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Shepherd Compello Ltd
























Annual report and financial statements



For the year ended 31 December 2022



Registered number: 04695072

 
Shepherd Compello Ltd


Company Information


Directors
Duncan McClure Fisher 
Holly Shepherd 
John Shepherd 
David Shapiro 




Registered number
04695072



Registered office
88 Leadenhall Street

London

EC3A 3BP




Independent auditor
Buzzacott LLP

130 Wood Street

London

EC2V 6DL





 
Shepherd Compello Ltd


Contents



Page
Directors' report
 
1 - 2
Strategic report
 
3 - 4
Independent auditor's report
 
5 - 8
Statement of income and retained earnings
 
9
Statement of financial position
 
10 - 11
Notes to the financial statements
 
12 - 29


 
Shepherd Compello Ltd

 
Directors' report
For the year ended 31 December 2022

The directors present their report and the financial statements of Shepherd Compello Ltd ('the company') for the year ended 31 December 2022.

Principal activity

The principal activity of the company during the year continued to be that of insurance brokerage.

Results and dividends

The profit for the year, after taxation, amounted to £758,986 (2021: £293,443).

No ordinary dividends were paid. The directors do not recommend payment of a final dividend (2021: £nil).

Directors

The directors who served during the year were:

Duncan McClure Fisher 
Holly Shepherd 
John Shepherd  
David Shapiro (appointed 31 May 2022)

Directors' responsibilities statement

The directors are responsible for preparing the Directors' report, the Strategic 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 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'. 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 for the company's financial statements and then apply them consistently;

make judgements and accounting estimates that are reasonable and prudent;

state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;

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

The 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 to enable them to ensure that the financial statements comply with the Companies Act 2006They 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.

Page 1

 
Shepherd Compello Ltd
 
Directors' report (continued)
For the year ended 31 December 2022

Matters covered in Strategic report

The company has chosen, in accordance with s.414C(11) of the Companies Act 2006, to set out in the Strategic report information required by Schedule 7 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 to be contained in the Directors' report. It has done so in respect of principal risks and uncertainties and future plans.

Disclosure of information to auditor

Each of the persons who are directors at the time when this Directors' report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the company's auditor is unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the company's auditor is aware of that information.

Post balance sheet events

There have been no significant events affecting the company since the year end. 

Auditor

The auditor, Buzzacott LLPwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board and signed on its behalf.
 





John Shepherd
Director

Date: 29 September 2023

Page 2

 
Shepherd Compello Ltd


Strategic report
For the year ended 31 December 2022

Introduction
 
The directors present the strategic report for Shepherd Compello Ltd ("the company") for the year ended 31 December 2022.

Business review
 
Turnover for the year was £9.6m. Profit before tax was £900k.

Principal risks and uncertainties
 
The directors consider the principal risks and uncertainties facing the business to be as follows:

Business and regulator risk
 
The company operates in a highly regulated and diverse business environment. The directors and management of the company therefore regularly review the business and regulatory risks to ensure these are mitigated as far as possible.

Exchange rate risk
 
The company is exposed to currency risk given a substantial portion of the company's operations are in currencies other than Sterling. The US dollar and Euro are the most significant currencies to which the company is exposed. The directors manage this risk and look to mitigate the effect of exchange rate fluctuations through the use of hedging and foreign exchange forward contracts as deemed appropriate at the time of trade.

Credit risk

Credit risk is the risk that a counterparty will be unable to pay amounts in full when due. The company monitors its debtor balances on an ongoing basis and provision is made for doubtful debts as necessary.
Investments of cash surpluses are only made through banks and companies which have sufficient credit ratings.

Liquidity risk
 
Liquidity risk is the risk that cash may not be available to pay obligations when they fall due. The company has appropriate cash flow management structures in place in order to anticipate demand for cash and meet obligations as they are due. In addition, controls are in place over client money to ensure that the company has appropriate cash resource to meet its obligations as they fall due.

Operating risk

The directors and management of the company meet regularly to review the operation of the business and to review the adequacy of operating systems and internal controls. When a risk is identified, it is assessed and the necessary remedial action is decided and agreed upon by the directors and management team. The company maintains errors and omissions insurance.

Page 3

 
Shepherd Compello Ltd


Strategic report (continued)
For the year ended 31 December 2022

Future plans

The company continues to invest in IT platforms in order to drive forward an improved service for our clients and reporting for our stakeholders, whilst improving internal efficiencies.
The directors have undertaken a strategic review of the business priorities through to 2024 and have mapped out how to grow turnover and profitability through investment in people and diversification of our current offering. This began in earnest during previous periods and will continue moving forward.
The company also continues to focus on the team and developing talent from within where there is opportunity to do so. 


This report was approved by the board and signed on its behalf.



John Shepherd
Director

Date: 29 September 2023

Page 4

 
 
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Independent auditor's report to the members of Shepherd Compello Ltd
For the year ended 31 December 2022

Opinion


We have audited the financial statements of Shepherd Compello Limited ('the company') for the year ended 31 December 2022, which comprise the Statement of income and retained earnings, the Statement of financial position and the related notes, including a summary of significant accounting policiesThe 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 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.


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 United Kingdom, including the Financial Reporting Council'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.

Page 5

 
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Independent auditor's report to the members of Shepherd Compello Ltd (continued)
For the year ended 31 December 2022

Opinion 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 Directors' report and the Strategic report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the Directors' report and the Strategic report 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 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 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 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.


Auditor's responsibilities for the audit of the financial statements
 

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


Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

 
Page 6

 
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Independent auditor's report to the members of Shepherd Compello Ltd (continued)
For the year ended 31 December 2022

Auditor's responsibilities for the audit of the financial statements (continued)
How the audit was considered capable of detecting irregularities including fraud
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud
and non-compliance with laws and regulations, was as follows:
 
the Senior Statutory Auditor ensured that the engagement team collectively had the appropriate competence,
capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
we made enquiries of management as to where they considered there was susceptibility to fraud, and their
knowledge of actual, suspected and alleged fraud;
we identified the laws and regulations that could reasonably be expected to have a material effect on the financial
statements of the company through discussions with directors and other management at the planning stage;
the audit team held a discussion to identify any particular areas that were considered to be susceptible to
misstatement, including with respect to fraud and non-compliance with laws and regulations; and
we focused our planned audit work on specific laws and regulations which we considered may have a direct material
effect on the financial statements or the operations of the company including the Companies Act 2006 and taxation
legislation.

We assessed the extent of compliance with the laws and regulations identified above through:
 
making enquiries of management;
inspecting legal correspondence throughout the year for any potential litigation or claims; and
considering the internal controls in place that are designed to mitigate risks of fraud and non-compliance with laws
and regulations.
 
To address the risk of fraud through management bias and override of controls, we:
 
identified and assessed the design effectiveness of controls management has in place to prevent and detect fraud;
determined the susceptibility of the company to management override of controls by checking the implementation
of controls and enquiring of individuals involved in the financial reporting process;
reviewed journal entries to identify unusual transactions;
performed analytical procedures to identify any large, unusual or unexpected transactions and investigated and large
variances from the prior year;
reviewed accounting estimates, in particular regarding deferred income, and evaluated where judgements or decisions made by management indicated bias (see note 3);
tested revenue by obtaining an understanding of the client's systems, including when insurance debtors, insurance creditors, and commissions are recorded, and when a bordereau is issued, as well as tracing a sample of transactions in the accounting records to their respective bank receipts and bordereaux;
tested revenue by tracing bank receipts through to their bordereaux and the accounting records; and
carried out substantive testing to check expenditure.
 
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which
included:
 
agreeing financial statement disclosures to underlying supporting documentation;
enquiring of management as to actual and potential litigation and claims; and
reviewing correspondence with the Financial Conduct Authority.

Page 7

 
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Independent auditor's report to the members of Shepherd Compello Ltd (continued)
For the year ended 31 December 2022

Auditor's responsibilities for the audit of the financial statements (continued)
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those
leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the
more that compliance with a law or regulation is removed from the events and transactions reflected in the financial
statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding
irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion,
omission or misrepresentation.
A further description of our responsibilities 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 Auditor's report.


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 2006Our 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.





Jonathan West (Senior Statutory Auditor)
for and on behalf of
Buzzacott LLP
Statutory Auditor
130 Wood Street
London
EC2V 6DL

30 September 2023
Page 8

 
Shepherd Compello Ltd


Statement of income and retained earnings
For the year ended 31 December 2022

Year ended 31 December 2022
Year ended 31 December 2021
Note
£
£

  

Turnover
 4 
9,329,756
7,884,762

Administrative expenses
  
(9,126,807)
(8,668,645)

Other operating income
 7 
701,901
894,000

Operating profit
 8 
904,850
110,117

Interest receivable and similar income
  
79,987
164,050

Interest payable and similar expenses
 10 
(47,882)
(20,042)

Profit before tax
  
936,955
254,125

Tax on profit
 11 
(177,969)
39,318

Profit after tax
  
758,986
293,443

  

  

Retained earnings at the beginning of the year
  
1,666,922
1,373,479

  
1,666,922
1,373,479

Profit for the year
  
758,986
293,443

Retained earnings at the end of the year
  
2,425,908
1,666,922

There were no recognised gains and losses for 2022 or 2021 other than those included in the statement of income and retained earnings.

The notes on pages 12 to 29 form part of these financial statements.
All amounts relate to continuing operations.

Page 9

 
Shepherd Compello Ltd - Registered number: 04695072

Statement of financial position
As at 31 December 2022

2022
2021
Note
£
£

Fixed assets
  

Intangible assets
 12 
-
-

Tangible assets
 13 
247,136
249,704

Investments
 14 
87
87

  
247,223
249,791

Current assets
  

Debtors: amounts falling due after more than one year
 15 
-
229,817

Debtors: amounts falling due within one year
 15 
6,185,995
4,936,551

Cash at bank and in hand
 16 
21,953,540
21,475,720

  
28,139,535
26,642,088

Creditors: amounts falling due within one year
 17 
(24,304,815)
(23,366,864)

Net current assets
  
 
 
3,834,720
 
 
3,275,224

Total assets less current liabilities
  
4,081,943
3,525,015

Creditors: amounts falling due after more than one year
 18 
(1,602,374)
(1,808,093)

Provisions for liabilities
  

Deferred tax
 21 
(3,661)
-

  
 
 
(3,661)
 
 
-

Net assets
  
2,475,908
1,716,922


Capital and reserves
  

Called up share capital 
 23 
34,335
34,335

Capital redemption reserve
 24 
15,665
15,665

Profit and loss account
 24 
2,425,908
1,666,922

  
2,475,908
1,716,922


The financial statements were approved and authorised for issue by the board:  and were signed on its behalf by:


John Shepherd
Director

Date: 29 September 2023

The notes on pages 12 to 29 form part of these financial statements.
Page 10

 
Shepherd Compello Ltd - Registered number: 04695072

Statement of financial position (continued)
As at 31 December 2022


Page 11

 
Shepherd Compello Ltd

 
Notes to the financial statements
For the year ended 31 December 2022

1.


General information

Shepherd Compello Ltd is a private company limited by shares and is registered and incorporated in England and Wales. The registered office and principal place of business is 55 Gracechurch Street, London, E3CV 0EE.
The company's principal activities and nature of its operations are disclosed in the Director's Report.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' ('FRS 102') and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the company's accounting policies (see note 3).

The following principal accounting policies have been applied:

 
2.2

Financial Reporting Standard 102 - reduced disclosure exemptions

The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
the requirements of Section 7 Statement of Cash Flows;
the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
the requirements of Section 33 Related Party Disclosures paragraph 33.7.

This information is included in the consolidated financial statements of Shepherd Global Limited as at 31 December 2022 and these financial statements may be obtained from Companies House.

 
2.3

Exemption from preparing consolidated financial statements

The company is a parent company that is also a subsidiary included in the consolidated financial statements
of its immediate parent undertaking established in the UK and is therefore exempt from the requirement to
prepare consolidated financial statements under section 400 of the Companies Act 2006.

Page 12

 
Shepherd Compello Ltd

Notes to the financial statements
For the year ended 31 December 2022

2.Accounting policies (continued)

 
2.4

Foreign currency translation

Functional and presentation currency

The company's functional and presentational currency is GBP.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.

 
2.5

Turnover

Brokerage income is recognised when the company's obligations to arrange the respective insurance policy have been substantially completed and the income due is reasonably certain. In respect of income earned or returned out of adjustment premiums, declarations of turnover or periodic premium income statements from clients, income is recognised when the amount has been determined.
Fee income is recognised when and to the extent that insurance services to which it relates have been substantially completed.

 
2.6

Operating leases: the company as lessee

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

Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.

 
2.7

Interest income

Interest income is recognised in profit or loss using the effective interest method.

 
2.8

Finance costs

Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

Page 13

 
Shepherd Compello Ltd

Notes to the financial statements
For the year ended 31 December 2022

2.Accounting policies (continued)

 
2.9

Pensions

Defined contribution pension plan

The company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the company pays fixed contributions into a separate entity. Once the contributions have been paid the company has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of financial position. The assets of the plan are held separately from the company in independently administered funds.

 
2.10

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the company operates and generates income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the reporting date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.

 
2.11

Intangible fixed assets

Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.

 Amortisation is provided on the following bases:

Computer software
20%

straight line
Website development costs
33%
straight line

Page 14

 
Shepherd Compello Ltd

Notes to the financial statements
For the year ended 31 December 2022

2.Accounting policies (continued)

 
2.12

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following basis:

Leasehold improvements
-
11% - 14% straight line
Fixtures, fittings and equipment
-
15% - 33% straight line
Motor vehicles
-
25% straight line

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

 
2.13

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

 
2.14

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

 
2.15

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

 
2.16

Provisions for liabilities

Provisions are made where an event has taken place that gives the company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to profit or loss in the year that the company becomes aware of the obligation, and are measured at the best estimate at the reporting date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Statement of financial position.

Page 15

 
Shepherd Compello Ltd

Notes to the financial statements
For the year ended 31 December 2022

2.Accounting policies (continued)

  
2.17

Claims handling provisions

An amount of income, representing anticipated future claims handling costs on contracts of insurance written or accepted under binding authorities as at the reporting date has been deferred to future accounting periods and is shown within creditors as a deferred income reserve.

  
2.18

Insurance debtors and creditors

i) The company acts as an agent in brokering the insurable risks of its clients and generally is not liable as a principal for premiums due to underwriters nor for claims payable of its clients. Notwithstanding the company's legal relationship with client and underwriters and since, in practice premium and claims monies are usually accounted for by insurance intermediaries, it has followed generally accepted accounting principles by showing cash, debtors, and creditors relating to insurance business as assets and liabilities of the company itself.
ii) The company has given regard to FRS 102 and offsets debtors and creditors from insurance broking transactions only when it is legally enforceable.

  
2.19

Research and development expenditure

Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.

 
2.20

Financial instruments

The company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.

Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan.

Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Statement of income and retained earnings.

Page 16

 
Shepherd Compello Ltd

 
Notes to the financial statements
For the year ended 31 December 2022

3.


Judgements in applying accounting policies and key sources of estimation uncertainty

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.
Material estimates are made in determining deferred income. Details of its nature and carrying amount are set out in note 22.
ncluded in creditors are amounts that are being investigated and may be subject to a future credit write back. At 31/12/22 these totalled £175,880.


4.


Turnover

An analysis of turnover by class of business is as follows:


2022
2021
£
£

Brokerage fees
9,324,838
7,880,286

Other income
4,918
4,476

9,329,756
7,884,762


Analysis of turnover by country of destination:

2022
2021
£
£
United States

3,083,250

3,131,443
 
Europe

2,112,027

1,575,985
 
United Kingdom

2,728,279

2,048,787
 
Other

1,406,200

1,128,547
 
9,329,756

7,884,762
 

Page 17

 
Shepherd Compello Ltd

 
Notes to the financial statements
For the year ended 31 December 2022

5.


Employees

Staff costs, including directors' remuneration, were as follows:


Year ended 31 December 2022
Year ended 31 December 2021
£
£

Wages and salaries
3,287,936
3,980,966

Social security costs
384,360
533,665

Company contributions to defined contribution pension schemes
251,880
272,024

3,924,176
4,786,655


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


Year ended 31 December 2022
Year ended 31 December 2021
            No.
            No.







Administration
17
24



Management
1
2



Production
30
30

48
56


6.


Directors' remuneration

Year ended 31 December 2022
Year ended 31 December 2021
£
£

Remuneration for qualifying services
464,846
573,067

Company contributions to defined contribution pension schemes
8,333
61,040

473,179
634,107


The highest paid director received remuneration of £464,846 (2021 - £500,000).

The value of the company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £8,333 (2021 - £10,000).

Page 18

 
Shepherd Compello Ltd

 
Notes to the financial statements
For the year ended 31 December 2022

7.


Other operating income

Year ended 31 December 2022
Year ended 31 December 2021
£
£

Intercompany recharges
701,901
894,000



8.


Operating profit

The operating profit is stated after charging:

Year ended 31 December 2022
Year ended 31 December 2021
£
£

Operating lease charges
430,224
480,387


9.


Auditor's remuneration

During the year, the company obtained the following services from the company's auditor and its associates:


2022
2021
£
£

Fees payable to the company's auditor and its associates for the audit of the company's financial statements
19,550
17,000

The company has taken advantage of the exemption not to disclose amounts paid for non-audit services as these are disclosed in the consolidated accounts of the parent company.


10.


Interest payable and similar expenses

Year ended 31 December 2022
Year ended 31 December 2021
£
£


Interest on finance leases and hire purchase contracts
6,568
-

Interest on bank overdrafts and loans
41,314
20,042

47,882
20,042

Page 19

 
Shepherd Compello Ltd

 
Notes to the financial statements
For the year ended 31 December 2022

11.


Taxation


Year ended 31 December 2022
Year ended 31 December 2021
£
£

Corporation tax


Current tax on profits for the year
168,030
-


Total current tax
168,030
-

Deferred tax


Origination and reversal of timing differences
9,939
(39,318)

Total deferred tax
9,939
(39,318)


Taxation on profit/(loss) on ordinary activities
177,969
(39,318)
Page 20

 
Shepherd Compello Ltd

 
Notes to the financial statements
For the year ended 31 December 2022
 
11.Taxation (continued)


Factors affecting tax charge for the year

The tax assessed for the year is lower than (2021 - lower than) the standard rate of corporation tax in the UK of 19% (2021 -  19%). The differences are explained below:

Year ended 31 December 2022
Year ended 31 December 2021
£
£


Profit on ordinary activities before tax
936,955
254,125


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2020 - 19%)
178,021
48,284

Effects of:


Tax effect of expenses that are not deductible in determining taxable profit
43,749
51,309

Research and development tax credit
-
(16,512)

Change in rate of deferred tax
2,386
(1,508)

Fixed asset differences
(1,267)
(1,968)

Group relief
(44,920)
(106,232)

Movement in deferred tax not recognised
-
(12,691)

Total tax charge for the year/period
177,969
(39,318)


Factors that may affect future tax charges

With effect from 1 April 2023 the rate of corporation tax increased, tapering from 19% for businesses with profits
of less than £50,000 to 25% for businesses with profit over £250,000.
The deferred tax asset has been calculated at 25%, being the substantively enacted rate at the reporting date.

Page 21

 
Shepherd Compello Ltd

 
Notes to the financial statements
For the year ended 31 December 2022

12.


Intangible assets




Website development costs
Computer software
Goodwill
Total

£
£
£
£



Cost


At 1 January 2022
18,401
7,568
231,033
257,002



At 31 December 2022

18,401
7,568
231,033
257,002



Amortisation


At 1 January 2022
18,401
7,568
231,033
257,002



At 31 December 2022

18,401
7,568
231,033
257,002



Net book value



At 31 December 2022
-
-
-
-



At 31 December 2021
-
-
-
-



Page 22

 
Shepherd Compello Ltd

 
Notes to the financial statements
For the year ended 31 December 2022

13.


Tangible fixed assets





Leasehold improvements
Motor vehicles
Fixtures and fittings
Total

£
£
£
£



Cost or valuation


At 1 January 2022
655,704
168,462
566,820
1,390,986


Additions
-
97,939
21,913
119,852


Disposals
-
(119,375)
-
(119,375)



At 31 December 2022

655,704
147,026
588,733
1,391,463



Depreciation


At 1 January 2022
519,011
139,562
482,709
1,141,282


Charge for the year
34,929
16,323
42,268
93,520


Disposals
-
(90,475)
-
(90,475)



At 31 December 2022

553,940
65,410
524,977
1,144,327



Net book value



At 31 December 2022
101,764
81,616
63,756
247,136



At 31 December 2021
136,693
28,900
84,111
249,704


14.


Fixed asset investments





Investments in subsidiary companies

£



Cost or valuation


At 1 January 2022
87



At 31 December 2022
87




Page 23

 
Shepherd Compello Ltd

 
Notes to the financial statements
For the year ended 31 December 2022

Subsidiary undertakings


The following were subsidiary undertakings of the company:

Name

Registered office

Class of shares

Holding

Shepherd Compello BV
Lubeckweg 2, 9723 HE Groningen, Netherlands
Ordinary
100%
Shepherd Compello Holdings LLC USA
8 The Green, Suit R, Dover, DE 19901-3618, USA
Ordinary
100%


15.


Debtors

2022
2021
£
£

Due after more than one year

Other debtors
-
229,817


2022
2021
£
£

Due within one year

Amounts owed by group undertakings
2,956,090
2,225,398

Other debtors
1,989,960
1,338,157

Insurance debtors
1,101,222
1,267,908

Prepayments and accrued income
138,723
98,810

Deferred taxation
-
6,278

6,185,995
4,936,551



16.


Cash and cash equivalents

2022
2021
£
£

Cash held on behalf of clients
21,849,684
21,127,772

Cash held in office account
103,856
347,948

21,953,540
21,475,720


Page 24

 
Shepherd Compello Ltd

 
Notes to the financial statements
For the year ended 31 December 2022

17.


Creditors: amounts falling due within one year

2022
2021
£
£

Bank loans
300,000
300,000

Trade creditors
95,203
151,405

Amounts owed to group undertakings
70,922
-

Corporation tax
322,921
267,807

Other taxation and social security
100,390
116,463

Obligations under finance leases
90,960
1,575

Insurance creditors
21,849,684
20,543,131

Other creditors
196,185
181,498

Accruals and deferred income
1,278,550
1,804,985

24,304,815
23,366,864


Net obligations under finances leases and hire purchase contracts are secured against the assets held under these agreements.


18.


Creditors: amounts falling due after more than one year

2022
2021
£
£

Bank loans
775,000
1,075,000

Net obligations under finance leases and hire purchase contracts
-
2,463

Accruals and deferred income
827,374
730,630

1,602,374
1,808,093


Net obligations under finance leases and hire purchase contracts are secured against the assets held under these agreements.

Page 25

 
Shepherd Compello Ltd

 
Notes to the financial statements
For the year ended 31 December 2022

19.


Loans



2022
2021
£
£

Amounts falling due within one year

Bank loans
300,000
300,000

Amounts falling after one year

Bank loans
775,000
1,075,000



1,075,000
1,375,000



20.


Finance lease obligations


Future minimum lease payments due under finance leases:

2022
2021
£
£


Within one year
4,864
2,283

Between 1-5 years
-
2,463

4,864
4,746

Finance lease payments represent rentals payable by the company for certain fixed assets. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 3 to 5 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.


21.


Deferred taxation




2022


£






At beginning of year
6,278


Charged to profit or loss
(9,939)



At end of year
(3,661)

Page 26

 
Shepherd Compello Ltd

 
Notes to the financial statements
For the year ended 31 December 2022
 
21.Deferred taxation (continued)

The deferred taxation balance is made up as follows:

2022
2021
£
£


Accelerated capital allowances
6,278
(28,953)

Other timing differences
(9,939)
35,231

(3,661)
6,278


22.


Deferred income

Deferred income is included in the financial statements as follows:

2022
2021
£
£
Current liabilities

304,253

260,061

Non-current liabilities

827,374

760,630

1,131,627

1,020,691


The deferred income represents deferral of commission income related to claims handling activities. The amount of the provision has been determined using assumptions regarding the future activity levels and is at fair value.


23.


Share capital

2022
2021
£
£
Allotted, called up and fully paid



Enter number Ordinary A shares of £1.00 each
31,830
31,830
Enter number Ordinary B shares of £1.00 each
2,502
2,502
Enter number Ordinary C shares of £1.00 each
3
3

34,335

34,335


Page 27

 
Shepherd Compello Ltd

 
Notes to the financial statements
For the year ended 31 December 2022

23.Share capital (continued)

A Ordinary shares and B Ordinary shares entitle the holders of the shares to the profit of the company as if
they were a single class of shares. In the event of liquidation of the company or otherwise, the assets of the
company remaining after the payment of all liabilities and the payment of an amount equal to the nominal
value of the C share to the holder of such share be applied between the holders of the A Ordinary shares
and B Ordinary shares pro rata to the number of shares held by them respectively. Each A Ordinary share
and B Ordinary share are entitled to one vote.
C Ordinary shares rank pari passu with A Ordinary and B Ordinary shares with regards to profit of the
company. In the event of liquidation of the company or otherwise, the assets of the company remaining
after the payment of all liabilities allow for the payment of an amount equal to the nominal value of the C
share to the holder of such share. C Ordinary shares do not confer the holder any rights to vote except
upon the appointment or removal of a B director, a resolution to change the number of directors, any
resolution which affects the rights of the holder of the C share or any shareholder reserved matter.


24.


Reserves

Capital redemption reserve
Reserves of proceeds from purchase and cancellation of shares.
Profit and loss account
Cumulative profit and loss net of distribution to owners.


25.


Pension commitments

The entity operates a defined contribution pension scheme. The assets of the scheme are held separately from
those of the entity in an independently administered fund. The pension cost charge represents contributions
payable by the entity to the fund and amounted to £251,879 (2021: £272,024). Contributions totalling £114,667 (2021: £140,923) were payable to the fund at the reporting date.


26.


Commitments under operating leases

At 31 December 2022, the company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

2022
2021
£
£


Not later than 1 year
171,093
341,088

Later than 1 year and not later than 5 years
157,600
323,829

328,693
664,917

Page 28

 
Shepherd Compello Ltd

 
Notes to the financial statements
For the year ended 31 December 2022

27.


Related party transactions

During the year, White Oak Underwriting Agency Limited ('White Oak'), an associate of Shepherd Compello Ltd, made repayments totalling £1,825,000 (2021: £2,016,900), on a loan balance with an effective interest rate of 10% per annum, during the year. There are no fixed repayment terms. Interest charged during the period was £60,000 (2021: £163,411).
The company charged fees to White Oak Underwriting Agency Limited £717,541 (2021: £509,500). At the year end, £700,510 (2021: £888,088) was due from White Oak Underwriting Agency Limited.
The company recharged £43,363 (2021: £436,077) of expenses to the Shepherd Global Limited, the parent, and the parent recharged expenses totalling £1,850,744 (2021: £388,792) to the company. The company made net payments of £829,366 (2021: £1,566,195) during the year. At the year end, the company was owed £314,975 (2021: £1,289,990) by Shepherd Global Limited.
At the year end, the company was owed £70,922 (2021: £4,286) to EPG Global Limited, a company under common control.
At the year end, the company was due £1,980,281 (2021: £206,336) by Shepherd Compello B.V., an entity controlled by the company.


28.


Transactions with directors

During the year, total advances of £131,348 (2021: £56,598) were made to J Shepherd and total repayments of £23,600 (2021: £nil) were received by the company. At the year end, £320,289 (2021: £161,724) was owed to the company by J Shepherd.
During the year, total advances of £278,639 (2021: £418,623) were made to H T Shepherd, and total repayments of £39,662 (2021: £10,000) were received by the company. At the year end, £969,401 (2021: £913,648) was owed to the company by H T Shepherd. These balances are included within "other debtors" in note 16, and are interest free and repayable on demand.


29.


Controlling party

The immediate and ultimate parent company is Shepherd Global Limited, which heads the smallest and largest group for which consolidated accounts are prepared. Its registered office is 55 Gracechurch Street, London, EC3V 0EE.
The consolidated financial statements of Shepherd Global Limited are available from The Registrar, Companies House, Crown Way, Cardiff, CF4 3UZ.
The ultimate controlling party is considered to be J Shepherd by virtue of his majority shareholdings in Shepherd Global Limited.


Page 29