CIA Insurance Services Limited - Limited company accounts 20.1

REGISTERED NUMBER: 04332604 (England and Wales)

STRATEGIC REPORT, DIRECTORS' REPORT AND

AUDITED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2019

FOR

CIA INSURANCE SERVICES LIMITED

Page

Company Information

1

Strategic Report

2

Directors' Report

3

Report of the Independent Auditors

5

Statement of Income and Retained Earnings

7

Statement of Financial Position

8

Notes to the Financial Statements

9

DIRECTORS:

Mr E J Blundell

Mrs L C Callaby

REGISTERED OFFICE:

Boughton Leigh House

Brownsover Road

Rugby

Warwickshire

CV21 1AW

REGISTERED NUMBER:

04332604 (England and Wales)

AUDITORS:

TGFP

Chartered Accountants & Statutory Auditors

Fulford House

Newbold Terrace

Leamington Spa

Warwickshire

CV32 4EA

The directors present their strategic report for the year ended 31 December 2019.

REVIEW OF BUSINESS

The financial results for the year ended 31 December 2019 reflect an increase in turnover of 14%, which was marginally higher than our original forecast for the year. We saw a small increase in the level of retained business and a substantial increase in new business levels, due to changes to our marketing that we had made in the second half of 2018.

Our marketing spend was higher than in 2018 as a result of these changes and there was a slight increase in other expenditure, which in the most part was due to the processing costs incurred for the increase in business.

We have been fortunate that to date in 2020 the ongoing pandemic has not had a material impact on the performance of the business. Our forecasts for 2020 do reflect a 4% decrease in turnover as a result of lower new business levels. This is due to a pre-planned change in our marketing strategy in which we are no longer utilising aggregator channels to generate the majority of new business. We are instead investing in our own brand marketing campaigns and further developing the CIA brand. This should put the business in a stronger position going forward.

The company's key financial performance indicators during the year are:

Turnover - £15,823,500 (2018 - £13.881.014)

Profit for the financial year - £341,269 (2018 - £125,552)

PRINCIPAL RISKS AND UNCERTAINTIES

The principal risks identified by the directors are credit risk and liquidity risk.

ON BEHALF OF THE BOARD:

Mrs L C Callaby - Director

3 December 2020

The directors present their report with the financial statements of the company for the year ended 31 December 2019.

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of insurance and re-insurance brokers.

DIVIDENDS

No dividends will be distributed for the year ended 31 December 2019.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 January 2019 to the date of this report.

Mr E J Blundell

Mrs L C Callaby

FINANCIAL INSTRUMENTS

The business' principal financial instruments comprise bank balances, insurance debtors, insurance creditors and other creditors. The main purpose of these instruments is to finance the business' operations.

Debtors are managed in respect of credit risk by policies concerning the credit offered to customers and the regular monitoring of amounts outstanding for both time and credit limits.

Creditors liquidity risk is managed by ensuring sufficient funds are available to meet amounts due.

STRATEGIC REPORT

In accordance with section 414C(11) of the Companies Act 2006 (Strategic Report and Directors Report) Regulations 2013, the company has prepared a Strategic Report, which includes information that would have previously been included in the Directors' Report.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Strategic Report, the Directors' 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), including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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;

-	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.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

AUDITORS

The auditors, TGFP, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

Mrs L C Callaby - Director

3 December 2020

Opinion

We have audited the financial statements of CIA Insurance Services Limited (the 'company') for the year ended 31 December 2019 which comprise the Statement of Income and Retained Earnings, Statement of Financial Position and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including 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 December 2019 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.

Basis for opinion

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 Auditors' 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 directors' 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 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.

Other information

The directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Directors' Report, but does not include the financial statements and our Report of the Auditors thereon.

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.

In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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 the 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.

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 where 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 directors' 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 Statement of Directors' Responsibilities set out on page three, 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 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.

Auditors' 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 a Report of the Auditors 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.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

Use of our 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 a Report of the Auditors 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.

BENJAMIN REYNOLDS BSc(Hons) FCA (Senior Statutory Auditor)

for and on behalf of TGFP

Chartered Accountants & Statutory Auditors

Fulford House

Newbold Terrace

Leamington Spa

Warwickshire

CV32 4EA

8 December 2020

TURNOVER

3

15,823,500

13,881,014

Cost of sales

2,820,299

2,674,795

GROSS PROFIT

13,003,201

11,206,219

Administrative expenses

12,676,030

11,082,667

327,171

123,552

Other operating income

50,000

50,000

OPERATING PROFIT

5

377,171

173,552

Income from fixed asset investments

10,371

(9,343

)

Interest receivable and similar income

6

8,030

3,567

18,401

(5,776

)

PROFIT BEFORE TAXATION

395,572

167,776

Tax on profit

7

54,303

42,224

PROFIT FOR THE FINANCIAL YEAR

341,269

125,552

Retained earnings at beginning of year

1,266,029

1,140,477

RETAINED EARNINGS AT END OF YEAR

1,607,298

1,266,029

FIXED ASSETS

Intangible assets

9

617

8,091

Tangible assets

10

429,792

301,719

430,409

309,810

CURRENT ASSETS

Debtors

11

773,839

719,520

Investments

12

45,052

37,008

Cash at bank and in hand

4,126,869

3,526,861

4,945,760

4,283,389

CREDITORS

Amounts falling due within one year

13

3,538,371

3,096,670

NET CURRENT ASSETS

1,407,389

1,186,719

TOTAL ASSETS LESS CURRENT LIABILITIES

1,837,798

1,496,529

CAPITAL AND RESERVES

Called up and paid share capital

15

230,500

230,500

Retained earnings

16

1,607,298

1,266,029

SHAREHOLDERS' FUNDS

1,837,798

1,496,529

The financial statements were approved by the Board of Directors and authorised for issue on 3 December 2020 and were signed on its behalf by:

Mr E J Blundell - Director

1.	STATUTORY INFORMATION

CIA Insurance Services Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

The presentation currency of the financial statements is the Pound Sterling (£).

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Financial Reporting Standard 102 - reduced disclosure exemptions

FRS 102 allows a qualifying entity certain disclosure exemptions. The company has taken advantage of the following available exemptions:

1 - the requirement to prepare a statement of cash flows;

2 - financial instruments disclosures, including categories of financial instruments; and

3 - the disclosure of key management personnel remuneration in total.

Related party exemption

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.

Significant judgements and estimates

The preparation of financial statements in conformity with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the company's accounting policies. For the year under review there were no specific areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates had a material bearing on the financial statements.

Turnover

Turnover represents commissions and fees received in respect of insurance services provided in the ordinary course of the company's activities. Turnover is recognised in the period to which the income relates.

Intangible assets

Separately acquired computer software is shown at historical cost.

Computer software has a finite useful life and is carried at cost less accumulated amortisation and any accumulated impairment losses.

Amortisation

Amortisation is provided on intangible assets so as to write off the cost, less any estimated residual value, over their useful life. Computer software is being amortised over its estimated useful life of four years or eleven years.

Tangible fixed assets

Tangible assets are stated in the statement of financial position at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Improvements to property - 10% on cost

Motor vehicles - 25% on cost

Computer equipment - 15% on reducing balance

Financial instruments

Financial instruments are classified and accounted for as financial assets, financial liabilities or equity instruments, according to the substance of the contractual arrangement. Equity instruments are those that entitle the holder to a residual interest in the company's assets after deducting all of its liabilities.

Basic financial instruments are recognised at amortised cost, except for investments in non-convertible preference and non-puttable ordinary and preference shares, which are measured at fair value provided that this can be measured reliably. Derivative financial instruments are initially recorded at cost and thereafter at fair value with changes recognised in profit or loss.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the date of the statement of financial position.

Trade debtors

Trade debtors are amounts due from customers for services performed in the ordinary course of business.

Trade debtors are recognised initially at the transaction price. They are subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for the impairment of trade debtors is established when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of the receivables.

Trade creditors

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade creditors are recognised initially at the transaction price and subsequently at amortised cost using the effective interest method.

Hire purchase and leasing commitments

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease.

Pension costs and other post-retirement benefits

The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate.

Clients' accounts

The company operates, what are called in the industry, client accounts. The company has entered into risk transfer agreements with the insurers which means that the insurers take on the risk of the policy from the date of purchase by the customer. Therefore, the cash held by the company in the client account is held in trust for the insurers and is not monies held on behalf of the company's customers.

Current asset investments

Investments are recorded in the statement of financial position at market value, with any gains or losses realised through profit or loss.

3.

TURNOVER

Turnover for the year from continuing operations all arose in the UK and related to the provision of services.

4.	EMPLOYEES AND DIRECTORS

2019

2018

£

£

Wages and salaries

2,511,454

2,424,546

Social security costs

185,669

185,204

Other pension costs

119,469

68,444

2,816,592

2,678,194

The average number of employees during the year was as follows:

2019

2018

Directors

2

2

Management

18

17

Support

81

94

101

113

2019

2018

£

£

Directors' remuneration

16,110

24,898

Directors' pension contributions to money purchase schemes

174

124

The number of directors to whom retirement benefits were accruing was as follows:

Money purchase schemes

2

2

5.	OPERATING PROFIT

The operating profit is stated after charging:

2019

2018

£

£

Hire of plant and machinery

14,021

16,255

Other operating leases

84,000

84,000

Depreciation - owned assets

54,574

52,269

Loss on disposal of fixed assets

-

216

Computer software amortisation

7,474

9,908

Auditors' remuneration

9,540

8,425

Remuneration trust contribution

5,313,000

4,735,500

6.

INTEREST RECEIVABLE AND SIMILAR INCOME

2019

2018

£

£

Deposit account interest

8,030

3,567

7.

TAXATION

Analysis of the tax charge

The tax charge on the profit for the year was as follows:

2019

2018

£

£

Current tax:

UK corporation tax

54,303

42,258

(Over)/under-provision of tax

-

(34

)

Tax on profit

54,303

42,224

Reconciliation of total tax charge included in profit and loss

The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained below:

2019

2018

£

£

Profit before tax

395,572

167,776

Profit multiplied by the standard rate of corporation tax in the UK of 19% (2018 - 19%)

75,159

31,877

Effects of:

Expenses not deductible for tax purposes

6,551

9,282

Capital allowances in excess of depreciation

(24,908

)

(676

)

Franked investment income

(442

)

1,775

Over/under provision

-

(34

)

Fair value (gains) / losses

(1,529

)

-

Group relief

(528

)

-

Total tax charge

54,303

42,224

8.	ADMINISTRATION EXPENSES

The company made a contribution in the accounting period to a remuneration trust in the amount of £5,313,000 (2018 - £4,735,500). The terms of the trust are set out in a trust deed executed by the company and the original trustees.

9.	INTANGIBLE FIXED ASSETS

Computer

software

£

COST

At 1 January 2019

and 31 December 2019

150,583

AMORTISATION

At 1 January 2019

142,492

Amortisation for year

7,474

At 31 December 2019

149,966

NET BOOK VALUE

At 31 December 2019

617

At 31 December 2018

8,091

10.	TANGIBLE FIXED ASSETS

Improvements

to

Motor

Computer

property

vehicles

equipment

Totals

£

£

£

£

COST

At 1 January 2019

49,448

43,050

670,029

762,527

Additions

-

-

182,647

182,647

At 31 December 2019

49,448

43,050

852,676

945,174

DEPRECIATION

At 1 January 2019

9,890

35,166

415,752

460,808

Charge for year

4,945

7,884

41,745

54,574

At 31 December 2019

14,835

43,050

457,497

515,382

NET BOOK VALUE

At 31 December 2019

34,613

-

395,179

429,792

At 31 December 2018

39,558

7,884

254,277

301,719

11.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2019

2018

£

£

Sales ledger control account

10,368

11,335

Insurance debtors

241,843

252,699

Amounts owed by group undertakings

475,364

398,000

Other debtors

11,236

10,809

Prepayments and accrued income

35,028

46,677

773,839

719,520

12.	CURRENT ASSET INVESTMENTS

The market value of investments at the year end is £45,052 (2018 - £37,008).

13.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2019

2018

£

£

Trade creditors

71,225

26,526

Insurance creditors

2,484,844

2,202,924

Tax

54,303

42,258

Social security and other taxes

46,001

45,226

Other creditors

75,191

75,191

Directors' current accounts

149,148

169,148

Accruals and deferred income

657,659

535,397

3,538,371

3,096,670

14.	SECURED DEBTS

There is security over the borrowings of the company by way of a fixed and floating charge over all assets.

15.

CALLED UP AND PAID SHARE CAPITAL

Allotted, issued and fully paid:

Number:

Class:

Nominal

2019

2018

value:

£

£

230,500

Ordinary

£1

230,500

230,500

16.

RESERVES

Share capital represents the number of shares issued at nominal price.

The profit and loss account represents accumulated comprehensive income for the year and prior periods, after deduction of dividends paid.

17.	PENSION COMMITMENTS

The company operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the company to the scheme and amounted to £119,295 (2018 - £68,320).

There were no contributions outstanding as payable to the scheme at the current or prior year ends.

18.	ULTIMATE PARENT COMPANY

The ultimate parent company is LEM Limited, incorporated in England and Wales, which is the parent of the smallest and largest group preparing consolidated financial statements that include the company.

19.	RELATED PARTY DISCLOSURES

Included within other creditors are amounts owing to a shareholder of the parent company totalling £75,191 (2018 - £75,191).

Also included in other creditors are amounts owing to the directors totalling £149,148 (2018 - £169,148).

Included in amounts owed to group undertakings are amounts owing of £222,694 (2018 - £152,000) from a company under the control of the directors.

The above loans are interest free and repayable on demand.

20.	CASH AT BANK AND IN HAND

Included within cash at bank in the balance sheet is £3,217,108 (2018 - £2,690,728) of cash held in the company's client account which is held on trust on behalf of the insurance companies. This money is paid to insurance creditors after the balance sheet date.