Company Registration No. 06092127 (England and Wales)
EVOLUTION INSURANCE SOLUTIONS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED
30 JUNE 2021
30 June 2021
EVOLUTION INSURANCE SOLUTIONS LIMITED
COMPANY INFORMATION
Director
Mr W Bidwell
Secretary
Mrs S Bidwell
Company number
06092127
Registered office
53A High Street
Saffron Walden
Essex
CB10 1AA
Auditor
Humphrey & Co Audit Services Ltd
7-9 The Avenue
Eastbourne
East Sussex
BN21 3YA
EVOLUTION INSURANCE SOLUTIONS LIMITED
CONTENTS
Page
Director's report
1
Director's responsibilities statement
2
Independent auditor's report
3 - 5
Profit and loss account
6
Statement of comprehensive income
7
Balance sheet
8
Statement of changes in equity
9
Statement of cash flows
10
Notes to the financial statements
11 - 24
EVOLUTION INSURANCE SOLUTIONS LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 30 JUNE 2021
- 1 -
The director presents his annual report and financial statements for the year ended 30 June 2021.
Principal activities
The principal activity of the company continued to be that of insurance brokers.
Review of the business
The company continued to trade profitably during the COVID-19 pandemic and since that time has remained robust. Staff, brokers and clients were very supportive throughout the pandemic and the director expects the company to continue a trajectory of steady growth in the coming years.
Results and dividends
The results for the year are set out on page 6.
No ordinary dividends were paid. The director does not recommend payment of a final dividend.
Director
The director who held office during the year and up to the date of signature of the financial statements was as follows:
Mr W Bidwell
Auditor
The auditor, Humphrey & Co Audit Services Ltd, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Energy and carbon report
As the company has not consumed more than 40,000 kWh of energy in this reporting period, it qualifies as a low energy user under these regulations and is not required to report on its emissions, energy consumption or energy efficiency activities.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
On behalf of the board
Mr W Bidwell
Director
21 February 2022
EVOLUTION INSURANCE SOLUTIONS LIMITED
DIRECTOR'S RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 30 JUNE 2021
- 2 -
The director is responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless he is 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 director is required to:
-
select suitable accounting policies and then apply them consistently;
-
make judgements and accounting estimates that are reasonable and prudent;
-
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
-
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The director is 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. He is 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.
EVOLUTION INSURANCE SOLUTIONS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF EVOLUTION INSURANCE SOLUTIONS LIMITED
- 3 -
Opinion
We have audited the financial statements of Evolution Insurance Solutions Limited (the 'company') for the year ended 30 June 2021 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows 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 FRS 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 30 June 2021 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
In auditing the financial statements, we have concluded that the director's 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 director 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 auditor's report thereon. The director is 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 director's r
eport for the financial year for which the financial statements are prepared is consistent with the financial statements
; and
-
the director's report has been prepared in accordance with applicable legal requirements.
EVOLUTION INSURANCE SOLUTIONS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF EVOLUTION INSURANCE SOLUTIONS LIMITED
- 4 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identifie
d
material misstatements in the director's
r
eport
.
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 director's remuneration specified by law are not made; or
-
we have not received all the information and explanations we require for our audit; or
-
the company is not entitled to claim exemption in preparing a strategic report due to it being a member of an ineligible group.
Responsibilities of director
As explained more fully in the Director's Responsibilities Statement set out on page 2, the director is 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 director is 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 director either intend
s
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.
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
.
EVOLUTION INSURANCE SOLUTIONS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF EVOLUTION INSURANCE SOLUTIONS LIMITED
- 5 -
Extent to which the audit was considered capable of detecting irregularities, including fraud
We obtained an understanding of the company and the laws and regulations that could reasonably be expected to have a direct effect on the financial statements through discussion with the directors and management and the application of our knowledge and experience. We discussed with management whether there were any known or suspected instances of fraud and/or non-compliance with relevant laws and regulations. We also obtained an understanding of the company's accounting systems and internal controls.
We audited the risk of management override of controls, by testing journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business. Our other audit procedures included, but were not limited to, carrying out detailed substantive testing of a sample of insurance policies taken up during the year and expenditure transactions arising in the year. We agreed wages records to wages costs in the accounts. We tested a sample of balance sheet items such as fixed assets, work in progress, debtors and creditors. We also reviewed the financial statements and checked disclosures to supporting documentation to assess compliance with applicable law and regulation.
Because of the inherent risk of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. The risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements as we will be less likely to become aware of instances of non-compliance. The risk is greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion
,
omission or misrepresentation.
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.
Mr Andrew Robinson (Senior Statutory Auditor)
For and on behalf of Humphrey & Co Audit Services Ltd
24 February 2022
Chartered Accountants
Statutory Auditor
7-9 The Avenue
Eastbourne
East Sussex
BN21 3YA
EVOLUTION INSURANCE SOLUTIONS LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 30 JUNE 2021
- 6 -
2021
2020
Notes
£
£
Turnover
3
1,061,064
794,094
Cost of sales
(378,153)
(183,912)
Gross profit
682,911
610,182
Administrative expenses
(603,794)
(626,234)
Other operating income
7,532
Operating profit/(loss)
4
79,117
(8,520)
Interest receivable and similar income
8
5,213
26,393
Gains/(losses) on investments
9
5,086
(5,891)
Profit before taxation
89,416
11,982
Tax on profit
10
(20,621)
(12,555)
Profit/(loss) for the financial year
68,795
(573)
The profit and loss account has been prepared on the basis that all operations are continuing operations.
EVOLUTION INSURANCE SOLUTIONS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2021
- 7 -
2021
2020
£
£
Profit/(loss) for the year
68,795
(573)
Other comprehensive income
-
-
Total comprehensive income for the year
68,795
(573)
EVOLUTION INSURANCE SOLUTIONS LIMITED
BALANCE SHEET
AS AT 30 JUNE 2021
30 June 2021
- 8 -
2021
2020
Notes
£
£
£
£
Fixed assets
Tangible assets
11
14,515
19,353
Investments
12
54,597
48,869
69,112
68,222
Current assets
Stocks
13
27,827
25,186
Debtors
14
105,383
123,318
Cash at bank and in hand
268,121
146,146
401,331
294,650
Creditors: amounts falling due within one year
15
(84,260)
(45,653)
Net current assets
317,071
248,997
Total assets less current liabilities
386,183
317,219
Provisions for liabilities
Deferred tax liability
17
8,390
8,221
(8,390)
(8,221)
Net assets
377,793
308,998
Capital and reserves
Called up share capital
19
100,000
100,000
Profit and loss reserves
277,793
208,998
Total equity
377,793
308,998
The financial statements were approved and signed by the director and authorised for issue on 21 February 2022
Mr W Bidwell
Director
Company Registration No. 06092127
EVOLUTION INSURANCE SOLUTIONS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2021
- 9 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 July 2019
100,000
209,571
309,571
Year ended 30 June 2020:
Loss and total comprehensive income for the year
-
(573)
(573)
Balance at 30 June 2020
100,000
208,998
308,998
Year ended 30 June 2021:
Profit and total comprehensive income for the year
-
68,795
68,795
Balance at 30 June 2021
100,000
277,793
377,793
EVOLUTION INSURANCE SOLUTIONS LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2021
- 10 -
2021
2020
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
24
129,093
19,546
Income taxes paid
(9,156)
(8,073)
Net cash inflow from operating activities
119,937
11,473
Investing activities
Purchase of tangible fixed assets
(600)
Proceeds on disposal of investments
(642)
(31,644)
Receipts arising from loans made
(2,485)
(10,015)
Interest received
5,213
26,393
Net cash generated from/(used in) investing activities
2,086
(15,866)
Net increase/(decrease) in cash and cash equivalents
122,023
(4,393)
Cash and cash equivalents at beginning of year
146,098
150,491
Cash and cash equivalents at end of year
268,121
146,098
Relating to:
Cash at bank and in hand
268,121
146,146
Bank overdrafts included in creditors payable within one year
(48)
EVOLUTION INSURANCE SOLUTIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
- 11 -
1
Accounting policies
Company information
Evolution Insurance Solutions Limited
(Company Registration No: 06092127)
is a
private
company
limited by shares
incorporated in England and Wales.
The registered office is
53A High Street, Saffron Walden, Essex, CB10 1AA.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in
sterling
, which is the functional currency of the company.
Monetary a
mounts
in these financial statements are
rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of certain financial instruments at fair value. The principal accounting policies adopted are set out below.
1.2
Going concern
The company continued to trade profitably during the COVID-19 pandemic and since that time has remained robust. Staff, brokers and clients were very supportive throughout the pandemic and the director expects the company to continue a trajectory of steady growth in the coming years.
true
A
t the time of approving the financial statements
,
t
he director has a reasonable expectation that the
company
has adequate resources to continue in operational existence for the foreseeable future. Thus
t
he director continues to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for services provided in the normal course of business
, and
is shown net of VAT and other sales related taxes
.
The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably.
1.4
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:
Land and buildings leasehold
20% straight line
Fixtures, fittings & equipment
25% reducing balance
Computer equipment
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
.
EVOLUTION INSURANCE SOLUTIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2021
1
Accounting policies
(Continued)
- 12 -
1.5
Impairment of fixed assets
At each reporting
period
end date, the
company
reviews the carrying amounts of its tangible
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.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit)
in
prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.6
Stocks
Stocks comprises of work in progress which is valued at the net realisable value.
At each reporting date, an assessment of policies issued in draft awaiting customer confirmation is made. Commissions payable on the policies where take up is expected are included as work in progress in the accounts. Work in progress is reviewed and amended up and until the Balance Sheet signing date.
1.7
Cash at bank and in hand
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.
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset
, with
the net amounts presented in the financial statements
,
when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
EVOLUTION INSURANCE SOLUTIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2021
1
Accounting policies
(Continued)
- 13 -
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
rate
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.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets, other than those
held
at
fair value through profit and loss
, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected.
If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
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.
EVOLUTION INSURANCE SOLUTIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2021
1
Accounting policies
(Continued)
- 14 -
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from
fellow group companies and preference shares that are classified as debt, are
initially recognised at transaction price unless the arrangement constitutes a
financing transaction, where the debt instrument is measured at the present value of
the future
paymen
ts discounted at a market rate of interest.
Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective
interest rate method.
Trade creditors
are obligations to pay for goods or services that have been acquired
in the ordinary course of business from suppliers. A
m
ounts payable are classified as
current liabilities if payment is due within one year or less. If not, they are presented
as non-current liabilities. Trade creditors are recognised initially at transaction price
and subsequently measured at amortised cost using the effective interest
rate
method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts,
are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are
s
ubsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as
being measured at
fair value th
r
ough profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations
expire or are discharged or cancelled.
1.9
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.
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.
1.10
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.
EVOLUTION INSURANCE SOLUTIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2021
1
Accounting policies
(Continued)
- 15 -
Deferred tax
Deferred taxation is provided in full in respect of taxation deferred by material timing differences between the treatment of certain items for taxation and accounting purposes. The deferred tax balance has not been discounted.
1.11
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.
1.12
Retirement benefits
The company operates a defined contribution scheme for the benefit of the director. Contributions payable are charged to the profit and loss account in the year they are payable.
1.13
Leases
Rentals payable under operating leases,
including
any lease incentives received, are charged to
profit or loss
on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the lease
d
asset are consumed.
1.14
Government grants
Government grants are recognised at the fair value of the asset receive
d
or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met
. Where a
grant does not specify performance conditions
it
is recognised in income when the proceeds are received or receivable
. A grant received before the recognition criteria are satisfied is recognised as a liability.
1.15
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.
EVOLUTION INSURANCE SOLUTIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2021
- 16 -
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the director is 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.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant
effect on amounts recognised in the financial statements.
Other debtors
Included within other debtors are loans granted through a peer to peer lending platform. A key area of judgement is whether there is any impairment on the recoverability of the loans.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are
as follows.
Tangible fixed assets
Tangible fixed assets are depreciated over their useful lives, and when appropriate, taking into account their residual values. The useful lives and residual values are reassessed on an annual basis.
When assessing the useful life of an asset, factors that are considered among others, include maintenance undertaken and technological advances.
When assessing the residual value of an asset, factors that are considered among others, are the market for the second hand item and projected values.
The carrying amount of these assets at the balance sheet date is £
14,515
(2020: £19,353).
Work in progress
Work in progress is based on commission payable on policies issued in draft prior to the year end but not yet taken up by the customer.
The company continues to review the take up of these policies until the Balance Sheet signing date and adjustments to the work in progress figure are made when required. Confirmation of take up may not occur until after the date the Balance Sheet is signed.
EVOLUTION INSURANCE SOLUTIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2021
- 17 -
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2021
2020
£
£
Turnover analysed by class of business
Commission and fees receivable
838,340
529,150
IPT handling fee
6,000
6,000
Other
216,724
258,944
1,061,064
794,094
2021
2020
£
£
Other significant revenue
Interest income
5,213
26,393
Grants received
7,532
2021
2020
£
£
Turnover analysed by geographical market
UK
1,061,064
794,094
4
Operating profit/(loss)
2021
2020
Operating profit/(loss) for the year is stated after charging/(crediting):
£
£
Exchange losses
411
1,693
Government grants
(7,532)
Depreciation of owned tangible fixed assets
4,838
14,993
Operating lease charges
26,434
26,628
5
Auditor's remuneration
2021
2020
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
6,000
6,000
For other services
Other assurance services
3,030
3,000
Taxation compliance services
600
1,600
All other non-audit services
865
8,242
4,495
12,842
EVOLUTION INSURANCE SOLUTIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2021
- 18 -
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2021
2020
Number
Number
Management
2
2
Bond
3
3
Warranty
1
1
Administration
2
1
Claims handling
1
1
Total
9
8
Their aggregate remuneration comprised:
2021
2020
£
£
Wages and salaries
361,379
364,496
Social security costs
37,336
39,417
Pension costs
31,833
6,201
430,548
410,114
7
Director's remuneration
2021
2020
£
£
Remuneration for qualifying services
51,956
29,333
Company pension contributions to defined contribution schemes
27,137
809
79,093
30,142
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2020 - 1).
8
Interest receivable and similar income
2021
2020
£
£
Interest income
Interest on bank deposits
1,776
22,147
Other interest income
3,437
4,246
Total income
5,213
26,393
EVOLUTION INSURANCE SOLUTIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2021
8
Interest receivable and similar income
(Continued)
- 19 -
Investment income includes the following:
Interest on financial assets not measured at fair value through profit or loss
1,776
22,147
9
Gains/(losses) on investments
2021
2020
£
£
Fair value gains/(losses) on financial instruments
Change in value of financial assets held at fair value through profit or loss
2,271
(5,985)
Other gains/(losses)
Gain on disposal of fixed asset investments
2,815
94
5,086
(5,891)
10
Taxation
2021
2020
£
£
Current tax
UK corporation tax on profits for the current period
20,452
9,156
Deferred tax
Origination and reversal of timing differences
169
3,399
Total tax charge
20,621
12,555
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:
2021
2020
£
£
Profit before taxation
89,416
11,982
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2020: 19.00%)
16,989
2,277
Tax effect of expenses that are not deductible in determining taxable profit
2,186
6,879
Tax effect of utilisation of tax losses not previously recognised
1,446
Timing differences on the taxation of fixed assets
3,399
Taxation charge for the year
20,621
12,555
EVOLUTION INSURANCE SOLUTIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2021
- 20 -
11
Tangible fixed assets
Land and buildings leasehold
Fixtures, fittings & equipment
Computer equipment
Total
£
£
£
£
Cost
At 1 July 2020 and 30 June 2021
58,345
36,708
35,935
130,988
Depreciation and impairment
At 1 July 2020
58,345
28,172
25,118
111,635
Depreciation charged in the year
2,134
2,704
4,838
At 30 June 2021
58,345
30,306
27,822
116,473
Carrying amount
At 30 June 2021
6,402
8,113
14,515
At 30 June 2020
8,536
10,817
19,353
12
Fixed asset investments
2021
2020
£
£
Listed investments
23,652
45,428
Unlisted investments
30,945
3,441
54,597
48,869
Listed
investments
included above:
Listed investments carrying amount
23,652
45,428
Fixed asset investments not carried at market value
The basis of determining the value of unlisted investments is at original cost less impairment as the fair values of these cannot be reliably measured.
The investment is valued at the amount determined by the independent fund managers.
EVOLUTION INSURANCE SOLUTIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2021
12
Fixed asset investments
(Continued)
- 21 -
Movements in fixed asset investments
Investments
£
Cost or valuation
At 1 July 2020
48,869
Additions
28,787
Valuation changes
2,270
Disposals
(25,329)
At 30 June 2021
54,597
Carrying amount
At 30 June 2021
54,597
At 30 June 2020
48,869
13
Stocks
2021
2020
£
£
Work in progress
27,827
25,186
14
Debtors
2021
2020
Amounts falling due within one year:
£
£
Trade debtors
56,006
48,826
Other debtors
44,226
68,598
Prepayments and accrued income
5,151
5,894
105,383
123,318
Other debtors includes
£
5,976
(
2020 - £31,728
)
due to the company after more than one year
.
15
Creditors: amounts falling due within one year
2021
2020
Notes
£
£
Bank loans and overdrafts
16
48
Trade creditors
15,517
7,761
Corporation tax
20,452
9,156
Other creditors
20,826
1,718
Accruals and deferred income
27,465
26,970
84,260
45,653
EVOLUTION INSURANCE SOLUTIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2021
- 22 -
16
Loans and overdrafts
2021
2020
£
£
Bank overdrafts
48
Payable within one year
48
17
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
2021
2020
Balances:
£
£
Accelerated capital allowances
8,390
8,221
2021
Movements in the year:
£
Liability at 1 July 2020
8,221
Charge to profit or loss
169
Liability at 30 June 2021
8,390
In the 12 months after the balance sheet date, £689 (2020: £919) of t
he deferred tax liability
set out above
is expected to reverse
in relation
to accelerated capital allowances
.
18
Retirement benefit schemes
2021
2020
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
31,833
6,201
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.
19
Share capital
2021
2020
2021
2020
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
100,000
100,000
100,000
100,000
EVOLUTION INSURANCE SOLUTIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2021
19
Share capital
(Continued)
- 23 -
Each ordinary share is entitled to one vote in any circumstance, pari passu to dividends or other distributions and pari passu to participate in a distribution on winding up.
20
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:
2021
2020
£
£
Within one year
27,000
18,000
Between two and five years
96,750
63,750
In over five years
42,000
165,750
81,750
The company is party to two separate leases for its premises.
The term of the first lease commenced on 1 October 2010 and finishes on 30 September 2025,
The term of the second lease commenced on 13 January 2016 and finished on 30 September 2020.
A Variation to the Underlease has been signed which amends the expiry date to 13 January 2030.
There are no break clauses in this lease, therefore, the full operating lease obligations are included above.
FRS 102 requires lease incentives to be recognised over the term of the lease. The above figures do not include the recognition of the lease incentive as they show the full amount that the company is obligated to pay.
Lease payments totalling £26,434 (2020: £26,628) were recognised as an expense in the year.
21
Related party transactions
The company has taken advantage of the exemption available in accordance with FRS 102 section 33 not to disclose transactions entered into between two or more members of a group, as the company is a wholly owned subsidiary undertaking of the group to which it is party to the transactions.
22
Director's transactions
Interest free loans have been granted by the company to its director as follows:
Description
% Rate
Opening balance
Amounts advanced
Amounts repaid
Closing balance
£
£
£
£
Mr W Bidwell -
-
10,015
12,500
(10,015)
12,500
10,015
12,500
(10,015)
12,500
EVOLUTION INSURANCE SOLUTIONS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2021
22
Director's transactions
(Continued)
- 24 -
The balance of the director's overdrawn loan account
was
repaid on 8 July 2021.
23
Ultimate controlling party
Evolution Holdings (Guernsey) Limited
, a company registered in Guernsey, is the ultimate parent company. Its registered office is Town Mills, Rue Du Pre, St Peter Port, GY1 6HS, Guernsey.
24
Cash generated from operations
2021
2020
£
£
Profit/(loss) for the year after tax
68,795
(573)
Adjustments for:
Taxation charged
20,621
12,555
Investment income
(5,213)
(26,393)
Depreciation and impairment of tangible fixed assets
4,838
14,993
Gain on sale of investments
(2,815)
(94)
Other gains and losses
(2,271)
5,985
Movements in working capital:
(Increase)/decrease in stocks
(2,641)
2,672
Decrease in debtors
20,420
20,987
Increase/(decrease) in creditors
27,359
(10,586)
Cash generated from operations
129,093
19,546
25
Analysis of changes in net funds
1 July 2020
Cash flows
30 June 2021
£
£
£
Cash at bank and in hand
146,146
121,975
268,121
Bank overdrafts
(48)
48
146,098
122,023
268,121
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