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COMPANY REGISTRATION NUMBER: 07447397
Verex Premium Finance Limited
Directors' Report and Financial Statements
31 December 2022
Verex Premium Finance Limited
Financial Statements
Period from 1 May 2022 to 31 December 2022
Content
Pages
Director's report
1 to 4
Independent auditor's report to the member
5 to 9
Statement of income and retained earnings
10
Statement of financial position
11 to 12
Notes to the financial statements
13 to 15
Verex Premium Finance Limited
Director's Report
Period from 1 May 2022 to 31 December 2022
The director presents his report and the financial statements of the company for the period ended 31 December 2022 .
PRINCIPAL ACTIVITIES
The company's principal activity during the year was the provision of credit granting services by non-deposit taking finance houses and other specialist consumer credit grantors.
DIRECTORS
The directors who served the company during the period were as follows:
Andrew Christopher Long
Crispin Peter Burdett
Mr Andrew Christopher Long and Mr Crispin Peter Burdett resigned as director on 14 March 2024 and 18 August 2023 respectively. Mr Brian Richard Hallett was appointed as director on 18 August 2023. RESULTS AND DIVIDENDS The results for the period are set out in detail on page 11. The directors did not recommend a dividend for the period (30 April 2022: £450,000). FUTURE DEVELOPMENTS Until 18 August 2023, the Company’s primary source of income was interest earned from premium financing services provided to its parent company, Verex Insurance Services Limited (VIS). However, on 18th August 2023, VIS (now JMG Realisations Ltd) entered administration and ceased trading, leading to a significant shift in the subsidiary’s financial circumstances. Currently, the subsidiary maintains a strong liquidity position and continues to meet its capital requirements, primarily due to the successful collection of outstanding debts. The Company has continued to utilise its cash reserves to produce Interest income during the period. This stability enables the Company to meet its short-term obligations, cover operational costs, and potentially distribute a dividend to the parent company. The company has adequate resources to continue for the period of at least 12 months from the date of approval of financial statements. With VIS in administration, the subsidiary can no longer rely on financial or operational support from its parent company. Additionally, the administrator for JMG Realisations Limited anticipate a solvent winding up in the next financial year, though the exact date remains undetermined, which introduces a level of uncertainty regarding the future financial standing of the subsidiary. The financial statements show a true and fair view of the Company’s current financial position but cannot be prepared on a going concern basis because of the anticipated solvent winding up and the uncertainty of the Administrators position. Considering the parent company administrator’s communication regarding impending winding up, the director anticipates that Verex Premium Finance will be placed into creditors' voluntary liquidation (CVA). Associated costs may arise from finalizing the company's position relative to its parent company and the debentures secured against it. Directors of Verex Premium Finance remain steadfast in their commitment to transparency and accountability in financial reporting. In light of this commitment, the director wishes to address a disagreement with the Company’s auditors, Anderson Ross, regarding the audit for the financial period ended 31 December 2022. The disagreement arose from the auditors’ adverse opinion on the financial statements, specifically concerning the use of the going concern assumption. The auditors have asserted that the financial statements are materially misstated because they believe the decision by the administrator to wind up the Company within the next twelve months, or shortly thereafter, warranted the use of an alternative basis of preparation. However, the directors would like to clarify that when the 2022 financial statements were finalized there was no indication or decision to wind up the Company. The developments that led to discussions of potential winding-up only came to light after the accounts had been prepared and finalized. The directors maintain that the financial statements were prepared based on the information available at the time, in accordance with the going concern assumption outlined in applicable accounting standards. These standards dictate that financial statements should be prepared on a going concern basis unless there is an explicit intention to liquidate or cease operations. Legal advice further supported this approach, confirming that preparing and filing the accounts under the going concern assumption prior to any steps toward liquidation or a Company Voluntary Arrangement (CVA) was appropriate. The Board has engaged extensively with the auditors, presenting evidence to support the appropriateness of the going concern basis. Despite these efforts, the auditors have maintained their stance. The directors affirm that the financial statements were prepared with diligence and in compliance with all relevant laws and regulations, based on the information available at the time of preparation. The uncertainties affecting this accounting period arose due to the prolonged audit process and the resulting delays. The Board firmly believes that the financial statements provide a true and fair view of the Company’s financial position. Furthermore, the directors contend that an emphasis of matter paragraph in the audit report would have adequately addressed the auditors’ concerns without risking the potential for the adverse opinion to mislead stakeholders or erode confidence. The directors remain committed to ensuring that the Company’s financial reporting is both accurate and fair, and they will continue to act in the best interests of all stakeholders.
DIRECTOR'S RESPONSIBILITIES STATEMENT
The directors are responsible for preparing the directors' 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) including Section 1A of FRS 102 - 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 the profit or loss of the company for that period. In preparing these financial statements, the directors are required to: - select suitable accounting policies and then apply them consistently; - make judgments and accounting estimates that are reasonable and prudent; - state whether applicable UK accounting policies have been followed, subject to any material departures disclosed and explained in the financial statements; and - prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable him to ensure that the financial statements comply with the Companies Act 2006. The directors 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. The directors are responsible for the maintenance and integrity of the corporate and financial information included on the company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. Statement of disclosure of information to auditors Each director who held office at the date of approval of this directors' report confirms 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.
AUDITOR
The auditor, Anderson Ross LLP, will be proposed for reappointment in accordance with Section 485 of the Companies Act 2006.
SMALL COMPANY PROVISIONS
This report has been prepared in accordance with the provisions applicable to companies entitled to the small companies exemption.
This report was approved by the board of directors on 30 December 2024 and signed on behalf of the board by:
Brian Richard Hallett
Director
Verex Premium Finance Limited
Independent Auditor's Report to the Member of Verex Premium Finance Limited
Period from 1 May 2022 to 31 December 2022
ADVERSE OPINION
We have audited the financial statements of Verex Premium Finance Limited (the 'Company') for the period 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 policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Section 1A of FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland issued by the Financial Reporting Council ('FRS 102') (altogether known as United Kingdom Generally Accepted Accounting Practice - 'UK GAAP'). In our opinion, because of the significance of the matter described in the basis for adverse opinion section of our report, the financial statements: - do not give a true and fair view of the state of the Company’s affairs as at 31 December 2022 and of the Company’s profit for the period then ended; - have not been properly prepared in accordance with UK GAAP; and - have not been prepared in accordance with the requirements of the Companies Act 2006 (the “Act”).
BASIS FOR ADVERSE OPINION
As explained in note 3, under the sub-heading "Going concern", the Company's parent company, JMG Realisations Ltd (formerly Verex Insurance Services Limited), is in administration with effect from 18 August 2023. We have received confirmation from the administrator of JMG Realisations Ltd, who is in control of the Company’s entire shareholding, that the administrator has decided that (a) it is in the public interest to keep the Company in operation for a few months as necessary, and (b) the Company will cease trading thereafter with a view to its business affairs being wound up within the next twelve months. Given the confirmed decision of the administrator to wind up the Company within the next twelve months or later, the financial statements should have been prepared on an appropriate basis other than on the going concern basis. As such, the financial statements are materially misstated. 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 adverse opinion on the financial statements.
.
.
OTHER INFORMATION
The other information comprises the information included in the Directors’ Report but does not include the financial statements and our auditor's report thereon. The director is responsible for the other information contained within the Director's 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement in the other information. 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. As described in the Basis for adverse opinion section of our report, the financial statements should have been prepared on a basis other than the going concern basis of accounting. We have concluded that the other information is materially misstated for the same reason.
OPINIONS ON OTHER MATTERS PRESCRIBED BY THE COMPANIES ACT 2006
As explained in the Basis for adverse opinion section of our report, the financial statements should have been prepared on a basis other than the going concern basis of accounting. Had an alternative appropriate basis of accounting been adopted, many elements in the accompanying financial statements for the period ended 31 December 2022 and for the year ended 30 April 2022 would have been materially affected such that the financial statements would have been materially and pervasively impacted. In In addition, the directors’ report does not consider the effects of the failure to adopt an alternative appropriate basis of accounting in preparing the financial statements.
Except for the effects of the matters described in the Basis for adverse opinion section of our report, in our opinion, based on the work undertaken in the course of the audit:
- the information given in the Directors' report for the financial period for which the financial statements are prepared is consistent with the financial statements; and
- the Directors' report has been prepared in accordance with applicable legal requirements.
MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION
As a result of the matters described in the Basis for adverse opinion section of our report, in the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, the directors’ report does not consider the effects of the failure to adopt an alternative appropriate basis of accounting in preparing the financial statements. Arising solely from the limitation of our work referred to above, namely the lack of audit evidence as to the appropriateness of the going concern basis of accounting: - to the extent that the financial statements have not been prepared on an alternative appropriate basis and the directors’ report has not considered the effects of this failure, we have not obtained all the information and explanations that we considered necessary for the purpose of our audit. We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: - adequate accounting records have not been kept by the Company, or returns adequate for our audit have not been received from branches not visited by us; or - the Company's financial statements are not in agreement with the accounting records and returns; or - certain disclosures of the directors' remuneration specified by law are not made; or - the directors were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemptions in preparing the directors' report and from the requirement to prepare a strategic report.
RESPONSIBILITIES OF THE DIRECTOR
As explained more fully in the Directors' Responsibilities Statement set out on page 4, 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 intends 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 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 inherent limitations of an audit mean that 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 laws and regulations. This risk increases the more that compliance 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 due to fraud than error, as fraud may involve intentional concealment, forgery, collusion, omission or misrepresentation. We design procedures in line with our responsibilities, outlined above and below, 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. However, the primary responsibility for the prevention and detection of fraud rests with those charged with governance and management. Our approach in identifying and assessing the risks of material misstatement in respect of irregularities, including fraud, and non-compliance with laws and regulations, was as follows: - We obtained an understanding of the nature of the industry and sector, including the legal and regulatory frameworks, that the Company operates in and how it is complying with those frameworks through discussions with management and our wider knowledge and experience. We considered the laws and regulations we identified in our planning of the audit. - We assessed the susceptibility of the financial statements to material misstatement, including how fraud might occur, through internal team discussions and by making enquiries of management as to where they considered there was susceptibility to fraud, and their knowledge of actual suspected and alleged fraud. We considered the fraud risk around revenue, which is specifically linked to the risk of management override. - In common with all audits performed under ISAs (UK), we considered the risk of management override by sampling from the entire population of journals, identifying specific transactions which did not meet our expectations based on specific criteria, and investigated these to gain an understanding and then agreed them to source documentation. We assessed whether the judgments and assumptions applied by management and those charged with governance in making accounting estimates were indicative of of potential bias and evaluated the business rationale of significant transactions that were unusual or outside the normal course of business. - Based on the understanding so gained, we designed our audit procedures to identify non-compliance with the said laws and regulations. Our procedures involved verifying that the material transactions were recorded in compliance with, where applicable, the Act. A further description of our responsibilities is available on the FRC'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 member, as a body, in accordance with Chapter 3 of Part 16 of the Act. 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 as a body, for our audit work, for this report, or for the opinions we have formed.
Naraidoo Savomy FCCA FCA CTA
(Senior Statutory Auditor)
For and on behalf of
Anderson Ross LLP
Statutory Auditors
22 West Green Road
London
United Kingdom, N15 5NN
30 December 2024
Verex Premium Finance Limited
Statement of Income and Retained Earnings
Period from 1 May 2022 to 31 December 2022
Period from
1 May 22 to
Year to
31 Dec 22
30 Apr 22
Note
£
£
Turnover
616,423
964,866
---------
---------
Gross profit
616,423
964,866
Administrative expenses
66,305
99,629
---------
---------
Operating profit
550,118
865,237
Interest payable and similar expenses
295,398
400,526
---------
---------
Profit before taxation
254,720
464,711
Tax on profit
---------
---------
Profit for the financial period and total comprehensive income
254,720
464,711
---------
---------
Dividends paid and payable
( 450,000)
Retained earnings at the start of the period
34,166
19,455
---------
---------
Retained earnings at the end of the period
288,886
34,166
---------
---------
All the activities of the company are from continuing operations.
Verex Premium Finance Limited
Statement of Financial Position
31 December 2022
31 Dec 22
30 Apr 22
Note
£
£
Current assets
Debtors
5
4,397,429
4,308,459
Cash at bank and in hand
41,086
4,285
------------
------------
4,438,515
4,312,744
Creditors: amounts falling due within one year
6
4,149,628
4,278,577
------------
------------
Net current assets
288,887
34,167
---------
--------
Total assets less current liabilities
288,887
34,167
---------
--------
Net assets
288,887
34,167
---------
--------
Verex Premium Finance Limited
Statement of Financial Position (continued)
31 December 2022
31 Dec 22
30 Apr 22
Note
£
£
Capital and reserves
Called up share capital
1
1
Profit and loss account
288,886
34,166
---------
--------
Shareholders funds
288,887
34,167
---------
--------
These financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies' regime and in accordance with Section 1A of FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'.
These financial statements were approved by the board of directors and authorised for issue on 30 December 2024 , and are signed on behalf of the board by:
Brian Richard Hallett
Director
Company registration number: 07447397
Verex Premium Finance Limited
Notes to the Financial Statements
Period from 1 May 2022 to 31 December 2022
1. General information
The company is a private company limited by shares, registered in England and Wales. The address of the registered office is Suite 1d, Widford Business Centre, 33 Robjohns Road, Chelmsford, CM1 3AG, England.
2. Statement of compliance
These financial statements have been prepared in compliance with Section 1A of FRS 102, 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland'.
3. Accounting policies
Basis of preparation
The financial statements have been prepared on the going concern basis and in accordance with the historical cost basis, as modified by the revaluation of certain financial assets and liabilities and investment properties measured at fair value through profit or loss. The financial statements are prepared in pound Sterling, which is the functional currency of the entity.
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.
Going concern
Until 18 August 2023, the company's primary source of income was interest earned from premium financing services provided to its parent company, Verex Insurance Services Limited (VIS). However, on 18th August 2023, VIS (now JMG Realisations Ltd) entered administration and ceased trading, leading to a significant shift in the subsidiary's financial circumstances. Currently, the subsidiary maintains a strong liquidity position and continues to meet its capital requirements,primarily due to the successful collection of outstanding debts. The company has continued to utilise its cash reserves to produce Interest income during the period. This stability enables the Company to meet its short-term obligations, cover operational costs, and potentially distribute a dividend to the parent company. The company has adequate resources to continue for the period of at least 12 months from the date of approval of financial statements, The financial statements show a true and fair view of the company's current financial position. With VIS in administration, the subsidiary can no longer rely on financial or operational support from its parent company. Additionally, the administrator for JMG Realisations Limited anticipates a solvent winding up in the next financial year, though the exact date remains undetermined, which introduces a level of uncertainty regarding the future financial standing of the subsidiary. Consequently, no adjustments have been made to the financial statements should the going concern basis not be be appropriate.
Judgements and key sources of estimation uncertainty
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
Turnover
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is recognised over the course of the insured customer's term of cover.
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 non-puttable ordinary shares.
4. Auditor's remuneration
Period from
1 May 22 to
Year to
31 Dec 22
30 Apr 22
£
£
Fees payable for the audit of the financial statements
9,500
9,000
-------
-------
5. Debtors
31 Dec 22
30 Apr 22
£
£
Trade debtors
3,972,012
4,082,175
Other debtors
425,417
226,284
------------
------------
4,397,429
4,308,459
------------
------------
6. Creditors: amounts falling due within one year
31 Dec 22
30 Apr 22
£
£
Trade creditors
25,940
Amounts owed to group undertakings and undertakings in which the company has a participating interest
518,758
391,979
Other creditors
3,604,930
3,886,598
------------
------------
4,149,628
4,278,577
------------
------------
Secured loans - within other creditors A loan of £3,582,530 (30 April 2022: £3,869,198) is secured by a debenture over all assets of the company. JMG Realisations Ltd, its parent company, acts as a guarantor for this loan.
7. Related party transactions
The immediate and ultimate parent undertaking and controlling party is JMG Realisations Ltd (formerly Verex Insurance Services Limited). The registered office of JMG Realisations Ltd is 9-10 Scirocco Close, Moulton Park, Northampton, NN3 6AP. JMG Realisations Ltd is in administration since 18 August 2023, and the company's entire shareholding is therefore held and controlled by the administrator of JMG Realisations Ltd. JMG Realisations Ltd The amount borrowed from the company during the period was £126,779 (30 April 2022: £-Nil). The amount repaid to the company during the period was £-Nil (30 April 2022: £877,398). The balance owed to the company at the end of the period amounts to £518,758 (30 April 2022: £391,979).