MASON OWEN (SPECIALIST RISKS) LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
Company Registration No. 08821076 (England and Wales)
MASON OWEN (SPECIALIST RISKS) LIMITED
COMPANY INFORMATION
Director
Mr A Gibbons
Company number
08821076
Registered office
7th Floor
20 Chapel Street
Liverpool
L3 9AG
Auditor
DSG Chartered Accountants
Castle Chambers
43 Castle Street
Liverpool
L2 9TL
MASON OWEN (SPECIALIST RISKS) LIMITED
CONTENTS
Page
Strategic report
1 - 2
Director's report
3
Director's responsibilities statement
4
Independent auditor's report
5 - 7
Profit and loss account
8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Notes to the financial statements
12 - 21
MASON OWEN (SPECIALIST RISKS) LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 JUNE 2022
- 1 -
The director presents the strategic report for the year ended 30 June 2022.
Principle activity
The principal activity during the year remains insurance consultancy and insurance broking.
Fair review of the business
The company has continued to perform well in the year and net assets have increased from £83k in 2021 to £143k in 2022. Operating profit has decreased slightly from £154k in 2021 to £152k in 2022; this was driven by reduction in gran income and an increase in overheads.
The company continues to develop within the intermediary sector of London Market Wholesale business. Specialist lines of business have been written during the financial year leading to the good performance. The further development of our office in Norwich has grown the Legal Indemnity book from the previous 12 months.
The business is an appointed representative of Mason Owen Financial Services Limited, which is authorised and regulated by the Financial Conduct Authority (FCA). There is a responsibility of management to ensure that the business remains fully compliant, yet still able to trade effectively and profitably. The firm does not hold permissions to hold client money as this element of the business is handled by Mason Owen Financial Services Limited, with whom the firm place all business, in view of the fact that direct Insurer relations and agency agreements are maintained by Mason Owen Financial Services Limited.
The company is a member of the British Insurance Brokers Association (BIBA), which provides valuable support to the business in terms of the ability to access new markets, to provide networking opportunities and in-depth technical information concerning matters such as regulation.
The business is staffed by sharing people with our parent company and allocating the cost of their time to work done within the business. Many assets of the business are shared with Mason Owen Financial Services Limited. However, 5 members of staff are allocated full time by the business and are deployed in Norwich and London.
The flexibility of IT and hybrid working arrangements have also provided additional strength to business continuity plans.
Principal risks and uncertainties
Exposure to credit risk
The risk of non-payment by clients is assessed by the directors. The company aims to minimise the risk by management of credit limits and monthly reviews of debtor days.
Coronavirus risk
The uncertainty brought by covid-19 to the wider economy could impact upon the performance of the company if firms who utilise the services of the company do not survive the current economic conditions. These would not result in bad debts to the company, moreover a loss of renewal revenue. There has been no significant loss of clients during the current financial year as the after effects of Coronavirus diminish over time.
The company believes that the business remains in a strong position to withstand the effects of the impact on the economy. The make-up of the client base and the robust continuity plan that was successfully deployed in 2020 along with prudent financial management have demonstrated the resilience of the firm.
MASON OWEN (SPECIALIST RISKS) LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2022
- 2 -
Specific risks
There is a risk, given the current economic climate that clients could go out of business, which may have an effect on the wholesale professional indemnity book of business, as would the continued consolidation of small firms in the broker market. However, new opportunities in this area will mitigate this risk, along with the continues growth of the specialist legal indemnity book of business.
However, in relation to the wider business, the management team monitors the business plans on a regular basis and takes appropriate mitigating action to risks posed.
The UK's decision to withdraw from the EU has not affected the business unduly during this accounting year.
Key performance indicators
It is envisaged that when assessing the performance of the business against key performance indicators such as income, cost control and overall profitability, the company will continue to perform well and develop in line with its business plan.
Future developments
Continued penetration to the Legal Indemnity market will allow for the continued growth in this business with further recruitment being the key to the growth plans of the firm.
Continuing pressure from other Statutory obligations have contributed to increasing compliance costs in the year, but the company remains positive about its growth strategy in the coming years.
Mr A Gibbons
Director
21 March 2023
MASON OWEN (SPECIALIST RISKS) LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 30 JUNE 2022
- 3 -
The director presents his annual report and financial statements for the year ended 30 June 2022.
The report contains the statutory information disclosed in addition to that set out in the strategic report. Information relating to the principal activity, financial risk management policies and future developments, which would otherwise be included in the Directors Report, are included in the Strategic Report.
Results and dividends
The results for the year are set out on page 8.
Ordinary dividends were paid amounting to £100,000. The director does not recommend payment of a further 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 A Gibbons
Mr M B Owen
(Resigned 1 April 2022)
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 A Gibbons
Director
21 March 2023
MASON OWEN (SPECIALIST RISKS) LIMITED
DIRECTOR'S RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 30 JUNE 2022
- 4 -
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;
-
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.
MASON OWEN (SPECIALIST RISKS) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF MASON OWEN (SPECIALIST RISKS) LIMITED
- 5 -
Opinion
We have audited the financial statements of Mason Owen (Specialist Risks) Limited (the 'company') for the year ended 30 June 2022 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies.
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102
The Financial Reporting Standard applicable in the UK and Republic of Ireland
(United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
-
give a true and fair view of the state of the company's affairs as at 30 June 2022 and of its profit for the year then ended;
-
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the
Auditor's
responsibilities for the audit of the
financial statements
section of our report. We are independent of the
company
in accordance with the ethical requirements that are relevant to our audit of the
financial statements
in the UK, including the FRC’s Ethical Standard
, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
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 strategic report and the director's
r
eport for the financial year for which the financial statements are prepared is consistent with the financial statements
; and
-
the strategic report and the director's report have been prepared in accordance with applicable legal requirements.
MASON OWEN (SPECIALIST RISKS) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF MASON OWEN (SPECIALIST RISKS) LIMITED
- 6 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identifie
d
material misstatements in the strategic report or the director's
r
eport
.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
-
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
-
the financial statements are not in agreement with the accounting records and returns; or
-
certain disclosures of
remuneration specified by law are not made; or
-
we have not received all the information and explanations we require for our audit.
Responsibilities of director
As explained more fully in the director's
r
esponsibilities
s
tatement, 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 director determines 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 intends to liquidate the company or to cease operations, or has
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
.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below
.
MASON OWEN (SPECIALIST RISKS) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF MASON OWEN (SPECIALIST RISKS) LIMITED
- 7 -
Capability of the audit in detecting irregularities, including fraud
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, and distributable profits legislation.
-
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 environmental regulations, Health and Safety at Work Act, Data Protection Act, Motor Insurance compliance, Employers Liability Act and compliance with the Financial Services & Markets Act.
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; testing the appropriateness of journal entries; reviewing post year end payments for evidence of claims pay outs 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 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.
Andrew Moss BA FCA
Senior Statutory Auditor
For and on behalf of DSG Chartered Accountants
21 March 2023
Chartered Accountants
Statutory Auditor
Castle Chambers
43 Castle Street
Liverpool
L2 9TL
MASON OWEN (SPECIALIST RISKS) LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 30 JUNE 2022
- 8 -
2022
2021
Notes
£
£
Turnover
3
475,439
494,099
Administrative expenses
(323,248)
(317,602)
Other operating income
15,483
Operating profit
4
152,191
191,980
Interest payable and similar expenses
6
(240)
Profit before taxation
151,951
191,980
Tax on profit
7
7,740
(37,134)
Profit for the financial year
159,691
154,846
The profit and loss account has been prepared on the basis that all operations are continuing operations.
MASON OWEN (SPECIALIST RISKS) LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2022
- 9 -
2022
2021
£
£
Profit for the year
159,691
154,846
Other comprehensive income
-
-
Total comprehensive income for the year
159,691
154,846
MASON OWEN (SPECIALIST RISKS) LIMITED
BALANCE SHEET
AS AT
30 JUNE 2022
30 June 2022
- 10 -
2022
2021
Notes
£
£
£
£
Fixed assets
Tangible assets
9
1,981
746
Current assets
Debtors
10
162,793
201,676
Cash at bank and in hand
36,413
7,078
199,206
208,754
Creditors: amounts falling due within one year
11
(57,591)
(125,949)
Net current assets
141,615
82,805
Total assets less current liabilities
143,596
83,551
Provisions for liabilities
Deferred tax liability
12
495
141
(495)
(141)
Net assets
143,101
83,410
Capital and reserves
Called up share capital
14
100
100
Profit and loss reserves
143,001
83,310
Total equity
143,101
83,410
The financial statements were approved by the board of directors and authorised for issue on 21 March 2023 and are signed on its behalf by:
Mr A Gibbons
Director
Company Registration No. 08821076
MASON OWEN (SPECIALIST RISKS) LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2022
- 11 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 July 2020
100
68,464
68,564
Year ended 30 June 2021:
Profit and total comprehensive income for the year
-
154,846
154,846
Dividends
8
-
(140,000)
(140,000)
Balance at 30 June 2021
100
83,310
83,410
Year ended 30 June 2022:
Profit and total comprehensive income for the year
-
159,691
159,691
Dividends
8
-
(100,000)
(100,000)
Balance at 30 June 2022
100
143,001
143,101
MASON OWEN (SPECIALIST RISKS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
- 12 -
1
Accounting policies
Company information
Mason Owen (Specialist Risks) Limited is a
private
company
limited by shares
incorporated in
England and Wales
.
The registered office is
7th Floor, 20 Chapel Street, Liverpool, L3 9AG.
The principal activity of the company is disclosed in the strategic report.
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 certain financial instruments at fair value. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares
publicly available consolidated financial statements
, including this company,
which are
intended to give a true and fair view of the assets, liabilities,
financial position and profit or loss
of the group
.
T
he company has
therefore
taken advantage of
e
xemptions from the following disclosure requirements:
-
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
-
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’
:
Interest
income/expense and net gains/losses for each category of financial instrument;
basis
of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income
;
-
Section 26 ‘Share based Payment’
:
Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements
;
-
Section 33 ‘Related Party Disclosures’
:
Compensation for key management personnel
.
The financial statements of the company are consolidated in the financial statements of
Mason Owen & Partners (Holdings) Limited
. These consolidated financial statements are available from its registered office,
20 Chapel Street, Liverpool, L3 9AG.
1.2
Going concern
After taking into account the current economic uncertainty and effects upon consumer confidence, as well as reviewing the company's forecasts, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future.
true
The diminishing risks associated with covid-19 have been assessed by the directors and it has been concluded that the business is in good shape to be able to withstand any effects on the UK economy. Cash flow models have been done on a conservative basis and they have shown that the business can retain liquidity and fulfil the statutory solvency obligations laid down by the Financial Conduct Authority.
The company therefore continues to adopt the going concern basis in preparing its financial statement.
MASON OWEN (SPECIALIST RISKS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2022
1
Accounting policies
(Continued)
- 13 -
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 does not include VAT as the firm is not registered for VAT and is net of other sales related taxes.
Turnover comprises revenue recognised by the company in relation to commission or fees in lieu of commission relating to insurance premiums finalised with insurers and confirmed by the client within the accounting period and is recognised at the point the policy is agreed with the client. Commission on returns, additional premiums and adjustments are brought into the accounts when these occur. Profit shares from insurance companies are recognised on a received basis.
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:
Fixtures and fittings
25% straight line
Computers
25% straight line
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and
is credited or charged to profit or loss
.
1.5
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
Cash and cash equivalents
Cash and cash equivalents
are basic financial assets
and
include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
MASON OWEN (SPECIALIST RISKS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2022
1
Accounting policies
(Continued)
- 14 -
1.7
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.
Basic financial assets
Basic financial assets, which include
debtors
and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest
method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Financial assets classified as receivable within one year are not amortised.
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.
MASON OWEN (SPECIALIST RISKS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2022
1
Accounting policies
(Continued)
- 15 -
Basic financial liabilities
Basic financial liabilities, including
creditors
, bank loans, loans from
fellow group companies and preference shares that are classified as debt, are
initially recognised at transaction price unless the arrangement constitutes a
financing transaction, where the debt instrument is measured at the present value of
the future
paymen
ts discounted at a market rate of interest.
Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective
interest rate method.
Trade creditors
are obligations to pay for goods or services that have been acquired
in the ordinary course of business from suppliers. A
m
ounts payable are classified as
current liabilities if payment is due within one year or less. If not, they are presented
as non-current liabilities.
Trade creditors
are recognised initially at transaction price
and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts,
are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are
s
ubsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in
profit
or
loss
in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as
being measured at
fair value th
r
ough profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations
expire or are discharged or cancelled.
1.8
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.9
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.
MASON OWEN (SPECIALIST RISKS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2022
1
Accounting policies
(Continued)
- 16 -
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the
profit and loss account
, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the
company
has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.10
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.
1.11
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.12
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.
Government grants received in the prior year related to the Coronavirus Job Retention Scheme.
1.13
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.
MASON OWEN (SPECIALIST RISKS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2022
- 17 -
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.
3
Turnover and other revenue
2022
2021
£
£
Turnover analysed by class of business
Agency commission and fees relating to insurance contracts
475,439
494,099
All turnover arose in the United Kingdom.
4
Operating profit
2022
2021
Operating profit for the year is stated after charging/(crediting):
£
£
Government grants
(15,483)
Fees payable to the company's auditor for the audit of the company's financial statements
3,000
3,000
Depreciation of owned tangible fixed assets
756
708
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2022
2021
Number
Number
5
4
Their aggregate remuneration comprised:
2022
2021
£
£
Wages and salaries
235,660
229,894
Social security costs
22,855
25,111
Pension costs
18,058
13,221
276,573
268,226
MASON OWEN (SPECIALIST RISKS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2022
5
Employees
(Continued)
- 18 -
Wages and salaries are recharged from other companies within the group and no directors are paid within this business.
6
Interest payable and similar expenses
2022
2021
£
£
Other interest
240
7
Taxation
2022
2021
£
£
Current tax
UK corporation tax on profits for the current period
29,175
37,269
Adjustments in respect of prior periods
(37,269)
Total current tax
(8,094)
37,269
Deferred tax
Origination and reversal of timing differences
354
(135)
Total tax (credit)/charge
(7,740)
37,134
The actual (credit)/charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2022
2021
£
£
Profit before taxation
151,951
191,980
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
28,871
36,476
Tax effect of expenses that are not deductible in determining taxable profit
658
658
Adjustments in respect of prior years
(37,269)
Taxation (credit)/charge for the year
(7,740)
37,134
8
Dividends
2022
2021
£
£
Final paid
100,000
140,000
MASON OWEN (SPECIALIST RISKS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2022
- 19 -
9
Tangible fixed assets
Fixtures and fittings
Computers
Total
£
£
£
Cost
At 1 July 2021
551
2,283
2,834
Additions
1,752
239
1,991
At 30 June 2022
2,303
2,522
4,825
Depreciation and impairment
At 1 July 2021
455
1,633
2,088
Depreciation charged in the year
182
574
756
At 30 June 2022
637
2,207
2,844
Carrying amount
At 30 June 2022
1,666
315
1,981
At 30 June 2021
96
650
746
10
Debtors
2022
2021
Amounts falling due within one year:
£
£
Trade debtors
160,101
201,676
Prepayments and accrued income
2,692
162,793
201,676
11
Creditors: amounts falling due within one year
2022
2021
£
£
Trade creditors
1,279
Amounts owed to group undertakings
7,702
110,076
Corporation tax
29,175
15,873
Accruals and deferred income
19,435
57,591
125,949
The company has given an unlimited multilateral and cross guarantees in respect of bank borrowings of all group undertakings and is a member of a VAT group.
MASON OWEN (SPECIALIST RISKS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2022
- 20 -
12
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2022
2021
Balances:
£
£
Accelerated capital allowances
495
141
2022
Movements in the year:
£
Liability at 1 July 2021
141
Charge to profit or loss
354
Liability at 30 June 2022
495
13
Retirement benefit schemes
2022
2021
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
18,058
13,221
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.
14
Share capital
2022
2021
2022
2021
Ordinary share capital
Number
Number
£
£
Issued and fully paid
of £1 each
100
100
100
100
15
Related party transactions
During the year the company entered into transactions, in the ordinary course of business. with the immediate parent. Amounts outstanding at year end was £160,101 (2021: £110,076) due to the immediate parent.
The company is exempt from disclosing transactions with group companies that are wholly owned within the same group.
MASON OWEN (SPECIALIST RISKS) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2022
- 21 -
16
Ultimate controlling party
The immediate parent company is Mason Owen Financial Services Limited.
The ultimate parent company was Mason Owen & Partners (Holdings) Limited until 31 March 2022. This is the smallest and largest group into which the results of this entity are consolidated. Copies of the group accounts can be obtained from the same registered address as the entity. From 1 April 2022 the ultimate parent company was MOFS (Holdings) Limited.
The ultimate controlling party was Mr M B Owen until 31 March 2022. From 1 April 2022 the ultimate controlling party was Mr A Gibbons.
2022-06-30
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Mr M B Owen
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