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Registered number: 07729977









ARGC TOPCO LIMITED









ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 AUGUST 2020

 
ARGC TOPCO LIMITED
 
 
COMPANY INFORMATION


Directors
Dr M Taranissi 
E Fincham (appointed 10 August 2022)




Registered number
07729977



Registered office
124 Finchley Road

London

NW3 5JS




Independent auditors
Nyman Libson Paul LLP
Chartered Accountants & Registered Auditors

124 Finchley Road

London

NW3 5JS





 
ARGC TOPCO LIMITED
 

CONTENTS



Page
Group Strategic Report
 
1 - 2
Directors' Report
 
3 - 4
Independent Auditors' Report
 
5 - 8
Consolidated Statement of Comprehensive Income
 
9
Consolidated Statement of Financial Position
 
10 - 11
Company Statement of Financial Position
 
12
Consolidated Statement of Changes in Equity
 
13
Company Statement of Changes in Equity
 
14
Consolidated Statement of Cash Flows
 
15
Notes to the Financial Statements
 
16 - 33

 
ARGC TOPCO LIMITED
 
 
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 AUGUST 2020

Introduction
 
The three directors presents the strategic report for the year ended 31 August 2020.

Business review
 
The group's turnover has decreased by 22% from £19.3 million to £15.1 million. During the lockdown period, the group/company suspended the start of new treatment cycles but remained open to monitor patients, provide consultations to both existing and new patients and answer questions and enquiries by video link or by telephone. Currently, after lockdown restrictions have been eased by the UK government, the clinic is open for all treatment cycles and is taking a range of measures to keep patients safe from Covid-19. As a result, there has been a short-term impact on turnover.
Gross profit has increased from 46% to 47%. An 8% increase in administrative costs from £5.6m to £6.1m has resulted in a 63% reduction in operating profit.

Principal risks and uncertainties
 
The company's and group's principal financial instruments comprise bank balances, trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in non-puttable ordinary shares.
The director's financial risk management objective is to maximise financial assets and minimise financial liabilities without engaging in speculation. 
The main risks arising from the group's financial instruments are as follows:
  -  Interest rates earned/paid on deposits and overdrafts. 
 - The term of the loan notes totalling £45m has passed the repayment date and no new terms have been agreed with the loan note holders. Accordingly, there is a risk that the loan note holders are in a position to demand the full repayment of the loan and force the company/group into financial difficulties. 
Loan notes due to key management personnel - M. Taranissi : £27,180,000
Loan notes due to other related parties - Close Brothers Private Equity : £18,120,000
To manage the above risks the director manages the group's finances in such a way as to avoid bank overdrafts situations and put any available funds on deposit to maximise credit interest without compromising business activities.

Financial key performance indicators
 
The key financial highlights are as follows: 

      2020     2019
Turnover      £ 15,052,822   £ 19,334,279
Operating profit       £  1,238,362              £  3,353,094
(Loss)/profit before tax    £  (2,182,380)   £  (1,577,993)

Page 1

 
ARGC TOPCO LIMITED
 

GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2020


This report was approved by the board on 8 September 2022 and signed on its behalf.



................................................
Dr M Taranissi
Director
Page 2

 
ARGC TOPCO LIMITED
 
 
 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 AUGUST 2020

The directors present their report and the financial statements for the year ended 31 August 2020.

Principal activity

The principal activity of the company continued to be that of a holding company. The group's activities consist of running fertility clinics.

Results and dividends

The loss for the year, after taxation and minority interests, amounted to £1,675,290 (2019 - loss £1,653,316).

The results for the year are set out on page 7.

Directors

The directors who served during the year were:

Dr M Taranissi 
R J E Holmes (appointed 9 March 2020, resigned 1 February 2022)
P C Skertchly (appointed 9 March 2020, resigned 1 February 2022)

Directors' responsibilities statement

The directors are responsible for preparing the Group Strategic Report, the Directors' Report and the consolidated financial statements in accordance with applicable law and regulations.
 
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and the Group and of the profit or loss of the Group for that period.

 In preparing these financial statements, the directors are required to:


select suitable accounting policies for the Group's financial statements and then apply them consistently;

make judgements and accounting estimates that are reasonable and prudent;

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group 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 the Group and to enable them to ensure that the financial statements comply with the Companies Act 2006They are also responsible for safeguarding the assets of the company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Page 3

 
ARGC TOPCO LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2020

Disclosure of information to auditors

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

Post balance sheet events

The ongoing court case between Dr M Taranissi and Close Brothers Private Equity was ruled in favour of Dr M Taranissi by the High Court of Justice on 27 October 2021. This ruling does not have any impact on the Statement of Comprehensive Income or the Statement of Financial Position of the group.
Loan notes held at the year-end were:
Loan notes due to key management personnel - M. Taranissi : £27,180,000                        
Loan notes due to other related parties - Close Brothers Private Equity : £18,120,000

Auditors

The auditorsNyman Libson Paul LLPwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board on 8 September 2022 and signed on its behalf.
 





Dr M Taranissi
Director
Page 4

 
ARGC TOPCO LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ARGC TOPCO LIMITED
 

Opinion


We have audited the financial statements of ARGC Topco Limited (the 'parent company') and its subsidiaries (the 'Group') for the year ended 31 August 2020, which comprise the Group Statement of Comprehensive Income, the Group and company Statements of Financial Position, the Group Statement of Cash Flows, the Group and company Statement of Changes in Equity and the related notes, including a summary of significant accounting policiesThe financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).


In our opinion the financial statements:


give a true and fair view of the state of the Group's and of the parent company's affairs as at 31 August 2020 and of the Group's loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.


Basis for opinion


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


Material uncertainty related to going concern


We draw attention to note 2.3 in the financial statements which indicates that as of the reporting date the company's and the group's current liabilities exceeded its current assets and the outstanding loan balances as disclosed in the consolidated financial statements have passed their full repayment date of May 2020. As stated in note 2.3, a material uncertainty exists that may cast doubt on the company's and the group's ability to be trading for the foreseeable future and be able to pay its future obligations. Our opinion is not modified in respect of this matter.
In auditing the financial statements, we have concluded that the going concern basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the directors’ assessment of the company's ability to continue to adopt the going concern basis of accounting included a review and scrutiny of management’s assessment and evidence provided to support the management’s claim that the company and the group will be trading for the foreseeable future and be able to pay its future obligations for the period of at least 12 months from the date of approval of the financial statements.


Page 5

 
ARGC TOPCO LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ARGC TOPCO LIMITED (CONTINUED)


Other information


The directors are responsible for the other information. The other information comprises the information included in the Annual Report, other than the financial statements and our Auditors' Report thereon. 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.


In connection with our audit of the financial statementsour 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 of 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.


We have nothing to report in this regard.


Opinion on other matters prescribed by the Companies Act 2006
 

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


the information given in the Group Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the Group Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.


Matters on which we are required to report by exception
 

In the light of the knowledge and understanding of the Group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Directors' Report.


We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:


adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.


Page 6

 
ARGC TOPCO LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ARGC TOPCO LIMITED (CONTINUED)


Responsibilities of directors
 

As explained more fully in the Directors' Responsibilities Statement set out on page 3, 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 Group's and the parent 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 Group or the parent company or to cease operations, or have no realistic alternative but to do so.


Auditors' 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 auditors' 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:
We gained an understanding of the legal and regulatory framework applicable to the company and the industry in which it operates and considered the risk of acts by the company that was contrary to applicable laws and regulations, including fraud. We designed audit procedures to respond to the risk, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
We focussed on laws and regulations which could give rise to a material misstatement in the financial statements, including, but not limited to, the Companies Act 2006 and UK tax legislation. Our tests included agreeing the financial statement disclosures to underlying supporting documentation and enquiries with management. There are inherent limitations in the audit procedures described above and, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. We did not identify any key audit matters relating to irregularities, including fraud. As in all our audits, we also addressed the risk of management override of internal controls, including testing journals and evaluating whether there was evidence of bias by the director that represented a risk of material misstatement due to fraud.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or noncompliance with laws and regulations throughout the audit.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors' report.


Page 7

 
ARGC TOPCO LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ARGC TOPCO LIMITED (CONTINUED)


Use of our report
 

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





Hetal Mistry (Senior Statutory Auditor)
for and on behalf of
Nyman Libson Paul LLP
Chartered Accountants
Registered Auditors
124 Finchley Road
London
NW3 5JS

14 September 2022
Page 8

 
ARGC TOPCO LIMITED
 
 
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 AUGUST 2020

2020
2019
Note
£
£

  

Turnover
 4 
15,052,822
19,334,279

Cost of sales
  
(8,028,212)
(10,361,637)

Gross profit
  
7,024,610
8,972,642

Administrative expenses
  
(6,091,219)
(5,619,548)

Other operating income
 5 
304,971
-

Operating profit
 6 
1,238,362
3,353,094

Interest receivable and similar income
 9 
9,079
14,229

Interest payable and similar expenses
 10 
(3,429,821)
(4,945,316)

Loss before taxation
  
(2,182,380)
(1,577,993)

Tax on loss
 11 
511,062
(61,769)

Loss for the financial year
  
(1,671,318)
(1,639,762)

  

(Loss) for the year attributable to:
  

Non-controlling interests
  
3,972
13,554

Owners of the parent company
  
(1,675,290)
(1,653,316)

  
(1,671,318)
(1,639,762)

Total comprehensive income for the year attributable to:
  

Non-controlling interest
  
3,972
13,554

Owners of the parent company
  
(1,675,290)
(1,653,316)

  
(1,671,318)
(1,639,762)

The notes on pages 16 to 33 form part of these financial statements.

Page 9

 
ARGC TOPCO LIMITED
REGISTERED NUMBER: 07729977

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 AUGUST 2020

2020
2020
2019
2019
Note
£
£
£
£

Fixed assets
  

Intangible assets
 13 
28,313,045
30,711,923

Tangible assets
 14 
4,084,934
4,276,925

  
32,397,979
34,988,848

Current assets
  

Stocks
 16 
123,717
589,323

Debtors: amounts falling due within one year
 17 
2,968,287
2,070,409

Cash at bank and in hand
 18 
5,440,125
2,595,079

  
8,532,129
5,254,811

Creditors: amounts falling due within one year
 19 
(56,653,829)
(54,296,861)

Net current liabilities
  
 
 
(48,121,700)
 
 
(49,042,050)

Total assets less current liabilities
  
(15,723,721)
(14,053,202)

Creditors: amounts falling due after more than one year
 20 
(1,242,123)
(1,233,825)

Provisions for liabilities
  

Deferred tax
  
4,270
(3,229)

Net liabilities
  
(16,961,574)
(15,290,256)

Page 10

 
ARGC TOPCO LIMITED
REGISTERED NUMBER: 07729977
    
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 AUGUST 2020

2020
2020
2019
2019
Note
£
£
£
£

Capital and reserves
  

Called up share capital 
 24 
9,000
9,000

Share premium account
 25 
940,500
940,500

Capital redemption reserve
 25 
500
500

Profit and loss account
 25 
(17,970,087)
(16,294,797)

Equity attributable to owners of the parent company
  
(17,020,087)
(15,344,797)

Non-controlling interests
  
58,513
54,541

  
(16,961,574)
(15,290,256)


The financial statements were approved and authorised for issue by the board and were signed on its behalf on 8 September 2022.




................................................
Dr M Taranissi
Director

The notes on pages 16 to 33 form part of these financial statements.
Page 11

 
ARGC TOPCO LIMITED
REGISTERED NUMBER: 07729977

COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 AUGUST 2020

2020
2020
2019
2019
Note
£
£
£
£

Fixed assets
  

Investments
 15 
46,325,632
46,325,632

Current assets
  

Debtors: amounts falling due within one year
 17 
7,982,733
4,870,003

Creditors: amounts falling due within one year
 19 
(52,814,916)
(50,316,205)

Net current liabilities
  
 
 
(44,832,183)
 
 
(45,446,202)

  

Net assets
  
1,493,449
879,430


Capital and reserves
  

Called up share capital 
 24 
9,000
9,000

Share premium account
 25 
940,500
940,500

Capital redemption reserve
 25 
500
500

Profit and loss account brought forward
  
(70,570)
406,957

Profit for the year
  
614,019
1,763,984

Other changes in the profit and loss account

  

-
(2,241,511)

Profit and loss account carried forward
  
543,449
(70,570)

  
1,493,449
879,430


The financial statements were approved and authorised for issue by the board and were signed on its behalf on 8 September 2022.


................................................
Dr M Taranissi
Director

The notes on pages 16 to 33 form part of these financial statements.
Page 12

 

 
ARGC TOPCO LIMITED


 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 AUGUST 2020



Share capital
Share premium account
Capital redemption reserve
Profit and loss reserve
Total controlling interest
Non-controlling interests
Total equity


£
£
£
£
£
£
£



At 1 September 2018
9,000
940,500
500
(12,399,970)
(11,449,970)
40,987
(11,408,983)



Comprehensive income for the year


Loss for the year
-
-
-
(1,653,316)
(1,653,316)
13,554
(1,639,762)


Dividends: Equity capital
-
-
-
(2,241,511)
(2,241,511)
-
(2,241,511)





At 1 September 2019
9,000
940,500
500
(16,294,797)
(15,344,797)
54,541
(15,290,256)



Comprehensive income for the year


Loss for the year
-
-
-
(1,675,290)
(1,675,290)
3,972
(1,671,318)



At 31 August 2020
9,000
940,500
500
(17,970,087)
(17,020,087)
58,513
(16,961,574)



The notes on pages 16 to 33 form part of these financial statements.
Page 13

 
ARGC TOPCO LIMITED
 

COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 AUGUST 2020


Share capital
Share premium account
Capital redemption reserve
Profit and loss reserve
Total equity

£
£
£
£
£


At 1 September 2018
9,000
940,500
500
406,957
1,356,957



Profit for the year
-
-
-
1,763,984
1,763,984

Dividends: Equity capital
-
-
-
(2,241,511)
(2,241,511)



At 1 September 2019
9,000
940,500
500
(70,570)
879,430



Profit for the year
-
-
-
614,019
614,019


At 31 August 2020
9,000
940,500
500
543,449
1,493,449


The notes on pages 16 to 33 form part of these financial statements.
Page 14

 
ARGC TOPCO LIMITED
 

CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 AUGUST 2020

2020
2019
£
£

Cash flows from operating activities

Loss for the financial year
(1,671,318)
(1,639,762)

Adjustments for:

Amortisation of intangible assets
2,398,878
2,399,317

Depreciation of tangible assets
216,698
224,025

Interest paid
3,429,821
4,945,316

Interest received
(9,079)
(14,229)

Taxation charge
(511,062)
61,769

Decrease/(increase) in stocks
465,606
(421,366)

(Increase) in debtors
(16,188)
(86,858)

Increase in creditors
2,369,469
1,592,437

Corporation tax (paid)
(299,768)
(823,392)

Net cash generated from operating activities

6,373,057
6,237,257


Cash flows from investing activities

Purchase of tangible fixed assets
(24,707)
(26,715)

Interest received
9,079
14,229

Net cash from investing activities

(15,628)
(12,486)

Cash flows from financing activities

Repayment of loans
(78,362)
(117,668)

Repayment of/new finance leases
(4,200)
(7,200)

Dividends paid
-
(2,241,511)

Interest paid
(3,429,821)
(4,945,316)

Net cash used in financing activities
(3,512,383)
(7,311,695)

Net increase/(decrease) in cash and cash equivalents
2,845,046
(1,086,924)

Cash and cash equivalents at beginning of year
2,595,079
3,682,003

Cash and cash equivalents at the end of year
5,440,125
2,595,079


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
5,440,125
2,595,079

5,440,125
2,595,079


Page 15

 
ARGC TOPCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2020

1.


General information

ARGC Topco Limited ("the company") is a private limited company domiciled and incorporated in England and Wales. The registered office is at Regina House, 124 Finchley Road, London, NW3 5JS. The principal place of business is 13 Upper Wimpole Street, London, W1G 6LP.
The group consists of ARGC Topco Limited and all of its subsidiaries.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

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

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

The company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements.

The following principal accounting policies have been applied:

 
2.2

Basis of consolidation

The consolidated financial statements present the results of the company and its own subsidiaries ("the group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Statement of Financial Position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Statement of Comprehensive Income from the date on which control is obtained. They are deconsolidated from the date control ceases.
All financial statements are made up to 31 August 2020. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

Page 16

 
ARGC TOPCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2020

2.Accounting policies (continued)

 
2.3

Going concern

At the reporting date, the group's total liabilities exceeded the group's total assets and the outstanding loan balances disclosed in the consolidated financial statements have passed their full repayment date of May 2020. The directors expect this situation will be resolved without any significant impact on the going concern status of the group and the company as various options are being explored.
The directors have reviewed the existing funding facilities of the group and believe that adequate resources will be available for the foreseeable future.
Accordingly, the directors are confident that the company and the group will continue to remain a going concern for the foreseeable future and for a period of at least twelve months from the date of approval of these financial statements. Therefore the directors consider it appropriate to adopt the going concern basis in preparing the company’s financial statements.

 
2.4

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the group and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts.
Revenue from medical services is recognised at the point in which the treatment has been administered.
 

 
2.5

Intangible assets

Goodwill
Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at  cost  less  accumulated amortisation and accumulated impairment losses. Goodwill is considered  to  have  a  finite useful life and is amortised on a systematic basis over its expected life, which is 20 years.
Other intangible assets
Intangible assets acquired separately from a business are recognised at cost. Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date if the fair value can be measured reliably.

 
2.6

Tangible fixed assets

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

At each reporting date the company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.

Page 17

 
ARGC TOPCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2020

2.Accounting policies (continued)


2.6
Tangible fixed assets (continued)

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives.

Depreciation is provided on the following basis:

Land and buildings - Freehold
-
2% straight line
Land and buildings - Leasehold
-
over the life of the lease
Plant and machinery
-
25% reducing balance
Fixtures, fittings & equipment
-
25% reducing balance

 
2.7

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

Investments in unlisted Group shares, whose market value can be reliably determined, are remeasured to market value at each reporting date. Gains and losses on remeasurement are recognised in the Consolidated Statement of Comprehensive Income for the period. Where market value cannot be reliably determined, such investments are stated at historic cost less impairment.

A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

 
2.8

Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell.

 
2.9

Debtors

Short term debtors are measured at transaction price, less any impairment.

 
2.10

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours.
 

 
2.11

Creditors

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

 
2.12

Interest income

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

 
2.13

Borrowing costs

All borrowing costs are recognised in profit or loss in the year in which they are incurred.

Page 18

 
ARGC TOPCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2020

2.Accounting policies (continued)

 
2.14

Financial instruments

The group 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.
Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method
Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received.
Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Consolidated Statement of Comprehensive Income.
Financial assets and liabilities are offset and the net amount reported in the Statement of Financial Position when there is an 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.

 
2.15

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in the Consolidated Statement of Comprehensive Income.
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.
Deferred tax
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the Statement of Financial Position date, except that:
 - The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits;
 - Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.
Deferred tax assets and liabilities are offset if, and only if, there is 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.
 

Page 19

 
ARGC TOPCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2020

2.Accounting policies (continued)

  
2.16

Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense.
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.

 
2.17

Government grants

Grants are accounted under the accruals model as permitted by FRS 102.
Grants of a revenue nature are recognised in the Consolidated Statement of Comprehensive Income in the same period as the related expenditure.
Grants received are in relation funds received from government under Coronavirus Job Retention Scheme.

 
2.18

Dividends

Equity instruments issued by the group are recorded at the proceeds received, net of direct issue costs. 
Dividends payable on equity instruments are recognised as liabilities once they become legally payable and are no longer at the discretion of the group.

 
2.19

Pensions

Defined contribution pension plan
The group contributes to a defined contribution plans for its employees. A defined contribution plan is a pension plan under which the group pays fixed contributions into a separate entity. Once the contributions have been paid the group has no further payment obligations.
The contributions are recognised as an expense in the Consolidated Statement of Comprehensive Income when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of Financial Position. The assets of the plan are held separately from the group in independently administered funds.

 
2.20

Provisions for liabilities

Provisions are made where an event has taken place that gives the group a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.

Page 20

 
ARGC TOPCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2020

3.


Judgements in applying accounting policies and key sources of estimation uncertainty

In the application of the group's accounting policies, the director is 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.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a  material  adjustment  to  the carrying amount of assets and liabilities are as follows.
Amortisation of goodwill
Determining the period over which goodwill is amortised requires an estimation of the value in use of the cash generating units to which goodwill has been allocated. The value in use calculation requires the entity to estimate the future cash flows expected to arise from the cash generating unit and a suitable discount rate in order to calculate present value.


4.


Turnover

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


2020
2019
£
£

Medical services

15,052,822
19,334,279


All turnover arose within the United Kingdom.


5.


Other operating income

2020
2019
£
£

Government grants receivable

304,971
-


Page 21

 
ARGC TOPCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2020

6.


Operating profit

The operating profit is stated after charging:

2020
2019
£
£

Depreciation of owned tangible fixed assets
216,698
220,301

Exchange differences
-
(3,724)

Amortisation of intangible assets
2,398,878
2,399,317

Cost of stocks recognised as an expense
4,476,318
6,331,768

Other operating lease rentals
886,510
946,650

7,545,008
9,453,710


7.


Auditors' remuneration

2020
2019
£
£


Fees payable to the Group's auditor for the audit of the Group's annual financial statements
59,650
55,980


Fees payable to the Group's auditor in respect of:


Audit of the financial statements of the group and company
21,600
18,780

Audit of the financial statements of the company's subsidiaries
38,050
37,200

59,650
55,980

Page 22

 
ARGC TOPCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2020

8.


Employees

Staff costs were as follows:


Group
Group
Company
Company
2020
2019
2020
2019
£
£
£
£


Wages and salaries
3,038,099
3,359,115
-
-

Social security costs
279,609
308,690
-
-

Cost of defined contribution scheme
57,660
51,018
-
-

3,375,368
3,718,823
-
-


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



Group
Group
Company
Company
        2020
        2019
        2020
        2019
            No.
            No.
            No.
            No.









Administrative
41
40
2
2



Medical Staff
49
51
-
-

90
91
2
2


9.


Interest receivable

2020
2019
£
£


Other interest receivable
9,079
14,229

Investment income includes interest on finacial assets not measured at fair value through profit and loss.


10.


Interest payable and similar expenses

2020
2019
£
£


Bank interest payable
33,948
47,320

Other loan interest payable
3,395,111
4,896,007

Finance leases and hire purchase contracts
593
1,017

Other interest payable
169
972

3,429,821
4,945,316

Page 23

 
ARGC TOPCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2020

11.


Taxation


2020
2019
£
£

Corporation tax


Current tax on profits for the year
382,967
647,486

Deferred tax


Origination and reversal of timing differences
(894,029)
(585,717)

Taxation on (loss)/profit on ordinary activities
 
(511,062)
 
61,769

Factors affecting tax charge for the year

The tax assessed for the year is lower than (2019 - higher than) the standard rate of corporation tax in the UK of 19% (2019 - 19%). The differences are explained below:

2020
2019
£
£


Loss on ordinary activities before tax
(2,186,352)
(1,577,993)


Loss on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2019 - 19%)
(415,407)
(299,819)

Effects of:


Non-tax deductible amortisation of goodwill and impairment
443,241
443,324

Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
-
150

Capital allowances for year in excess of depreciation
33,572
15,813

(Reduction)/Increase in taxation due to a difference in rates
(454,538)
(97,699)

Other differences leading to an increase (decrease) in the tax charge
(117,930)
-

Total tax charge for the year
(511,062)
61,769


Factors that may affect future tax charges



12.


Dividends

2020
2019
£
£


Interim paid
-
2,241,511

Page 24

 
ARGC TOPCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2020

13.


Intangible assets

Group and Company





Patent and license costs
Goodwill
Total

£
£
£



Cost


At 1 September 2019
8,778
47,968,776
47,977,554



At 31 August 2020

8,778
47,968,776
47,977,554



Amortisation


At 1 September 2019
8,339
17,257,292
17,265,631


Charge for the year on owned assets
439
2,398,439
2,398,878



At 31 August 2020

8,778
19,655,731
19,664,509



Net book value



At 31 August 2020
-
28,313,045
28,313,045



At 31 August 2019
439
30,711,484
30,711,923

The company had no intangible fixed assets at 31 August 2020 or at 31 August 2019.



Page 25

 
ARGC TOPCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2020

14.


Tangible fixed assets

Group






Land and buildings Freehold
Land and buildings Leasehold
Plant and machinery
Fixtures fittings & equipment
Total

£
£
£
£
£



Cost or valuation


At 1 September 2019
2,647,464
2,076,765
142,701
421,101
5,288,031


Additions
-
-
8,580
16,127
24,707



At 31 August 2020

2,647,464
2,076,765
151,281
437,228
5,312,738



Depreciation


At 1 September 2019
101,523
555,637
106,435
247,511
1,011,106


Charge for the year on owned assets
11,004
107,047
22,431
76,216
216,698



At 31 August 2020

112,527
662,684
128,866
323,727
1,227,804



Net book value



At 31 August 2020
2,534,937
1,414,081
22,415
113,501
4,084,934



At 31 August 2019
2,545,941
1,521,128
36,266
173,590
4,276,925

The company had no tangible fixed assets at 31 August 2020 or at 31 August 2019.

The net book value of assets held under finance leases or hire purchase contracts, included above, are as follows:


2020
2019
£
£



Plant and machinery
-
11,170

-
11,170

Page 26

 
ARGC TOPCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2020

15.


Fixed asset investments

Company





Investments in subsidiary companies

£



Cost 


At 1 September 2019
46,325,632



At 31 August 2020
46,325,632





Subsidiary undertakings


The following were subsidiary undertakings of the company:

Name

Principal activity

Class of shares

Holding

A. R. G. C. Limited
Fertility clinic
Ordinary
100%
London Fertility Centre Limited
Property holding
Ordinary
100%
Old School Surrey Limited
Fertility clinic
Ordinary
77.83%


 


16.


Stocks

Group
Group
2020
2019
£
£

Finished goods and goods for resale
123,717
589,323

123,717
589,323


Page 27

 
ARGC TOPCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2020

17.


Debtors

Group
Group
Company
Company
2020
2019
2020
2019
£
£
£
£


Trade debtors
301,396
205,862
-
-

Amounts owed by group undertakings
-
-
5,656,832
3,430,632

Other debtors
86,731
221,587
-
-

Prepayments and accrued income
254,259
203,589
-
-

Deferred taxation (note 22)
2,325,901
1,439,371
2,325,901
1,439,371

2,968,287
2,070,409
7,982,733
4,870,003



18.


Cash and cash equivalents

Group
Group
2020
2019
£
£

Cash at bank and in hand
5,440,125
2,595,079

5,440,125
2,595,079



19.


Creditors: Amounts falling due within one year

Group
Group
Company
Company
2020
2019
2020
2019
£
£
£
£

Bank loans
31,008
117,668
-
-

Other loans
45,612,227
45,612,227
45,300,000
45,300,000

Trade creditors
1,619,501
1,433,545
-
-

Corporation tax
123,818
45,459
-
-

Other taxation and social security
386,192
85,380
-
-

Obligations under finance lease and hire purchase contracts
-
4,200
-
-

Other creditors
840,659
2,267,169
-
906,000

Accruals and deferred income
8,040,424
4,731,213
7,514,916
4,110,205

56,653,829
54,296,861
52,814,916
50,316,205


Page 28

 
ARGC TOPCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2020

20.


Creditors: Amounts falling due after more than one year

Group
Group
2020
2019
£
£

Bank loans (note 20)
1,242,123
1,233,825




21.


Loans




Group
Group
Company
Company
2020
2019
2020
2019
£
£
£
£

Amounts falling due within one year

Bank loans
31,008
117,668
-
-

Other loans
45,612,227
45,612,227
45,300,000
45,300,000


45,643,235
45,729,895
45,300,000
45,300,000

Amounts falling due 1-2 years

Bank loans
47,773
-
-
-

Amounts falling due 2-5 years

Bank loans
152,862
-
-
-

Amounts falling due after more than 5 years

Bank loans
1,041,488
1,233,825
-
-

1,041,488
1,233,825
-
-

46,885,358
46,963,720
45,300,000
45,300,000


The subsidiary's bank loans are secured by way of a fixed and floating charge over the assets of the subsidiary as well as specific charges over the subsidiary's freehold premises and a bank deposit account.
Included in other loans are amounts in relation to the loan notes. The term for the loan notes totalling £45.3 million has expired but their repayment has not been demanded.

Page 29

 
ARGC TOPCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2020

.


The following amounts were outstanding at the reporting end date:

2020
2019
2020
2019
        £
        £
        £
        £
Group and Company

Loan notes due to Key management personnel

27,180,000

27,180,000

27,180,000
 
27,180,000
 
Loan notes due to other related parties

18,120,000

18,120,000

18,120,000
 
18,120,000
 

45,300,000

45,300,000

45,300,000
 
45,300,000
 

No guarantees have been given or received.
The loan note holders are in discussion to agree the split of unpaid loan interest between themselves.


22.


Financial instruments

Group
Group
Company
Company
2020
2019
2020
2019
£
£
£
£

Financial assets

Financial assets that are debt instruments measured at amortised cost
388,127
415,182
5,656,832
3,430,632


Financial liabilities

Financial liabilities measured at amortised cost
(57,337,443)
(55,399,937)
(52,814,916)
(49,410,295)

Enter Text here - user input


Financial assets that are debt instruments measured at amortised cost comprise trade debtors, amounts owed by group undertakings and other debtors.


Financial liabilities measured at amortised cost comprise bank overdrafts, bank loans, other loans, trade creditors, amounts owed to group undertakings, other creditors and accruals.


23.


Deferred taxation

Page 30

 
ARGC TOPCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2020
 
23.Deferred taxation (continued)


Group



2020
2019


£

£






At beginning of year
1,436,142
850,425


Credited to profit or loss
894,029
585,717



At end of year
2,330,171
1,436,142

Company


2020
2019


£

£






At beginning of year
1,439,371
859,682


Credited to profit or loss
886,530
579,689



At end of year
2,325,901
1,439,371

The deferred tax balance is made up as follows:

Group
Group
Company
Company
2020
2019
2020
2019
£
£
£
£

Accelerated capital allowances
4,270
(3,229)
-
-

Unpaid loan interest
2,325,901
1,439,371
2,325,901
1,439,371

2,330,171
1,436,142
2,325,901
1,439,371

Comprising:

Asset - due within one year
2,325,901
1,439,371
2,325,901
1,439,371

Liability
4,270
(3,229)
-
-

2,330,171
1,436,142
2,325,901
1,439,371



24.


Share capital

2020
2019
£
£
Allotted, called up and fully paid



540,000 Ordinary A Shares shares of £0.01 each
5,400
5,400
Page 31

 
ARGC TOPCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2020

24.Share capital (continued)

360,000 Ordinary B Shares shares of £0.01 each
3,600
3,600

9,000

9,000



25.


Reserves

Capital redemption reserve

The reserve records the nominal value of shares repurchased by the company.

Profit and loss account

Retained earnings represents accumulated comprehensive income for the year and prior periods less dividends paid.


26.


Pension commitments

The group contributes to defined contribution pension schemes. The assets of the schemes are held separately from those of the group  in independently administered funds. The pension cost charge represents contributions payable by the group  to the funds and amounted to £57,660 (2019 - £51,018). Contributions totalling £10,442 (2019 - £11,914) were payable to the funds at the reporting date and are included in creditors.


27.


Commitments under operating leases

At 31 August 2020 the Group and the company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:


Group
Group
2020
2019
£
£

Not later than 1 year
783,219
880,353

Later than 1 year and not later than 5 years
2,374,141
2,537,182

Later than 5 years
3,356,606
3,345,174

6,513,966
6,762,709

28.


Transactions with directors

Dividends totalling £Nil (2019 - £2,241,511 ) were paid in the year in respect of the ''Ordinary A'' shares held by one of the company's directors.
One of the directors has provided interest-free finance to the group during the year. At the reporting date, the director was owed £830,187  (2019: £1,349,255). The amount is unsecured.

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ARGC TOPCO LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2020

29.


Related party transactions

During the year the group entered into the following transactions with related parties:


2020
2019
£
£

Dividends paid to key management personnel
-
2,241,511
Loan interest paid to key management personnel
-
3,171,000
Loan Interest paid to other related party
-
1,359,000
-
6,771,511


30.


Post balance sheet events

Since March 2020, the Covid-19 pandemic has caused a severe financial impact on the economy.  Measures taken to contain the spread of the virus, including travel bans, quarantines, social distancing, and closures of non-essential services and all IVF clinics in the UK are unable to provide any treatments under the general direction issued by Human Fertilisation and Embryology Authority (HFEA).
During the lockdown period, the group/company suspended the start of new treatment cycles but remained open to monitor patients, provide consultations to both existing and new patients and answer questions and enquiries by video link or by telephone. Currently, after lockdown restrictions have been eased by the UK government, the clinic is open for all treatment cycles and is taking a range of measures to keep patients safe from Covid-19. As a result, there has been a short-term impact on turnover and the director believes that the trade will return to normal very quickly.
The clinics have remained open for all treatment cycles as per the guidance from HFEA during the subsequent lockdowns in November 2020 and January 2021.
The group/company has determined that these events are non-adjusting subsequent events. Accordingly, the financial position and results of operations as of and for the year ended 31 August 2020 have not been adjusted to reflect their impact. The pandemic is ongoing and it is not possible to reliably estimate its duration and impact on the financial position and results of the group/company for future periods.
The term for the loan notes totalling £45.3 million has expired. New terms have not been agreed. At the date of approval of these financial statements, the loan note holders have not demanded payment.


31.


Controlling party

The ultimate controlling party is Dr M Taranissi, a director of the company, by virtue of his majority shareholding.
 
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