Company registration number 03697314 (England and Wales)
REICH INSURANCE BROKERS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
REICH INSURANCE BROKERS LIMITED
COMPANY INFORMATION
Directors
Mr S P Taylor
Mr J Child
(Appointed 16 June 2023)
Mr J P Cumpstey
(Appointed 5 May 2023)
Mr A Kay
(Appointed 16 June 2023)
Mr J D King
(Appointed 5 May 2023)
Mrs R M Margerson
(Appointed 16 June 2023)
Mr M R Millar
(Appointed 5 May 2023)
Mr S P Rootham
(Appointed 16 June 2023)
Mr R Wootten
(Appointed 16 June 2023)
Secretary
Mr G R Manning
(Appointed 6 April 2023)
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 - 3
Directors' report
4
Directors' responsibilities statement
5
Independent auditor's report
6 - 8
Profit and loss account
9
Statement of comprehensive income
10
Balance sheet
11
Statement of changes in equity
12
Notes to the financial statements
13 - 25
REICH INSURANCE BROKERS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2023
- 1 -
The directors present the strategic report for the year ended 31 March 2023.
Review of the business
The company's principal activity during the period continued to be the provision of insurance broking services. The company is a UK chartered insurance broker providing commercial and private client solutions to its diverse client base across the UK. The company is regulated by the Financial Conduct Authority “FCA”.
On 27 February 2023, the entire ordinary share capital of Reich Group Limited was acquired by Aston Lark Group Limited. The ultimate parent of Aston Lark Group Limited is Howden Group Holdings Limited.
Financial performance
Market conditions were tough during the year caused by a challenging macro environment. Interest rate rises and the outbreak of war in Ukraine led to sanctions on Russia and widespread disruption to financial markets and the international community.
Whilst turnover (commission and fee income) remained resilient, the growth of +1% on 2022 was marginal compared to the group’s increase in underlying cost base.
The profitability of the group has reduced in 2023, however, an element of the reduction in reported operating profit was impacted by the acquisition. The main measure of the group’s profit performance is operating profit before depreciation and amortisation ("EBITDA") which has been assessed below before and after the exceptional items.
2023 2022
Turnover £14,823,255 £14,683,047
Operating Profit £2,491,965 £4,931,199
EBITDA £3,350,736 £5,801,216
EBITDA (excluding exceptionals) £4,812,761 £5,801,216
Profit and loss reserves £26,025,786 £24,812,734
Current ratio 11.84 3.80
Turnover: Total staff costs (times) 1.83 2.32
Non-financial performance
The group will continue to make investment in the underlying systems, governance and infrastructure to support the Company going forward as part of the ongoing integration with Howden Group Holdings Limited.
REICH INSURANCE BROKERS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 2 -
Principal risks and uncertainties
The directors have considered the risks faced by the business and the associated controls in place to address those risks. The principal categories of risk and an overview of the controls in place within the business to mitigate those risks are shown below
| |
| Experienced and qualified executive board and senior management appointed, allowing the business to pursue appropriate strategies. |
| Diverse client base with no undue reliance on any one client or group of clients |
| The company operates in a competitive market, with continued uncertainty over the impact of inflation and the current economic outlook. Diversified business across a variety of classes of insurance products partly mitigates exposure and provides resilience against soft market conditions in any one class and any fall in retention levels across sectors |
| Additional investment within our financial department has further strengthened our ability to monitor and conduct regular forecasting of the company’s financial position |
| Limited exposure restricted to EURO and USD commission and fees as general insurance premiums are collected and settled in the same currency |
| The Bank of England has increased the base rate of interest in the UK throughout the financial period and has continued to do so after the balance sheet date. The base rate rose in the period from 0.75% to 4.25%, and at the date of signing seems to have stabilised at 5.25%. The financial statements demonstrate that the company does not rely on interest income to meet its financial obligations and in spite of the economic financial uncertainty experienced during the period, financial results have proved resilient. |
| Regular forecasting and monitoring of the Company’s cash flows ensure sufficient available funds for ongoing operations and future developments, along with compliance of the FCA’s capital requirements. |
| Cash at bank is held with FCA regulated banks in the UK. Client credit risk exposure is spread over a large number of clients with individual client exposures subject to review as and when they arise. |
| The company has adopted a hybrid working pattern for staff. Following the outbreak of covid-19 in 2020, there has been an increased deployment and upgrade in capability of IT functions. |
| Formal organisation structure in place with no undue reliance on any one individual. |
| Formal compliance structure in place which continues to be monitored at a senior level. The board recognises that the business is sensitive to regulatory changes implemented by the FCA which are to an extent outside of the company's direct control. |
REICH INSURANCE BROKERS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 3 -
Governance and board
Since the acquisition on 27 February 2023 new directors have been appointed to the board as part of a governance review. The new board appointments provide the company with further experience and knowledge depth at a senior level. The current board consists of experienced and qualified management, with many years in the insurance broking industry. This enables the board to pursue appropriate strategies to deliver its objectives of promoting the company's long-term success and creating benefits for its stakeholders.
The company is regulated by the FCA and must adhere to the FCA's principles of business which provide high level standards including the management and control to organise and control its affairs, responsibly and effectively with adequate risk management systems.
The company operates an organisational structure with clear allocation and appropriate segregation of responsibilities amongst the board members which is documented in a responsibilities map and statement of responsibilities in line with the requirements of the FCA's Senior Managers and Certification Regime.
Since the acquisition of Reich Group Limited in February 2023, the board has continued to review existing committees and implement new forums when necessary to enforce high professional standards.
Mr S P Taylor
Director
29 December 2023
REICH INSURANCE BROKERS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2023
- 4 -
The directors present their annual report and financial statements for the year ended 31 March 2023.
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 £592,263. 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
(Resigned 11 May 2023)
Mr J Child
(Appointed 16 June 2023)
Mr J P Cumpstey
(Appointed 5 May 2023)
Mr A Kay
(Appointed 16 June 2023)
Mr J D King
(Appointed 5 May 2023)
Mrs R M Margerson
(Appointed 16 June 2023)
Mr M R Millar
(Appointed 5 May 2023)
Mr S P Rootham
(Appointed 16 June 2023)
Mr R Wootten
(Appointed 16 June 2023)
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.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
On behalf of the board
Mr S P Taylor
Director
29 December 2023
REICH INSURANCE BROKERS LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MARCH 2023
- 5 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
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 ;
prepare the on the going concern basis unless it is inappropriate to presume that the group and 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
- 6 -
Opinion
We have audited the financial statements of Reich Insurance Brokers Limited (the 'company') for the year ended 31 March 2023 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 2023 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' report 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
- 7 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
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' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
REICH INSURANCE BROKERS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF REICH INSURANCE BROKERS LIMITED
- 8 -
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.
Nathaniel Davidson BA(Hons) ACA (Senior Statutory Auditor)
For and on behalf of Lopian Gross Barnett & Co
29 December 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 2023
- 9 -
2023
2022
Notes
£
£
Turnover
3
14,823,225
14,683,047
Administrative expenses
(11,187,832)
(10,060,161)
Other operating income
318,597
308,313
Exceptional item
4
(1,462,025)
Operating profit
5
2,491,965
4,931,199
Interest receivable and similar income
9
23,266
2,506
Interest payable and similar expenses
10
(5,872)
(6,669)
Other gains and (losses)
11
(34,927)
(5,339)
Fair value gains and losses on investment properties
16
243,585
Profit before taxation
2,474,432
5,165,282
Tax on profit
12
(669,117)
(1,128,533)
Profit for the financial year
1,805,315
4,036,749
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 2023
- 10 -
2023
2022
£
£
Profit for the year
1,805,315
4,036,749
Other comprehensive income
-
-
Total comprehensive income for the year
1,805,315
4,036,749
REICH INSURANCE BROKERS LIMITED
BALANCE SHEET
AS AT
31 MARCH 2023
31 March 2023
- 11 -
2023
2022
Notes
£
£
£
£
Fixed assets
Goodwill
14
6,555,974
7,274,717
Other intangible assets
14
7,102
30,378
Total intangible assets
6,563,076
7,305,095
Tangible assets
15
959,054
571,603
Investment property
16
366,900
Investments
17
60,000
2,189,461
7,582,130
10,433,059
Current assets
Debtors
18
16,562,434
10,489,548
Cash at bank and in hand
3,355,900
9,560,641
19,918,334
20,050,189
Creditors: amounts falling due within one year
19
(1,116,263)
(5,281,469)
Net current assets
18,802,071
14,768,720
Total assets less current liabilities
26,384,201
25,201,779
Provisions for liabilities
Deferred tax liability
20
58,015
88,645
(58,015)
(88,645)
Net assets
26,326,186
25,113,134
Capital and reserves
Called up share capital
22
300,400
300,400
Profit and loss reserves
26,025,786
24,812,734
Total equity
26,326,186
25,113,134
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.true
The financial statements were approved by the board of directors and authorised for issue on 29 December 2023 and are signed on its behalf by:
Mr S P Taylor
Director
Company registration number 03697314 (England and Wales)
REICH INSURANCE BROKERS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2023
- 12 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 April 2021
300,400
21,495,985
21,796,385
Year ended 31 March 2022:
Profit and total comprehensive income
-
4,036,749
4,036,749
Dividends
13
-
(720,000)
(720,000)
Balance at 31 March 2022
300,400
24,812,734
25,113,134
Year ended 31 March 2023:
Profit and total comprehensive income
-
1,805,315
1,805,315
Dividends
13
-
(592,263)
(592,263)
Balance at 31 March 2023
300,400
26,025,786
26,326,186
REICH INSURANCE BROKERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
- 13 -
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 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 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. The company has therefore taken advantage of exemptions 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
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
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 2023
1
Accounting policies
(Continued)
- 14 -
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:
Freehold land and buildings
No depreciation charged in the year
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 at 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 2023
1
Accounting policies
(Continued)
- 15 -
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.
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 payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
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.
REICH INSURANCE BROKERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 16 -
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 leases asset are consumed.
1.18
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.
REICH INSURANCE BROKERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 17 -
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2023
2022
£
£
Turnover analysed by class of business
Insurance Brokerage
14,823,225
14,683,047
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
14,823,225
14,683,047
2023
2022
£
£
Other revenue
Interest income
23,266
-
Dividends received
-
2,506
4
Exceptional item
2023
2022
£
£
Expenditure
Exceptional items
1,462,025
-
The exceptional items relate to bonus payments to employees in relation to the Employee Benefit Trust scheme which was a long term incentive plan, one off costs for the group acquisition and a one off charitable donation.
5
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange gains
(29,578)
(1,153)
Research and development costs
88,403
88,138
Fees payable to the company's auditor for the audit of the company's financial statements
127,100
81,940
Depreciation of owned tangible fixed assets
128,411
113,494
Profit on disposal of tangible fixed assets
-
(546)
(Profit)/loss on disposal of investment property
15,049
Amortisation of intangible assets
742,019
742,020
Operating lease charges
237,049
249,291
REICH INSURANCE BROKERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 18 -
6
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
127,100
81,940
7
Employees
The average monthly number of persons (including directors) employed by the company during the year was 121 (2022 - 112).
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
6,312,662
5,513,927
Social security costs
531,830
578,244
Pension costs
236,746
213,621
7,081,238
6,305,792
8
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
479,167
573,545
Company pension contributions to defined contribution schemes
4,901
19,603
484,068
593,148
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2022 - 2).
Included in rent is £33,716 (2022: £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.
9
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
23,266
Other income from investments
Dividends received
2,506
Total income
23,266
2,506
REICH INSURANCE BROKERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 19 -
10
Interest payable and similar expenses
2023
2022
£
£
Other interest
5,872
6,669
11
Amounts written off investments
2023
2022
£
£
Fair value gains/(losses) on financial instruments
Change in value of financial assets held at fair value through profit or loss
168,609
(4,393)
Other gains/(losses)
Loss on disposal of investments held at fair value
(203,536)
(946)
(34,927)
(5,339)
12
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
699,748
1,087,444
Deferred tax
Origination and reversal of timing differences
(30,631)
41,089
Total tax charge
669,117
1,128,533
REICH INSURANCE BROKERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
12
Taxation
(Continued)
- 20 -
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:
2023
2022
£
£
Profit before taxation
2,474,432
5,165,282
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2022: 19.00%)
470,142
981,404
Tax effect of expenses that are not deductible in determining taxable profit
93,558
12,945
Tax effect of utilisation of tax losses not previously recognised
(1,858)
Permanent capital allowances in excess of depreciation
247
(26,485)
Amortisation on assets not qualifying for tax allowances
140,984
158,125
Effect of revaluations of investments
(3,325)
(45,446)
Deferred tax adjustments in respect of prior years
(30,631)
41,089
Dividend income
(476)
Other adjustments
5,735
Chargeable gains
1,642
Taxation charge for the year
669,117
1,128,533
13
Dividends
2023
2022
£
£
Interim paid
592,263
720,000
14
Intangible fixed assets
Goodwill
Development costs
Total
£
£
£
Cost
At 1 April 2022 and 31 March 2023
10,948,172
116,386
11,064,558
Amortisation and impairment
At 1 April 2022
3,673,455
86,008
3,759,463
Amortisation charged for the year
718,743
23,276
742,019
At 31 March 2023
4,392,198
109,284
4,501,482
Carrying amount
At 31 March 2023
6,555,974
7,102
6,563,076
At 31 March 2022
7,274,717
30,378
7,305,095
REICH INSURANCE BROKERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 21 -
15
Tangible fixed assets
Freehold land and buildings
Leasehold improvements
Fixtures and fittings
Computers
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 1 April 2022
471,106
255,534
297,078
74,498
1,098,216
Additions
432,935
3,792
79,135
515,862
At 31 March 2023
432,935
471,106
259,326
376,213
74,498
1,614,078
Depreciation and impairment
At 1 April 2022
147,955
152,994
200,639
25,025
526,613
Depreciation charged in the year
31,407
26,698
57,939
12,367
128,411
At 31 March 2023
179,362
179,692
258,578
37,392
655,024
Carrying amount
At 31 March 2023
432,935
291,744
79,634
117,635
37,106
959,054
At 31 March 2022
323,151
102,540
96,439
49,473
571,603
16
Investment property
2023
£
Fair value
At 1 April 2022
366,900
Disposals
(366,900)
At 31 March 2023
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.
The property was disposed during the year and reported no gain or loss on disposal.
17
Fixed asset investments
2023
2022
£
£
Listed investments
1,956,470
Unlisted investments
60,000
232,991
60,000
2,189,461
REICH INSURANCE BROKERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
17
Fixed asset investments
(Continued)
- 22 -
Fixed asset investments revalued
Listed investments were disposed during the year (2022 value: £1,956,470). These investments comprised of stock exchange listed equities which were disposed during the year (2022 value: £317,748) and listed Employee Benefit Trust Bonds (EBTs) which were also disposed (2022 value: £1,638,722). The reported loss on disposal of these investments was £113,522.
The stock exchange listed equities comprise of brought forward balance of £317,748, additions of £nil, disposals of £317,748 and revaluation loss of £nil. The reported loss on disposal of these investments was £47,982.
The Employee Benefit Trust Bonds comprise of brought forward balance of £1,638,722, additions of £nil, disposals of £1,638,722 and revaluation gain of £nil. The reported loss on disposal of these investments was £65,540.
Fixed asset investments not carried at market value
Included in the value of investments above are unlisted investments at cost of £60,000 (2022 - £232,991). These comprise of brought forward of £232,991, a revaluation gain of £17,500 and disposals of £190,491. The reported profit on disposal of these investments was £34,972.
Movements in fixed asset investments
Investments
£
Cost or valuation
At 1 April 2022
2,189,461
Valuation changes
17,500
Disposals
(2,146,961)
At 31 March 2023
60,000
Carrying amount
At 31 March 2023
60,000
At 31 March 2022
2,189,461
18
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
5,708,683
6,030,532
Corporation tax recoverable
397,116
18,655
Amounts owed by group undertakings
4,749,320
3,291,726
Other debtors
5,273,700
239,214
Prepayments and accrued income
339,615
815,421
16,468,434
10,395,548
REICH INSURANCE BROKERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
18
Debtors
(Continued)
- 23 -
2023
2022
Amounts falling due after more than one year:
£
£
Other debtors
94,000
94,000
Total debtors
16,562,434
10,489,548
Debtors more than one year relate to a subordinated loan to a group company. The loan is unsecured.
19
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
93,361
112,991
Amounts owed to group undertakings
100
Corporation tax
494,682
Other taxation and social security
422,146
182,121
Other creditors
193,172
4,241,432
Accruals and deferred income
407,584
250,143
1,116,263
5,281,469
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
2023
2022
Balances:
£
£
Accelerated capital allowances
26,636
19,563
Revaluations
31,379
69,082
58,015
88,645
2023
Movements in the year:
£
Liability at 1 April 2022
88,645
Credit to profit or loss
(30,630)
Liability at 31 March 2023
58,015
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.
REICH INSURANCE BROKERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 24 -
21
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
236,746
213,621
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.
22
Share capital
2023
2022
2023
2022
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:
2023
2022
£
£
Within one year
337,500
249,291
Between two and five years
1,350,000
997,164
In over five years
1,030,993
1,011,507
2,718,493
2,257,962
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:
2023
2022
Amounts due to related parties
£
£
Companies under common control
-
4,054,079
REICH INSURANCE BROKERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
25
Related party transactions
(Continued)
- 25 -
The following amounts were outstanding at the reporting end date:
2023
2022
Amounts due from related parties
£
£
Companies under common control
5,148,310
349,220
26
Directors' transactions
Description
Opening balance
Amounts advanced
Amounts repaid
Closing balance
£
£
£
£
Mr S P Taylor -
1,526
515,164
(516,690)
-
Mr D A Lopian -
(106,098)
238,945
(132,847)
-
(104,572)
754,109
(649,537)
-
27
Parent company and ultimate controlling party
The 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.
The ultimate parent of Reich Group Limited is Howden Group Holdings Limited. There are no parties who have individual control over the company or the group.
2023-03-312022-04-01falseCCH SoftwareCCH Accounts Production 2023.300Mr S P TaylorMr D A LopianMr J ChildMr J P CumpsteyMr A KayMr J D KingMrs R M MargersonMr M R MillarMr S P RoothamMr R WoottenMr G R Manningfalse036973142022-04-012023-03-3103697314bus:Director12022-04-012023-03-3103697314bus:Director32022-04-012023-03-3103697314bus:Director42022-04-012023-03-3103697314bus:Director52022-04-012023-03-3103697314bus:Director62022-04-012023-03-3103697314bus:Director72022-04-012023-03-3103697314bus:Director82022-04-012023-03-3103697314bus:Director92022-04-012023-03-3103697314bus:Director102022-04-012023-03-3103697314bus:CompanySecretary12022-04-012023-03-3103697314bus:Director22022-04-012023-03-3103697314bus:RegisteredOffice2022-04-012023-03-31036973142023-03-31036973142021-04-012022-03-310369731412022-04-012023-03-310369731412021-04-012022-03-3103697314core:RetainedEarningsAccumulatedLosses2021-04-012022-03-3103697314core:RetainedEarningsAccumulatedLosses2022-04-012023-03-3103697314core:Goodwill2023-03-3103697314core:Goodwill2022-03-3103697314core:OtherResidualIntangibleAssets2023-03-3103697314core:OtherResidualIntangibleAssets2022-03-31036973142022-03-3103697314core:DevelopmentCostsCapitalisedDevelopmentExpenditure2023-03-3103697314core:DevelopmentCostsCapitalisedDevelopmentExpenditure2022-03-3103697314core:LandBuildingscore:OwnedOrFreeholdAssets2023-03-3103697314core:LeaseholdImprovements2023-03-3103697314core:FurnitureFittings2023-03-3103697314core:ComputerEquipment2023-03-3103697314core:MotorVehicles2023-03-3103697314core:LandBuildingscore:OwnedOrFreeholdAssets2022-03-3103697314core:LeaseholdImprovements2022-03-3103697314core:FurnitureFittings2022-03-3103697314core:ComputerEquipment2022-03-3103697314core:MotorVehicles2022-03-3103697314core:CurrentFinancialInstrumentscore:WithinOneYear2023-03-3103697314core:CurrentFinancialInstrumentscore:WithinOneYear2022-03-3103697314core:CurrentFinancialInstruments2023-03-3103697314core:CurrentFinancialInstruments2022-03-3103697314core:ShareCapital2023-03-3103697314core:ShareCapital2022-03-3103697314core:RetainedEarningsAccumulatedLosses2023-03-3103697314core:RetainedEarningsAccumulatedLosses2022-03-3103697314core:ShareCapital2021-03-3103697314core:RetainedEarningsAccumulatedLosses2021-03-3103697314core:ShareCapitalOrdinaryShares2023-03-3103697314core:ShareCapitalOrdinaryShares2022-03-3103697314core:Goodwill2022-04-012023-03-3103697314core:IntangibleAssetsOtherThanGoodwill2022-04-012023-03-3103697314core:DevelopmentCostsCapitalisedDevelopmentExpenditure2022-04-012023-03-3103697314core:LandBuildingscore:OwnedOrFreeholdAssets2022-04-012023-03-3103697314core:LeaseholdImprovements2022-04-012023-03-3103697314core:FurnitureFittings2022-04-012023-03-3103697314core:ComputerEquipment2022-04-012023-03-3103697314core:MotorVehicles2022-04-012023-03-3103697314core:UKTax2022-04-012023-03-3103697314core:UKTax2021-04-012022-03-310369731422022-04-012023-03-310369731422021-04-012022-03-310369731432022-04-012023-03-310369731432021-04-012022-03-310369731442022-04-012023-03-310369731442021-04-012022-03-3103697314core:Goodwill2022-03-3103697314core:DevelopmentCostsCapitalisedDevelopmentExpenditure2022-03-31036973142022-03-3103697314core:LandBuildingscore:OwnedOrFreeholdAssets2022-03-3103697314core:LeaseholdImprovements2022-03-3103697314core:FurnitureFittings2022-03-3103697314core:ComputerEquipment2022-03-3103697314core:MotorVehicles2022-03-3103697314core:Non-currentFinancialInstrumentscore:ListedExchangeTraded2023-03-3103697314core:Non-currentFinancialInstrumentscore:ListedExchangeTraded2022-03-3103697314core:Non-currentFinancialInstrumentscore:UnlistedNon-exchangeTraded2023-03-3103697314core:Non-currentFinancialInstrumentscore:UnlistedNon-exchangeTraded2022-03-3103697314core:Non-currentFinancialInstruments2023-03-3103697314core:Non-currentFinancialInstruments2022-03-3103697314core:WithinOneYear2023-03-3103697314core:WithinOneYear2022-03-3103697314core:BetweenTwoFiveYears2023-03-3103697314core:BetweenTwoFiveYears2022-03-3103697314core:MoreThanFiveYears2023-03-3103697314core:MoreThanFiveYears2022-03-3103697314bus:PrivateLimitedCompanyLtd2022-04-012023-03-3103697314bus:FRS1022022-04-012023-03-3103697314bus:Audited2022-04-012023-03-3103697314bus:FullAccounts2022-04-012023-03-31xbrli:purexbrli:sharesiso4217:GBP