Company Registration No. 10710780 (England and Wales)
THE EVEWELL (HARLEY STREET) LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
THE EVEWELL (HARLEY STREET) LIMITED
COMPANY INFORMATION
Directors
C J Davis
A M Elder
S E Smith
K M Flax
A E Chirkowski
Secretary
G J Davis
Company number
10710780
Registered office
61 Harley Street
London
W1G 8QU
England
Auditor
HW Fisher LLP
Acre House
11-15 William Road
London
NW1 3ER
United Kingdom
THE EVEWELL (HARLEY STREET) LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Notes to the financial statements
11 - 22
THE EVEWELL (HARLEY STREET) LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The directors present the strategic report for the year ended 31 December 2023.
Fair review of the business and key performance indicators
The principal activity of the company is to operate an outpatient fertility and gynaecology clinic, The Evewell Harley Street, located at 61 Harley Street, that opened in October 2018.
The company made a pre-tax profit of £1,470,160 (2022: £1,091,471) for the year on turnover of £10,752,302 (2022: £9,886,568).
At 31 December 2023, the company had net assets of £834,257 (2022: net liabilities of £955,191). The improvement in the balance sheet position is due to the positive results for the year as well as an issue of share capital to the parent company, The Evewell Group Limited (see note 20 for further details).
The company’s key financial performance indicators are revenue and operating profit.
The key financial and other performance indicators for the company are as follows:
The company has grown revenue 9% from £9.9 million to £10.8 million, driven primarily by growth in egg collection cycles. Gross margin was consistent at 82%, and operating profit margin decreased from 17% in 2022 to 16% in 2023 due to increased administration expenses.
The latest publicly available clinical success rates are available on the website of the company, at www.evewell.com, and the website of the Human Fertilisation and Embryology Authority (HFEA).
Principal risks and uncertainties
As a clinic that provides comprehensive fertility and gynaecological services, the company has clinical quality and safety risks. The company maintains strict operating procedures and processes for the provision of patient care as well as in the laboratories, which are managed though a quality management system and quality management team. The company also invests in advanced laboratory technologies, an electronic medical records system and an electronic quality management system to provide safe and efficient care. The key area of focus for the company is providing high quality patient care that also ensures the safety of patients and staff.
The company, which is regulated by the HFEA and the Care Quality Commission, strives to maintain the highest standards.
A principal risk of the company is clinical and general liability, which is managed through its operating procedures and processes and various insurance policies, including healthcare liability insurance.
The company is subject to data protection and cyber risk from information technology systems failure, threats to data protection and cybercrime. These risks are mitigated through a cyber insurance policy, as well as regular review and certification through Cyber Essentials.
The main risks associated with the company's financial assets and liabilities are set out below.
Credit risk, liquidity risk and cash flow risk
The directors do not consider these risks to be material risks to the business, given that the majority of income is
received as at the time of providing the service.
Price risk
The directors regularly monitor the price competitiveness of the services offered. The directors consider that pricing is in line with competitors operating in similar parts of the market in the UK.
THE EVEWELL (HARLEY STREET) LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Future developments
There have been no significant changes in the business activities post year-end. The business has been trading well during 2024 and is profitable at the time of approving these financial statements. The directors have prepared forecasts and believe the company will continue to be profitable for the foreseeable future.
K M Flax
Director
24 September 2024
THE EVEWELL (HARLEY STREET) LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
The directors present their annual report and financial statements for the year ended 31 December 2023.
Principal activities
The principal activity of the company continued to be that of a Gynaecology and Fertility centre, providing day patient health care services and procedures.
Results and dividends
The results for the year are set out on page 8.
Ordinary dividends were paid amounting to £750,000. 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:
C J Davis
A M Elder
S E Smith
K M Flax
A E Chirkowski
Post reporting date events
On 27 June 2024, the company paid an interim dividend of £1,600,000 to it's parent company, The Evewell Group Limited.
On 10 September 2024, the company paid an interim dividend of £800,000 to its parent company, The Evewell Group Limited.
There are no other post balance sheet events to report.
Auditor
The auditor, HW Fisher LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Strategic report
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of financial risk management objectives and policies, information on exposure to financial risk and future developments.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
On behalf of the board
K M Flax
Director
24 September 2024
THE EVEWELL (HARLEY STREET) LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
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:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable 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.
THE EVEWELL (HARLEY STREET) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF THE EVEWELL (HARLEY STREET) LIMITED
- 5 -
Opinion
We have audited the financial statements of The Evewell (Harley Street) Limited (the 'company') for the year ended 31 December 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity 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:
give a true and fair view of the state of the company's affairs as at 31 December 2023 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.
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.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
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.
THE EVEWELL (HARLEY STREET) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF THE EVEWELL (HARLEY STREET) LIMITED
- 6 -
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 and the directors' report.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, 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 remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Detection of 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.
As part of our planning process:
We enquired of management the systems and controls the company has in place, the areas of the financial statements that are mostly susceptible to the risk of irregularities and fraud, and whether there was any known, suspected or alleged fraud. The company did not inform us of any known, suspected or alleged fraud.
We obtained an understanding of the legal and regulatory frameworks applicable to the company. We determined that the following were most relevant: HFEA, CQC, FRS 102 and Companies Act 2006.
We considered the incentives and opportunities that exist in the company, including the extent of management bias, which present a potential for irregularities and fraud to be perpetuated, and tailored our risk assessment accordingly.
Using our knowledge of the company, together with the discussions held with the company at the planning stage, we formed a conclusion on the risk of misstatement due to irregularities including fraud and tailored our procedures according to this risk assessment.
THE EVEWELL (HARLEY STREET) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF THE EVEWELL (HARLEY STREET) LIMITED
- 7 -
The key procedures we undertook to detect irregularities including fraud during the course of the audit included:
Identifying and testing journal entries and the overall accounting records, in particular those that were significant and unusual.
Reviewing the financial statement disclosures and determining whether accounting policies have been appropriately applied.
Assessing the extent of compliance, or lack of, with the relevant laws and regulations.
Testing key revenue lines, in particular cut-off, for evidence of management bias.
Performing a physical verification of key assets.
Obtaining third-party confirmation of material bank and loan balances.
Documenting and verifying all significant related party balances and transactions.
Reviewing documentation such as the company board minutes for discussion of irregularities including fraud.
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements even though we have properly planned and performed our audit in accordance with auditing standards. The primary responsibility for the prevention and detection of irregularities and fraud rests with the directors.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
This report is made solely to the company's member in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's member those matters we are required to state to 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 member for our audit work, for this report, or for the opinions we have formed.
Gilles Siow (Senior Statutory Auditor)
For and on behalf of HW Fisher LLP
Chartered Accountants
Statutory Auditor
Acre House
11-15 William Road
London
NW1 3ER
United Kingdom
24 September 2024
THE EVEWELL (HARLEY STREET) LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
2023
2022
Notes
£
£
£
£
Turnover
3
10,752,302
9,886,568
Cost of sales
(1,974,805)
(1,818,609)
Gross profit
8,777,497
8,067,959
Administrative expenses
(7,006,380)
(6,431,544)
Operating profit
4
1,771,117
1,636,415
Interest receivable and similar income
7
246,000
255,274
Interest payable and similar expenses
8
(546,957)
(800,218)
Profit before taxation
1,470,160
1,091,471
Tax on profit
9
(380,712)
602,805
Profit for the financial year
1,089,448
1,694,276
The profit and loss account has been prepared on the basis that all operations are continuing operations.
THE EVEWELL (HARLEY STREET) LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
11
15,465
29,985
Tangible assets
12
758,601
933,396
774,066
963,381
Current assets
Debtors
13
5,758,816
5,624,087
Cash at bank and in hand
638,747
285,498
6,397,563
5,909,585
Creditors: amounts falling due within one year
14
(6,173,754)
(6,378,945)
Net current assets/(liabilities)
223,809
(469,360)
Total assets less current liabilities
997,875
494,021
Creditors: amounts falling due after more than one year
15
(163,618)
(1,449,212)
Net assets/(liabilities)
834,257
(955,191)
Capital and reserves
Called up share capital
20
477
477
Share premium account
1,277,493
Profit and loss reserves
833,780
(2,233,161)
Total equity
834,257
(955,191)
The financial statements were approved by the board of directors and authorised for issue on 24 September 2024 and are signed on its behalf by:
K M Flax
Director
Company Registration No. 10710780
THE EVEWELL (HARLEY STREET) LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
Share capital
Share premium account
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 January 2022
477
1,277,493
(3,927,437)
(2,649,467)
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
-
1,694,276
1,694,276
Balance at 31 December 2022
477
1,277,493
(2,233,161)
(955,191)
Year ended 31 December 2023:
Profit and total comprehensive income for the year
-
-
1,089,448
1,089,448
Issue of share capital
20
1,450,000
-
1,450,000
Dividends
10
-
-
(750,000)
(750,000)
Reduction of shares
20
(1,450,000)
(1,277,493)
2,727,493
Balance at 31 December 2023
477
833,780
834,257
THE EVEWELL (HARLEY STREET) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
1
Accounting policies
Company information
The Evewell (Harley Street) Limited is a private company limited by shares incorporated in England and Wales. The registered office is 61 Harley Street, London, England, W1G 8QU.
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.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’: Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of The Evewell Group Limited. These consolidated financial statements are available from its registered office: 61 Harley Street, London, England, United Kingdom, W1G 8QU.
1.2
Going concern
As of 31 December 202true3, the company's balance sheet had net assets of £825,654 (2022: a deficit of £955,191). The business has been trading well during 2024 and is profitable at the time of approving these financial statements. The directors have prepared forecasts and believe the company will continue to make profits. The company also has the on-going support of the principal investors who provided loans to the business, should it be required. Accordingly the directors have a reasonable expectation that the company will 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 services provided in the normal course of business.
Deferred income is recognised in line with annual storage fees for storage of medical sample.
1.4
Intangible fixed assets - Software
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Software expenditure is initially measured at cost and amortised over 3 years being the expected useful life of the asset.
THE EVEWELL (HARLEY STREET) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 12 -
1.5
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:
Leasehold improvements
Over 20 years
Plant and equipment
20% straight line
Fixtures, fittings and equipment
20 - 25% straight line
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.6
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.7
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
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.
THE EVEWELL (HARLEY STREET) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, loans from fellow group companies and bank loans 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.
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.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.8
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs.
1.9
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.
THE EVEWELL (HARLEY STREET) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
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.
1.10
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
1.11
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.12
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to expense 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 lease asset are consumed.
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.
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.
Share options
The parent company has granted share options to employees of this company. The fair value of the share based payments is determined at the grant date and the calculation requires estimates to be made as to the valuation of the company's share capital, discount rates and the likelihood of the options vesting. The directors consider these assumptions to be reasonable based on the current size and conditions of the company and the sector it operates in.
THE EVEWELL (HARLEY STREET) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 15 -
3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Gynaecology and fertility services
10,752,302
9,886,568
2023
2022
£
£
Other significant revenue
Interest income
246,000
255,274
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
10,752,302
9,886,568
4
Operating profit
2023
2022
Operating profit for the year is stated after charging:
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
18,750
17,400
Depreciation of owned tangible fixed assets
236,611
414,064
Amortisation of intangible assets
14,520
11,120
Operating lease charges
559,263
612,145
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Business Management
3
3
Admin
27
20
Clinical
32
29
Total
62
52
THE EVEWELL (HARLEY STREET) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
5
Employees
(Continued)
- 16 -
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
4,033,586
3,663,259
Social security costs
492,201
472,273
Pension costs
43,878
39,871
4,569,665
4,175,403
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
1,203,079
1,112,817
Company pension contributions to defined contribution schemes
2,642
2,202
1,205,721
1,115,019
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2022 - 2).
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
928,875
895,059
Company pension contributions to defined contribution schemes
1,321
1,101
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
6,150
Interest receivable from group companies
239,850
255,274
Total income
246,000
255,274
THE EVEWELL (HARLEY STREET) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
8
Interest payable and similar expenses
2023
2022
£
£
Interest payable to group undertakings
68,685
217,232
Other interest
478,272
582,986
546,957
800,218
9
Taxation
2023
2022
£
£
Deferred tax
Origination and reversal of timing differences
380,712
(602,805)
The actual charge/(credit) for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Profit before taxation
1,470,160
1,091,471
Expected tax charge based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
345,782
207,379
Tax effect of expenses that are not deductible in determining taxable profit
2,318
2,534
Tax effect of income not taxable in determining taxable profit
(1,995)
Tax effect of utilisation of tax losses not previously recognised
(896,928)
Effect of change in corporation tax rate
22,538
70,348
Group relief
8,289
Permanent capital allowances in excess of depreciation
12,069
5,673
Deferred tax adjustments in respect of prior years
1,007
Other adjustments
(1,107)
Taxation charge/(credit) for the year
380,712
(602,805)
The company has tax losses carried forward of £836,478 (2022: £2,415,439).
Factors that may affect future tax charges
Changes to the UK corporation tax rates were substantially enacted as part of the 2021 budget on 3 March 2021. This included an increase to the main rate from 19% to 25% from April 2023. The company will be taxed at a rate of 25% unless its profits are sufficiently low enough to qualify for a lower rate of tax, the lowest being 19%.
Where applicable, deferred taxes at the balance sheet date have been measured using a tax rate of 25% to reflect the rate that the timing differences are likely to unwind and are reflected in the financial statements.
THE EVEWELL (HARLEY STREET) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
10
Dividends
2023
2022
£
£
Interim paid
750,000
11
Intangible fixed assets
Software
£
Cost
At 1 January 2023 and 31 December 2023
94,445
Amortisation and impairment
At 1 January 2023
64,460
Amortisation charged for the year
14,520
At 31 December 2023
78,980
Carrying amount
At 31 December 2023
15,465
At 31 December 2022
29,985
12
Tangible fixed assets
Leasehold improvements
Plant and equipment
Fixtures, fittings and equipment
Total
£
£
£
£
Cost
At 1 January 2023
816,553
1,689,857
241,581
2,747,991
Additions
13,784
29,848
18,184
61,816
Disposals
(13,000)
(13,000)
At 31 December 2023
830,337
1,706,705
259,765
2,796,807
Depreciation and impairment
At 1 January 2023
173,830
1,443,047
197,718
1,814,595
Depreciation charged in the year
41,246
173,255
22,110
236,611
Eliminated in respect of disposals
(13,000)
(13,000)
At 31 December 2023
215,076
1,603,302
219,828
2,038,206
Carrying amount
At 31 December 2023
615,261
103,403
39,937
758,601
At 31 December 2022
642,723
246,810
43,863
933,396
THE EVEWELL (HARLEY STREET) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
13
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
311,584
400,689
Amounts owed by group undertakings
2,422,364
1,275,045
Other debtors
2,328
13,410
Prepayments and accrued income
337,636
216,325
3,073,912
1,905,469
2023
2022
Amounts falling due after more than one year:
£
£
Amounts owed by group undertakings
2,173,992
2,826,994
Other debtors
223,890
223,890
2,397,882
3,050,884
Deferred tax asset
287,022
667,734
2,684,904
3,718,618
Total debtors
5,758,816
5,624,087
Within amounts owed by group undertakings is an unsecured loan for £2,050,000 (2022: £2,650,000) which attracts interest at 10% and is repayable in full in 2026.
14
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Loans
16
4,745,000
4,631,779
Trade creditors
290,107
221,719
Amounts owed to group undertakings
87,174
174,134
Taxation and social security
164,108
161,297
Other creditors
30,530
43,398
Accruals and deferred income
856,835
1,146,618
6,173,754
6,378,945
THE EVEWELL (HARLEY STREET) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
15
Creditors: amounts falling due after more than one year
2023
2022
£
£
Amounts owed to group undertakings
1,294,355
Accruals and deferred income
163,618
154,857
163,618
1,449,212
Within amounts owed to group undertakings is an unsecured loan for £nil (2022: £1,150,000) which attracts interest at 10% and is repayable in full in 2026. This loan was fully repaid in 2023.
16
Loans
2023
2022
£
£
Loans
4,745,000
4,631,779
Payable within one year
4,745,000
4,631,779
The loan is secured against all property and assets of the company, both present and future, for the duration of the loan. The loan attracts interest at a rate of 10% per annum. Interest is included within accruals and deferred income in these financial statements.
17
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Assets
Assets
2023
2022
Balances:
£
£
Accelerated capital allowances
77,903
63,874
Tax losses
209,119
603,860
287,022
667,734
2023
Movements in the year:
£
Asset at 1 January 2023
(667,734)
Charge to profit or loss
380,712
Asset at 31 December 2023
(287,022)
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.
THE EVEWELL (HARLEY STREET) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
18
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
43,878
39,871
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
20
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of 0.1p each
476,875
476,875
477
477
476,875
476,875
477
477
On 7 August 2023, the company issued 1,450,000,000 ordinary shares at nominal value of £0.001 per share.
On 8 August 2023, the company passed a special resolution to reduce the ordinary share capital of the company by the sum of £1,450,000 and such sum be transferred to the profit and loss account of the company.
On 9 August 2023, the company passed a special resolution to reduce the share premium of the company by the sum of £1,277,493 and such sum be transferred to the profit and loss account of the company.
21
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:
2023
2022
£
£
Within one year
499,094
462,717
Between two and five years
2,045,416
1,814,142
In over five years
4,010,333
4,409,100
6,554,843
6,685,959
22
Events after the reporting date
On 27 June 2024, the company paid an interim dividend of £1,600,000 to its parent company, The Evewell Group Limited.
On 10 September 2024, the company paid an interim dividend of £800,000 to its parent company, The Evewell Group Limited.
23
Directors' transactions
At 31 December 2023 the company owed £440 (2022: £376) to the directors.
THE EVEWELL (HARLEY STREET) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
24
Ultimate controlling party
The immediate and ultimate parent company is The Evewell Group Limited, a company incorporated in the England and Wales.
The results for the year ended 31 December 2023 are included in the consolidated accounts of The Evewell Group Limited.
The address of the parent's registered office is 61 Harley Street, London, England, United Kingdom, W1G 8QU.
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