Kingsbridge Risk Solutions Limited - Limited company accounts 20.1

REGISTERED NUMBER: 04122238 (England and Wales)

Strategic Report, Report of the Directors and

Financial Statements for the Year Ended 31 December 2021

for

Kingsbridge Risk Solutions Limited

Page

Company Information

1

Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

6

Statement of Comprehensive Income

8

Balance Sheet

9

Statement of Changes in Equity

10

Cash Flow Statement

11

Notes to the Cash Flow Statement

12

Notes to the Financial Statements

13

DIRECTORS:

J D Boast

M A Castellucci

W McKernan

G McKernan

K Stephens

P R Havenhand

G Williamson

REGISTERED OFFICE:

9 Miller Court

Severn Drive Tewkesbury Business Park

Tewkesbury

Gloucestershire

GL20 8DN

REGISTERED NUMBER:

04122238 (England and Wales)

SENIOR STATUTORY AUDITOR:

Charles Hinitt FCCA

AUDITORS:

Charles Hinitt & Associates Limited

Chartered Certified Accountants &

Statutory Auditors

48 Belle Vue Terrace

Malvern

Worcestershire

WR14 4QG

BANKERS:

The Royal Bank of Scotland Plc

PO Box 412

62/63 Threadneedle Street

London

EC2R 8LA

SOLICITORS:

Morgan, Lewis & Bockius UK LLP

Condor House

5-10 St. Paul's Churchyard

London

EC4M 8AL

The directors present their strategic report for the year ended 31 December 2021.

REVIEW OF BUSINESS

Kingsbridge Group Limited was incorporated on 12 January 2016. On 31st May 2016 Kingsbridge Group acquired the business of the Kingsbridge group of companies which has been operating since 2001. The main trading company is Kingsbridge Risk Solutions Limited.

Kingsbridge is a leading corporate insurance broker providing tailored insurance and IR35 consulting solutions to independent contractors, freelancers and recruitment companies and specialty insurance broking services to corporate clients across a number of industries and insurance classes.

In 2020 the Kingsbridge Group was acquired by NSM Insurance Group. This acquisition allowed the business to continue investing in developing its people and systems and in broadening and improving its offering to ensure that its products meet its customers' needs and provide value for money, building on the acquisitions made in previous years and its innovative new IR35 offering. Kingsbridge's unique platform of brands, distribution channels and platforms positions it in an unrivalled position with which to tackle the fundamental long term trend from permanent to flexible employment, both in the UK and internationally.

The business has offices in Tewkesbury, Liverpool and London and employs around 95 people.

KEY PERFORMANCE INDICATORS

Kingsbridge Risk Solutions Limited has continued a trend of strong organic growth and the KPIs of the business reflect this. The company achieved revenue of £13,984k during the year and reported profit of £5,614k.

PRINCIPLE RISKS AND UNCERTAINTIES

Market

The addressable market has reduced over the last 12 months most significantly by the changes to IR35 legislation and it's impact on the number of Limited Companies and PSCs available to insure. These changes have caused disruption to our markets and whilst over the longer term we expect our markets to recover, the long term impact of these changes and on the broader UK economy remains uncertain. The Group seeks to minimise these risks through the investment in new products, services and markets to generate both new revenue opportunities and further investment into developing wider distribution channels.

Competitive

The Group operates in competitive markets where customers' insurance requirements are driven by the specific risks in their respective industries. The Group has an ethos of high service delivery and ensures that it's product offering is competitive and appropriate to the business sectors in which it operates.

Legislative & regulatory

Kingsbridge Risk Solutions is directly regulated by the FCA in respect of its insurance activities. There is a risk that a change in regulations or tax legislation could have a detrimental effect on the Group. The Group treats compliance as a high priority and keeps up to date with recent developments in regulatory guidance and relevant legislation so as to proactively plan and to minimise their impact and identify any opportunities that might result from it.

Interest and Inflation rate risk

An element of the group's borrowing is linked to SONIA and so the group is exposed to fluctuations in interest rates in line with Monetary Policy. The company reviews this exposure at board level in conjunction with forecasted cash flows. The Bank of England project that CPI inflation is expected to remain high in 2023 at 9%, 7 points higher than target. Base rate interest has moved in an aim to control the rise in inflation.

ON BEHALF OF THE BOARD:

P R Havenhand - Director

22 December 2022

The directors present their report with the financial statements of the company for the year ended 31 December 2021.

PRINCIPAL ACTIVITIES

The principal activities of the company in the year under review were those of insurance broking, risk consulting, risk financing and risk management advice.

DIVIDENDS

No dividends will be distributed for the year ended 31 December 2021.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 January 2021 to the date of this report.

J D Boast

M A Castellucci

W McKernan

G McKernan

K Stephens

Other changes in directors holding office are as follows:

A G M Stevens - resigned 4 February 2021

P R Havenhand - appointed 12 February 2021

R A Styring - appointed 13 April 2021

R G Hartley - appointed 26 April 2021 - resigned 1 November 2021

G Williamson was appointed as a director after 31 December 2021 but prior to the date of this report.

J D R Twining and R A Styring ceased to be directors after 31 December 2021 but prior to the date of this report.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

-	select suitable accounting policies and then apply them consistently;

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

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

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

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

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

ON BEHALF OF THE BOARD:

P R Havenhand - Director

22 December 2022

Opinion

We have audited the financial statements of Kingsbridge Risk Solutions Limited (the 'company') for the year ended 31 December 2021 which comprise the Statement of Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes to the Cash Flow Statement, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 31 December 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 Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

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

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether 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 the audit:

-	the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Report of the Directors.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

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

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

-	certain disclosures of directors' remuneration specified by law are not made; or

-	we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page four, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditors' responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect immaterial misstatements in respect of irregularities, including fraud.

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

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Charles Hinitt FCCA (Senior Statutory Auditor)

for and on behalf of Charles Hinitt & Associates Limited

Chartered Certified Accountants &

Statutory Auditors

48 Belle Vue Terrace

Malvern

Worcestershire

WR14 4QG

22 December 2022

TURNOVER

3

13,984,478

12,480,814

Cost of sales

832,997

1,019,474

GROSS PROFIT

13,151,481

11,461,340

Administrative expenses

7,598,603

7,871,809

5,552,878

3,589,531

Other operating income

61,010

105,045

OPERATING PROFIT

5

5,613,888

3,694,576

Interest receivable and similar income

133

5,908

5,614,021

3,700,484

Interest payable and similar expenses

7

-

13,846

PROFIT BEFORE TAXATION

5,614,021

3,686,638

Tax on profit

8

1,140,406

336,045

PROFIT FOR THE FINANCIAL YEAR

4,473,615

3,350,593

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

4,473,615

3,350,593

FIXED ASSETS

Intangible assets

9

797,825

185,531

Tangible assets

10

236,515

149,509

Investments

11

1

279,221

1,034,341

614,261

CURRENT ASSETS

Debtors

12

49,793,502

45,196,709

Cash at bank and in hand

13

6,383,468

6,984,324

56,176,970

52,181,033

CREDITORS

Amounts falling due within one year

14

24,865,082

25,036,417

NET CURRENT ASSETS

31,311,888

27,144,616

TOTAL ASSETS LESS CURRENT LIABILITIES

32,346,229

27,758,877

PROVISIONS FOR LIABILITIES

16

156,236

42,499

NET ASSETS

32,189,993

27,716,378

CAPITAL AND RESERVES

Called up share capital

17

15,002

15,002

Retained earnings

18

32,174,991

27,701,376

SHAREHOLDERS' FUNDS

32,189,993

27,716,378

The financial statements were approved by the Board of Directors and authorised for issue on 22 December 2022 and were signed on its behalf by:

P R Havenhand - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 February 2020

15,002

24,350,783

24,365,785

Changes in equity

Total comprehensive income

-

3,350,593

3,350,593

Balance at 31 December 2020

15,002

27,701,376

27,716,378

Changes in equity

Total comprehensive income

-

4,473,615

4,473,615

Balance at 31 December 2021

15,002

32,174,991

32,189,993

Cash flows from operating activities

Cash generated from operations

1

834,766

273,911

Interest paid

-

(13,193

)

Interest element of hire purchase or finance lease rental payments paid

-

(653

)

Tax paid

(742,582

)

(398,662

)

Net cash from operating activities

92,184

(138,597

)

Cash flows from investing activities

Purchase of intangible fixed assets

(565,722

)

(182,402

)

Purchase of tangible fixed assets

(194,273

)

(65,563

)

Purchase of fixed asset investments

-

(269,220

)

Sale of intangible fixed assets

-

63,930

Sale of tangible fixed assets

3,311

48,975

Sale of fixed asset investments

79,030

42,344

Tangible fixed assets transferred

(29,924

)

-

Write off investments

14,405

-

Interest received

133

5,908

Net cash from investing activities

(693,040

)

(356,028

)

Cash flows from financing activities

Capital repayments in year

-

(7,750

)

Amount introduced by directors

-

16,000

Net cash from financing activities

-

8,250

Decrease in cash and cash equivalents

(600,856

)

(486,375

)

Cash and cash equivalents at beginning of year

2

6,984,324

7,470,699

Cash and cash equivalents at end of year

2

6,383,468

6,984,324

1.	RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

Period

1.2.20

Year Ended

to

31.12.21

31.12.20

£

£

Profit before taxation

5,614,021

3,686,638

Depreciation charges

342,203

89,824

(Profit)/loss on disposal of fixed assets

(69,111

)

51,949

Finance costs

-

13,846

Finance income

(133

)

(5,908

)

5,886,980

3,836,349

Increase in trade and other debtors

(4,596,793

)

(22,959,406

)

(Decrease)/increase in trade and other creditors

(455,421

)

19,396,968

Cash generated from operations

834,766

273,911

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 31 December 2021

31.12.21

1.1.21

£

£

Cash and cash equivalents

6,383,468

6,984,324

Period ended 31 December 2020

31.12.20

1.2.20

£

£

Cash and cash equivalents

6,984,324

7,471,911

Bank overdrafts

-

(1,212

)

6,984,324

7,470,699

3.	ANALYSIS OF CHANGES IN NET FUNDS

At 1.1.21

Cash flow

At 31.12.21

£

£

£

Net cash

Cash at bank and in hand

6,984,324

(600,856

)

6,383,468

6,984,324

(600,856

)

6,383,468

Total

6,984,324

(600,856

)

6,383,468

1.	STATUTORY INFORMATION

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

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

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

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

Preparation of consolidated financial statements

The financial statements contain information about Kingsbridge Risk Solutions Limited as an individual company and do not contain consolidated financial information as the parent of a group. The company is exempt under Section 400 of the Companies Act 2006 from the requirements to prepare consolidated financial statements as it and its subsidiary undertakings are included by full consolidation in the consolidated financial statements of its holding company White Mountains Insurance Group Limited, Hanover, New Hampshire, USA.

Turnover

Turnover represents net invoiced sales of services and is shown gross of introducer commission. The majority of the services of the company are not subject to VAT, however under a group registration, during the 2020 period the company began operating a VAT account under partial exemption.

Goodwill

Goodwill representing the excess of the purchase price over the fair value of the net assets of businesses acquired has been amortised by equal annual instalments over its expected useful economic life of ten years.

Intangible fixed assets

Amortisation is provided at the following rates in order to write off each asset over its estimated useful life :

Domain Names - 10% on cost

Development costs - 50% on cost

Tangible fixed assets

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

Fixtures and fittings

-

20% on cost

Motor vehicles

-

25% on cost

Computer equipment

-

33% on cost

Financial instruments

Basic financial instruments are recognised at amortised cost.

Non-basic financial instruments are initially recorded at cost and thereafter at fair value with changes recognised in the profit and loss.

Taxation

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

Current or deferred taxation assets and liabilities are not discounted.

On 3 March 2021, the UK Government announced an increase in the UK's main corporation tax rate from 19% to 25%, effective from 1 April 2023. This will increase the company's future current tax charge accordingly. The rate change was substantively enacted on 24 May 2021 and has therefore been applied when calculating the company's deferred tax balances at the balance sheet date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Foreign currencies

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.

Hire purchase and leasing commitments

Assets obtained under hire purchase contracts or finance leases are capitalised in the balance sheet. Those held under hire purchase contracts are depreciated over their estimated useful lives. Those held under finance leases are depreciated over their estimated useful lives or the lease term, whichever is the shorter.

The interest element of these obligations is charged to profit or loss over the relevant period. The capital element of the future payments is treated as a liability.

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

Pension costs and other post-retirement benefits

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

Income recognition

The company recognises profit sharing arrangements with underwriters of insurance policies to the extent that it can reasonably estimate those which will be due after more than one year.

Full provision of the taxation due on this income is included within these accounts.

Client monies held in non-statutory trust bank accounts

As required by the FCA, the company hold funds on behalf of its clients within non-statutory trust client bank accounts. These monies do not belong to the company. However, as the client and underwriter debtor and creditor balances are included as assets and liabilities, the company considers it necessary to include on its balance sheet cash balances held within the non-statutory client bank accounts.

Going concern

The Directors are required to prepare the statutory financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business. In satisfaction of this responsibility the Directors have also considered the Company’s ability to meet its liabilities as they fall due.

The Directors have paid special attention to the COVID-19 situation and the potential associated impact on the Company and at the date of approval of these accounts the expected negative impact on the UK and Worldwide economy appears to have levelled off.

The Directors have also paid attention to the Worldwide economic outlook, specifically that of the UK and USA where the Bank of England and the Federal Reserve are predicting likely two year recessions by September 2023.

The Directors consider that the Company has sufficient cash, reserves and external funding to continue for at least the next twelve months and beyond, and as such, consider that it is appropriate to prepare the financial statements on the going concern basis.

3.

TURNOVER

The turnover and profit before taxation are attributable to the principal activities of the company.

An analysis of turnover by class of business is given below:

Period

1.2.20

Year Ended

to

31.12.21

31.12.20

£

£

Commissions

13,984,478

12,480,814

13,984,478

12,480,814

4.	EMPLOYEES AND DIRECTORS

Period

1.2.20

Year Ended

to

31.12.21

31.12.20

£

£

Wages and salaries

4,069,194

4,696,459

Social security costs

374,740

338,124

Other pension costs

224,285

199,594

4,668,219

5,234,177

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

Period

1.2.20

Year Ended

to

31.12.21

31.12.20

Sales

61

44

Administration

34

50

95

94

Period

1.2.20

Year Ended

to

31.12.21

31.12.20

£

£

Directors' remuneration

623,654

565,833

Information regarding the highest paid director is as follows:

Period

1.2.20

Year Ended

to

31.12.21

31.12.20

£

£

Emoluments etc

394,500

334,866

5.	OPERATING PROFIT

The operating profit is stated after charging/(crediting):

Period

1.2.20

Year Ended

to

31.12.21

31.12.20

£

£

Other operating leases

116,919

132,239

Depreciation - owned assets

117,338

89,203

(Profit)/loss on disposal of fixed assets

(69,111

)

51,949

Goodwill amortisation

132,278

622

Development costs amortisation

92,588

-

Auditors' remuneration

156,465

115,216

6.	EXCEPTIONAL ITEMS

Period

1.2.20

Year Ended

to

31.12.21

31.12.20

£

£

Fixed asset write off

(14,405

)

(63,930

)

7.

INTEREST PAYABLE AND SIMILAR EXPENSES

Period

1.2.20

Year Ended

to

31.12.21

31.12.20

£

£

Interest payable

-

13,193

Hire purchase

-

653

-

13,846