L.E.M Limited - Limited company accounts 16.3

REGISTERED NUMBER: 05687169 (England and Wales)

GROUP STRATEGIC REPORT,

REPORT OF THE DIRECTORS AND

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2016

FOR

L.E.M LIMITED

Page

Company Information

1

Group Strategic Report

2

Report of the Directors

3

Report of the Independent Auditors

5

Consolidated Income Statement

7

Consolidated Other Comprehensive Income

8

Consolidated Balance Sheet

9

Company Balance Sheet

10

Consolidated Statement of Changes in Equity

11

Company Statement of Changes in Equity

12

Consolidated Cash Flow Statement

13

Notes to the Consolidated Cash Flow Statement

14

Notes to the Consolidated Financial Statements

15

DIRECTORS:

Ms L Martin

Mr E Blundell

REGISTERED OFFICE:

Boughton Leigh House

Brownsover Road

Rugby

Warwickshire

CV21 1AW

REGISTERED NUMBER:

05687169 (England and Wales)

AUDITORS:

TGFP

Chartered Accountants & Statutory Auditors

Fulford House

Newbold Terrace

Leamington Spa

Warwickshire

CV32 4EA

The directors present their strategic report of the company and the group for the year ended 31 December 2016.

REVIEW OF BUSINESS

The financial results for the period ending 31 December 2016 reflect an increase in turnover of 13% which was higher

than our original forecast.

The increase was as a result of the continued growth of our let property insurance business due to maintaining the

existing levels of retained business along with a higher level of advertising expenditure than was originally forecast.

The 2017 forecasts currently reflect a further increase in turnover compared to 2016 due to a further increase in our

marketing spend whilst continuing to retain the high levels of existing business.

ON BEHALF OF THE BOARD:

Ms L Martin - Director

31 August 2017

The directors present their report with the financial statements of the company and the group for the year ended

31 December 2016.

PRINCIPAL ACTIVITY

The principal activity of the group in the year under review was that of insurance and re-insurance brokers.

DIVIDENDS

No dividends will be distributed for the year ended 31 December 2016.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 January 2016 to the date of this

report.

Ms L Martin

Mr E Blundell

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Group 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). 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 the group and of the profit or loss of the group 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 and the group's transactions and disclose with reasonable accuracy at any time the financial position of the

company and the group 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 the group 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 group's auditors are unaware, and each director has taken all the steps that he ought to have

taken as a director in order to make himself aware of any relevant audit information and to establish that the group's

auditors are aware of that information.

AUDITORS

The auditors, TGFP, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

Ms L Martin - Director

31 August 2017

We have audited the financial statements of L.E.M Limited for the year ended 31 December 2016 on pages seven to

twenty one. The financial reporting framework that has been applied in their preparation is applicable law and United

Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial

Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'.

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.

Respective responsibilities of directors and auditors

As explained more fully in the Statement of Directors' Responsibilities set out on page three, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.

Scope of the audit of the financial statements

An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give

reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or

error. This includes an assessment of: whether the accounting policies are appropriate to the group's and the parent

company's circumstances and have been consistently applied and adequately disclosed; the reasonableness of

significant accounting estimates made by the directors; and the overall presentation of the financial statements. In

addition, we read all the financial and non-financial information in the Group Strategic Report and the Report of the

Directors to identify material inconsistencies with the audited financial statements and to identify any information that is

apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of

performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the

implications for our report.

Opinion on financial statements

In our opinion the financial statements:

-	give a true and fair view of the state of the group's and of the parent company's affairs as at 31 December 2016 and of the group's 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.

Opinion on other matter 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 Group 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 has been prepared in accordance with applicable legal requirements. In

the light of the knowledge and understanding of the group and the parent company and its environment, we have not

identified any material misstatements in the Group Strategic Report or the Report of the Directors.

Matters on which we are required to report by exception

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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

-	the parent company 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.

BENJAMIN REYNOLDS BSc(Hons) FCA (Senior Statutory Auditor)

for and on behalf of TGFP

Chartered Accountants & Statutory Auditors

Fulford House

Newbold Terrace

Leamington Spa

Warwickshire

CV32 4EA

7 September 2017

TURNOVER

12,118,799

10,704,978

Cost of sales

2,253,652

1,985,140

GROSS PROFIT

9,865,147

8,719,838

Administrative expenses

9,699,899

8,561,857

OPERATING PROFIT

4

165,248

157,981

Income from fixed asset investments

(5,503

)

(892

)

Interest receivable and similar income

2,849

2,799

(2,654

)

1,907

PROFIT BEFORE TAXATION

162,594

159,888

Tax on profit

5

67,227

67,134

PROFIT FOR THE FINANCIAL YEAR

95,367

92,754

Profit attributable to:

Owners of the parent

95,367

92,754

PROFIT FOR THE YEAR

95,367

92,754

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

95,367

Prior year adjustment

(1,277,048

)

TOTAL COMPREHENSIVE INCOME SINCE LAST ANNUAL REPORT

(1,184,294

)

Total comprehensive income attributable to:

Owners of the parent

95,367

(1,184,294

)

FIXED ASSETS

Intangible assets

9

26,886

167,391

Tangible assets

10

286,183

269,621

Investments

11

-

-

313,069

437,012

CURRENT ASSETS

Debtors

12

312,748

346,428

Investments

13

44,617

52,154

Cash at bank and in hand

3,580,404

3,041,044

3,937,769

3,439,626

CREDITORS

Amounts falling due within one year

14

4,037,818

3,758,985

NET CURRENT LIABILITIES

(100,049

)

(319,359

)

TOTAL ASSETS LESS CURRENT LIABILITIES

213,020

117,653

CAPITAL AND RESERVES

Called up share capital

15

10,000

10,000

Retained earnings

16

203,020

107,653

SHAREHOLDERS' FUNDS

213,020

117,653

The financial statements were approved by the Board of Directors on 31 August 2017 and were signed on its behalf by:

Ms L Martin - Director

Mr E Blundell - Director

FIXED ASSETS

Intangible assets

9

-

-

Tangible assets

10

-

-

Investments

11

2,120,007

2,120,007

2,120,007

2,120,007

CURRENT ASSETS

Cash at bank

922

148

CREDITORS

Amounts falling due within one year

14

959,415

1,297,002

NET CURRENT LIABILITIES

(958,493

)

(1,296,854

)

TOTAL ASSETS LESS CURRENT LIABILITIES

1,161,514

823,153

CAPITAL AND RESERVES

Called up share capital

15

10,000

10,000

Retained earnings

16

1,151,514

813,153

SHAREHOLDERS' FUNDS

1,161,514

823,153

Company's profit/(loss) for the financial year

338,361

(58

)

The financial statements were approved by the Board of Directors on 31 August 2017 and were signed on its behalf by:

Ms L Martin - Director

Mr E Blundell - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 January 2015

10,000

1,291,947

1,301,947

Prior year adjustment

-

(1,277,048

)

(1,277,048

)

As restated

10,000

14,899

24,899

Changes in equity

Total comprehensive income

-

92,754

92,754

Balance at 31 December 2015

10,000

107,653

117,653

Changes in equity

Total comprehensive income

-

95,367

95,367

Balance at 31 December 2016

10,000

203,020

213,020

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 January 2015

10,000

813,211

823,211

Changes in equity

Total comprehensive income

-

(58

)

(58

)

Balance at 31 December 2015

10,000

813,153

823,153

Changes in equity

Total comprehensive income

-

338,361

338,361

Balance at 31 December 2016

10,000

1,151,514

1,161,514

Cash flows from operating activities

Cash generated from operations

1

661,509

464,577

Tax paid

(67,134

)

(58,781

)

Net cash from operating activities

594,375

405,796

Cash flows from investing activities

Purchase of intangible fixed assets

(79,621

)

(10,339

)

Purchase of tangible fixed assets

(70,777

)

(75,177

)

Sale of tangible fixed assets

12,500

-

Interest received

2,849

2,799

Dividends received

2,034

1,071

Net cash from investing activities

(133,015

)

(81,646

)

Cash flows from financing activities

Amount introduced by directors

1,160,000

1,715,000

Amount withdrawn by directors

(1,082,000

)

(1,851,000

)

Net cash from financing activities

78,000

(136,000

)

Increase in cash and cash equivalents

539,360

188,150

Cash and cash equivalents at beginning of year

2

3,041,044

2,852,894

Cash and cash equivalents at end of year

2

3,580,404

3,041,044

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

2016

2015

as restated

£

£

Profit before taxation

162,594

159,888

Depreciation charges

274,339

217,017

Profit on disposal of fixed assets

(12,500

)

-

Finance income

2,654

(1,907

)

427,087

374,998

Decrease/(increase) in trade and other debtors

33,681

(13,195

)

Increase in trade and other creditors

200,741

102,774

Cash generated from operations

661,509

464,577

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Consolidated Cash Flow Statement in respect of cash and cash equivalents are

in respect of these Balance Sheet amounts:

Year ended 31 December 2016

31.12.16

1.1.16

£

£

Cash and cash equivalents

3,580,404

3,041,044

Year ended 31 December 2015

31.12.15

1.1.15

as restated

£

£

Cash and cash equivalents

3,041,044

2,852,894

1.	STATUTORY INFORMATION

L.E.M 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 General Information page.

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.

Turnover

Turnover represents commissions and fees received in respect of insurance services provided.

Goodwill

Goodwill, being the amount paid in connection with the acquisition of a business in 2006, is being amortised evenly over its estimated useful life of ten years.

Intangible assets

The computer software is being amortised over its estimated useful life of four years or eleven years.

Tangible fixed assets

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

Motor vehicles

-

25% on cost

Computer equipment

-

15% on reducing balance

Hire purchase and leasing commitments

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 group operates a defined contribution pension scheme. Contributions payable to the group's pension

scheme are charged to profit or loss in the period to which they relate.

3.	EMPLOYEES AND DIRECTORS

2016

2015

as restated

£

£

Wages and salaries

2,055,063

1,812,200

Social security costs

150,061

134,327

Other pension costs

53,329

48,630

2,258,453

1,995,157

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

2016

2015

as restated

Directors

2

2

Management

17

17

Support

86

80

105

99

The average number of employees by undertakings that are proportionately consolidated during the year was

105 .

2016

2015

as restated

£

£

Directors' remuneration

18,928

18,133

4.	OPERATING PROFIT

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

2016

2015

as restated

£

£

Hire of plant and machinery

25,201

28,143

Other operating leases

86,500

86,500

Depreciation - owned assets

54,215

54,393

Profit on disposal of fixed assets

(12,500

)

-

Goodwill amortisation

159,637

159,631

Computer software amortisation

60,489

2,993

Auditors' remuneration

8,460

7,050

5.

TAXATION

Analysis of the tax charge

The tax charge on the profit for the year was as follows:

2016

2015

as restated

£

£

Current tax:

UK corporation tax

67,227

67,134

Tax on profit

67,227

67,134

6.	INDIVIDUAL INCOME STATEMENT

As permitted by Section 408 of the Companies Act 2006, the Income Statement of the parent company is not

presented as part of these financial statements.

7.	PRIOR YEAR ADJUSTMENT

No adjustment was made to amortise the goodwill arising on consolidation in previous years dating back to

2006. Therefore, a charge was included in the previous year to account for the amortisation that should have

been included for the last 8 years.

8.	ADMINISTRATION EXPENSES

The company made a contribution in the accounting period to a remuneration trust in the amount of £4,174,500

(2015 £4,061,588). The terms of the trust are set out in a trust deed executed by the company and the original

trustees.

9.	INTANGIBLE FIXED ASSETS

Group

Computer

Goodwill

software

Totals

£

£

£

COST

At 1 January 2016

1,596,316

70,026

1,666,342

Additions

-

79,621

79,621

At 31 December 2016

1,596,316

149,647

1,745,963

AMORTISATION

At 1 January 2016

1,436,679

62,272

1,498,951

Amortisation for year

159,637

60,489

220,126

At 31 December 2016

1,596,316

122,761

1,719,077

NET BOOK VALUE

At 31 December 2016

-

26,886

26,886

At 31 December 2015

159,637

7,754

167,391