURANCE BROKERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
- 19 -
13
Intangible fixed assets
Goodwill
Development costs
Total
£
£
£
Cost
At 1 April 2021
10,948,172
114,586
11,062,758
Additions - internally developed
1,800
1,800
At 31 March 2022
10,948,172
116,386
11,064,558
Amortisation and impairment
At 1 April 2021
2,954,712
62,731
3,017,443
Amortisation charged for the year
718,743
23,277
742,020
At 31 March 2022
3,673,455
86,008
3,759,463
Carrying amount
At 31 March 2022
7,274,717
30,378
7,305,095
At 31 March 2021
7,993,460
51,855
8,045,315
Other Intangible fixed assets above relate to development and set up costs in relation to a Customer Relationship Management (CRM) project. The company has undertaken this project, which is ongoing, with the view of enhancing its ability to provide a more complete service to its client base.
14
Tangible fixed assets
Leasehold improvements
Fixtures and fittings
Computers
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 April 2021
471,106
242,155
262,322
237,458
1,213,041
Additions
13,379
34,756
55,000
103,135
Disposals
(217,960)
(217,960)
At 31 March 2022
471,106
255,534
297,078
74,498
1,098,216
Depreciation and impairment
At 1 April 2021
116,548
134,899
153,140
45,204
449,791
Depreciation charged in the year
31,407
18,095
47,499
16,492
113,493
Eliminated in respect of disposals
(36,671)
(36,671)
At 31 March 2022
147,955
152,994
200,639
25,025
526,613
Carrying amount
At 31 March 2022
323,151
102,540
96,439
49,473
571,603
At 31 March 2021
354,558
107,256
109,182
192,254
763,250
REICH INSURANCE BROKERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
- 20 -
15
Investment property
2022
£
Fair value
At 1 April 2021
183,000
Disposals
(59,685)
Net gains or (losses) through fair value adjustments
243,585
At 31 March 2022
366,900
The fair value of the investment property has been arrived at on the basis of a valuation carried out in March 2022 by Avison Young Chartered Surveyors, who are not connected with the company. The valuation was made on an open market value basis by reference to market evidence of transaction prices for similar properties.
16
Fixed asset investments
2022
2021
£
£
Listed investments
1,956,470
1,720,317
Unlisted investments
232,991
42,600
2,189,461
1,762,917
Fixed asset investments revalued
Included in the value of investments are listed investments of £1,956,470 (2021 - £1,720,317). These investments comprise stock exchange listed equities valued at £317,748 (2021 - £319,484) and listed Employee Benefit Trust Bonds (EBTs) valued at £1,638,722 (2021 - £1,400,833).
The stock exchange listed equities comprise of brought forward balance of £319,484, additions of £36,013, disposals of £27,659 and revaluation loss of £10,090.
The Employee Benefit Trust Bonds comprise of brought forward balance of £1,400,833, additions of £237,696, disposals of £6,206 and revaluation gain of £6,399.
The original EBT was established on 1 April 2010. In relation to the assets of the EBT there are the following restrictions: (1) The Trustees shall not cause any part of the income or capital of the trust to become payable to or applicable for the benefit of an excepted person of the Company, (2) The Trustees shall not apply any part of the Trust Fund directly or indirectly towards the acquisition of any interest in the company, (3) The Trustees shall not infringe the rule against perpetuities.
Fixed asset investments not carried at market value
Included in the value of investments above are unlisted investments at cost of £232,991 (2021 - £42,500). These comprise of brought forward of £42,600, additions of £183,594 and revaluation gain of £6,797.
Following the group reorganisation Reich Insurance Brokers Limited holds an investment in Reich Brokers (a dormant company from 31 March 2021) of £100. This is included in the values above.
REICH INSURANCE BROKERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
16
Fixed asset investments
(Continued)
- 21 -
Movements in fixed asset investments
Investments
£
Cost or valuation
At 1 April 2021
1,762,917
Additions
457,303
Valuation changes
3,106
Disposals
(33,865)
At 31 March 2022
2,189,461
Carrying amount
At 31 March 2022
2,189,461
At 31 March 2021
1,762,917
17
Financial instruments
The directors consider that the carrying amounts of financial liabilities carried at amortised cost in the financial statements approximate to their fair values.
Gains and losses on fair value adjustments are recognised in the profit and loss.
18
Debtors
2022
2021
Amounts falling due within one year:
£
£
Trade debtors
6,030,532
4,913,043
Corporation tax recoverable
18,655
41,245
Amounts owed by group undertakings
3,291,726
2,894,484
Other debtors
239,214
202,470
Prepayments and accrued income
815,421
237,232
10,395,548
8,288,474
2022
2021
Amounts falling due after more than one year:
£
£
Other debtors
94,000
98,498
Total debtors
10,489,548
8,386,972
Debtors more than one year relate to a subordinated loan to a group company. The loan is unsecured.
REICH INSURANCE BROKERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
- 22 -
19
Creditors: amounts falling due within one year
2022
2021
£
£
Trade creditors
112,991
18,671
Amounts owed to group undertakings
100
100
Corporation tax
494,682
472,772
Other taxation and social security
182,121
183,024
Other creditors
4,241,432
4,922,313
Accruals and deferred income
250,143
217,215
5,281,469
5,814,095
20
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Liabilities
Liabilities
2022
2021
Balances:
£
£
Accelerated capital allowances
19,563
9,903
Revaluations
69,082
37,653
88,645
47,556
2022
Movements in the year:
£
Liability at 1 April 2021
47,556
Charge to profit or loss
41,089
Liability at 31 March 2022
88,645
The deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.
21
Retirement benefit schemes
2022
2021
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
213,621
207,004
The company operates a defined contribution pension scheme for all qualifying employees.
The assets of the scheme are held separately from those of the company in an independently administered fund.
REICH INSURANCE BROKERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
- 23 -
22
Share capital
2022
2021
2022
2021
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary A of £1 each
300,000
300,000
300,000
300,000
Ordinary B of £1 each
400
400
400
400
300,400
300,400
300,400
300,400
23
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:
2022
2021
£
£
Within one year
249,291
249,291
Between two and five years
997,164
997,164
In over five years
1,011,507
1,260,798
2,257,962
2,507,253
24
Events after the reporting date
There were no events after the reporting period end date which require disclosure at the balance sheet date.
25
Related party transactions
The following amounts were outstanding at the reporting end date:
2022
2021
Amounts due to related parties
£
£
Companies under common control
4,054,079
4,830,041
The following amounts were outstanding at the reporting end date:
2022
2021
Amounts due from related parties
£
£
Companies under common control
349,220
306,792
REICH INSURANCE BROKERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022
25
Related party transactions
(Continued)
- 24 -
Other information
Included within other debtors for the year ended 31 March 2022 is an amount
of
£
1,526
(2021: £
910 other creditor
) owing
from
Simon Taylor
, a director of the company. This loan is made up of a brought forward
other creditor
of £
910
,
advances of £
184,544
and credits of £
182,108
. The loan is repayable on demand and no interest was charged
in the year. This
loan
was fully repaid
after the balance sheet date.
Included within other
creditors
for the year ended 31 March 2022 is an amount
of
£
106,098
(2021:
£12,644
) owing
from
Daniel Lopian
, a director of the company. This loan is made up of a brought forward of £
12,644
,
advances of £
397,907
and credits of £
491,361
. The loan is repayable on demand and no interest was charged
in the year.
There were no other related party transactions which require disclosure.
26
Ultimate controlling party
The ultimate parent company which owns 100% of the issued share capital is Reich Group Limited, a company incorporated in England and Wales. The group consolidate accounts can be found at Reich Group Limited's registered office of The Copper Room, Deva City Office Park, Trinity Way,Manchester, M3 7BG.
2022-03-31
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