Registered number:
FOR THE YEAR ENDED 31 DECEMBER 2021
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CKRE LIMITED
COMPANY INFORMATION
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CKRE LIMITED
CONTENTS
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CKRE LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
CKRe Limited (‘’CKRe’’) is an international insurance and reinsurance broking company and a broker at Lloyd’s based in London, United Kingdom.
The Company arranges insurance and reinsurance contracts for corporate, private and insurance company clients throughout the world.
CKRe continued to make good progress as an international business during the year despite the continuing impact of the global Covid-19 pandemic. The robustness of its ability to trade, both in an office based and remote environment, has ensured that it could continue to transact business, despite governmental restrictions on office based working at various points, and restrictions on overseas travel during the period.
The Company continued to focus on its specialist broking activities embracing treaty and facultative reinsurance as well as retail insurance, with the majority of business derived from clients outside the UK. As part of this strategy the company has a diverse portfolio embracing marine, aviation, energy, private clients and sports risks as well as a strong reputation in Africa and the ability to transact all key insurance classes throughout the world. The company has continued to demonstrate a profitable performance and in 2021 recorded a profit before taxation of £124,713 for the 12 month period despite the business restrictions imposed by the pandemic. There were no changes in the shareholders or the ultimate holding company during the year.
At a macro level the principal risks and uncertainties faced by the company remain the uncertain global economic environment as the post pandemic recovery takes place leading to economic supply and inflationary pressures. In addition, the threat of political instability around the world creates trading uncertainty, sanction restrictions, currency fluctuations and domestic protectionism.
At a local level the principal risks and certainties are the changes in the regulatory requirements in the countries in which the company trades or operates from, the ever increasing cyber threats and the retention of key talent in the business in a competitive trading environment.
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CKRE LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
CKRe actively manages all risks in the business through the identification of the key risks, instigating mitigation plans and reviewing the risk register with regular Board oversight.
CKRe’s principal regulator is the Financial Conduct Authority and it operates within the principals and good practice required by the Regulator. Practices and procedures are documented and monitored as part of the regulatory process and regular reports are produced at each Board Meeting. The company is also subject to the requirements of being a Lloyd’s broker and adheres to the regulatory practices required by the countries with whom it trades and where it operates. Procedures and practices are in place to ensure money laundering, conflicts of interest and sanction restrictions are implemented and monitored. The Business also ensures it follows good practice diversity management and is developing a strategy for environmental sustainability, social responsibility and excellence in corporate governance. The Directors consider the risk management and governance procedures that are in place are relevant and appropriate for the business and all necessary risk mitigation practices are in place. Financial key performance indicators The company uses a number of measures to regularly monitor performance including:
∙
Management accounts to review revenue and expenses against budget
∙
Analysis of placements with underwriters
∙
Monitoring of debtors and creditors
∙
Cashflow and regulatory capital projections
∙
Assessment of performance against objectives
∙
Compliance key indicator reports
∙
Audits of compliance and business processes
∙
Monitoring of incidents that could have a material financial impact on the business
The Directors are satisfied with the implementation of these and other measures as a means of monitoring the continuing good health of the Business and to identify adverse trends and future changes so that corrective actions can be taken in good time.
This report was approved by the board on 26 August 2022 and signed on its behalf.
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CKRE LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
The directors present their report and the audited financial statements for the year ended 31 December 2021.
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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), 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 for the Company's financial statements and then apply them consistently;
∙
make judgments 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; and
∙
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 to 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.
The profit for the year, after taxation, amounted to £
124,713
(2020:
£
189,854
)
.
The EBITDA for the year, before amounts written off investments and differences due to foreign exchange, showed a positive amount for the financial year of £217,791
(2020: £212,434).
The director who served during the year was:
G. Callaghan (resigned 9 February 2022)
Following the year-end, H. Dika was appointed as a director on 1 February 2022.
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CKRE LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
The auditors, Wilder Coe Ltd, will be proposed for reappointment in accordance with
section 485 of the Companies Act 2006.
This report was approved by the board on
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CKRE LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CKRE LIMITED
We have audited the financial statements of CKRe Limited (the 'Company') for the year ended 31 December 2021, which comprise the Statement of Comprehensive Income, the Balance Sheet, the Statement of Cash Flows, Analysis of Net Debt, the Statement of Changes in Equity
and the related notes, 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).
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 United Kingdom, including the Financial Reporting Council'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.
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' 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.
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CKRE LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CKRE LIMITED (CONTINUED)
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.
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.
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CKRE LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CKRE LIMITED (CONTINUED)
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 Auditors' 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.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, 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:
Discussions with and enquiries of management and those charged with governance were held with a view to identifying those laws and regulations that could be expected to have a material impact on the financial statements. During the engagement team briefing, the outcomes of these discussions and enquiries were shared with the team, as well as consideration as to where and how fraud may occur in the entity. The following laws and regulations were identified as being of significance to the entity:
∙
Those laws and regulations considered to have a direct effect on the financial statements include UK financial reporting standards, Company Law, Tax and Pensions legislation, distributable profits legislation and FCA regulations.
∙
Those laws and regulations for which non-compliance may be fundamental to the operating aspects of the business and therefore may have a material effect on the financial statements include operating licence, environmental regulations, health and safety legislation.
Audit procedures undertaken in response to the potential risks relating to irregularities (which include fraud and non-compliance with laws and regulations) comprised of: enquiries of management and those charged with governance as to whether the entity complies with such laws and regulations; enquiries with the same concerning any actual or potential litigation or claims; inspection of relevant legal correspondence; review of board minutes; testing the appropriateness of journal entries; and the performance of analytical review to identify unexpected movements in account balances which may be indicative of fraud.
No instances of material non-compliance were identified. However, the likelihood of detecting irregularities, including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the entity’s controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. As explained above, there is an unavoidable risk that material misstatements may not be detected, even though the audit has been planned and performed in accordance with ISAs (UK).
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 Auditors' Report.
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CKRE LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF CKRE LIMITED (CONTINUED)
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 Auditors' 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.
for and on behalf of
Chartered Accountants & Statutory Auditors
1st Floor Sackville House
143-149 Fenchurch Street
EC3M 6BL
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CKRE LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2021
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CKRE LIMITED
REGISTERED NUMBER:
03600683
BALANCE SHEET
AS AT
31 DECEMBER 2021
The financial statements were approved and authorised for issue by the board and were signed on its behalf on
The notes on pages 14 to 25 form part of these financial statements.
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CKRE LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED
31 DECEMBER 2021
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CKRE LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2021
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CKRE LIMITED
ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 DECEMBER 2021
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CKRE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
CKRe Limited (Company number: 03600683), having its registered office and principal place of business at Second Floor, 40 Lime Street, London, EC3M 7AW, is a private limited company incorporated in England and Wales.
2.
ACCOUNTING POLICIES
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in
the UK and the Republic of Ireland and the Companies Act 2006
.
The following principal accounting policies have been applied:
Functional and presentation currency
Transactions and balances
Grants of a revenue nature are recognised in the Statement of Comprehensive Income in the same period as the related expenditure.
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CKRE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
2.
ACCOUNTING POLICIES (continued)
Insurance brokers usually act as agents in placing the insurable risks of their clients with insurers, and, as such, are generally not liable as principals for amounts arising from such transactions. Notwithstanding these legal relationships, debtors and creditors arising from insurance broking transactions are shown as assets and liabilities. This recognises that the insurance broker is entitled to retain the investment income on any cash flows arising from these transactions.
Debtors and creditors arising from a transaction between clients and insurers are recorded simultaneously. Consequently, there is a high level of correlation between the totals reported in respect of insurance broking debtors and insurance broking creditors. The position of the insurance broker as agent means that generally the credit risk is borne by the principals. There can be circumstances when the insurance broker acquires the credit risk. There is much legal uncertainty surrounding the circumstances and the extent of such exposure and consequently it cannot be evaluated. However, the total of insurance broking debtors appearing in the balance sheet is not an indication of credit risk. It is normal practice for insurance brokers to settle accounts with other intermediaries, clients, insurers and market settlement bureaux on a net basis. Thus, large changes in both insurance broking debtors and creditors can result from comparatively small cash settlements. For this reason, the totals of insurance broking debtors and creditors give no indication of future cash flows. Insurance broking debtors and creditors include gross balances in respect of claims being handled by the company on an administration/collection only basis.
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CKRE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
2.
ACCOUNTING POLICIES (continued)
The Company makes contributions to a qualifying workplace pension scheme in respect of certain employees and directors. The pension charge represents amounts payable by the Company to the scheme in respect of the year.
Goodwill
Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, Goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight-line basis to the Statement of Comprehensive Income over its useful economic life.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the Statement of Comprehensive Income.
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CKRE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
2.
ACCOUNTING POLICIES (continued)
The whole of the turnover is attributable to the principal activity of the Company, being that of (Re)insurance broking, rather than just insurance.
All turnover is accounted for in the UK, which is predominately derived from overseas activities.
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CKRE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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CKRE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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CKRE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
There are taxable trading losses of £2,021,714
(2020: £2,207,657)
, available to carry forward and offset against future taxable profits, and a non-trade loan relationship deficit of £100,000
(2020: £100,000).
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CKRE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
Page 21
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CKRE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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CKRE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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CKRE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
Irredeemable preference shares
The existing preference shares do not carry a coupon rate and carry no voting rights. In the event of winding up or on a reduction of capital involving a return of capital, the preference shares hold priority for the return of capital above any other class of shares. Capital redemption reserve The capital redemption reserve relates to the redemption of preference shares in 2008 by the Company and is a non-distributable reserve.
Included within amounts owed to group undertakings is an amount due to the Company's immediate parent undertaking of £260,000
(2020: £260,000).
Included within amounts owed by connected companies is an amount due from the Company's appointed representative of £127,694 (2020: £26,619).
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CKRE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
As at 31 December 2021 and 2020 the immediate parent undertaking is Risk Capital SA, a company incorporated in Luxembourg.
As at 31 December 2021 and 2020 the ultimate parent undertaking is HC.PI Investment Limited, a company incorporated in Cyprus. As at 31 December 2021 and 2020 the ultimate controlling party is H. Junior Chalhoub by virtue of his shareholding in the ultimate parent undertaking.
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