Company registration number 10126139 (England and Wales)
PREMIER MEDICAL GROUP LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
PREMIER MEDICAL GROUP LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
- 1 -
The directors present the strategic report for the year ended 31 December 2021.
Review of the Business
The statement of financial position shows the company's financial position at the period end. The company's turnover for the period was £22,334,555 (31 December 2020: £31,022,696), The net assets as at 31 December 2021 were £5,260,983 (31 December 2020: £3,655,470).
The COVID-19 pandemic started to impact the company in early 2020 and the national lockdown implemented in March 2020 caused a fall in road traffic accidents and company activity. To ensure continuation of service, the company implemented video assessments where possible, however to mitigate the impact, further mitigation were implemented including utilising the Job Retention Scheme.
The pandemic has created issues in supply chains and extended case life cycles due to the availability of medical experts, medical records and court dates. Further lockdowns in 2020 and 2021 plus the introduction of the Official Injury Claim Portal in May 2021, coupled with the previous period being 18 months, mean the results are not easily comparable to preceding years.
Key performance indicators are disclosed below.
Principal risks and uncertainties
Legislative risk
The industry in which the group operates has been affected by uncertainty caused by the Chancellors announcement in the 2015 Autumn Statement that they will abolish general damages for 'minor' soft tissue claims which was proposed to include whiplash injuries. The reforms have been implemented in May 2021 and present both a risk and an opportunity to future volumes.
Credit and cashflow risk
The group gives long credit terms to many of its customers. This is abrogated by reconciling regularly and issuing any credit notes promptly. The company monitors its short and middle term cash requirements and makes sure it has adequate funds to pay liabilities as they fall due.
Development and Performance
The industry in which the company operates is expected to change following the introduction of the Official Injury Claims Portal. There has been a reduction in the total number of cases following implementation of the portal, although this has not had a significant negative impact on the performance of the company. There is currently uncertainty on the impact the portal will have on collection profiles, and this has an impact on company’s cash flows. The Directors remain of the opinion that any change in collection profile in the short term will reverse in the long term as the services provided support access to justice for individual claimants.
The company intends to consolidate its position in core markets to successfully manage any uncertainty caused by the reforms discussed, whilst exploring growth opportunities in adjacent markets.
PREMIER MEDICAL GROUP LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 2 -
Other performance indicators
Key performance indicators used by the company were as follows:
Subsequent Events
There were no subsequent events.
Mrs J Russell
Director
23 December 2022
PREMIER MEDICAL GROUP LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
- 3 -
The directors present their annual report and financial statements for the year ended 31 December 2021.
Principal activities
The company is a wholly owned subsidiary of Kuro Health Limited.
The principal activity of the company is the facilitation of non-invasive medical services.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Dr H O Brunjes
(Resigned 11 February 2021)
Dr R C Goodall
(Resigned 30 August 2022)
Mrs J Russell
(Appointed 11 February 2021)
V Joshi
(Appointed 6 September 2021)
Results and dividends
The results for the year are set out on page 8.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Financial instruments
The group’s principal financial instruments comprise cash and cash equivalents, trade creditors, debenture and trade debtors. The main purpose of these instruments is to raise funds for the group’s operations. Due to the nature of these funds there is no exposure to price risk. Trade debtors are managed in respect of credit and cash flow risk by policies concerning the credit offered to customers and the regular monitoring of amounts outstanding and overdue. Trade creditors risk is managed by ensuring sufficient funds are available to meet amounts due.
Auditor
The auditor, Price Bailey LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
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
, being information needed by the auditor on connection with preparing its report,
of which the
auditor
is unaware.
Having made enquiries of fellow directors and the group's auditor, each director has taken all the steps that he is obliged to take as a director in order to make himself aware of any relevant audit information, and to establish that the auditor is aware of that information
.
Going concern
After making enquiries, the directors have a reasonable expectation that the company have adequate resources to continue in operational existence fore the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the annual report and accounts.
On behalf of the board
Mrs J Russell
Director
23 December 2022
PREMIER MEDICAL GROUP LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2021
- 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.
-
State whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements.
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.
PREMIER MEDICAL GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF PREMIER MEDICAL GROUP LIMITED
- 5 -
Opinion
We have audited the financial statements of Premier Medical Group Limited (the 'Company') for the year ended 31 December 2021, which comprise the Profit and Loss Account, Statement of Comprehensive Income, Balance Sheet, Statement of Changes in Equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including 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 31 December 2021 and of its profit or loss for the period 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 Auditors' 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 United Kingdom, including the Financial Reporting Council's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
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.
Opinion on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
-
the information given in the Strategic Report and the Directors' Report for the financial period 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.
PREMIER MEDICAL GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF PREMIER MEDICAL GROUP 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 in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
-
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
-
the financial statements are not in agreement with the accounting records and returns; or
-
certain disclosures of Directors' remuneration specified by law are not made; or
-
we have not received all the information and explanations we require for our audit; or
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 Auditors' Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
We gained an understanding of the legal and regulatory framework applicable to the Company and the industry in which it operates and considered the risk of the Company not complying with the applicable laws and regulations including fraud in particular those that could have a material impact on the financial statements. This included those regulations directly related to the financial statements, including financial reporting, tax legislation and distributable profits. In relation to the industry, this included consideration of the Company’s Medco status, employment law and health & safety. The risks were discussed with the audit team and we remained alert to any indications of non-compliance throughout the audit.
PREMIER MEDICAL GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF PREMIER MEDICAL GROUP LIMITED
- 7 -
We carried out specific procedures to address the risks identified. These included the following:
-
A review of legal fees incurred;
-
Reviewing minutes of meetings of those charged with governance;
-
A review of the latest Medco assessment, consideration of the policies and procedures in place to ensure the company is compliant with Medco and the response from management in implementing recommendations and guidance highlighted by Medco in the most recent review;
-
Agreeing the financial statement disclosures to underlying supporting documentation;
-
Enquiring of management including those responsible for the key regulations and;
-
Reviewing the key accounting policies and estimates
To address the risk of management override of controls, we carried out testing of journal entries and other adjustments for appropriateness. We reviewed systems and procedures to identify potential areas of management override risk. In particular, we carried out testing of journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions to identify large or unusual transactions. We reviewed key authorisation procedures and decision-making processes for any unusual or one-off transactions. We also assessed management bias in relation to the accounting policies adopted and in determining significant accounting estimates.
Due to the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial
Reporting Council's website at:
www.frc.org.uk/auditorsresponsibilities
. This description forms part of our
Auditors' Report.
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume any responsibility to anyone other than the Company and the Company’s members, as a body, for our audit work, for this report, or the opinions we have formed.
Darren Amott (Senior Statutory Auditor)
For and on behalf of Price Bailey LLP
23 December 2022
Chartered Accountants
Statutory Auditors
3rd Floor, 24 Old Bond Street
London
W1S 4AP
PREMIER MEDICAL GROUP LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2021
- 8 -
Year
Period
ended
ended
31 December
31 December
2021
2020
Notes
£
£
Turnover
3
22,334,555
31,022,696
Cost of sales
(16,163,835)
(22,064,729)
Gross profit
6,170,720
8,957,967
Administrative expenses
(4,325,242)
(8,185,435)
Other operating income
87,799
554,511
Operating profit
4
1,933,277
1,327,043
Interest receivable and similar income
7
97
Interest payable and similar expenses
8
(268,608)
(428,584)
Profit before taxation
1,664,766
898,459
Tax on profit
9
(59,253)
(138,318)
Profit for the financial year
1,605,513
760,141
The profit and loss account has been prepared on the basis that all operations are continuing operations.
PREMIER MEDICAL GROUP LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2021
- 9 -
Year
Period
ended
ended
31 December
31 December
2021
2020
£
£
Profit for the year
1,605,513
760,141
Other comprehensive income
-
-
Total comprehensive income for the year
1,605,513
760,141
PREMIER MEDICAL GROUP LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2021
31 December 2021
- 10 -
2021
2020
Notes
£
£
£
£
Fixed assets
Intangible assets
10
1,008,631
804,288
Tangible assets
11
128,930
162,767
1,137,561
967,055
Current assets
Debtors falling due after more than one year
12
37,118
44,928
Debtors falling due within one year
12
31,623,280
28,295,675
Cash at bank and in hand
12,943
12,674
31,673,341
28,353,277
Creditors: amounts falling due within one year
13
(25,924,919)
(23,584,862)
Net current assets
5,748,422
4,768,415
Total assets less current liabilities
6,885,983
5,735,470
Creditors: amounts falling due after more than one year
14
(1,575,000)
(2,025,000)
Provisions for liabilities
Provisions
16
50,000
55,000
(50,000)
(55,000)
Net assets
5,260,983
3,655,470
Capital and reserves
Called up share capital
19
1,000
1,000
Profit and loss reserves
5,259,983
3,654,470
Total equity
5,260,983
3,655,470
The financial statements were approved by the board of directors and authorised for issue on 23 December 2022 and are signed on its behalf by:
Director
Company Registration No. 10126139
PREMIER MEDICAL GROUP LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2021
- 11 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 July 2019
1
2,894,329
2,894,330
Period ended 31 December 2020:
Profit and total comprehensive income for the period
-
760,141
760,141
Issue of share capital
19
999
-
999
Balance at 31 December 2020
1,000
3,654,470
3,655,470
Period ended 31 December 2021:
Profit and total comprehensive income for the period
-
1,605,513
1,605,513
Balance at 31 December 2021
1,000
5,259,983
5,260,983
PREMIER MEDICAL GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
- 12 -
1
Accounting policies
Company information
Premier Medical Group Limited is a
private
company
limited by shares
incorporated in
England and Wales
.
The registered office is
Premier House, Eco Park Road, Ludlow, Shropshire, United Kingdom, SY8 1ES.
1.1
Reporting period
The prior period financial statements were for an 18 month period. The prior financial period was extended to its maximum length to try and encompass the effect of Covid -19 pandemic within one accounting period. The comparatives figures including related notes are therefore for 18 months.
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, and in accordance with applicable accounting standards.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 exemptions from the following disclosure requirements:
The financial statements of the company are consolidated in the financial statements of
Kuro Health Limited
. These consolidated financial statements are available from its registered office,
4th Floor, Park Gate, 161-163 Preston Road, Brighton, East Sussex, BN1 6AF.
PREMIER MEDICAL GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 13 -
1.3
Going concern
The financial statements have been prepared on a going concern basis. Forecasts have been prepared that show the Company and the wider Group will have sufficient liquidity to meet its financial obligations for a period of at least 12 months from the date of this financial report.
true
This assessment undertaken by the Directors has been predominantly considered from a cash-flow perspective, as the company remains profitable and with a strong balance sheet. The Directors have considered the implications of the Coronavirus Pandemic within the going concern assumption along with current rates of inflation and wider market conditions. The Directors have continued to monitor and assess the legacy impact on the business resulting from varying travel restrictions and national lockdowns over the last two years. New ways of processing cases have been developed to ensure continuation of service to customers. To ensure the Business continues to operate as a going concern, the Company continually monitor the longer-term impacts of the pandemic on key stakeholders caused by issues such as court delays and availability of medical experts, which have extended case life cycles.
The Directors have also considered the impact of the new Official Injury Claims portal, implemented on the 31
st
May 2021. The Directors monitor both internal and external key performance indicators for the work generated via the new portal, including volume of cases, instructions received and case cycle times. However, there is currently uncertainty on the impact the portal will have on collection profiles, and this has an impact on Company’s cash flows. The Directors remain of the opinion that any change in collection profile in the short term will reverse in the long term as the services provided support access to justice for individual claimants. However, there remains a level of uncertainty around collections, due to limited number of cases that have settled during the 18 months of operation for the new portal.
The Directors are reviewing and implementing a number of strategies to mitigate the impact of the change in collection profiles discussed above. These strategies include a review of all commercial arrangements, operational processes and associated costs and have the aim to reduce the working capital requirements of the Company in both short term and long term.
The Company along with the wider Group, have a long-term and close working relationship with its bankers. The Group’s facilities have been renegotiated post year-end with a temporary increase invoice discounting facility from £14 million to £15.275 million until August 2023, as well as drawing on other short-term finance that has been made available. The Group and the shareholders have confirmed they continue to support the working capital requirements as necessary via loans and personal guarantees.
The Directors have prepared forecasts for a period of more than 12 months from the date of approval of these financial statements and are confident that the sources of funding available, together with the mitigation strategies that are in place, will provide sufficient liquidity until the issues with the Official Injury Claims Portal are resolved. The Company and Group is well funded and capitalised, and despite the uncertainty above, the Directors believe that it is appropriate to prepare the accounts on a going concern basis.
1.4
Turnover
Turnover is recorded at the fair value of the consideration receivable in the normal course of business, net of VAT, other sales related taxes and discounts.
The company provides services in the medical legal sector. Medical work is contracted for delivery over an agreed period, typically ending at the settlement of the legal medical claim. Requests for payments are issued at predetermined points in the process according to contract and are recorded as turnover. At the balance sheet date, the company accrues for turnover in respect of services performed but un-invoiced, accrued income is included within other debtors. Any associated expected costs of services provided are accrued and included in other creditors.
PREMIER MEDICAL GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 14 -
1.5
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date
where
it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the
fair
value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
Amortisation 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:
Software
20% straight line
1.6
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
20% straight line
Fixtures and fittings
20% straight line
Computers
20% 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
.
1.7
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.
PREMIER MEDICAL GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 15 -
1.8
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.
1.9
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 balance sheet when the company becomes party to the contractual provisions of the instrument.
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.
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.
PREMIER MEDICAL GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 16 -
Basic financial liabilities
Basic financial liabilities, including
creditors
, 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 creditors
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 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.
1.10
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.
1.11
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.
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.
PREMIER MEDICAL GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 17 -
1.12
Provisions
Provisions are recognised when the
company
has a legal or constructive present obligation as a result of a past event, it is probable that the
company
will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation.
Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision i
s
measured at present value
,
the unwinding of the discount is recognised as a finance cost in
profit
or
loss
in the period
in which
it arises.
1.13
Employee benefits
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
1.14
Retirement benefits
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. Payments to the defined contribution scheme are charged as an expense as they fall due.
1.15
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.
1.16
Government grants
The company is using the accrual model to account for government grants.
Government grants are recognised at the fair value of the asset receive
d
or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
Relevant grants in this period are:
Government grants relating to the 'Coronavirus Job Retention Scheme' are recognised as income over the periods when the related costs are incurred.
Government grants relating to the settlement of interest and lender-levied charges relating to the Coronavirus Business Interruption Loan Scheme are recognised as income in the period in which the related costs are incurred.
1.17
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.
1.18
Research and development expenditure
Research and development expenditure is written off against profits in the year in which it is incurred. Where research and development qualifies for "R&D" credit in respect of corporation tax, a claim for such credit is made in the year in which the costs are incurred.
PREMIER MEDICAL GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 18 -
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.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant
effect on amounts recognised in the financial statements.
Credit note provisions
Revenue from services are recognised in accordance with the policy set out at 1.4 on the expectation that the case will be successfully concluded. Cases on average complete within two years however there are instances where cases are unsuccessful, and fees are not recoverable.
As a consequence, an element of judgement is required to account for potential fluctuations in income. A provision for credit notes is utilised to estimate the potential impact of such changes to case profiles and the respective incomes. The provision is calculated based on historical experience, current trends, industry knowledge and other relevant factors. The judgements used to calculate the provision, are material to the results of the company. A small change in those judgements could have a significant impact on the accounts. Therefore, the results of the company are sensitive to movements in this provision if assumptions and trends change.
The senior management team have adequate controls and KPIs in place to monitor and assess the suitability of the provision to ensure income is fairly stated in the financial statements.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2021
2020
£
£
Turnover analysed by geographical market
United Kingdom
22,334,555
31,022,696
2021
2020
£
£
Other revenue
Interest income
97
-
Grants received
87,799
554,511
Turnover is derived from the companies main trading activity, the provision of medical services.
PREMIER MEDICAL GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 19 -
4
Operating profit
2021
2020
Operating profit for the period is stated after charging/(crediting):
£
£
Government grants
(87,799)
(554,511)
Fees payable to the company's auditor for the audit of the company's financial statements
18,850
17,722
Depreciation of owned tangible fixed assets
61,587
58,418
Operating lease charges
129,319
201,820
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2021
2020
Number
Number
Admin
6
6
Operations
107
122
Sales
1
1
Total
114
129
Their aggregate remuneration comprised:
2021
2020
£
£
Wages and salaries
2,591,675
4,068,789
Social security costs
218,827
337,061
Pension costs
117,583
174,211
2,928,085
4,580,061
6
Directors' remuneration
2021
2020
£
£
Remuneration for qualifying services
321,883
561,136
Company pension contributions to defined contribution schemes
4,268
34,996
326,151
596,132
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2020 - 1).
PREMIER MEDICAL GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
6
Directors' remuneration
(Continued)
- 20 -
Remuneration disclosed above include the following amounts paid to the highest paid director:
2021
2020
£
£
Remuneration for qualifying services
203,503
307,148
7
Interest receivable and similar income
2021
2020
£
£
Interest income
Interest on bank deposits
97
8
Interest payable and similar expenses
2021
2020
£
£
Interest on bank overdrafts and loans
268,608
428,584
9
Taxation
2021
2020
£
£
Current tax
UK corporation tax on profits for the current period
60,600
95,952
Adjustments in respect of prior periods
(194,760)
Group tax relief
185,603
21,106
Total current tax
51,443
117,058
Deferred tax
Origination and reversal of timing differences
7,810
21,260
Total tax charge
59,253
138,318
PREMIER MEDICAL GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
9
Taxation
(Continued)
- 21 -
The actual charge for the year can be reconciled to the expected charge/(credit) for the year based on the profit or loss and the standard rate of tax as follows:
2021
2020
£
£
Profit before taxation
1,664,766
898,459
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2020: 19.00%)
316,306
170,707
Tax effect of expenses that are not deductible in determining taxable profit
1,539
4,267
Unutilised tax losses carried forward
(19,624)
Adjustments in respect of prior years
(194,760)
(17,791)
Effect of change in corporation tax rate
(7,787)
Permanent capital allowances in excess of depreciation
(3,290)
(15,826)
Depreciation on assets not qualifying for tax allowances
4,748
Research and development tax credit
(47,778)
Movement in deferred tax asset
7,810
Movement on provisions
(950)
Taxation charge for the period
59,253
138,318
10
Intangible fixed assets
Software
£
Cost
At 1 January 2021
804,288
Additions
204,343
At 31 December 2021
1,008,631
Amortisation and impairment
At 1 January 2021 and 31 December 2021
Carrying amount
At 31 December 2021
1,008,631
At 31 December 2020
804,288
The software is still being developed and will be amortised once it comes into use.
PREMIER MEDICAL GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 22 -
11
Tangible fixed assets
Leasehold improvements
Fixtures and fittings
Computers
Total
£
£
£
£
Cost
At 1 January 2021
97,113
11,072
141,569
249,754
Additions
4,137
4,328
19,285
27,750
At 31 December 2021
101,250
15,400
160,854
277,504
Depreciation and impairment
At 1 January 2021
38,603
8,634
39,750
86,987
Depreciation charged in the year
31,145
2,248
28,194
61,587
At 31 December 2021
69,748
10,882
67,944
148,574
Carrying amount
At 31 December 2021
31,502
4,518
92,910
128,930
At 31 December 2020
58,510
2,438
101,819
162,767
12
Debtors
2021
2020
Amounts falling due within one year:
£
£
Trade debtors
30,191,232
25,988,669
Amounts owed by group undertakings
76,659
Other debtors
100,067
100,000
Prepayments and accrued income
1,255,322
2,207,006
31,623,280
28,295,675
2021
2020
Amounts falling due after more than one year:
£
£
Deferred tax asset (note 17)
37,118
44,928
Total debtors
31,660,398
28,340,603
PREMIER MEDICAL GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 23 -
13
Creditors: amounts falling due within one year
2021
2020
Notes
£
£
Bank loans and overdrafts
15
11,003,402
7,234,432
Trade creditors
4,372,829
3,154,163
Amounts owed to group undertakings
3,668,505
6,980,026
Corporation tax
60,600
95,952
Other taxation and social security
5,537,922
4,745,959
Other creditors
20,015
13,436
Accruals and deferred income
1,261,646
1,360,894
25,924,919
23,584,862
Included in creditors due within one year are amounts due to group undertakings, the loans are interest free and repayable on demand.
14
Creditors: amounts falling due after more than one year
2021
2020
Notes
£
£
Bank loans and overdrafts
15
1,575,000
2,025,000
15
Loans and overdrafts
2021
2020
£
£
Bank loans
2,025,000
5,000,000
Bank overdrafts
10,553,402
4,259,432
12,578,402
9,259,432
Payable within one year
11,003,402
7,234,432
Payable after one year
1,575,000
2,025,000
The company's finance facilities are provided by Barclays Bank PLC.
The company has access to an invoice discount facility line of £11 million. As at 31 December 2021 the outstanding balance due to Barclays Bank PLC in respect of the facility was £10,553,402 (2020: £4,259,432). This balance is included in creditors due within one year.
The company has a CBILS loan of £5 million. As at 31 December 2021 the outstanding balance due to Barclays Bank PLC in respect of the facility was £2,025,000 (31 December 2020: £5,000,000).
The facilities are secured by a fixed & floating charge over current & future assets of the company.
PREMIER MEDICAL GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 24 -
16
Provisions for liabilities
2021
2020
£
£
Dilapidations
50,000
55,000
Movements on provisions:
Dilapidations
£
At 1 January 2021
55,000
Utilisation of provision
(5,000)
At 31 December 2021
50,000
The provision for dilapidations are in respect of leases on properties occupied by the group.
17
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Assets
Assets
2021
2020
Balances:
£
£
Decelerated capital allowances
27,618
34,478
Provisions
9,500
10,450
37,118
44,928
2021
Movements in the year:
£
Asset at 1 January 2021
(44,928)
Charge to profit or loss
7,810
Asset at 31 December 2021
(37,118)
The deferred tax asset above in respect of provisions is not expected to reverse within the next 12 months.
PREMIER MEDICAL GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 25 -
18
Retirement benefit schemes
2021
2020
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
117,583
174,211
19
Share capital
2021
2020
2021
2020
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
1,000
1,000
1,000
1,000
20
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
115,104
142,251
Between two and five years
460,416
460,416
In over five years
62,755
172,859
638,275
775,526
21
Cross guarantee
A cross guarantee was given by the company in favour of Barclays Bank PLC. The cross guarantee is in support of the finance facilities provided by Barclays Bank PLC to the Kuro Health group of entities. The cross guarantee includes the following group companies: Kuro Health Limited, Premier Medical Group Limited, Rehab-Link Limited, South East Specialist Medicals Reports Limited and Mobile Doctors Limited. The balance owed to Barclays Bank PLC at 31 December 2021 was £15,073,106 (31 December 2020: £10,154,499).
22
Related party transactions
PREMIER MEDICAL GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
22
Related party transactions
(Continued)
- 26 -
During the period the company entered into the following transactions with related parties:
The company made payments for medical legal services of £15,650 (2020: £7,978) to companies controlled or associated to the directors.
No details are included for the subsidiaries that are 100% owned as the exemption for such companies is being claimed.
23
Ultimate controlling party
The company's ultimate parent company is
Kuro Health Limited,
a company incorporated in England and Wales. The financial statements of
Kuro Health Limited a
re available on request from the registered office at 4th Floor, Park Gate, 161-163 Preston Road, Brighton, East Sussex, BN1 6AF
2021-12-31
2021-01-01
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