ISO Health Limited
Annual Report and Financial Statements
For the year ended 31 December 2022
Company Registration No. 09938242 (England and Wales)
ISO Health Limited
Company Information
Directors
M Holt
B Murphy
C Abolt
(Appointed 1 June 2022)
S Narayanan
(Appointed 3 January 2022)
P Stanton
(Appointed 12 December 2022)
Secretary
B Ostrom
Company number
09938242
Registered office
10 Chiswell Street
London
England
EC1Y 4UQ
Auditor
Moore Kingston Smith LLP
Charlotte Building
17 Gresse Street
London
W1T 1QL
ISO Health Limited
Contents
Page
Strategic report
1 - 3
Directors' report
4 - 5
Independent auditor's report
6 - 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 - 23
ISO Health Limited
Strategic Report
For the year ended 31 December 2022
Page 1

The directors present the strategic report for the year ended 31 December 2022.

Fair review of the business

The company, incorporated in England and Wales in the United Kingdom, is a wholly owned subsidiary of Real Chemistry International Limited, incorporated in England and Wales in the United Kingdom.

 

In 2022, the ultimate parent company, W2O Holdings Inc., introduced intercompany remuneration between the parent and the company with respect to the following intercompany transactions:

 

•    The provision of certain marketing and advertising consulting services; and

•    The granting of rights to use certain network resources and intellectual property.

 

The impact of this change was an increase in revenue of £794,774 and an increase in cost of sales of £5,839,921.

 

The results of the company for the year are set out in the Statement of Comprehensive Income. The company made a profit before tax of £595,849 (2021: £3,648,027). In 2022, transfer pricing was implemented. Profit before tax excluding transfer pricing is £5,640,997 (2021: £3,648,027).

 

The company generated turnover of £13,561,584 in 2022, compared to £12,087,958 in 2021, an increase of 12%. In response to the rapidly changing trading environment for marketing and consulting services, the Company has focused on managing its cost base by reorganising the executive management structure, with closer ties to the parent company. All strategic decisions are undertaken by the parent, ensuring strategic goals drive the business with greater collaboration with fellow group entities.

 

The company generated gross profit of £1,638,098 in 2022, compared to gross profit £5,515,782 in 2021, a decrease of 70%. In 2022, transfer pricing was implemented. Gross profit excluding transfer pricing is £6,683,246 (2021: £5,515,782). The increase in gross profit (excluding transfer pricing) is mainly due to the increase in revenue as stated above and a decrease in allocated staff costs within the entity. Allocated number of employees to the entity has decreased from 74 to 63 in 2022. The implementation of transfer pricing has led to a decrease in operating profit of £603,221 in 2022 from a profit of £3,648,027 in 2021.

 

The Balance Sheet shows the company’s financial position. At 31 December 2022, the Company was in a net current asset position of £9,104,680 (2021: £8,740,336) and a net asset position of £9,108,170 (2021: £8,753,479).

ISO Health Limited
Strategic Report (Continued)
For the year ended 31 December 2022
Page 2
Principal risks and uncertainties

The company’s activities are based principally on agreed contracts with clients that provide a significant level of continuity in supporting ongoing income streams.

 

Nevertheless, as in the nature of the industry, the key risk the company faces is the reduction in spend from clients, or a loss of clients through either the cancellation of the client contract concerned or a competitive pitch process. In addition, a large proportion of revenue is derived from one customer and therefore there is a risk should that client not renew their contract. However, management endeavour to mitigate these risks by:

 

The company is exposed to the normal risk of trade debtors defaulting on payment. However, the wide spread of customers and credit control procedures in place minimises the risk of such default.

 

The principal financial assets employed by the company are cash and cash equivalents. Daily cash reporting for all operations is maintained to ensure the business retains sufficient cash reserves and effective working capital management.

 

The company’s cash position is reported on a regular basis and monitored on a projected basis in the light of the company’s historical and expected future trading performance.

Development and performance

The company operates in a contract and project-based environment, which relies heavily on existing client relationships and the ability to win new client growth. Historically the business has performed well in these disciplines and as such the Board remains confident about the company’s prospects for the future.

 

The company depends on the commitment, talent, creative abilities, and technical skills of its people. Engagement and clear communication are important. Engagement with the workforce is achieved through:

 

The company engages with its customers through dedicated client relationship teams. The company develops various services, with an emphasis on innovation for clients and managing any conflicts of interest with multiple agencies. Due diligence is undertaken for all new clients and written contracts must be in place before commencing any significant work.

Key performance indicators

The management team monitor various key performance indicators including billing, turnover, and profitability compared with budget and prior years on a client basis.

 

KPI

2022

2021

Change

Change

 

£

£

£

%

Turnover

13,561,584

12,087,958

1,473,626

12%

Gross profit

1,638,098

5,515,782

(3,877,684)

(70)%

Operating profit

603,221

3,648,027

(3,044,806)

(83)%

 

Refer to the fair review of the business for details explaining the operating results for the year.

ISO Health Limited
Strategic Report (Continued)
For the year ended 31 December 2022
Page 3

On behalf of the board

P Stanton
Director
30 October 2023
ISO Health Limited
Directors' Report
For the year ended 31 December 2022
Page 4

The directors present their annual report and financial statements for the year ended 31 December 2022.

Principal activities

The principal activity of the company continued to be that of medical education.

Results and dividends

The results for the year are set out on page 10.

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

Directors

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

M Holt
B Murphy
C Abolt
(Appointed 1 June 2022)
S Narayanan
(Appointed 3 January 2022)
J Weiss
(Resigned 3 January 2022)
P Stanton
(Appointed 12 December 2022)
Qualifying third party indemnity provisions

The company has made qualifying third party indemnity provisions for the benefit of its directors during the year. These provisions remain in force at the reporting date.

Financial instruments
Liquidity risk

The company does not use derivative financial instruments. The company actively manages its finances to ensure the company has sufficient funds available for its operations.

Foreign currency risk

The company has foreign currency assets and liabilities. The company does not currently use financial instruments to manage the risk of fluctuating exchange rates and as such no hedge accounting is applied. The directors keep these measures under constant review.

Credit risk

The company does not use credit checks. The company actively manages its relationships with clients and in 2022 there were no bad debt within the company.

Post reporting date events

There were no post reporting date events that require disclosure in the financial statements.

Auditor

The auditor, Moore Kingston Smith LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

ISO Health Limited
Directors' Report (Continued)
For the year ended 31 December 2022
Page 5
Statement of directors' responsibilities

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.

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.

Going concern

The directors consider that the company has access to sufficient funding to meet its financial obligations as they fall due. In forming their decision, the directors have considered the fact that the parent company has provided a letter confirming that it will provide financial support as required for at least one year from the date of signing of these financial statements. As a result, the directors continue to adopt the going concern basis of accounting in preparation of the financial statements.

On behalf of the board
P Stanton
Director
30 October 2023
ISO Health Limited
Independent Auditor's Report
To the Members of ISO Health Limited
Page 6
Opinion

We have audited the financial statements of ISO Health Limited (the 'company') for the year ended 31 December 2022 which comprise 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 FRS 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.

ISO Health Limited
Independent Auditor's Report (Continued)
To the Members of ISO Health Limited
Page 7

Opinions on other matters prescribed by the Companies Act 2006

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

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.

ISO Health Limited
Independent Auditor's Report (Continued)
To the Members of ISO Health Limited
Page 8
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.

 

As part of an audit in accordance with ISAs (UK) we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

 

 

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

 

 

ISO Health Limited
Independent Auditor's Report (Continued)
To the Members of ISO Health Limited
Page 9

Explanation as to what extent the audit was considered capable of detecting 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 extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.

The objectives of our audit in respect of fraud, are; to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses to those assessed risks; and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the company.

Our approach was as follows:

 

 

There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, 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.

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 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Ian Graham
Senior Statutory Auditor
for and on behalf of Moore Kingston Smith LLP
31 October 2023
Chartered Accountants
Statutory Auditor
Charlotte Building
17 Gresse Street
London
W1T 1QL
ISO Health Limited
Statement of Comprehensive Income
For the year ended 31 December 2022
Page 10
2022
2021
Notes
£
£
Turnover
3
13,561,584
12,087,958
Cost of sales
(11,923,486)
(6,572,176)
Gross profit
1,638,098
5,515,782
Administrative expenses
(1,569,745)
(1,867,755)
Other operating income
534,868
-
0
Operating profit
4
603,221
3,648,027
Interest payable and similar expenses
6
(7,372)
-
0
Profit before taxation
595,849
3,648,027
Tax on profit
7
(241,158)
(22,302)
Profit for the financial year
354,691
3,625,725

The Profit and Loss Account has been prepared on the basis that all operations are continuing operations.

ISO Health Limited
Balance Sheet
As at 31 December 2022
Page 11
2022
2021
Notes
£
£
£
£
Fixed assets
Tangible assets
8
3,490
13,143
Current assets
Debtors
9
10,872,378
9,108,711
Cash at bank and in hand
1,483,496
2,935,532
12,355,874
12,044,243
Creditors: amounts falling due within one year
10
(3,251,194)
(3,303,907)
Net current assets
9,104,680
8,740,336
Net assets
9,108,170
8,753,479
Capital and reserves
Called up share capital
12
200
200
Profit and loss reserves
9,107,970
8,753,279
Total equity
9,108,170
8,753,479
The financial statements were approved by the board of directors and authorised for issue on 30 October 2023 and are signed on its behalf by:
P  Stanton
Director
Company Registration No. 09938242
ISO Health Limited
Statement of Changes in Equity
For the year ended 31 December 2022
Page 12
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 January 2021
200
5,127,554
5,127,754
Year ended 31 December 2021:
Profit and total comprehensive income for the year
-
3,625,725
3,625,725
Balance at 31 December 2021
200
8,753,279
8,753,479
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
354,691
354,691
Balance at 31 December 2022
200
9,107,970
9,108,170
ISO Health Limited
Statement of Cash Flows
For the year ended 31 December 2022
Page 13
2022
2021
Notes
£
£
£
£
Cash flows from operating activities
Cash (absorbed by)/generated from operations
15
(966,679)
1,468,926
Interest paid
(7,372)
-
0
Income taxes (paid)/refunded
(477,985)
11,228
Net cash (outflow)/inflow from operating activities
(1,452,036)
1,480,154
Net (decrease)/increase in cash and cash equivalents
(1,452,036)
1,480,154
Cash and cash equivalents at beginning of year
2,935,532
1,455,378
Cash and cash equivalents at end of year
1,483,496
2,935,532
ISO Health Limited
Notes to the Financial Statements
For the year ended 31 December 2022
Page 14
1
Accounting policies
Company information

ISO Health Limited is a private company limited by shares incorporated in England and Wales. The registered office is 10 Chiswell Street, London, England, EC1Y 4UQ.

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

Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

1.3
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

Fixed fee

When a contract indicates services are supplied on a fixed fee basis, the company recognises revenue over the period in which the service is provided to the customer representing the effort incurred over the life of the project. In the current period, management began assessing the work performed on a periodic basis to ensure that the period over which services are being provided remains appropriate. In previous years, fixed fee revenue was recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete could be estimated reliably.

 

Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.

 

Time-and-expense

Time-and-expense professional service arrangements require the client to pay based on the number of hours worked by revenue-generating professionals at contractually agreed-upon rates. The company recognises revenues for professional services rendered under time-and-expense engagements based on an over time input method utilising the hours incurred at agreed-upon rates as work is performed. In some cases, time-and-expense arrangements are subject to a cap, in which case management assesses the work performed on a periodic basis to ensure that the cap has not been exceeded.

 

Other operating income

Other operating income includes the company's allocation of the release of the lease incentive liability following the exit of the office lease held by a fellow group undertaking.

ISO Health Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2022
1
Accounting policies
(Continued)
Page 15
1.4
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Plant and equipment
25% on reducing balance
Fixtures and fittings
25% on reducing balance
Computer equipment
33% on cost

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

1.5
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible 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).

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.

1.6
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand and deposits held at call with banks.

1.7
Financial instruments
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.

ISO Health Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2022
1
Accounting policies
(Continued)
Page 16
Impairment of financial assets

Financial assets are assessed for indicators of impairment at each reporting date.

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.

Basic financial liabilities

Basic financial liabilities, including creditors and loans from fellow group companies, 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.

1.8
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

ISO Health Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2022
1
Accounting policies
(Continued)
Page 17
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.

1.9
Leases

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

1.10
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

2
Judgements and key sources of estimation uncertainty

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

ISO Health Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2022
2
Judgements and key sources of estimation uncertainty
(Continued)
Page 18
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.

Turnover

In the current year, the company implemented a change in the way that it assesses the stage of completion relating to services that are supplied on a fixed fee basis. The company now assesses the progress of a project by reference to the amount of effort incurred on that project as a proportion of the total actual (or estimated) effort required for that project. The company previously assessed the stage of completion by reference to the delivery of certain milestones within each project. The impact of this change was a decrease in revenue of £809,902. The company has reported total revenue of £13,561,584 for 2022.

3
Turnover
2022
2021
£
£
Turnover analysed by class of business
Revenue from third party customers
13,561,584
12,087,958
2022
2021
£
£
Turnover analysed by geographical market
United Kingdom
8,684,838
7,650,468
Europe
3,652,135
2,044,074
Rest of the world
1,224,611
2,393,416
13,561,584
12,087,958
4
Operating profit
2022
2021
Operating profit for the year is stated after charging:
£
£
Exchange losses
63,432
12,687
Fees payable to the company's auditor for the audit of the company's financial statements
31,300
27,000
Depreciation of owned tangible fixed assets
6,855
14,138
Loss on disposal of tangible fixed assets
2,798
-
Operating lease charges
764,199
733,262
ISO Health Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2022
Page 19
5
Employees

The company uses the services of employees from a fellow group undertaking and does not have any contractual employees under service contracts.

 

The average monthly number of persons allocated to the company is 63 (2021: 74).

2022
2021
Number
Number
Total
-
0
-
0

Their aggregate remuneration comprised:

2022
2021
£
£
Wages and salaries
3,399,654
4,286,743
Social security costs
401,502
493,295
Pension costs
180,789
229,155
3,981,945
5,009,193
6
Interest payable and similar expenses
2022
2021
£
£
Other finance costs:
Other interest
7,372
-
0
7
Taxation
2022
2021
£
£
Current tax
UK corporation tax on profits for the current period
242,170
27,985
Deferred tax
Origination and reversal of timing differences
(1,012)
(5,683)
Total tax charge
241,158
22,302
ISO Health Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2022
7
Taxation
(Continued)
Page 20

The actual 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:

2022
2021
£
£
Profit before taxation
595,849
3,648,027
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
113,211
693,125
Tax effect of expenses that are not deductible in determining taxable profit
127,530
10,233
Change in unrecognised deferred tax assets
-
0
(2,650)
Effect of change in corporation tax rate
554
(120)
Group relief
-
0
(678,286)
Other permanent differences
(137)
-
0
Taxation charge for the year
241,158
22,302
8
Tangible fixed assets
Plant and equipment
Fixtures and fittings
Computer equipment
Total
£
£
£
£
Cost
At 1 January 2022
6,238
1,169
52,066
59,473
Disposals
(6,238)
(1,169)
(30,047)
(37,454)
At 31 December 2022
-
0
-
0
22,019
22,019
Depreciation and impairment
At 1 January 2022
3,661
736
41,933
46,330
Depreciation charged in the year
329
75
6,451
6,855
Eliminated in respect of disposals
(3,990)
(811)
(29,855)
(34,656)
At 31 December 2022
-
0
-
0
18,529
18,529
Carrying amount
At 31 December 2022
-
0
-
0
3,490
3,490
At 31 December 2021
2,577
433
10,133
13,143
ISO Health Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2022
Page 21
9
Debtors
2022
2021
Amounts falling due within one year:
£
£
Trade debtors
4,401,377
3,807,643
Amounts owed by group undertakings
6,200,701
5,062,771
Other debtors
149,350
149,350
Prepayments and accrued income
119,438
88,447
10,870,866
9,108,211
Deferred tax asset (note 11)
1,512
500
10,872,378
9,108,711
10
Creditors: amounts falling due within one year
2022
2021
£
£
Trade creditors
154,902
186,862
Corporation tax
282,190
518,005
Other taxation and social security
544,896
594,698
Accruals and deferred income
2,269,206
2,004,342
3,251,194
3,303,907
11
Deferred taxation

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

Assets
Assets
2022
2021
Balances:
£
£
Accelerated capital allowances
1,512
500
2022
Movements in the year:
£
Asset at 1 January 2022
(500)
Credit to profit or loss
(1,012)
Asset at 31 December 2022
(1,512)
ISO Health Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2022
11
Deferred taxation
(Continued)
Page 22

The deferred tax asset set out above is expected to reverse within 12 months and relates to the utilisation of tax losses against future expected profits of the same period.

12
Share capital
2022
2021
2022
2021
Ordinary share capital
Number
Number
£
£
Issued and fully paid
A Class Ordinary Shares of £1 each
90
90
90
90
B Class Ordinary Shares of £1 each
55
55
55
55
C Class Ordinary Shares of £1 each
55
55
55
55
200
200
200
200

All classes of ordinary shares have the same voting rights and rights to dividends.

13
Operating lease commitments
Lessee

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

2022
2021
£
£
Within one year
-
0
52,045
14
Ultimate controlling party

The company considered its immediate parent company to be W2O London TopCo Limited, a company registered in England and Wales. The ultimate parent company is W2O Holdings Inc. The registered office address is 199 Water Street 14th Floor New York, NY 10038 United States of America.

 

W2O Holdings Inc. is the largest and smallest company in the group of which the company is a member which prepares consolidated accounts.

ISO Health Limited
Notes to the Financial Statements (Continued)
For the year ended 31 December 2022
Page 23
15
Cash (absorbed by)/generated from operations
2022
2021
£
£
Profit for the year after tax
354,691
3,625,725
Adjustments for:
Taxation charged
241,158
22,302
Finance costs
7,372
-
0
Loss on disposal of tangible fixed assets
2,798
-
Depreciation and impairment of tangible fixed assets
6,855
14,138
Movements in working capital:
Increase in debtors
(1,762,655)
(2,484,863)
Increase in creditors
183,102
291,624
Cash (absorbed by)/generated from operations
(966,679)
1,468,926
16
Analysis of changes in net funds
1 January 2022
Cash flows
31 December 2022
£
£
£
Cash at bank and in hand
2,935,532
(1,452,036)
1,483,496
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