Company Registration No. 10477419 (England and Wales)
FALCON MGA SERVICES LIMITED
ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
PAGES FOR FILING WITH REGISTRAR
LB GROUP
1 Vicarage Lane
Stratford
London
England
E15 4HF
FALCON MGA SERVICES LIMITED
CONTENTS
Page
Balance sheet
1
Notes to the financial statements
2 - 6
FALCON MGA SERVICES LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 1 -
2023
2022
Notes
£
£
£
£
Current assets
Debtors
5
103,775
29,290
Cash at bank and in hand
467
79
104,242
29,369
Creditors: amounts falling due within one year
6
(932,832)
(872,562)
Net current liabilities
(828,590)
(843,193)
Creditors: amounts falling due after more than one year
7
(3,185)
(4,787)
Net liabilities
(831,775)
(847,980)
Capital and reserves
Called up share capital
8
1,200
1,200
Profit and loss reserves
(832,975)
(849,180)
Total equity
(831,775)
(847,980)
The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.true
For the financial year ended 31 December 2023 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.
The directors acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.
The members have not required the company to obtain an audit of its financial statements for the year in question in accordance with section 476.
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements were approved by the board of directors and authorised for issue on 31 July 2024 and are signed on its behalf by:
Mr P F Wilde
Director
Company Registration No. 10477419
FALCON MGA SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
1
Accounting policies
Company information
Falcon MGA Services Limited is a private company limited by shares incorporated in England and Wales. The registered office is 1 Vicarage Lane, Stratford, London, England, E15 4HF.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
1.2
Going concern
The Company is a managing general agent ("MGA") underwriting insurance on behalf of major insurance companies. For the period ended 31 December 2023 the Company made a profit of £16,205 (2022: £96,832 loss) and had a deficiency of net assets of £831,775 (2022: £847,980).
Resolution Underwriting Holdings Limited, one of the Company's major creditors, has provided funding to support this company.
The directors have considered the outlook for the Company, which they consider to be positive and budgets prepared for the period to 31 December 2025 have been prepared on a prudent basis and indicate that it will achieve material profitability from 2023 onwards. Accordingly the financial statements of the Company as at 31 December 2023 have been prepared on a going concern basis. The directors are confident about the Company's prospects but recognise that the success or otherwise of it meeting its forecasts is inevitably uncertain. Accordingly the Company may require the continued support from Resolution Underwriting Partnership Limited and its parent, which has been committed to.
1.3
Turnover
The company generates revenue principally from commissions, profit commissions and fees associated with underwriting and administering insurance contracts.
Brokerage, commission and fees are recognised when they can be ascertained with reasonable certainty, which is when the underwriting services have been substantially completed and which is normally when the amounts concerned are advised or confirmed by the relevant third parties.
Profit commissions are receivable based upon the underwriting performance of certain schemes. They are recognised when the Company can be certain that the commission will be paid and the amount can be reasonably accurately ascertained.
1.4
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Computers
4 Years Straight Line
FALCON MGA SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 3 -
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.5
Cash at bank and in hand
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.6
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
1.7
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.
FALCON MGA SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 4 -
1.8
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.9
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
1.10
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
2
Judgements 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.
3
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Total
2
2
FALCON MGA SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 5 -
4
Tangible fixed assets
Computers
£
Cost
At 1 January 2023 and 31 December 2023
1,350
Depreciation and impairment
At 1 January 2023 and 31 December 2023
1,350
Carrying amount
At 31 December 2023
At 31 December 2022
5
Debtors
2023
2022
Amounts falling due within one year:
£
£
Amounts owed by group undertakings
98,376
25,748
Other debtors
5,399
3,542
103,775
29,290
6
Creditors: amounts falling due within one year
2023
2022
£
£
Bank loans
1,602
1,563
Trade creditors
800
6,963
Amounts owed to group undertakings
874,130
790,272
Taxation and social security
17,573
35,705
Other creditors
21,789
8,793
Accruals and deferred income
16,938
29,266
932,832
872,562
Loans due within one year includes bank loans of £1,602 (2022: £1,563) from the government business bounce back loan scheme.
7
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Bank loans and overdrafts
3,185
4,787
Loans due after one year includes bank loans of £3,185 (2022: £4,787) from the government business bounce back loan scheme.
FALCON MGA SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 6 -
8
Called up share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary A Shares of £1 each
1,000
1,000
1,000
1,000
Ordianry B shares of £1 each
100
100
100
100
Ordinary C shares of £1 each
100
100
100
100
1,200
1,200
1,200
1,200
9
Events after the reporting date
On 31 May 2024 Aviation Innovation Holdings, LLC acquired 100% of the share capital of the Company.
10
Related party transactions
Resolution Underwriting Holdings Limited was a shareholder in the company until its sold its shareholding on 31 May 2024, see note 9. At the balance sheet date, the company owed £456,100 (2022: £491,700) to Resolution Underwriting Holdings Limited, the total of which is interest bearing and repayable according to the loan agreement. Interest is due at 6% to Resolution Underwriting Holdings Limited and totalled £29,186 (2022: £30,245) for the period of which £157,212 (2022: £124,666) was owed by the Company as at 31 December 2023.
The company acts as an Appointed Representative of Resolution Underwriting Partnership Limited, a FCA regulated entity and Lloyd's coverholder. Resolution Underwriting Partnership Limited are wholly owned by Resolution Underwriting Holdings Limited. During the year, the company earned commission of £201,083 (2022: £86,286) relating to this agreement with Resolution Underwriting Partnership Limited. As at 31 December 2023, the Company was owed £98,376 (2022: £25,748) from Resolution Underwriting Partnership Limited in respect of this agreement.
The Company was charged £13,353 (2022: £3,810) by Resolution Group Services Limited for the rent of desk space. At the balance sheet date the company owed £260,818 (2022: £173,906) to Resolution Group Services Limited.
Mr C G Harman and Mr N H Topche are also directors of Resolution Underwriting Holdings Limited, Resolution Underwriting Partnership Limited and Resolution Group Services Limited. Mr S G Batchelor is also a director of Resolution Underwriting Holdings Limited.
11
Parent company
As at the 31 December 2023 the parent company was Resolution Underwriting Holdings Limited, a company incorporated and domiciled in England. The address of the registered office is 1 Vicarage Lane, London E15 4HF.
On 31 May 2024 the parent company changed to Aviation Innovation Holdings, LLC, an entity registered in the United States of America.