Company Registration No. 03726678 (England and Wales)
SPORTSCOVER EUROPE LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
LB GROUP
1 Vicarage Lane
Stratford
London
E15 4HF
SPORTSCOVER EUROPE LIMITED
COMPANY INFORMATION
Directors
Mr S C Gowland
Mr R J Draper
Mr M J Crannis
Mr C W Singh
(Appointed 1 January 2023)
Mr A Morpeth
(Appointed 30 January 2024)
Company number
03726678
Registered office
8 Eagle Court
London
EC1M 5QD
Auditor
LB Group Limited (Stratford)
1 Vicarage Lane
Stratford
London
E15 4HF
SPORTSCOVER EUROPE LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Directors' responsibilities statement
5
Independent auditor's report
6 - 8
Profit and loss account
9
Statement of comprehensive income
10
Balance sheet
11
Statement of changes in equity
12
Statement of cash flows
13
Notes to the financial statements
14 - 27
SPORTSCOVER EUROPE LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

The Directors have pleasure in presenting their reports together with the audited financial statements for the year ended 31 December 2023.

 

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

Key Performance Indicators

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

 

          Year ended Year ended

31 December         31 December

     2023             2022

 

£             £

Turnover             1,433,526     1,201,829

Profit/(Loss) before taxation         140,763      269,554        

Profit/(Loss) after tax             161,620 269,554

Net current assets             749,968     636,730

Net assets                 741,976     635,356

 

Key Developments and Financial Performance during the Year

 

Key Developments

Sportscover Europe Limited shares the same office and resources with a fellow group company, Active Underwriting Specialists Limited. Most shared costs are recharged on a proportional basis.

 

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

 

Financial Performance

The company made a profit after tax of £161,620 during the year under review, a reduction of £107,934 over the prior year. Net assets as at 31 December 2023 were £741,976 (2022: £635,356).

 

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

 

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

 

Turnover increased by 19% from £1,201,829 last year to £1,433,526.

 

Expenses increased by 41% (2022: 28%) in the year, which is generally in line with the increase in turnover.

Future Developments

The company has plans to develop business in UK and Europe as new contracts have been secured and business development projects continue to come to fruition. Further to this, the company has sought to expand its IT infrastructure subsequent to the year end.

 

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

Financial Position at the Balance Sheet Date

The company’s net assets at the year-end increased from £635,356 to £741,976 due to profits incurred in the year.

 

SPORTSCOVER EUROPE LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Principal Risks and Uncertainties Facing the Company

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

On behalf of the board

Mr M J Crannis
Director
11 September 2024
SPORTSCOVER EUROPE LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -

The directors present their annual report and financial statements for the year ended 31 December 2023.

 

Company Number

 

The company registration number is 03726678.

Ordinary dividends were paid amounting to £55,000. The directors do not recommend payment of a further dividend.

Directors

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

Mr R C Hayes
(Resigned 5 October 2023)
Mr C G Harman
(Resigned 5 October 2023)
Mr S C Gowland
Mr R J Draper
Mr M J Crannis
Mr C W Singh
(Appointed 1 January 2023)
Mr A Morpeth
(Resigned 1 January 2023 and appointed 30 January 2024)
Results and dividends

The audited financial statements and related notes for the year ended 31 December 2023 are set out on pages 11 to 27. The company’s results for the year after taxation was a profit of £161,620 (2022: £269,554).

 

The directors have made a payment of £55,000 worth of dividends within the year (2022: £nil).

 

Qualifying Third Party Indemnity Provisions

 

The company has put in place qualifying third party indemnity provisions for all of the directors of Sportscover Europe Limited.

    

Donations

 

During the year, the company made £60 donations for charitable or political purposes (2022: £329).

 

Risk Management

 

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

 

Operational Risk

Operational risk is effectively managed by the controls and procedures in place at the company. One of the key risks under this heading is the loss of the office environment, which includes the computer systems, and the resulting impact on the company’s ability to continue to trade. The directors have developed a business continuity plan that provides for the company to be fully operational within a 16 hour period in the event that its current offices are no longer available.

 

Liquidity Risk

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

 

SPORTSCOVER EUROPE LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -

Credit Risk

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

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

 

A significant amount of cash is held with the following institutions:

 

Rating at        Balance at     Rating at     Balance at

31 December     31 December     31 December 31 December

2022             2023         2021          2022

 

Natwest         A         1,251,220         A          1,892,837

 

 

Market risk

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

Future developments

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

Auditor

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

 

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

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

On behalf of the board
Mr M J Crannis
Director
11 September 2024
SPORTSCOVER EUROPE LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 5 -

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

 

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

 

 

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.

SPORTSCOVER EUROPE LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF SPORTSCOVER EUROPE LIMITED
- 6 -
Opinion

We have audited the financial statements of Sportscover Europe Limited (the 'company') for the year ended 31 December 2023 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

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

 

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

SPORTSCOVER EUROPE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF SPORTSCOVER EUROPE LIMITED
- 7 -
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:

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.

 

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, incorporated the following:

 

SPORTSCOVER EUROPE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF SPORTSCOVER EUROPE LIMITED
- 8 -

We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

 

 

To address the risk of fraud through management bias and override of controls, our work included:

 

 

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

 

 

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.

 

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

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

Richard Lane
Senior Statutory Auditor
For and on behalf of LB Group Limited (Stratford)
11 September 2024
Chartered Accountants
Statutory Auditor
1 Vicarage Lane
Stratford
London
E15 4HF
SPORTSCOVER EUROPE LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
2023
2022
Notes
£
£
Turnover
3
1,433,526
1,201,829
Cost of sales
(23,276)
(8,507)
Gross profit
1,410,250
1,193,322
Administrative expenses
(1,305,991)
(926,210)
Exceptional item
4
24,628
-
0
Operating profit
5
128,887
267,112
Interest receivable and similar income
9
12,875
3,293
Interest payable and similar expenses
10
(999)
(851)
Profit before taxation
140,763
269,554
Tax on profit
11
20,857
-
0
Profit for the financial year
161,620
269,554

The notes on pages 16 to 27 form part of these financial statements.

 

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

 

SPORTSCOVER EUROPE LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
2023
2022
£
£
Profit for the year
161,620
269,554
Other comprehensive income
-
-
Total comprehensive income for the year
161,620
269,554
SPORTSCOVER EUROPE LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 11 -
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
14
-
0
19,600
Tangible assets
15
30,593
15,183
30,593
34,783
Current assets
Debtors
16
772,696
566,629
Cash at bank and in hand
1,251,220
1,892,837
2,023,916
2,459,466
Creditors: amounts falling due within one year
18
(1,273,948)
(1,822,736)
Net current assets
749,968
636,730
Total assets less current liabilities
780,561
671,513
Creditors: amounts falling due after more than one year
19
(30,937)
(36,157)
Provisions for liabilities
Deferred tax liability
21
7,648
-
0
(7,648)
-
Net assets
741,976
635,356
Capital and reserves
Called up share capital
23
441,100
441,100
Profit and loss reserves
300,876
194,256
Total equity
741,976
635,356
The financial statements were approved by the board of directors and authorised for issue on 11 September 2024 and are signed on its behalf by:
Mr M J Crannis
Director
Company Registration No. 03726678
SPORTSCOVER EUROPE LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 January 2022
441,100
(75,298)
365,802
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
269,554
269,554
Balance at 31 December 2022
441,100
194,256
635,356
Year ended 31 December 2023:
Profit and total comprehensive income for the year
-
161,620
161,620
Dividends
12
-
(55,000)
(55,000)
Balance at 31 December 2023
441,100
300,876
741,976
SPORTSCOVER EUROPE LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 13 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash absorbed by operations
25
(473,963)
(320,924)
Interest paid
(999)
(851)
Net cash outflow from operating activities
(474,962)
(321,775)
Investing activities
Purchase of intangible assets
(99,000)
(24,000)
Purchase of tangible fixed assets
(20,310)
(2,712)
Interest received
12,875
3,293
Net cash used in investing activities
(106,435)
(23,419)
Financing activities
Repayment of bank loans
(5,220)
(5,367)
Dividends paid
(55,000)
-
0
Net cash used in financing activities
(60,220)
(5,367)
Net decrease in cash and cash equivalents
(641,617)
(350,561)
Cash and cash equivalents at beginning of year
1,892,837
2,243,398
Cash and cash equivalents at end of year
1,251,220
1,892,837
SPORTSCOVER EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 14 -
1
Accounting policies
Company information

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

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.

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

After considering the current trading, the directors believe that the Company will have adequate resources to meets its liabilities as they fall due and so to operate trueas a going concern for at least twelve months following the date of approval of these financial statements. The directors therefore consider it appropriate to continue to apply the going concern basis for preparing the financial statements.

1.3
Turnover

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

 

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

Assets and liabilities relating to insurance transactions

The company acts as agent in placing the insurance business of its clients and is not generally liable as principal for amounts arising from such transactions. The company is entitled to retain any investment income arising from the cash flows attributable to these transactions and have therefore included debtors, creditors and cash balances relating to insurance transactions within the assets and liabilities of the company. Debtors balances included in respect of insurance transactions are not an indication of credit risk.

1.4
Intangible fixed assets other than goodwill

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

 

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

Amortisation 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:

Software
Over usual life of 5 years
SPORTSCOVER EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
1.5
Tangible fixed assets

Tangible fixed assets 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.

 

Repairs and maintenance are charged to profit or loss during the period in which they are incurred.

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:

Fixtures and fittings
15% reducing balance
Computers
40% reducing balance

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.

1.6
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.7
Cash and cash equivalents

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.

SPORTSCOVER EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
1.8
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.

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

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.

SPORTSCOVER EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 17 -
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.

Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.9
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.

1.10
Taxation

The tax expense for the period comprises current and deferred tax (when applicable). Tax is recognised in profit or loss, except that a charge attributable to an item of income or 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.

Current tax

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's subsidiaries operate and generate taxable income.

SPORTSCOVER EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 18 -
Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.11
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.

1.12
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.13
Leases

 

All other leases are treated as operating leases. Their annual rentals are charged to profit or loss on a straight-line basis over the term of the lease.

 

Where the Company has a legal obligation, a dilapidations provision is created on inception of a lease. These provisions are a best estimate of the cost required to return leased properties to their original condition upon termination of the lease. Where the obligation arises from ‘wear and tear’, the provision is accrued as the ‘wear and tear’ occurs.

SPORTSCOVER EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 19 -
1.14
Foreign exchange

 

Functional and presentation currency

 

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

 

Transactions and balances

 

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

 

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

1.15

Pension costs

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

1.16

Dividends

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

1.17

Reserves

The Company’s reserves are as follows:

 

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

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

SPORTSCOVER EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
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.

 

Other key sources of estimation uncertainty

 

•    Claims handling provision

 

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

 

3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Underwriting
1,433,526
1,201,829
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
1,433,526
1,201,829
2023
2022
£
£
Other revenue
Interest income
12,875
3,293
4
Exceptional item
2023
2022
£
£
Expenditure
Exceptional credit
(24,628)
-

During the year, the company wrote off a loan due to a connected company, as this amount was no longer payable.

SPORTSCOVER EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
5
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange differences apart from those arising on financial instruments measured at fair value through profit or loss
(1,299)
(343)
Fees payable to the company's auditor for the audit of the company's financial statements
10,200
9,200
Depreciation of owned tangible fixed assets
3,373
6,136
Impairment of owned tangible fixed assets
1,527
10,457
Amortisation of intangible assets
19,918
4,400
Impairment of intangible assets
98,682
-
0
Operating lease charges
30,531
19,459
6
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
10,200
9,200
For other services
Other taxation services
450
450
All other non-audit services
450
450
900
900
7
Employees

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

2023
2022
Number
Number
Directors
6
5
Underwriting and claims
11
9
Administration
3
3
Total
20
17
SPORTSCOVER EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
7
Employees
(Continued)
- 22 -

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
680,965
494,923
Social security costs
68,443
41,525
Pension costs
63,747
50,413
813,155
586,861
8
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
145,320
142,000
Company pension contributions to defined contribution schemes
29,231
-
174,551
142,000
9
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
12,875
3,293
10
Interest payable and similar expenses
2023
2022
£
£
Interest on bank overdrafts and loans
999
851
11
Taxation
2023
2022
£
£
Deferred tax
Origination and reversal of timing differences
(20,857)
-
0
SPORTSCOVER EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
11
Taxation
(Continued)
- 23 -

The actual (credit)/charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

2023
2022
£
£
Profit before taxation
140,763
269,554
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2022: 19.00%)
35,191
51,215
Tax effect of expenses that are not deductible in determining taxable profit
29,317
-
0
Tax effect of income not taxable in determining taxable profit
(3,219)
-
0
Permanent capital allowances in excess of depreciation
(23,909)
-
0
Deferred tax adjustments in respect of prior years
(20,857)
-
0
Profits offset by losses brought forward
(37,380)
(51,215)
Taxation credit for the year
(20,857)
-
Taxation credit in the financial statements
(20,857)
-

The corporation tax rate changed on 1 April 2023 from 19% to 25%.

12
Dividends
2023
2022
£
£
Final paid
55,000
-
0
13
Impairments

Impairment tests have been carried out where appropriate and the following impairment losses have been recognised in profit or loss:

2023
2022
Notes
£
£
In respect of:
Intangible assets
14
98,682
-
0
Property, plant and equipment
15
1,527
10,457
Fixed asset investments
-
(2,077)
Recognised in:
Administrative expenses
100,209
8,380
SPORTSCOVER EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
14
Intangible fixed assets
Software
£
Cost
At 1 January 2023
24,000
Additions
99,000
At 31 December 2023
123,000
Amortisation and impairment
At 1 January 2023
4,400
Amortisation charged for the year
19,918
Impairment losses
98,682
At 31 December 2023
123,000
Carrying amount
At 31 December 2023
-
0
At 31 December 2022
19,600

More information on impairment movements in the year is given in note 13.

15
Tangible fixed assets
Fixtures and fittings
Computers
Total
£
£
£
Cost
At 1 January 2023
28,301
11,770
40,071
Additions
-
0
20,310
20,310
At 31 December 2023
28,301
32,080
60,381
Depreciation and impairment
At 1 January 2023
18,775
6,113
24,888
Depreciation charged in the year
1,429
1,944
3,373
Impairment losses
-
0
1,527
1,527
At 31 December 2023
20,204
9,584
29,788
Carrying amount
At 31 December 2023
8,097
22,496
30,593
At 31 December 2022
9,526
5,657
15,183

More information on impairment movements in the year is given in note 13.

SPORTSCOVER EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 25 -
16
Debtors
2023
2022
Amounts falling due within one year:
£
£
Other debtors
703,421
558,818
Prepayments and accrued income
40,770
7,811
744,191
566,629
Deferred tax asset (note 21)
28,505
-
0
772,696
566,629

 

17
Insurance debtors and creditors

The company acts as agent in placing the insurance business of its clients and is not generally liable as principal for amounts arising from such transactions. The company is entitled to retain any investment income arising from the cash flows attributable to these transactions and have therefore included debtors, creditors and cash balances relating to insurance transactions within the assets and liabilities of the company. Debtors balances included in respect of insurance transactions are not an indication of credit risk.

 

At 31 December 2023, the funds held in insurance transaction bank accounts totalled £1,083,018 (2022: £1,626,783).

 

At 31 December 2023, included within other creditors, there were gross insurance creditors of £963,037 (2022: £1,495,518).

18
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans
20
6,218
6,218
Trade creditors
65,289
23,078
Taxation and social security
21,073
20,631
Other creditors
1,114,256
1,611,296
Accruals and deferred income
67,112
161,513
1,273,948
1,822,736

The company has no overdraft facility as at 31 December 2023.

19
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Bank loans and overdrafts
20
30,937
36,157
SPORTSCOVER EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
19
Creditors: amounts falling due after more than one year
(Continued)
- 26 -
Amounts included above which fall due after five years are as follows:
Payable by instalments
9,064
9,084
20
Loans and overdrafts
2023
2022
£
£
Bank loans
37,155
42,375
Payable within one year
6,218
6,218
Payable after one year
30,937
36,157
21
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

Liabilities
Liabilities
Assets
Assets
2023
2022
2023
2022
Balances:
£
£
£
£
Accelerated capital allowances
7,648
-
-
-
Tax losses
-
-
28,505
-
7,648
-
28,505
-
2023
Movements in the year:
£
Liability at 1 January 2023
-
Credit to profit or loss
(20,857)
Asset at 31 December 2023
(20,857)
22
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
63,747
50,413

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

SPORTSCOVER EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 27 -
23
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary of £1 each
441,100
441,100
441,100
441,100
24
Related party transactions

In the prior year, ActiveRisk Limited became the intermediary parent company. The ultimate parent company is Whitburn Capital Limited which is controlled by Steven Gowland.

 

At the balance sheet date, the following balances were held with related party companies: Amounts due to related parties: Active Underwriting Specialists Limited £151,220 (2022: £77,734). Amounts due from related parties: ActiveRisk Group Limited £353,151 (2022: £337,715): ActiveRisk Europe Ltd £412 (2022: £nil): ActiveRisk Ltd £14,096 (2022: £nil). All related party balances are interest free and all are repayable on demand.

 

25
Cash absorbed by operations
2023
2022
£
£
Profit for the year after tax
161,620
269,554
Adjustments for:
Taxation credited
(20,857)
-
0
Finance costs
999
851
Investment income
(12,875)
(3,293)
Amortisation and impairment of intangible assets
118,600
4,400
Depreciation and impairment of tangible fixed assets
4,900
16,593
Movements in working capital:
Increase in debtors
(177,562)
(346,801)
Decrease in creditors
(548,788)
(262,228)
Cash absorbed by operations
(473,963)
(320,924)
26
Analysis of changes in net funds
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
1,892,837
(641,617)
1,251,220
Borrowings excluding overdrafts
(42,375)
5,220
(37,155)
1,850,462
(636,397)
1,214,065
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