ACTIVE_UNDERWRITING_SPECI - Accounts

The Directors have pleasure in presenting their reports together with the audited financial statements for the year ended 31 December 2021.

The principal activity of the company continues to be that of insurance agents.

The directors consider the following statistics to be the key performance indicators of the company as of the dates and periods indicated.

     Year ended     Year ended

31 December         31 December

2021         2020

     £             £

Turnover                    226,459             120,506

Profit/(Loss) before taxation          9,146             12,521            

Profit/(Loss) after tax              9,146              12,521

Net current assets              77,352         77,005

Net assets                  40,588             31,442

The company made a profit of £9,146 during the year under review, compare to a profit of £12,521 in 2020. Net assets as at 31 December 2021 were £40,588 (2020: £31,442).

The insurance business written related specifically to risks associated with amateur sports, personal accident, general liability, property and contingency business.

In 2021 the Company operated under binding authorities with the following syndicates at Lloyds: Antares Underwriting Syndicate 1274. The company also had the following non-Lloyd’s facilities: Allianz Global Limited and National Insurance and Guarantee Corporation Limited. Business from these syndicates / facilities formed the majority of the revenue base in 2022.

During the year, the ownership of the company changed from Wild Goose Holdings PTY to a Joint-Venture owned by Resolution Underwriting Holdings Limited and Whitburn Capital Limited. During this period, the key management team of the business remained and the Deed of Company Arrangement in respects to the previous owner was removed.

Active Underwriting Specialists Limited shares the same office and resources with a fellow group company, Sportscover Europe Limited. Most shared costs are recharged on a proportional basis. In some instances, the costs that are directly attributable to the company are recharged. The overheads for the year have declined as the aggregate overheads of Sportscover Europe Limited has declined.

Sportscover Europe Limited continues to support Active Underwriting Specialists Limited and as at the year end there is monies due from Sportcover Europe Limited.

The company continues to pursue new business opportunities and a disciplined renewal of the current book of business at competitive rates.

The business continues to operate on a Going Concern basis on a cash positive position during this period.

The company’s net assets at the year-end increased to £40,588 from £31,442 due to the profit for the year.

Management continually monitor the key risks facing the company together with assessing the controls used for managing these risks. The board of directors formally reviews and documents the principal risks facing the business at least annually. These are listed in the Directors’ report.

On behalf of the board

The directors present their annual report and financial statements for the year ended 31 December 2021.

Company Number

The company registration number is 05671105.

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

The audited financial statements and related notes for the year ended 31 December 2021 are set out on pages 10 to 22 The company’s results for the year after taxation was a profit of £7,463 (2020: £12,521).

The directors do not recommend the payment of a dividend (2020: £nil).

Qualifying Third Party Indemnity Provisions

The company has put in place qualifying third party indemnity provisions for all of the directors of Active Underwriting Specialists Limited.

Donations

During the year, the company made no donations for charitable or political purposes (2020: £nil).

Risk Management

The company is exposed to a variety of financial and non-financial risks. The directors consider the key risks that could impact the business to be as follows:

Operational Risk

Operational risk is effectively managed by the controls and procedures in place at the company. One of the key risks under this heading is the loss of the office environment, which includes the computer systems, and the resulting impact on the company’s ability to continue to trade. The directors have developed a business continuity plan that provides for the company to be fully operational within a 48 hour period in the event that its current offices are no longer available.

Liquidity Risk

In order to ensure that sufficient funds are available for on-going operations and to support future development, the company uses a mixture of group financing and working capital facilities.

Credit Risk

There is a risk that cash is not able to be collected for insurance policies written and as a consequence the company is unable to collect its commissions, which may result in it failing to meet its liabilities. The company manages this risk by only dealing with accredited brokers, who have been through a detailed approval process. Following accreditation, these brokers are also subject to subsequent financial and performance reviews.

Credit risk also arises from cash and cash equivalents and deposits with banks and financial institutions. For banks and financial institutions, only independently rated parties with minimum rating "A" are accepted.

Market risk

Market risk arises from the Group's use of interest bearing, tradable and foreign currency financial instruments. It is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in interest rates (interest rate risk), foreign exchange rates (currency risk) or other market factors (other price risk).

Foreign exchange risk

Foreign exchange risk arises when the company enters into transactions denominated in a currency other than its functional currency. The company policy is, where possible, to settle liabilities denominated in their functional currency (primarily Euro or Pound Sterling) with the cash generated from their own operations in that currency. Where group entities have liabilities denominated in a currency other than their functional currency (and have insufficient reserves of that currency to settle them), cash already denominated in that currency will, where possible, be transferred from elsewhere within the Company.

In order to monitor the continuing effectiveness of this policy, the Board receives a monthly forecast, analysed by the major currencies held by the Group, of liabilities due for settlement and expected cash reserves.

The Group is predominantly exposed to currency risk on commissions received from policies written and based in the Euro-zone. Apart from these particular cash-flows the Company aims to fund expenses in the respective currency and to manage foreign exchange risk at a local level by matching the currency in which revenue is generated and expenses are incurred.

Post reporting date events

Subsequent to the year end the companies the immediate parent company changed from Activerisk Group Limited, to Activerisk Limited.

Information on future developments in the business of the company has been included in the Strategic Report on page 1.

In accordance with the company's articles, a resolution proposing that LB Group Limited (Stratford) be reappointed as auditor of the company will be put at a General Meeting.

All of the directors as at the date of this report have taken all the steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditors are aware of that information. The directors are not aware of any relevant audit information of which the company's auditor is unaware.

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.

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

•     select suitable accounting policies and then apply them consistently;

•     make judgements and accounting estimates that are reasonable and prudent;

•     prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

We have audited the financial statements of Active Underwriting Specialists Limited (the 'company') for the year ended 31 December 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 Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

•     give a true and fair view of the state of the company's affairs as at 31 December 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.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the 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 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.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

• the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

• the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.

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 and the directors' report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

•     adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

•     the financial statements are not in agreement with the accounting records and returns; or

•     certain disclosures of remuneration specified by law are not made; or

•     we have not received all the information and explanations we require for our audit; or

•     the directors were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemption in preparing the directors' report.

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

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.

An overview of the scope of our audit, including the extent to which the audit was considered capable of detecting irregularities, including fraud

As part of designing our audit, we determined materiality and assessed the risk of material misstatement in the financial statements, whether due to fraud or error, and then designed and performed audit procedures responsive to those risks. In particular, we looked at where the directors made subjective judgements such as making assumptions on significant accounting estimates.

We tailored the scope of our audit to ensure that we performed sufficient work to be able to give an opinion on the financial statements as a whole. We used the outputs of a risk assessment, our understanding of the Company, its environment, controls and critical business processes, to consider qualitative factors in order to ensure that we obtained sufficient coverage across all financial statement line items.

Our audit procedures were designed to respond to those identified risks, including non-compliance with laws and regulations (irregularities) and fraud that are material to the financial statements.

In identifying and assessing risks of material misstatement in respect of irregularities including non-compliance with laws and regulations, our procedures included but were not limited to:

•    at planning stage, we gained an understanding of the legal and regulatory framework applicable to the     Company, the industry in which it operates and considered the risk of acts by the Company which were     contrary to the applicable laws and regulations;

•    we discussed with the directors the policies and procedures in place regarding compliance with laws     and regulations;

•    we discussed amongst the engagement team the identified laws and regulations, and remained alert to     any indications of non-compliance; and

•    during the audit, we focused on areas of laws and regulations that could reasonably be expected to        have a material effect on the financial statements from our general commercial and sector experience     and through discussions with the directors (as required by auditing standards), from inspection of the    Company’s regulatory and legal correspondence and review of minutes of directors’ meetings in the     year. We identified that the principal risks of non-compliance with laws and regulations related to     breaches of laws and regulations that have a direct impact on the preparation of financial statements,     such as the Companies Act 2006.

Our procedures in relation to fraud included but were not limited to:

•    inquiries of management whether they have knowledge of any actual, suspected or alleged fraud;

•    gaining an understanding of the internal controls established to mitigate risk related to fraud;

•    discussions amongst the engagement team regarding risk of fraud such as opportunities for fraudulent     manipulation of financial statements, and determined that the principal risks were related to posting     journal     entries to manipulate financial performance, management bias through judgements and     assumptions in     significant accounting estimates, in particular in relation to the provisions for the     settlement of future claims, and significant one-off or unusual transactions; and

•    addressing the risk of fraud through management override of controls by performing journal entry     testing.

The primary responsibility for the prevention and detection of irregularities including fraud rests with both those charged with governance and management. As with any audit, there remained a risk of non-detection of irregularities, as there may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal controls.

As a result of our procedures, we did not identify any ‘key audit matters’ relating to irregularities, including fraud. The risks of material misstatement that had the greatest effect on our audit, including fraud, are discussed under ‘key audit matters’ within this report.

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.

Use of our report

This report is made solely to the company's member 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 member those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.

The notes on pages 14 to 21 form part of these financial statements.

The company had no other recognised gains or losses in the current or proceeding period and therefore no comprehensive income statement has been presented.

Active Underwriting Specialists Limited is a private company limited by shares incorporated in England and Wales. The registered office is 8 Eagle Court, London EC1M 5QD.

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

After making enquiries, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. The company therefore continues to adopt the going concern basis in preparing its financial statements. In making this assessment the directors have considered trading forecasts, future plans and management’s growth projections for at least 12 months from the signing of the balance sheet. Furthermore, the directors have made reasonable provisions against relevant non-recoverable assets in the balance sheet of the business and assessed the regulatory environment in which the company exists, ensuring that compliance has been met throughout the current and post balance sheet period.true

The directors are confident that the continued support of its partner business, Sportscover Europe Limited, as required for relevant front and back office support, alongside a positive trading forecast has allowed for the Going Concern of the business to be continued. The directors of the business are therefore confident in the Going Concern of the business and its ability to continue trading on an ongoing basis.

Turnover is recognised at the fair value of the consideration received or receivable for goods and 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.

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

Income represents commission receivable from the placing of insurance business on behalf of insurance companies underwriting the risks. Commission income due for each insurance policy placed is recognised at the commencement of the insurance policy. Commission income is stated net of commissions due back on refunded premiums. Income is wholly attributable to the principal activity of the company.

A part of commission income is deferred as it is probable that the company will be required to render further services during the life of the policy. A claims handling provision has been recognised for probable future claims and will recognised as revenue when the service has been completed.

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.

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, 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.

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

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.

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Functional and presentation currency

Items included in the financial statements of the Company are measured using the currency of the primary economic environment in which the entity operates (‘the functional currency'). The financial statements are presented in ‘sterling', which is the company's functional currency.

Transactions and balances

Foreign currency transactions are translated into the company’s entity's functional currency using the average monthly exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in profit or loss within ‘finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within ‘other operating income or expense'.

Pension costs

Contributions to the company’s defined contribution pension scheme are charged to profit or loss in the year in which they become payable.

Dividends

Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting. Dividends on shares recognised as liabilities are recognised as expenses and classified within interest payable.

Reserves

The Company’s reserves are as follows:

•    Called up share capital reserve represents the nominal value of the shares issued.

•    The share premium account includes the premium on issue of equity shares, net of any issue     costs.

•    Profit and loss account represents cumulative profits or losses, net of dividends paid and other     adjustments.

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Other key sources of estimation uncertainty

•    Claims handling provision

The company estimates the amount of income to be deferred to recognise the services which will be rendered over the life of the policy. The services concerned are claims handling. The estimate has been based on salary and related costs of the current claims team and the number of claims processed in the current financial year that relate to policies incepted in previous years. This is an estimate because claims can be made on all lines of business, except for Directors and Officers insurance, after the expiry of the policy. Claims can be made on our largest class of business over three years after the expiration of the policy.

The average monthly number of persons (including directors) employed by the company during the year was:

The average number of employees employed by the company were 0 (2020: 1). The services of 12 employees were used by the company (2020: 11 employees), all of whom were employed by a fellow group company, Sportscover Europe Limited. This includes one director, who is also employed by Sportscover Europe Limited.

Their aggregate remuneration comprised of:

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:

The company does not have any bank overdraft facility as at 31 December 2021.

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.

During the period, the immediate parent company changed from Sportscover Australia Pty to Activerisk Group Limited. Post year end, the immediate parent company became Activerisk Limited. All new parent entities were incorporated in the UK. The post balance sheet event did not impact the ultimate parent company noted below.

During the year the ultimate controlling company became Activerisk Group Limited, a joint venture, owned equally by Resolution Underwriting Holdings Limited and Whitburn Capital Limited.

At the balance sheet date, the following balances were owing from related party companies: Sportscover Europe Limited: £54,520 (2020: £87,579). All related party balances are interest free and are repayable on demand.

Sportscover Europe Ltd administers the cash flow for the company, the net amount owing relates to commissions drawn down on behalf of and still payable to the company, less amounts withheld for expenses including recharges for staff costs as per Note 5 and associated administrative costs.