Company Registration No. 03069773 (England and Wales)
HCL Doctors Limited
Annual report and financial statements
for the year ended 30 June 2021
HCL Doctors Limited
Company information
Directors
Ian Munro
Jamie Webb
Gary Taylor
(Appointed 23 September 2020)
Company number
03069773
Registered office
33 Soho Square
London
W1D 3QU
Independent auditor
Saffery Champness LLP
Trinity
16 John Dalton Street
Manchester
M2 6HY
HCL Doctors Limited
Contents
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 8
Statement of income and retained earnings
9
Statement of financial position
10
Notes to the financial statements
11 - 24
HCL Doctors Limited
Strategic report
For the year ended 30 June 2021
Page 1
The directors present the strategic report for the year ended 30 June 2021.
Fair review of the business
The Company reports its third full period of trading since it was acquired by Health Care Resourcing Group Limited (“HCRG”, or “Group”) on 9 March 2018, and it continues to operate as a subsidiary of Group.
HCL Doctors Limited principal activity during the year was the provision of temporary, locum, Doctors principally to NHS Trusts within the UK.
Turnover for the period was £5.4m (£10.7m in the fifteen months to 30 June 2020) producing a gross profit of £1.7m (£2.5m in the fifteen months to 30 June 2020) being 31.5%. Profit before tax was £309k (£96k in the fifteen months to 30 June 2020).
The continual review of central operating structures, and substantial investment in branch and divisional leadership and in quality & training is helping HCL Doctors achieve its goal, of being the provider of choice in each geographical region in which we operate. As part of this, our internal review, KPI management and regional structures are also continually reviewed, with further evolution in the quality of our services is expected to continue.
With continued profitability, the outlook for the 2021/22 financial year is strong.
Principal risks and uncertainties
The Group has management structures and policies and procedures which are designed to enable the achievement of the business objectives while controlling risks associated in the environment in which it operates. The group has a risk management process in place which is designed to identify, manage and mitigate business risk. The risk management process covers financial, operational, commercial and clinical areas of risk.
In terms of financial risk management, the Group considers that it has limited exposure to the various aspects of financial risk. The majority of the Group's revenue is invoiced in sterling whilst all of its operations and costs arise within the UK. The Group does not enter into currency hedging contracts. Furthermore, the Group ensures its liquidity is maintained by entering into long term or short-term financial instruments as necessary to support operational and other funding requirements. The risk that there is a reduction in demand for our services is mitigated by providing services in several different marketplaces, both from a sector and geographical perspective.
Commercial risks are managed closely by the Group Board, and fundamentally include loss of contracts, reputation, changes to legislation, and political risks, for instance as a result of Brexit. The strengthening of the Group Board over the last few years has brought substantial experience and knowledge into the Group, which will enable these risks to be managed appropriately and mitigated wherever possible.
HCL Doctors Limited
Strategic report (continued)
For the year ended 30 June 2021
Page 2
Covid-19
The majority of this year was operated under the restrictions of the lockdowns imposed by the UK Government on businesses and households.
As the business supplies into the NHS, the demand for its services continued but the availability of candidates was restricted as infections and enforced isolations increased. At the date of signing this report, it would appear that the effects of the pandemic are reducing largely due to the vaccination roll out and the Board are hopeful that the business can return to normal pre Covid levels of operating.
Key Performance Indicators
In addition to the KPIs noted above, all of which are managed by the Group at Divisional and Branch level, the company maintains and reports a substantial number of other financial and non-financial indicators routinely each month.
Directors
The Group’s Board of Directors, at the time of writing this report consists of:
Statutory Directors:
-
Jamie Webb, HCRG’s Group Chief Financial Officer.
-
Gary Taylor, joined the Group in October 2019 and appointed to the Board of HCL Doctors in September 2020.
Governance
During the past year, there has been a continued focus on corporate governance, with the board spending a large proportion of its time examining and strengthening our processes throughout the wider Group. Ensuring that a solid governance framework is in place is key to maintaining trust and transparency and an important building block for future growth.
Outlook
The directors are pleased with the results for the year and are confident of making further performance improvements and achieving additional growth through contract wins in the forthcoming year.
Jamie Webb
Director
19 August 2022
HCL Doctors Limited
Directors' report
For the year ended 30 June 2021
Page 3
The directors present their annual report and financial statements for the year ended 30 June 2021.
Principal activities
The principal activity of the company continued to be that of providing workforce solutions to the healthcare sector.
Results and dividends
The results for the year are set out on page 9.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Ian Munro
Tristan Ramus
(Resigned 23 September 2020)
Jamie Webb
Gary Taylor
(Appointed 23 September 2020)
Auditor
Saffery Champness LLP have expressed their willingness to continue in office.
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
Jamie Webb
Director
19 August 2022
HCL Doctors Limited
Directors' responsibilities statement
For the year ended 30 June 2021
Page 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 year. 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.
HCL Doctors Limited
Independent auditor's report
To the member of HCL Doctors Limited
Page 5
Opinion
We have audited the financial statements of HCL Doctors Limited (the 'company') for the year ended 30 June 2021 which comprise the statement of income and retained earnings, the statement of financial position 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 Financial Reporting Standard 102
The Financial Reporting Standard applicable in the UK and Republic of Ireland
(United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
-
give a true and fair view of the state of the company's affairs as at 30 June 2021 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.
HCL Doctors Limited
Independent auditor's report (continued)
To the member of HCL Doctors Limited
Page 6
The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
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'
r
eport 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 the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identifie
d
material misstatements in the strategic report or the directors'
r
eport
.
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
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'
r
esponsibilities
s
tatement, 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.
HCL Doctors Limited
Independent auditor's report (continued)
To the member of HCL Doctors Limited
Page 7
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the
financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue an
auditor's
report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with
ISAs (UK)
will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these
financial statements
.
Irregularities, including fraud, 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 specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud are detailed below.
Identifying and assessing risks related to irregularities:
We assessed the susceptibility of the company’s financial statements to material misstatement and how fraud might occur, including through discussions with the directors, discussions within our audit team planning meeting, updating our record of internal controls and ensuring these controls operated as intended. We evaluated possible incentives and opportunities for fraudulent manipulation of the financial statements. We identified laws and regulations that are of significance in the context of the company by discussions with directors and by updating our understanding of the sector in which the company operates.
Laws and regulations of direct significance in the context of the company include The Companies Act 2006 and UK Tax legislation.
Audit response to risks identified
We considered the extent of compliance with these laws and regulations as part of our audit procedures on the related financial statement items including a review of financial statement disclosures. We reviewed the company's records of breaches of laws and regulations, minutes of meetings and correspondence with relevant authorities to identify potential material misstatements arising. We discussed the company's policies and procedures for compliance with laws and regulations with members of management responsible for compliance.
During the planning meeting with the audit team, the engagement partner drew attention to the key areas which might involve non-compliance with laws and regulations or fraud. We enquired of management whether they were aware of any instances of non-compliance with laws and regulations or knowledge of any actual, suspected or alleged fraud. We addressed the risk of fraud through management override of controls by testing the appropriateness of journal entries and identifying any significant transactions that were unusual or outside the normal course of business. We assessed whether judgements made in making accounting estimates gave rise to a possible indication of management bias. At the completion stage of the audit, the engagement partner’s review included ensuring that the team had approached their work with appropriate professional scepticism and thus the capacity to identify non-compliance with laws and regulations and fraud
.
HCL Doctors Limited
Independent auditor's report (continued)
To the member of HCL Doctors Limited
Page 8
There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
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 the member in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's member, for our audit work, for this report, or for the opinions we have formed.
Simon Kite BSc FCA (Senior Statutory Auditor)
For and on behalf of Saffery Champness LLP
19 August 2022
Chartered Accountants
Statutory Auditors
Trinity
16 John Dalton Street
Manchester
M2 6HY
HCL Doctors Limited
Statement of income and retained earnings
For the year ended 30 June 2021
Page 9
Year
Period
ended
ended
30 June
30 June
2021
2020
Notes
£
£
Revenue
3
5,361,497
10,687,040
Cost of sales
(3,649,883)
(8,141,772)
Gross profit
1,711,614
2,545,268
Administrative expenses
(1,845,678)
(2,403,908)
Other operating income
7,419
Exceptional gains/(losses)
4
435,967
Exceptional items
4
(45,438)
Profit before taxation
309,322
95,922
Tax on profit
7
460,000
(121,000)
Profit/(loss) for the financial year
769,322
(25,078)
Retained earnings brought forward
(4,760,372)
(4,735,294)
Retained earnings carried forward
(3,991,050)
(4,760,372)
The income statement has been prepared on the basis that all operations are continuing operations.
HCL Doctors Limited
Statement of financial position
As at 30 June 2021
Page 10
2021
2020
Notes
£
£
£
£
Non-current assets
Property, plant and equipment
8
1,576
16,639
Current assets
Trade and other receivables
9
16,597,897
13,222,496
Cash and cash equivalents
4,737
1,466
16,602,634
13,223,962
Current liabilities
10
(19,346,899)
(16,803,760)
Net current liabilities
(2,744,265)
(3,579,798)
Total assets less current liabilities
(2,742,689)
(3,563,159)
Deferred income
12
(242,507)
(191,359)
Net liabilities
(2,985,196)
(3,754,518)
Equity
Called up share capital
14
161
161
Other reserves
15
1,005,693
1,005,693
Retained earnings
16
(3,991,050)
(4,760,372)
Total equity
(2,985,196)
(3,754,518)
The financial statements were approved by the board of directors and authorised for issue on 19 August 2022 and are signed on its behalf by:
Jamie Webb
Director
Company Registration No. 03069773
HCL Doctors Limited
Notes to the financial statements
For the year ended 30 June 2021
Page 11
1
Accounting policies
Company information
HCL Doctors Limited is a
private
company
limited by shares
incorporated in
England and Wales
.
The registered office is
33 Soho Square, London, W1D 3QU.
1.1
Reporting period
The current accounting period relates to the year ended 30 June 2021. The previous accounting period was extended and therefore the comparative figures relate to the 15 month period ended 30 June 2020.
1.2
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 a
mounts
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
.
T
he company has
therefore
taken advantage of
e
xemptions 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’
:
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
Health Care Resourcing Group Limited
. These consolidated financial statements are available from its registered office,
33 Soho Square, London, W1D 3QU.
HCL Doctors Limited
Notes to the financial statements (continued)
For the year ended 30 June 2021
1
Accounting policies (continued)
Page 12
1.3
Going concern
The directors consider the going concern basis to be appropriate, in spite of the loss in the year, the net current liabilities and the net liabilities, because of the support of its fellow group companies.
true
The company is a subsidiary of Health Care Resourcing Group Limited ('HCRG') and relies upon group facilities for the finances to meet its liabilities as they fall due. Based on the forecasts for the trade of the company over the next 12 months and beyond this time frame the Board believe that a going concern basis is correct. Therefore the board of HCRG have provided a letter of support for this subsidiary and ensures the trading support for the 12 months from the date that these accounts are signed.
1.4
Revenue
Revenue is recognised at the fair value of the consideration received or receivable for services provided in the normal course of business
, and
is shown net of VAT and other sales related taxes
.
The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Revenue arising from temporary placements is recognised when the service has been delivered. Revenue from permanent placements is recognised when the individual commences their employment.
1.5
Property, plant and equipment
Property, plant and equipment
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
33% 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 non-current assets
At each reporting
period
end date, the
company
reviews the carrying amounts of its tangible
assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). 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.
HCL Doctors Limited
Notes to the financial statements (continued)
For the year ended 30 June 2021
1
Accounting policies (continued)
Page 13
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
Cash and cash equivalents
Cash and cash equivalents
are basic financial assets
and
include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.8
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.
Financial instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset
, with
the net amounts presented in the financial statements
,
when there is a legally 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.
Basic financial assets
Basic financial assets, which include trade and other receivables, 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.
HCL Doctors Limited
Notes to the financial statements (continued)
For the year ended 30 June 2021
1
Accounting policies (continued)
Page 14
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.
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.
HCL Doctors Limited
Notes to the financial statements (continued)
For the year ended 30 June 2021
1
Accounting policies (continued)
Page 15
Basic financial liabilities
Basic financial liabilities, including
trade and other payables
, bank loans, loans from
fellow group companies and preference shares that are classified as debt, 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
paymen
ts discounted at a market rate of interest.
Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective
interest rate method.
Trade payables
are obligations to pay for goods or services that have been acquired
in the ordinary course of business from suppliers. A
m
ounts 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 payables
are recognised initially at transaction price
and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts,
are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are
s
ubsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in
profit
or
loss
in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as
being measured at
fair value th
r
ough profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations
expire or are discharged or cancelled.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.10
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
HCL Doctors Limited
Notes to the financial statements (continued)
For the year ended 30 June 2021
1
Accounting policies (continued)
Page 16
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the
income statement
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.
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. Where items recognised in other comprehensive income or equity are chargeable to or deductible for tax purposes, the resulting current or deferred tax expense or income is presented in the same component of comprehensive income or equity as the transaction or other event that resulted in the tax expense or income. 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.
1.11
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
non-current assets
.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13
Leases
Rentals payable under operating leases,
including
any lease incentives received, are charged to
profit or loss
on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the lease
s
asset are consumed.
HCL Doctors Limited
Notes to the financial statements (continued)
For the year ended 30 June 2021
1
Accounting policies (continued)
Page 17
1.14
Foreign exchange
Transactions in currencies other than
pounds sterling
are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation
in the period
are included in profit or loss.
2
Critical accounting 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.
Deferred tax asset
The company has tax losses of £4,276,000 (2020 - £3,240,000), but only recognises a deferred tax asset of these losses to the extent that it is probable that future taxable profit will be available against which the unused tax losses can be utilised. The directors consider that an appropriate period for which future taxable profits can be estimated with any reliability is seven years.
Bad debt provision
M
anagement review the aged debtors listing on a weekly basis for any slow moving debts. If it is deemed probable that they will not be able to recover the debt a provision is made in the
financial statements
.
Disputes
On occasion, the group is party to litigation and administrative proceedings related to its operations. Management consults with legal experts on issues related to legal disputes and with other experts internal or external to the Group on issues related to the ordinary course of business.
HCL Doctors Limited
Notes to the financial statements (continued)
For the year ended 30 June 2021
Page 18
3
Revenue
2021
2020
£
£
Revenue analysed by class of business
Labour recruitment
5,361,497
10,687,040
2021
2020
£
£
Revenue analysed by geographical market
United Kingdom
5,361,497
10,687,040
4
Exceptional items
2021
2020
£
£
Expenditure
Impairment of intercompany write off
(435,967)
-
Restructuring costs
-
45,438
(435,967)
45,438
In the current year, the write off of an intercompany balance generated a gain of £435,967. In the prior year, the reorganisation of the business incurred costs of £45,438.
5
Operating profit
2021
2020
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
Depreciation of owned property, plant and equipment
15,063
792
Operating lease charges
39,210
86,073
HCL Doctors Limited
Notes to the financial statements (continued)
For the year ended 30 June 2021
Page 19
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2021
2020
Number
Number
Administrative and management
13
25
Operational care staff
19
17
Total
32
42
Their aggregate remuneration comprised:
2021
2020
£
£
Wages and salaries
698,241
2,244,333
Social security costs
74,666
146,963
Pension costs
12,254
22,860
785,161
2,414,156
7
Taxation
2021
2020
£
£
Deferred tax
Origination and reversal of timing differences
(460,000)
121,000
HCL Doctors Limited
Notes to the financial statements (continued)
For the year ended 30 June 2021
7
Taxation (continued)
Page 20
The actual (credit)/charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2021
2020
£
£
Profit before taxation
309,322
95,922
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2020: 19.00%)
58,771
18,225
Tax effect of expenses that are not deductible in determining taxable profit
537
Gains not taxable
(82,834)
Group relief
21,200
Depreciation on assets not qualifying for tax allowances
2,863
150
Other non-reversing timing differences
(163)
Deferred tax adjustments in respect of prior years
121,000
Losses available to carry forward
(18,749)
Deferred tax
(460,000)
Taxation (credit)/charge for the year
(460,000)
121,000
8
Property, plant and equipment
Leasehold improvements
£
At 1 July 2020 and 30 June 2021
17,431
At 1 July 2020
792
Depreciation charged in the year
15,063
At 30 June 2021
15,855
Carrying amount
At 30 June 2021
1,576
At 30 June 2020
16,639
HCL Doctors Limited
Notes to the financial statements (continued)
For the year ended 30 June 2021
Page 21
9
Trade and other receivables
2021
2020
Amounts falling due within one year:
£
£
Trade receivables
750,322
324,613
Amounts owed by group undertakings
14,711,509
12,127,597
Prepayments and accrued income
146,066
240,286
15,607,897
12,692,496
Deferred tax asset (note 11)
990,000
530,000
16,597,897
13,222,496
10
Current liabilities
2021
2020
£
£
Trade payables
316,467
770,167
Amounts owed to group undertakings
18,452,632
15,244,043
Taxation and social security
294,068
493,447
Other payables
283,732
296,103
19,346,899
16,803,760
There is a cross company guarantee in place for all Health Care Resourcing Group Limited (HCRG) subsidiary trading companies in relation to the invoice discount facility held by HCRG. The total group liability at 30 June 2021 in respect of this facility was £12,395,044 (2020: £6,937,411).
11
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Assets
Assets
2021
2020
Balances:
£
£
Tax losses
990,000
530,000
HCL Doctors Limited
Notes to the financial statements (continued)
For the year ended 30 June 2021
11
Deferred taxation (continued)
Page 22
2021
Movements in the year:
£
Asset at 1 July 2020
(530,000)
Credit to profit or loss
(460,000)
Asset at 30 June 2021
(990,000)
An amount of
£118,000
of the above deferred tax asset set out above i
s
expected to reverse within 12 months and relates to losses available to set off against future profits.
Deferred tax is not recognised in respect of
tax
losses of
£nil
(2020: £1,487,000)
as it is not probable that they will be recovered against the reversal of deferred tax liabilities or future taxable profits.
12
Deferred income
2021
2020
£
£
Other deferred income
242,507
191,359
13
Retirement benefit schemes
2021
2020
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
12,254
22,860
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.
HCL Doctors Limited
Notes to the financial statements (continued)
For the year ended 30 June 2021
Page 23
14
Share capital
2021
2020
£
£
Ordinary share capital
Issued and fully paid
100 Ordinary A shares of of $1 each
61
61
84 Ordinary A shares of £1 each
84
84
16 Ordinary B shares of £1 each
16
16
161
161
15
Other reserves
The tax equalisation reserve represents the corporation tax that was group relieved at a gross value through the intercompany account and the net tax charge to surrender
.
16
Retained earnings
Retained earnings represents accumulated losses less dividends paid, as adjusted for subsequent transfers to or from other reserves.
17
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:
2021
2020
£
£
Within one year
35,000
39,011
Between two and five years
140,000
140,000
In over five years
268,333
303,333
443,333
482,344
18
Related party transactions
Transactions with related parties
During the year the company entered into the following transactions with related parties:
HCL Doctors Limited
Notes to the financial statements (continued)
For the year ended 30 June 2021
18
Related party transactions (continued)
Page 24
Purchases
Purchases
2021
2020
£
£
Group undertakings
796,959
809,867
The following amounts were outstanding at the reporting end date:
2021
2020
Amounts due to related parties
£
£
Group undertakings
18,452,632
15,244,043
The following amounts were outstanding at the reporting end date:
2021
2020
Amounts due from related parties
£
£
Group undertakings
14,711,509
12,127,597
19
Ultimate controlling party
Until 29 June 2021, the immediate and ultimate parent undertaking is Health Care Resourcing Group Limited, a company incorporated and registered in England & Wales. This is the smallest and largest group in which this company is consolidated. Copies of Health Care Resourcing Group Limited financial statements are available from 33 Soho Square, London, W1D 3QU.
On 29 June 2021, HCRG Workforce Solutions Limited became the immediate parent company.
There is not considered to be an ultimate controlling party.
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