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Boots Hearingcare Limited

Registered number: 00823009
Annual report and
 financial statements
For the year ended 31 March 2024

 
BOOTS HEARINGCARE LIMITED
 
 
COMPANY INFORMATION


Directors
M Wanna 
S James 
B Christ 
S Hunter 
O Lux (appointed 8 June 2024)




Company secretary
S Reece-Jones



Registered number
00823009



Registered office
21 Trinity Square
Llandudno

Conwy

LL30 2RH




Independent auditor
Forvis Mazars LLP
Chartered Accountants & Statutory Auditor

One St. Peter's Square

Manchester

M2 3DE




Bankers
HSBC Bank Plc
4 Hardman Square

Spinningfields

Manchester

M3 3EB





 
BOOTS HEARINGCARE LIMITED
 

CONTENTS



Page
Strategic Report
 
1 - 4
Directors' Report
 
5 - 9
Directors' Responsibilities Statement
 
10
Independent Auditor's Report to the members of Boots Hearingcare Limited
 
11 - 14
Statement of Comprehensive Income
 
15
Statement of Financial Position
 
16 - 17
Statement of Changes in Equity
 
18
Notes to the Financial Statements
 
19 - 39


 
BOOTS HEARINGCARE LIMITED
 
 
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2024

Introduction
 
The Directors present their Strategic Report for the year ended 31 March 2024. The comparative information covers the year ended 31 March 2023.

Review of business
 
This review has been prepared by the Directors in accordance with the requirements of the Companies Act 2006.
In carrying out the review of the development and financial performance of the Company during the financial year, together with the financial position of the Company at the end of the year, the Board has determined that the following key performance indicators (KPIs) represent the most effective measures of the Company’s progress:



Year to 31 March 2024 £'000
 

Average growth

Year to 31 March 2023 £'000

Average growth
Turnover and growth
146,050

4.2%

140,184

-1.6%
Gross profit
60,276



58,075


Operating profit
21,843



24,122


Net assets and shareholders' funds
10,844



9,142



Turnover

Average growth was an increase of 4.2% in FY 2024 compared to FY 2023 and compares with an annualised growth rate of 7.6% per annum over the 4 years to 31 March 2024. These 4 years illustrate the achievement of our goal: To pioneer, innovate and sustainably grow market share to realise growth in annual revenue. These 4 years include Covid and Covid rebound years, plus the effects on the UK economy and our customers of the war in Ukraine.

Gross margin

Gross margin performance (year ended 31 March 2024: +41.3%; year ended 31 March 2023: +41.4%) as reported in these KPIs is a blend of margins achieved across the range of products and services.

Operating profit

Operating profit margin: FY 2024 15.0%, FY 2023: 17.2%

The Company’s position at 31 March 2024

As at 31 March 2024, the Company had net assets of £10,843,855 (31 March 2023: £9,142,014).

Page 1

 
BOOTS HEARINGCARE LIMITED
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024

Principal risks and uncertainties
 
The Company is exposed to a number of financial risks including price risk and credit risk. The Company does not use derivatives as part of its financial risk management.

Price risk

Our differentiated position within the market place allows us to minimise any risk from competitor pricing.

Credit risk

The Company ensures that strong credit control processes are in place to minimise any credit risk.

Future developments in the Company’s business
 
Future developments in the Company’s business may be affected by the challenges to UK trading conditions. Boots Hearingcare and our partners will continue to take all necessary measures to protect our customers and colleagues. The Company’s professionalism and the strength of its partnerships with Sonova Group and with Boots are expected to maintain the robust financial performance of the Company together with its financial position.

As a result, the Company’s dynamism is expected to continue to produce good growth, offering consumers the most comprehensive hearing care services in the country. The Company’s reputation for innovative hearing healthcare solutions continues to grow and be further enhanced through the continued strengthening of the long standing relationship that exists with Sonova Holding AG and with Boots.

Delivery of the Company’s full synergies and strengths will continue to be developed.

Section 172(1) Statement
 
The Board of Boots Hearingcare Limited comprises Directors from Sonova (51% owned) and Directors from Boots (49% owned). This reflects ownership and control of the Company, which is effectively a partnership delivering hearing healthcare as part of the full range of healthcare solutions provided by Boots.

The Directors of Boots Hearingcare – as those of all UK Companies, must act in accordance with the duties detailed in section 172 of the UK Companies Act 2006.

The Directors of the Company act in the way they consider, in good faith, would be most likely to promote the success of the Company for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to:

the likely consequences of any decision in the long term;
the interest of the Company’s employees;
the need to foster the Company’s business relationships with suppliers and customers;
the impact of the Company’s operations on the community and environment;
maintaining the Company’s reputation for high standards of business conduct; and
the need to act fairly between members of the Company.


Page 2

 
BOOTS HEARINGCARE LIMITED
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024

The Directors from Sonova and from Boots meet regularly with the Company’s Hearingcare Leadership Team to discuss matters that are strategically significant, ensuring these are dealt with drawing on the ethical codes of conduct, experience, healthcare and technical excellence of both Sonova as a leading global hearingcare provider, together with and complemented by the joined up healthcare excellence of Boots. In ensuring hearingcare excellence the requirement of ensuring good corporate governance is necessarily essential to Boots Hearingcare as well as to our Partners Sonova and Boots. Working together, the highest of professional standards in hearing healthcare excellence require good corporate governance to promote the success of the company for the benefit of its customers as well as for that of both its shareholders and stakeholders.

The Directors behave responsibly towards its shareholders and stakeholders and aim to promote the long term success of the Company by considering certain stakeholder groups as noted below as being fundamental to this objective.

Shareholders: The Directors of Boots Hearingcare Limited are always mindful of their obligations to the shareholders of their Groups as embodied in the strategic priorities of the wider Sonova Group and the wider Walgreens Boots Alliance, Inc. Group when setting the strategic direction of the Company and regularly meeting with the Company’s Hearingcare Leadership Team to oversee any key decisions required in the day-to-day management activities. The regular meetings including formal Board meetings, are a collaboration of the Joint Venture Partners with a view to maximise opportunities, create synergies and align an agreed corporate strategy.
Employees: We invest effectively in the continual advancement of our employees’ skills and  competencies. Our clinicians are engaged on a continual professional development programme. The Company’s Hearingcare Leadership Team (HLT) engage with employees using multiple methods  including newsletters, consultations and surveys. Both the Company’s engagement with employees and our policy of promoting equal opportunities and diversity are described in the Directors’ Report. The success of Boots Hearingcare Limited stems not only from our innovative Hearingcare and joined up healthcare solutions, but most importantly from our people and our culture.
Professional excellence and people are necessarily at the heart of our organisation. We invest in the         supporting infrastructure that enable our clinicians to deliver best in class customer care. To support the growth of the Company we train dispensers who are eligible to register with the Health and Care Professions Council (HCPC). The HCPC regulate the legal protected function (prescription and sale of hearing aids) and  title of the Hearing Aid Dispenser with an overall aim of ensuring public protection. We strive to ensure we are an Employer of Choice.
Customers: Understanding our customers’ articulated and unexpressed needs and turning them into our challenges – this is what motivates us daily – and ultimately leads to innovative leadership in products, solutions, processes across all disciplines in our caring provision of specialist hearing healthcare excellence within the joined up healthcare provision of Boots. The Board has specific responsibility for oversight of clients, customers and customer feedback processes in ensuring our people and our culture provide the best in hearing healthcare to our customers. We have formal customer feedback and engagement channels to ensure we continue to meet customer expectations.

Page 3

 
BOOTS HEARINGCARE LIMITED
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024

Suppliers: Our suppliers are an integral part of our value chain: a risk to them is also a risk to us and to our customers. Good communication and feedback are fundamental to our protection and enhancement of this chain. The main sources of supplies within Boots Hearingcare Limited are provided by Sonova Group and by Walgreens Boots Group. Other supplies are sourced through the external supply chain, and all our suppliers are required to be as committed to sustainable development as we are. Critical suppliers are reviewed by our due diligence processes. We value all of our suppliers and have multi-year contracts with our key suppliers. Through our partnership with Sonova and Boots as well as through our work we create positive change for the people and communities with which we interact. We remain committed to establishing good working relationships with all our suppliers.
Regulators: As clinicians we work closely with the HCPC in the continual advancement of our clinicians skills and competencies. We support our audiologists and qualified professionals with their ongoing training, development and adherence to regulatory registrations. As employers we ensure all regulatory requirements are checked and compliance ensured. We work to maintain transparent, constructive and professional relationships with the HCPC and with all other applicable regulatory authorities in the continuous verification of our compliance.
It is important to Sonova, Boots and Boots Hearingcare that our continuing effective dialogue as shareholder-joint venture partners, employees and hearing healthcare professionals, customers and  customer feedback processes continues to flourish internally at all levels as well as with our suppliers so that the achievement of our strategy and objectives properly considers, adjusts and takes into account all issues raised by all stakeholders, ensuring feedback is heard and dialogue is continually productive.

The Board confirm the application and compliance with good corporate governance throughout the financial year ended 31 March 2024 in their purpose, strategy and consideration of decisions taken  both for the current year and for the long term future developments of the enterprise. Future developments in the Company’s business embrace and depend upon this good corporate governance in the continued achievement of providing consumers with the most comprehensive care in innovative hearing healthcare solutions.


Approved by the Directors on 29 August 2024 and signed by their order by.


S Reece-Jones
Company Secretary

Page 4

 
BOOTS HEARINGCARE LIMITED
 
 
 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2024

The Directors present their report and the financial statements for the year ended 31 March 2024.

Principal activities

The principal activity of the Company during the year was the hearing assessment and ear health consultation of members of the general public and where appropriate, prescribing and fitting innovative hearing healthcare solutions including hearing aids, ancillary equipment and rehabilitative services.

Results and dividends

The profit for the year, after taxation, amounted to £16,593,973 (2023: £19,727,847).

During the year interim dividends were paid of £15,000,000 (2023: £22,500,000). The Directors have not recommended the payment of a final dividend (2023: £nil).

Directors

The Directors who served during the year were:

M Wanna 
S James 
B Christ 
S Hunter 
O Lux (appointed 8 June 2024)
C Fond (resigned 8 June 2024)
 
Qualifying indemnity provision

The Company has purchased Directors and officers liability insurance in respect of all of the Company’s Directors.

Financial risk management

The Company finances its operations through a mixture of retained profits and cash generated from operations and where necessary may fund expansion of capital expenditure programmes through loan finance, lease finance and hire purchase borrowings. The management’s objectives are to:

retain sufficient liquid funds to enable it to meet its day to day obligations as they fall due whilst maximising returns on surplus funds; and
match the repayment schedule of any external borrowings with the expected future cash flows expected to arise from the Company’s trading activities.

Where appropriate, funds are held primarily in short term variable rate deposit accounts and money market investments. The Directors believe that this gives them the flexibility to release cash resources at short notice and also allows them to take advantage of changing conditions in the finance markets as they arise.

The Company does not actively use derivative financial instruments as part of its financial risk management. It is exposed to the usual credit risk but seeks to mitigate any cash flow risk associated with selling on credit and manages this through strong credit control procedures.
Page 5

 
BOOTS HEARINGCARE LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024

Going concern
The results for the year ended 31 March 2024 show a 4.2% increase in annual revenue compared with the year ended 31 March 2023, which, overall, shows the year ended 31 March 2024 achieved an annualised revenue growth of 7.6% over the 4 years to 31 March 2024. This annualised growth is in line with our goal to pioneer, innovate and sustainably grow market share to realise growth in annual revenue.
Taking account of the major uncertainties affecting both the UK and global economies, annual revenue to 31 March 2025 is expected, as a minimum, to remain in line with the year ended 31 March 2024.
On the basis of their assessment of the Company's financial position and resources, the Directors believe that the Company is well placed to manage its business risks. Therefore, the Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Thus, they continue to adopt the going concern basis of accounting in preparing the annual financial statements.
In reaching this assessment, the Directors observe that the Company had a strong liquidity position with a cash balance amounting to £10.8m (2023: £15.1m). The Company also maintained a net asset position of £10.8m as at 31 March 2024 (2023: £9.1m), and excluding debtors due in greater than one year, had net current assets of £9.7m (2023: £8.1m). Given the entity had no external borrowings in place, coupled with this strong financial position, the Directors had no concern in relation to the ability of the business to continue as a going concern.
Furthermore, the Directors have given consideration to the period ending 31 March 2025. Under the worst-case scenario, which the Directors have assumed to be a recurrence of the COVID year ended 31 March 2021 conditions, the cash balance would also be protected as no dividend would be distributed in this scenario.

Political and charitable donations

During the year, the Company made no charitable donations (2023: £nil). No political donations were made (2023: £nil).

Future developments in the Company's business

Please refer to the Strategic Report on page 2. 

Page 6

 
BOOTS HEARINGCARE LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024

Engagement with employees

Good communications and consultation are central to the Company’s management process and fundamental to the success of this professional practice. The Company:

provides employees systematically with information on matters of concern to them as employees;
consults employees or their representatives on a regular basis, so that the Company can take the views of employees into account in making decisions that are likely to affect their interests;
encourages the involvement of employees in the Company’s performance; and
achieves a common awareness on the part of all employees of the financial and the economic factors that affect the Company’s performance.

Disabled employees

The Company’s employment policy is to promote equal opportunities and diversity across the Company. This involves recruiting, retaining, rewarding and developing people solely on the basis of ability, with reasonable adjustments to working environment, working arrangements and working conditions to support disabled employees. We are committed, wherever possible, to supporting the rehabilitation and return to work of employees who become disabled during their career with us. Appropriate arrangements are made for the continued employment and training, career development and promotion of disabled persons employed by the Company.

Page 7

 
BOOTS HEARINGCARE LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024

Energy and carbon reporting

Boots Hearingcare Limited is committed to the protection of the environment and the reduction of its carbon footprint. In accordance with changes introduced by the 2018 Regulations of the Companies Act 2006, the Directors of the Company are required to report on the energy and carbon information relating to the Company.

The related carbon footprint, measured in CO2e tonnes, is calculated from the usage data submitted for energy usage from gas and electricity and business travel activity. Data is converted using the UK Department for Environment, Food & Rural Affairs (DEFRA) CO2e factors and conversion factors are updated annually.

UK greenhouse gas emissions and energy use data for the period 1 April to 31 March 2024
Current reporting year 2024
Reporting year  2023



Energy consumption used to calculate emissions (kWh)
706,325
535,134



Scope 1 (emissions in metric tonnes CO2e)





Owned transport
7.36
14.53
Total Scope 1
7.36
14.53



Scope 2 (emissions in metric tonnes CO2e)





Purchased gas
6.51
12.79
Purchased electricity
25.32
30.94
Total Scope 2
31.83
43.73



Scope 3 (emissions in metric tonnes CO2e)





Business travel in employee owned vehicles
164.27
185.47
Total Scope 3
164.27
185.47



Total gross emissions in metric tonnes CO2e
203.46
243.73

Intensity ratio (Tonnes CO2e per £1 million sales)

1.39

1.74


We have continued to replace inefficient lighting with LED (light emitting diode) technology and continued increasing video conferencing technology for staff meetings, to reduce the need for travel between sites.

Disclosure of information to auditor

Each of the persons who are Directors at the time when this Directors' Report is approved has confirmed that:
 
so far as the Directors are aware, there is no relevant audit information of which the Company's auditor is unaware; and

the Directors have taken all the steps that ought to have been taken as Directors in order to be aware of any relevant audit information and to establish that the Company's auditor is aware of that information.

Page 8

 
BOOTS HEARINGCARE LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024


Auditor

The auditor, Forvis Mazars LLPwill be proposed for reappointment at the annual general meeting.

This report was approved by the board on 29 August 2024 and signed on its behalf.
 


S Reece-Jones
Company Secretary

Page 9

 
BOOTS HEARINGCARE LIMITED
 
 
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MARCH 2024

The Directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare the financial statements in accordance with 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 of the profit or loss of the Company for that period.

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

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

make judgments and accounting estimates that are reasonable and prudent;

state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and 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 hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Page 10

 
BOOTS HEARINGCARE LIMITED
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF BOOTS HEARINGCARE LIMITED
 

Opinion

We have audited the financial statements of Boots Hearingcare Limited (the ‘Company’) for the year ended 31 March 2024 which comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Changes in Equity and notes to the financial statements, including a summary of significant accounting policies. 
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including 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:

give a true and fair view of the state of the Company’s affairs as at 31 March 2024 and of its profit 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 "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.
Page 11

 
BOOTS HEARINGCARE LIMITED
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF BOOTS HEARINGCARE LIMITED
 

Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the 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 12

 
BOOTS HEARINGCARE LIMITED
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF BOOTS HEARINGCARE LIMITED
 

Responsibilities of Directors

As explained more fully in the Directors' Responsibilities Statement set out on page 10, 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 intend either to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
 
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.
 
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. 

Based on our understanding of the Company and its industry, we considered that non-compliance with the following laws and regulations might have a material effect on the financial statements: employment regulation, health and safety regulation, anti-money laundering regulation. 

To help us identify instances of non-compliance with these laws and regulations, and in identifying and assessing the risks of material misstatement in respect to non-compliance, our procedures included, but were not limited to:
Inquiring of management and, where appropriate, those charged with governance, as to whether the company is in compliance with laws and regulations, and discussing their policies and procedures regarding compliance with laws and regulations;
Inspecting correspondence, if any, with relevant licensing or regulatory authorities;
Communicating identified laws and regulations to the engagement team and remaining alert to any indications of non-compliance throughout our audit; and
Considering the risk of acts by the company which were contrary to applicable laws and regulations, including fraud.  

We also considered those laws and regulations that have a direct effect on the preparation of the financial statements, such as tax legislation, pension legislation, the Companies Act 2006. 
Page 13

 
BOOTS HEARINGCARE LIMITED
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF BOOTS HEARINGCARE LIMITED
 

In addition, we evaluated the Directors' and management’s incentives and opportunities for fraudulent manipulation of the financial statements, including the risk of override of controls, and determined that the principal risks were related to posting manual journal entries to manipulate financial performance, management bias through judgements and assumptions in significant accounting estimates, revenue recognition (which we pinpointed to the cut-off assertion), and significant one-off or unusual transactions.

Our audit procedures in relation to fraud included but were not limited to:
Making enquiries of the directors and management on whether they had knowledge of any actual, suspected or alleged fraud;
Gaining an understanding of the internal controls established to mitigate risks related to fraud;
Discussing amongst the engagement team the risks of fraud; and
Addressing the risks of fraud through management override of controls by performing journal entry testing.

There are inherent limitations in the audit procedures described above and the primary responsibility for the prevention and detection of irregularities including fraud rests with management. As with any audit, there remained a risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal controls.

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 auditor’s report.

Use of the audit 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.




Christopher Martin (Senior Statutory Auditor)

  
for and on behalf of Forvis Mazars LLP


Chartered Accountants and Statutory Auditor 
One St. Peter's Square
Manchester 
M2 3DE

30 August 2024
Page 14

 
BOOTS HEARINGCARE LIMITED
 
 
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2024

2024
2023
Note
£
£

  

Turnover
 4 
146,050,305
140,184,359

Cost of sales
  
(85,774,064)
(82,108,953)

Gross profit
  
60,276,241
58,075,406

Administrative expenses
  
(38,510,472)
(33,983,103)

Other operating income
 5 
77,000
30,000

Operating profit
 6 
21,842,769
24,122,303

Interest receivable and similar income
 10 
295,524
160,650

Profit before tax
  
22,138,293
24,282,953

Tax on profit
 11 
(5,544,320)
(4,555,106)

Profit for the financial year
  
16,593,973
19,727,847

All amounts relate to continuing operations. 
There were no recognised gains and losses for 2024 or 2023 other than those included in the Statement of Comprehensive Income.  

There was no other comprehensive income for 2024 (2023£nil).

The notes on pages 19 to 39 form part of these financial statements.

Page 15

 
BOOTS HEARINGCARE LIMITED
REGISTERED NUMBER: 00823009

STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2024

2024
2023
Note
£
£

Fixed assets
  

Intangible assets
 13 
126,021
71,968

Tangible assets
 14 
2,525,214
2,030,663

Investments
 15 
85
85

  
2,651,320
2,102,716

Current assets
  

Stocks
 16 
2,550,844
1,415,671

Debtors: amounts falling due after more than one year
 17 
3,324,072
3,482,621

Debtors: amounts falling due within one year
 17 
15,442,152
12,507,748

Cash at bank and in hand
 18 
10,782,392
15,103,756

  
32,099,460
32,509,796

Creditors: amounts falling due within one year
 19 
(19,037,771)
(20,918,187)

Net current assets
  
 
 
13,061,689
 
 
11,591,609

Total assets less current liabilities
  
15,713,009
13,694,325

Provisions for liabilities
  

Deferred tax
 20 
(438,136)
(278,558)

Other provisions
 21 
(4,431,018)
(4,273,753)

  
 
 
(4,869,154)
 
 
(4,552,311)

Net assets
  
10,843,855
9,142,014


Capital and reserves
  

Called up share capital 
 22 
133
133

Share premium account
 23 
542,420
542,420

Capital redemption reserve
 23 
21
21

Profit and loss account
 23 
10,301,281
8,599,440

  
10,843,855
9,142,014


Page 16

 
BOOTS HEARINGCARE LIMITED
REGISTERED NUMBER: 00823009
    
STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 MARCH 2024

The financial statements were approved and authorised for issue by the Board and were signed on its behalf on 30 August 2024. 




S Hunter
Director

The notes on pages 19 to 39 form part of these financial statements.

Page 17

 
BOOTS HEARINGCARE LIMITED
 

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2024


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

£
£
£
£
£


At 1 April 2022
133
542,420
21
11,300,159
11,842,733


Comprehensive income for the year

Profit for the year
-
-
-
19,727,847
19,727,847
Total comprehensive income for the year
-
-
-
19,727,847
19,727,847


Contributions by and distributions to owners

Dividends: Equity capital
-
-
-
(22,500,000)
(22,500,000)

Recognition of equity-settled share-based payments in the year
-
-
-
71,434
71,434


Total transactions with owners
-
-
-
(22,428,566)
(22,428,566)



At 1 April 2023
133
542,420
21
8,599,440
9,142,014


Comprehensive income for the year

Profit for the year
-
-
-
16,593,973
16,593,973
Total comprehensive income for the year
-
-
-
16,593,973
16,593,973


Contributions by and distributions to owners

Dividends: Equity capital
-
-
-
(15,000,000)
(15,000,000)

Recognition of equity-settled share-based payments in the year
-
-
-
107,868
107,868


Total transactions with owners
-
-
-
(14,892,132)
(14,892,132)


At 31 March 2024
133
542,420
21
10,301,281
10,843,855


The notes on pages 19 to 39 form part of these financial statements.

Page 18

 
BOOTS HEARINGCARE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

1.


General information

Boots Hearingcare Limited (the “Company”) is a private company limited by shares and it is incorporated and domiciled in England and Wales. The address of its registered office is 21 Trinity Square, Llandudno, Conwy, LL30 2RH. The Company’s registered number is 823009.
The principal activity of the Company during the year was the hearing assessment and ear health consultation of members of the general public and where appropriate, prescribing and fitting innovative hearing healthcare solutions including hearing aids, ancillary equipment and rehabilitative services.

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.

These financial statements have been presented in pound sterling which is the functional currency of the Company, and rounded to the nearest pound.

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

The following principal accounting policies have been applied:

  
2.2

Financial reporting standard 102 - reduced disclosure exemptions

The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
  the requirements of Section 7 Statement of Cash Flows;
  the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
  the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45,     11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
  the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27,     12.29(a), 12.29(b) and 12.29A;
  the requirements of Section 26 Share-based Payments paragraphs 26.18(b), 26.19 to 26.21     and 26.23;
  the requirements of Section 33 Related Party Disclosures paragraph 33.7.
This information is included in the consolidated financial statements of Sonova Holding AG as at 31  March 2024 and these financial statements may be obtained from Sonova Holding AG,  Laubisruetistrasse 28, 8712 Staefa, Switzerland.

Page 19

 
BOOTS HEARINGCARE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

2.Accounting policies (continued)

  
2.3

Exemption from preparing consolidated financial statements

The Company is a parent company that is also a subsidiary included in the consolidated financial statements of a larger group by a parent undertaking and is therefore exempt from the requirement to prepare consolidated financial statements under Section 401 of the Companies Act 2006.

 
2.4

Going concern

The results for the year ended 31 March 2024 show a 4.2% increase in annual revenue compared with the year ended 31 March 2023, which, overall, shows the year ended 31 March 2024 achieved an annualised revenue growth of 7.6% over the 4 years to 31 March 2024. This annualised growth is in line with our goal to pioneer, innovate and sustainably grow market share to realise growth in annual revenue.
Taking account of the major uncertainties affecting both the UK and global economies, annual revenue to 31 March 2025 is expected, as a minimum, to remain in line with the year ended 31 March 2024.
On the basis of their assessment of the Company's financial position and resources, the Directors believe that the Company is well placed to manage its business risks. Therefore, the Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Thus, they continue to adopt the going concern basis of accounting in preparing the annual financial statements.
In reaching this assessment, the Directors observe that the Company had a strong liquidity position with a cash balance amounting to £10.8m (2023: £15.1m). The Company also maintained a net asset position of £10.8m as at 31 March 2024 (2023: £9.1m), and excluding debtors due in greater than one year, had net current assets of £9.7m (2023: £8.1m). Given the entity had no external borrowings in place, coupled with this strong financial position, the Directors had no concern in relation to the ability of the business to continue as a going concern.
Furthermore, the Directors have given consideration to the period ending 31 March 2025. Under the worst-case scenario, which the Directors have assumed to be a recurrence of the COVID year ended 31 March 2021 conditions, the cash balance would also be protected as no dividend would be distributed in this scenario.

Page 20

 
BOOTS HEARINGCARE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

2.Accounting policies (continued)

 
2.5

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is Great British pounds.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.

  
2.6

Turnover

Turnover represents the amounts (excluding value added tax) derived from the provision of goods and services to customers during the period.
Turnover is recognised after receipt of a customer’s order to the extent that the Company has performed its contractual obligations and the risks and rewards have passed to the buyer. For Hearing Aids, the product revenue is recognised when the customer order is placed after completion of relevant obligations whilst the professional services are recognised as each of the separate service components which comprise the care pathway are completed. A provision is made for services that have been invoiced that are yet to be performed.
Turnover is stated net of a provision for expected returns after the period end date based on historic rates of return.

 
2.7

Government grants

Grants are accounted under the accruals model as permitted by FRS 102. Grants relating to expenditure on tangible fixed assets are credited to profit or loss at the same rate as the depreciation on the assets to which the grant relates. The deferred element of grants is included in creditors as deferred income.
Grants of a revenue nature are recognised in the Statement of Comprehensive Income in the same period as the related expenditure.

 
2.8

Interest income

Interest income is recognised in the Statement of Comprehensive Income using the effective interest method.

Page 21

 
BOOTS HEARINGCARE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

2.Accounting policies (continued)

  
2.9

Employee benefits

The company provides a range of benefits to employees, including paid holiday arrangements, defined contribution pension plan and share based payments.
(i) Short term benefits
Short term benefits, including holiday pay and other similar non-monetary benefits, are recognised as an expense in the period in which the service is received.
(ii) Defined contribution pension plans
The Company operates a defined contribution benefit scheme. The assets of the scheme are held separately from those of the Company. Contributions to this scheme are charged to the Statement of Comprehensive Income in the year they are incurred.
(iii) Share-based payments
Equity-settled share-based payments are measured at fair value at the date of grant. The fair value determined at grant date of the equity-settled share-based payments is expensed on a straight line basis over the vesting period, based on an estimate of shares that will eventually vest.
The Company has taken advantage of the transition exemption under paragraph 35.10(b) of FRS 102 in respect of share based payment transactions on the date of transition to FRS 102 (1 April 2014) and has elected not to apply Section 26 Share based payments to equity instruments granted before the date of transition to FRS 102. The previous framework has been applied to instruments granted prior to the date of transition.

Page 22

 
BOOTS HEARINGCARE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

2.Accounting policies (continued)

 
2.10

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised on profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company operates and generates income.
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; and
  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 business combinations, when deferred tax is recognised on the differences between 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.

Page 23

 
BOOTS HEARINGCARE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

2.Accounting policies (continued)

  
2.11

Intangible assets

Goodwill
Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer's interest in the fair value of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated impairment losses. Goodwill is amortised on a straight line basis to the Statement of Comprehensive Income over its useful economic life. It is amortised to the income statement over its estimated economic life as below:
Advanced Hearing Group  - 15 years
All other acquisitions   - 10 years
Other intangible assets
Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.
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.
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
Software is amortised over its estimated useful life, of between 4 and 5 years, on a straight line basis.
Where factors, such as technological advancement or changes in market price, indicate that residual value or useful life have changed, the residual value, useful life or amortisation rate are amended prospectively to reflect the new circumstances.
The assets are reviewed for impairment if the above factors indicate that the carrying amount may be impaired.

 
2.12

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 24

 
BOOTS HEARINGCARE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

2.Accounting policies (continued)


2.12
Tangible fixed assets (continued)

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following basis:

Leasehold property
-
Over the life of the lease
Motor vehicles
-
5 years
Fixtures & fittings
-
6 years
Computer equipment
-
4 years

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

  
2.13

Leased assets

At inception the company assesses agreements that transfer the right to use assets. The assessment considers whether the arrangement is, or contains, a lease based on the substance of the arrangement.
(i) Lease incentives
Incentives received to enter into an operating lease are credited to the statement of comprehensive income to reduce the lease expense, on a straight-line basis over the period of the lease.
(ii) Operating leased assets – as a lessee
Leases that do not transfer all the risks and rewards of ownership are classified as operating leases. Payments under operating leases are charged to the statement of comprehensive income on a straight-line basis over the period of the lease.
The Company has taken advantage of the exemption under paragraph 35.10(p) of FRS 102 in respect of lease incentives on leases in existence on the date of transition to FRS 102 (1 April 2014) and continues to credit such lease incentives to the statement of comprehensive income over the period to the first review date on which the rent is adjusted to market rates.

 
2.14

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

  
2.15

Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first-in first-out basis.
At each reporting date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.

Page 25

 
BOOTS HEARINGCARE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

2.Accounting policies (continued)

 
2.16

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

 
2.17

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. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

 
2.18

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.

 
2.19

Provisions for liabilities

Provisions are recognised when an event has taken place that gives rise to a legal or constructive obligation, a transfer of economic benefits is probable and a reliable estimate can be made.
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
 
When payments are eventually made, they are charged to the provision carried in the Statement of Financial Position.

  
2.20

Impairment of non-financial assets

At each balance sheet date non-financial assets not carried at fair value are assessed to determine whether there is an indication that the asset may be impaired. If there is such an indication the recoverable amount of the asset is compared to the carrying amount of the asset.
The recoverable amount of the asset is the higher of the fair value less costs to sell and value in use. Value in use is defined as the present value of the future cash flows before interest and tax obtainable as a result of the asset’s continued use. These cash flows are discounted using a pre-tax discount rate that represents the current market risk-free rate and the risks inherent in the asset.
If the recoverable amount of the asset is estimated to be lower than the carrying amount, the carrying amount is reduced to its recoverable amount. An impairment loss is recognised in the profit and loss account, unless the asset has been revalued when the amount is recognised in profit and loss to the extent of any previously recognised revaluation. Thereafter any excess is recognised in the Profit and Loss account.
If an impairment loss is subsequently reversed, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but only to the extent that the revised carrying amount does not exceed the carrying amount that would have been determined (net of depreciation or amortisation) had no impairment loss been recognised in prior periods. A reversal of an impairment loss is recognised in the Statement of Comprehensive Income.

Page 26

 
BOOTS HEARINGCARE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

2.Accounting policies (continued)

  
2.21

Financial instruments

The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in 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. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost.
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 Statement of Comprehensive Income.
For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.
For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the Company would receive for the asset if it were to be sold at the reporting date.
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.

 
2.22

Dividends

Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.

Page 27

 
BOOTS HEARINGCARE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

3.


Judgments in applying accounting policies and key sources of estimation uncertainty

The preparation of the financial statements requires management to make judgments, estimates and assumptions that affect the application of the accounting policies and the reported amounts of assets and liabilities, turnover and expenses. Actual results may differ from these estimates. 
Estimates and underlying assumptions are continually evaluated and are based on historical experience and other factors, including expectations of future events that are reasonable under the circumstances. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.
The following judgments (apart from those involving estimates) have had the most significant effect on the financial statements:
i) Deferral of an amount of revenue for hearing aids, representing professional services invoiced that have yet to be performed
Turnover is recognised after receipt of a customer’s order to the extent that the Company has performed its contractual obligations and the risks and rewards have passed to the buyer. For hearing aids, the product revenue is recognised when the customer order is placed after completion of relevant obligations whilst the professional services are recognised as each of the separate service components which comprise the care pathway are completed. For unfitted hearing aids a provision of 38% of the invoiced value is made for services that have been invoiced that are yet to be performed.
The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below.
(i) Useful economic lives of tangible assets and intangible assets
The annual depreciation and amortisation charge for tangible assets and intangible assets is sensitive to changes in the estimated useful economic lives and residual values of the assets. The useful economic lives and residual values are re-assessed annually. They are amended when necessary to reflect current estimates, based on technological advancement, future investments, economic utilisation and the physical condition of the assets.
ii) Warranty provisions
Where extended warranties are separately sold, sales revenue is allocated to the term that the extended warranty covers. Where warranties are included with the products when the sale is made, cost of repairs is provided for based on proportion of historic returns, applied to the number of in-date sales and the standard cost of repairs. This proportion of historic returns is calculated annually and is currently in the region of 16% of the latter half of product lifecycle, being the term not covered by manufacturer’s warranty.
 


4.


Turnover

All turnover arose in respect of the principal activity of the Company. 

All turnover arose within the United Kingdom.

Page 28

 
BOOTS HEARINGCARE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

5.


Other operating income

2024
2023
£
£

Government grant
55,000
30,000

Other income
22,000
-

77,000
30,000


During the year the Company received income of £22,000 (2023: £nil) in relation to the repayment of training costs.
An additional £55,000 (2023: £30,000) was received in relation to the Welsh Business Finance Capital Investment ("BFCI") grant in relation to the office refurbishment and job safeguarding.


6.


Operating profit

Operating profit is stated after charging:

2024
2023
£
£

Depreciation of tangible fixed assets (note 14)
690,141
605,371

Amortisation of intangible assets (note 13)
54,204
53,433

Other operating lease charges (note 25)
- Land and buildings
359,329
353,725

- Plant and machinery 
 (including motor vehicles)
67,027
71,297


7.


Auditor's remuneration

During the year, the Company obtained the following services from the Company's auditor :


2024
2023
£
£

Fees payable to the Company's auditor for the audit of the Company's financial statements

80,000
70,000

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

Taxation compliance services
12,750
6,850

All non-audit services not included above
6,380
3,570

Page 29

 
BOOTS HEARINGCARE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

8.


Employees

Staff costs were as follows:


2024
2023
£
£

Wages and salaries
34,224,474
30,754,014

Social security costs
3,799,364
3,625,395

Share based payments
107,868
71,434

Cost of defined contribution scheme
667,228
575,678

38,798,934
35,026,521


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


        2024
        2023
            No.
            No.







Hearing assessment staff
437
418



Administrative staff
279
287

716
705


9.


Directors' remuneration

The remuneration of the Directors are paid by the parent company undertakings that make no recharge to the Company. They are Directors of a number of undertakings such that it is not possible to make an apportionment of their emoluments in respect of this Company. The Company’s immediate parent company is Sonova Holding AG, a company incorporated in Switzerland.


10.


Interest receivable and similar income

2024
2023
£
£


Bank interest receivable
64,502
30,403

Other interest receivable
231,022
130,247

295,524
160,650

Page 30

 
BOOTS HEARINGCARE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

11.


Tax on profit


2024
2023
£
£

Corporation tax


Current tax on profits for the year
5,398,881
4,410,064

Adjustments in respect of previous periods
(14,139)
(113,554)


5,384,742
4,296,510


Total current tax
5,384,742
4,296,510

Deferred tax


Origination and reversal of timing differences
159,578
258,596

Total deferred tax
159,578
258,596


Tax on profit
5,544,320
4,555,106

Factors affecting tax charge for the year

The tax assessed for the year is higher than (2023: lower than) the standard rate of corporation tax in the UK.

2024
2023
£
£


Profit on ordinary activities before tax
22,138,293
24,282,953


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2023: 19%)
5,534,574
4,613,761

Effects of:


Expenses not deductible for tax purposes
25,830
2,662

Fixed asset differences
44,693
(4,124)

Adjustments to tax charge in respect of prior periods
(14,139)
(113,554)

Origination and reversal of timing difference in relation to deferred tax
-
62,061

Non-taxable income
(7,500)
(5,700)

Short term timing difference
(39,138)
-

Total tax charge for the year
5,544,320
4,555,106

Page 31

 
BOOTS HEARINGCARE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

12.


Dividends

2024
2023
£
£


Equity shares Class A: £5,901.20 per £0.05 share
7,652,715
11,479,072


Equity shares Class B: £5,901.20 per £0.05 share
7,347,285
11,020,928

15,000,000
22,500,000


13.


Intangible assets




Computer software
Goodwill
Total

£
£
£



Cost


At 1 April 2023
1,519,258
7,112,071
8,631,329


Additions
108,257
-
108,257



At 31 March 2024

1,627,515
7,112,071
8,739,586



Amortisation


At 1 April 2023
1,447,290
7,112,071
8,559,361


Charge for the year
54,204
-
54,204



At 31 March 2024

1,501,494
7,112,071
8,613,565



Net book value



At 31 March 2024
126,021
-
126,021



At 31 March 2023
71,968
-
71,968



Page 32

 
BOOTS HEARINGCARE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

14.


Tangible assets





 Leasehold Property
Fixtures & fittings
Computer equipment
Total

£
£
£
£



Cost 


At 1 April 2023
61,548
3,279,242
6,632,328
9,973,118


Additions
-
650,114
534,578
1,184,692


Disposals
(61,548)
-
(451,705)
(513,253)



At 31 March 2024

-
3,929,356
6,715,201
10,644,557



Depreciation


At 1 April 2023
61,548
1,866,117
6,014,790
7,942,455


Charge for the year
-
337,516
352,625
690,141


Disposals
(61,548)
-
(451,705)
(513,253)



At 31 March 2024

-
2,203,633
5,915,710
8,119,343



Net book value



At 31 March 2024
-
1,725,723
799,491
2,525,214



At 31 March 2023
-
1,413,125
617,538
2,030,663

Page 33

 
BOOTS HEARINGCARE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

15.


Investments





Investments in subsidiaries

£



Cost


At 1 April 2023
85



At 31 March 2024
85





Subsidiary undertaking


The following was a subsidiary undertaking of the Company:

Name

Registered office

Class of shares

Holding

Boots Hearingcare Ireland Limited
Ireland
Ordinary
100%

On 24th April 2019 Boots Hearingcare Ireland Limited was incorporated in Ireland as a 100% owned subsidiary, to establish and grow Boots Hearingcare in Ireland. Working closely with Sonova AG and Boots Retail Ireland, the Company is assisting and supporting in growing its wholly owned subsidiary Boots Hearingcare Ireland Limited. 
The principal place of business of Boots Hearingcare Ireland Limited is 2nd floor, 5 Riverwalk, Citywest Business Campus, Citywest, Dublin 24, D24 TW13.


16.


Stocks

2024
2023
£
£

Raw materials and consumables
2,550,844
1,415,671


The amount of stocks recognised as an expense during the year was £38,321,096 (2023: £39,328,279). There is no material difference between the carrying amount of inventory and the replacement cost.

Page 34

 
BOOTS HEARINGCARE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

17.


Debtors

2024
2023
£
£

Due after more than one year

Prepayments and accrued income
3,324,072
3,482,621


2024
2023
£
£

Due within one year

Trade debtors
6,420,409
6,532,821

Amounts owed by Group undertakings
3,477,810
1,869,121

Amounts owed by own subsidiary
3,069,148
2,550,421

Other debtors
45,962
47,820

Prepayments and accrued income
1,608,428
1,507,565

Corporation tax
820,395
-

15,442,152
12,507,748



18.


Cash at bank and in hand

2024
2023
£
£

Cash at bank and in hand
10,782,392
15,103,756



19.


Creditors: Amounts falling due within one year

2024
2023
£
£

Trade creditors
1,664,269
2,455,250

Amounts owed to Group undertakings
7,954,803
8,693,748

Corporation tax
-
94,863

Other taxation and social security
1,227,614
711,698

Other creditors
173,931
358,190

Accruals and deferred income
8,017,154
8,604,438

19,037,771
20,918,187


The above loans are unsecured, interest free and repayable on demand.

Page 35

 
BOOTS HEARINGCARE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

20.


Deferred tax




2024
2023


£

£






At beginning of year
(278,558)
(19,962)


Charged to profit or loss
(159,578)
(258,596)



At end of year
(438,136)
(278,558)

The provision for deferred tax is made up as follows:

2024
2023
£
£


Accelerated capital allowances
348,990
149,380

Short term timing differences
89,146
129,178

438,136
278,558


21.


Other provisions




Warranty provisions
Provision for returns
Total

£
£
£





At 1 April 2023 
2,265,715
2,008,038
4,273,753


Released during the year 
(568,277)
(2,008,038)
(2,576,315)


Utilised during the year
(989,955)
-
(989,955)


Additional provisions
1,775,117
1,948,418
3,723,535



At 31 March 2024
2,482,600
1,948,418
4,431,018

The warranty provision is in respect of warranties provided to customers, for periods of up to three years. The provision is based on calculations taking into account past claims history and future expectations.

Page 36

 
BOOTS HEARINGCARE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

22.


Called up share capital

2024
2023
£
£
Allotted, called up and fully paid



1,353 (2023: 1,353) Ordinary A shares of £0.05 each
68
68
1,299 (2023: 1,299) Ordinary B shares of £0.05 each
65
65

133

133


The shares, which were reclassified on 20 February 2013 into 1,353 A and 1,299 B shares, rank pari passu except that the Ordinary A shares were to receive a priority dividend and/or return of capital of £4,570,973 before the Ordinary B shares would entitle their holders to any economic rights. That obligation to the Ordinary A shareholders has since been discharged in full by priority dividend.       



23.


Reserves

Share premium account

Share premium represents the amount above the nominal value received for issued share capital, less transaction costs.

Capital redemption reserve

The capital redemption reserve represents the value of the Company's own shares which have been repurchased.

Profit and loss account

This reserve includes the cumulative profits or losses less dividends distributed to shareholders.


24.


Pension commitments

The Company has contributed to Government scheme (NEST) or to employee personal pension plans – operated as defined contribution pension schemes. The assets of the schemes are held separately from those of the Company in independently administered funds. Contributions paid during the year to the Government scheme (NEST) were £653,213 (year ended 31 March 2023: £563,322). There were outstanding contributions at 31 March 2024 of £279 (31 March 2023 outstanding contributions payable £294). In addition to the defined contribution pension schemes the Company also contributes towards its employees’ personal pension plans. The pension cost charge in relation to these contributions paid in the year totalled £14,588 (year ended 31 March 2023 £12,356). At 31 March 2024 the outstanding contributions were £nil (31 March 2023: £nil).     

Page 37

 
BOOTS HEARINGCARE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

25.


Commitments under operating leases

At 31 March 2024 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

2024
2023
£
£

Land and buildings


Not later than 1 year
352,750
275,117

Later than 1 year and not later than 5 years
1,204,167
826,553

Later than 5 years
722,917
-

2,279,834
1,101,670

2024
2023

£
£

Other


Not later than 1 year
40,355
13,876

Later than 1 year and not later than 5 years
17,294
91,244

57,649
105,120

The amount of operating leases recognised as an expense during the year was £426,356 (2023: £425,022).

Page 38

 
BOOTS HEARINGCARE LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

26.


Related party transactions

The Company’s immediate parent company is Sonova Holding AG, a company incorporated in Switzerland, which is also the Company’s ultimate parent company and controlling party, heading the group of which the Company is a member.       
The Company entered into transactions with Group companies, wholly owned by Sonova Holding AG. The Company made purchases from group companies in the year totalling £37,965,610 (2023: £36,659,824). Included within debtors due within one year are amounts owed to Group companies as at 31 March 2024 of £3,477,810 (2023: £1,869,120). Included within creditors due within one year are amounts owed to Boots UK Limited ("Boots") as at 31 March 2024 of £2,076,848 (2023: £1,235,479). 
During the year ended 31 March 2013, Boots acquired a 49% minority investment in the Company. The Company made purchases from Boots in the year totalling £21,188,028 (2023 £19,781,401). Included within creditors due within one year are amounts owed to Boots as at 31 March 2024 of £5,877,954 (2023: £7,458,269).  
The Company has contributed to a Government scheme (NEST) or to employee personal pension plans. See note 24.
On 24 April 2019 Boots Hearingcare Ireland Limited was incorporated in Ireland as a 100% owned subsidiary, to establish and grow Boots Hearingcare in Ireland. The Company made sales to Boots Hearingcare Ireland Limited in the year totalling £nil (2023: £nil). Included within debtors due within one year are amounts owed by Boots Hearingcare Ireland Ltd at 31 March 2024 of £3,069,148 (2023: £2,550,421), on which interest is charged at 3% over Bank of England base rate.
No other material transactions with related parties were undertaken such as are required to be disclosed under section 33.1A of FRS 102.       


27.


Subsidiary company

On 24 April 2019 Boots Hearingcare Ireland Ltd was incorporated in Ireland as a 100% owned subsidiary, to establish and grow Boots Hearingcare in Ireland. Working closely with Sonova AG and Boots Retail Ireland, the Company is assisting and supporting in growing its wholly owned subsidiary Boots Hearingcare Ireland Ltd.
  
As a qualifying entity, the Company has taken advantage of the exemption for qualifying entities under FRS102 from the requirement to present consolidated financial statements in which it consolidates its investment in its wholly owned subsidiary Boots Hearingcare Ireland Ltd.  


28.


Controlling party

The immediate and ultimate parent company and controlling party is Sonova Holding AG, a company incorporated in Switzerland which heads the only group of which the Company is a member (which as the only group is therefore both the smallest and largest group). Copies of the ultimate parent company’s financial statements can be obtained from: Sonova Holding AG, Laubisruetistrasse 28, 8712 Staefa, Switzerland.

Page 39