Company Registration No. 03209576 (England and Wales)
Network Medical Products Limited
Annual Report And Financial Statements
For The Year Ended 31 December 2021
NETWORK MEDICAL PRODUCTS LIMITED
Network Medical Products Limited
COMPANY INFORMATION
Directors
Mr J R Ishbia
Mr D Pierce
Company number
03209576
Registered office
Coronet House
Kearsley Road
Ripon
HG4 2SG
Auditor
Azets Audit Services Limited
Triune Court
Monks Cross Drive
York
YO32 9GZ
NETWORK MEDICAL PRODUCTS LIMITED
Network Medical Products Limited
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Notes to the financial statements
12 - 23
NETWORK MEDICAL PRODUCTS LIMITED
Network Medical Products Limited
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
- 1 -
The directors present the strategic report for the year ended 31 December 2021.
Business model
We concentrate on Innovation and quality by producing dynamic and superior equipment within the key fields of Ophthalmology and ENT.
We strive to deliver service excellence to our customers through the Network Medical branding. We work with our customers, suppliers, and new product development team to provide innovative and exceptional industry based technical expertise which is applied to understanding the medical processes and improvements that can be made to products. This enables our customers to improve their service and ensures that we are a market leader, meeting the customer needs.
We operate in the UK, Europe and Worldwide supplying medical equipment to Hospitals, distributors, and health professionals in over 80 countries worldwide.
Relationships with our suppliers and customers are vital to ensure our mutual businesses prosper, strengthen, and continue to work together in the future.
Business review and results
NETWORK MEDICAL PRODUCTS LIMITED
Network Medical Products Limited
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 2 -
Key performance indicators
The company adopts a variety of key performance indicators (KPI’s) to in which the senior management monitor it’s performance. The principal KPI’s are Quality and Regulatory, sales and margin reports, Cashflow including Accounts Receivable and Accounts Payable, monthly management accounts, Inventory control and customer feedback.
To ensure customer excellence, any customer concerns are monitored and followed up promptly to ensure customer satisfaction and expectation as part of the Network Medical process.
The use of the KPI’s assists management in ensuring that service levels are established, and profitability is scrutinized, with any variances analysed with action taken where appropriate.
Principal risks and uncertainties
Detailed monthly management accounts are prepared and reviewed to monitor actual financial performance against budget which is agreed annually by the senior management team.
The cashflow is monitored weekly to ensure enough liquidity throughout the business.
The company is subject to exchange rate fluctuations for which they endeavour to ensure the best value for money at the time.
Future developments
The company operates in a very competitive market and concentrates on Innovation and introduction of new and exciting medical items. This provides the company with an advantage over its competitors. The companies aim to is to continue to grow and become a market leader for all of its products.
Financial instruments
The company is exposed to the usual credit risk and cash flow risk associated with selling on credit and manages this through strict credit control procedures.
Mr D Pierce
Director
28 April 2022
NETWORK MEDICAL PRODUCTS LIMITED
Network Medical Products 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 principal activity of the company continued to be that of being an innovative designer and manufacturer of specialised sterile single use products for use in ENT and Ophthalmic surgery.
Results and dividends
The results for the year are set out on page 9.
Ordinary dividends were paid amounting to £573,477. 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:
Mr J R Ishbia
Mr D Pierce
Auditor
Azets Audit Services Limited were appointed auditor to the company following their acquisition of the trade of Garbutt & Elliott Audit Limited on 1 December 2021. In accordance with s487(2) of the Companies Act 2006 they are deemed reappointed annually.
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
Mr D Pierce
Director
28 April 2022
NETWORK MEDICAL PRODUCTS LIMITED
Network Medical Products 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.
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.
NETWORK MEDICAL PRODUCTS LIMITED
Network Medical Products Limited
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF NETWORK MEDICAL PRODUCTS LIMITED
- 5 -
Opinion
We have audited the financial statements of Network Medical Products Limited (the 'company') for the year ended 31 December 2021 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 December 2021 and of its loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
NETWORK MEDICAL PRODUCTS LIMITED
Network Medical Products Limited
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF NETWORK MEDICAL PRODUCTS LIMITED
- 6 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report and the directors' report.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
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.
NETWORK MEDICAL PRODUCTS LIMITED
Network Medical Products Limited
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF NETWORK MEDICAL PRODUCTS LIMITED
- 7 -
Extent to which the audit was considered capable of detecting irregularities, including fraud
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial and sector experience, through discussion with the directors and other management, and from inspection of the company's regulatory and legal correspondence. We discussed with the directors and other management the policies and procedures regarding compliance with laws and regulations. We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance during the audit.
The company is subject to laws and regulations that directly affect the financial statements including financial reporting legislation (including related companies legislation), distributable profits legislation, pensions legislation, taxation legislation and further laws and regulations that could indirectly affect the financial statements, comprising environmental, employment legislation and health and safety and, in the current climate, Covid-19 regulations. We assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items. Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the directors and other management and inspection of regulatory and legal correspondence, if any. These procedures did not identify any potentially material actual or suspected non-compliance.
To identify risks of material misstatement due to fraud we considered the opportunities, incentives and pressures that may exist within the company to commit fraud. Our risk assessment procedures included: enquiry of directors to understand the high-level policies and procedures in place to prevent and detect fraud, reading Board minutes and considering performance targets and incentive schemes in place for management. We communicated identified fraud risks throughout our team and remained alert to any indications of fraud during the audit.
As a result of these procedures, we identified the greatest potential for fraud in the following areas:
- revenue recognition and in particular the risk that revenue is recorded in the wrong period; and
- subjective accounting estimates
Both fraud risks arise due to a desire to present stronger results and enable management to benefit from enhanced incentives. As required by auditing standards we also identified and addressed the risk of management override of controls.
We performed the following procedures to address the risks of fraud identified:
- identifying and testing high risk journal entries through vouching the entries to supporting documentation.
- assessing significant accounting estimates for bias.
- testing the timing and recognition of revenue and, in particular, that it was appropriately recognised.
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it.
In addition, as with any audit, there remained a higher risk of non-detection of fraud, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. Our audit procedures are designed to detect material misstatement. We are not responsible for preventing non-compliance or fraud and cannot be expected to detect non-compliance with all laws and regulations.
NETWORK MEDICAL PRODUCTS LIMITED
Network Medical Products Limited
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF NETWORK MEDICAL PRODUCTS LIMITED
- 8 -
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
Martin Davey (Senior Statutory Auditor)
For and on behalf of Azets Audit Services Limited
29 April 2022
Chartered Accountants
Statutory Auditor
Triune Court
Monks Cross Drive
York
YO32 9GZ
NETWORK MEDICAL PRODUCTS LIMITED
Network Medical Products Limited
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2021
- 9 -
2021
2020
Notes
£
£
Turnover
3
5,277,170
10,605,662
Cost of sales
(4,336,192)
(5,967,124)
Gross profit
940,978
4,638,538
Administrative expenses
(1,540,770)
(2,083,389)
Other operating income
20,160
24,965
Operating (loss)/profit
4
(579,632)
2,580,114
Interest receivable and similar income
6
191
139
Interest payable and similar expenses
7
(1,301)
(Loss)/profit before taxation
(579,441)
2,578,952
Tax on (loss)/profit
8
80,000
(540,000)
(Loss)/profit for the financial year
(499,441)
2,038,952
The profit and loss account has been prepared on the basis that all operations are continuing operations.
NETWORK MEDICAL PRODUCTS LIMITED
Network Medical Products Limited
BALANCE SHEET
AS AT
31 DECEMBER 2021
31 December 2021
- 10 -
2021
2020
Notes
£
£
£
£
Fixed assets
Intangible assets
10
85,226
30,479
Tangible assets
11
440,959
434,337
526,185
464,816
Current assets
Stocks
12
1,303,983
1,175,321
Debtors
13
2,652,064
2,753,943
Cash at bank and in hand
172,779
1,465,130
4,128,826
5,394,394
Creditors: amounts falling due within one year
14
(1,783,903)
(1,960,184)
Net current assets
2,344,923
3,434,210
Total assets less current liabilities
2,871,108
3,899,026
Provisions for liabilities
Deferred tax liability
15
125,000
80,000
(125,000)
(80,000)
Net assets
2,746,108
3,819,026
Capital and reserves
Called up share capital
350,122
350,122
Share premium account
19,143
19,143
Profit and loss reserves
2,376,843
3,449,761
Total equity
2,746,108
3,819,026
The financial statements were approved by the board of directors and authorised for issue on 28 April 2022 and are signed on its behalf by:
Mr D Pierce
Director
Company Registration No. 03209576
NETWORK MEDICAL PRODUCTS LIMITED
Network Medical Products Limited
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2021
- 11 -
Share capital
Share premium account
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 January 2020
350,122
19,143
3,218,501
3,587,766
Year ended 31 December 2019:
Profit and total comprehensive income for the year
-
-
2,038,952
2,038,952
Dividends
9
-
-
(1,807,692)
(1,807,692)
Balance at 31 December 2020
350,122
19,143
3,449,761
3,819,026
Year ended 31 December 2021:
Loss and total comprehensive income for the year
-
-
(499,441)
(499,441)
Dividends
9
-
-
(573,477)
(573,477)
Balance at 31 December 2021
350,122
19,143
2,376,843
2,746,108
NETWORK MEDICAL PRODUCTS LIMITED
Network Medical Products Limited
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
- 12 -
1
Accounting policies
Company information
Network Medical Products Limited is a private company limited by shares incorporated in England and Wales. The registered office is Coronet House, Kearsley Road, Ripon, HG4 2SG.
1.1
Accounting convention
These financial statements have been prepared in accordance with “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £1.
The financial statements have been prepared under the historical cost convention, modified to include certain financial instruments at fair value. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’: 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 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of SCP Medical Holdings (UK) Limited. These consolidated financial statements are available from its registered office, which is Winston & Strawn London LLP, Citypoint, 1 Ropemaker Street, London, EC2Y 9AW.
The immediate parent company is SCP Medical Holdings (UK) Limited, which is the smallest group into which these financial statements are consolidated. The registered office of SCP Medical Holdings (UK) Limited is Winston & Strawn London LLP, Citypoint, 1 Ropemaker Street, London, EC2Y 9AW. The ultimate parent company is Shore Capital Partners, LLC, which is the largest group into which these financial statements are consolidated. The registered office of Shore Capital Partners, LLC is 1 East Wacker Drive, Suite 2900, Chicago, IL 60601, United States.
1.2
Going concern
The directors have considered all factors, including in the wider economy, as part of their assessment of going concern. Although the current economic climate in light of the COVID-19 pandemic creates both cashflow and profitability risks for the company, the directors believe on balance that the company has sufficient resources to enable trading to continue for a period of at least one year from the date of approval of the financial statements, on the basis of information currently available to them as at the point of approving these financial statements. Accordingly, these financial statements have been prepared on the going concern basis.true
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
NETWORK MEDICAL PRODUCTS LIMITED
Network Medical Products Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 13 -
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
1.4
Research and development expenditure
Research and development expenditure is written off against profits in the year in which it is incurred.
1.5
Intangible fixed assets - goodwill
Goodwill, being the amount paid in connection with the acquisition of a business in 2002, has been written off evenly over its estimated useful life of five years.
1.6
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 of assets less their residual values over their useful lives on the following bases:
Software
25% reducing balance
1.7
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:
Plant and equipment
25% reducing balance
Motor vehicles
25% reducing balance
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.
1.8
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.
NETWORK MEDICAL PRODUCTS LIMITED
Network Medical Products Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 14 -
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 is estimated to be less than its carrying amount, the carrying amount of the asset 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 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 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.
1.9
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.10
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.
1.11
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.
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 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.
NETWORK MEDICAL PRODUCTS LIMITED
Network Medical Products Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 15 -
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.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans and loans from fellow group companies, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
NETWORK MEDICAL PRODUCTS LIMITED
Network Medical Products Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 16 -
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.12
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.
1.13
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.
NETWORK MEDICAL PRODUCTS LIMITED
Network Medical Products Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 17 -
1.14
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
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.
1.15
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.16
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
1.17
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
1.18
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.
NETWORK MEDICAL PRODUCTS LIMITED
Network Medical Products 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.
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.
Stock Valuations
The company converts raw materials to finished goods. Stock values include costs such as labour and overheads attributable to generating finished goods, as management believe this is the most suitable costing method to take into account the matching concept of accounting.
3
Turnover and other revenue
2021
2020
£
£
Turnover analysed by class of business
Medical instruments and supplies
5,277,170
10,605,662
2021
2020
£
£
Turnover analysed by geographical market
United Kingdom
1,536,653
6,969,126
Rest of Europe
2,419,423
1,762,748
Rest of the world
1,321,094
1,873,788
5,277,170
10,605,662
4
Operating (loss)/profit
2021
2020
Operating (loss)/profit for the year is stated after charging/(crediting):
£
£
Exchange differences apart from those arising on financial instruments measured at fair value through profit or loss
55,366
52,969
Research and development costs
10,455
6,148
Government grants
(19,977)
(12,499)
Fees payable to the company's auditor for the audit of the company's financial statements
10,750
8,550
Depreciation of owned tangible fixed assets
101,086
91,624
Amortisation of intangible assets
26,642
9,441
Operating lease charges
116,337
100,295
NETWORK MEDICAL PRODUCTS LIMITED
Network Medical Products Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 19 -
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2021
2020
Number
Number
Cost of sales
44
56
Administrative
8
10
Directors
2
2
Total
54
68
Their aggregate remuneration comprised:
2021
2020
£
£
Wages and salaries
1,860,784
1,966,083
Social security costs
166,754
162,014
Pension costs
36,920
44,604
2,064,458
2,172,701
6
Interest receivable and similar income
2021
2020
£
£
Interest income
Interest on bank deposits
191
139
7
Interest payable and similar expenses
2021
2020
£
£
Other interest
1,301
8
Taxation
2021
2020
£
£
Current tax
UK corporation tax on profits for the current period
(125,000)
550,000
NETWORK MEDICAL PRODUCTS LIMITED
Network Medical Products Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
8
Taxation
2021
2020
£
£
(Continued)
- 20 -
Deferred tax
Origination and reversal of timing differences
16,991
(10,000)
Changes in tax rates
28,009
Total deferred tax
45,000
(10,000)
Total tax (credit)/charge
(80,000)
540,000
The actual (credit)/charge for the year can be reconciled to the expected (credit)/charge for the year based on the profit or loss and the standard rate of tax as follows:
2021
2020
£
£
(Loss)/profit before taxation
(579,441)
2,578,952
Expected tax (credit)/charge based on the standard rate of corporation tax in the UK of 19.00% (2020: 19.00%)
(110,094)
490,001
Tax effect of expenses that are not deductible in determining taxable profit
211
47,531
Effect of change in corporation tax rate
28,009
Other adjustments
1,874
2,468
Taxation (credit)/charge for the year
(80,000)
540,000
9
Dividends
2021
2020
£
£
Interim paid
573,477
1,807,692
NETWORK MEDICAL PRODUCTS LIMITED
Network Medical Products Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 21 -
10
Intangible fixed assets
Goodwill
Software
Total
£
£
£
Cost
At 1 January 2021
130,000
45,196
175,196
Additions
81,389
81,389
At 31 December 2021
130,000
126,585
256,585
Amortisation and impairment
At 1 January 2021
130,000
14,717
144,717
Amortisation charged for the year
26,642
26,642
At 31 December 2021
130,000
41,359
171,359
Carrying amount
At 31 December 2021
85,226
85,226
At 31 December 2020
30,479
30,479
11
Tangible fixed assets
Plant and equipment
Motor vehicles
Total
£
£
£
Cost
At 1 January 2021
1,135,749
7,152
1,142,901
Additions
107,708
107,708
At 31 December 2021
1,243,457
7,152
1,250,609
Depreciation and impairment
At 1 January 2021
701,412
7,152
708,564
Depreciation charged in the year
101,086
101,086
At 31 December 2021
802,498
7,152
809,650
Carrying amount
At 31 December 2021
440,959
440,959
At 31 December 2020
434,337
434,337
NETWORK MEDICAL PRODUCTS LIMITED
Network Medical Products Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 22 -
12
Stocks
2021
2020
£
£
Raw materials and consumables
836,782
682,967
Work in progress
114,023
Finished goods and goods for resale
353,178
492,354
1,303,983
1,175,321
13
Debtors
2021
2020
Amounts falling due within one year:
£
£
Trade debtors
1,169,496
1,421,262
Amounts owed by group undertakings
1,235,519
1,235,519
Other debtors
15,789
48,232
Prepayments and accrued income
231,260
48,930
2,652,064
2,753,943
14
Creditors: amounts falling due within one year
2021
2020
£
£
Trade creditors
764,204
979,532
Amounts owed to group undertakings
434,689
40,366
Corporation tax
425,000
550,000
Other taxation and social security
59,776
55,241
Other creditors
8,448
Accruals and deferred income
91,786
335,045
1,783,903
1,960,184
15
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2021
2020
Balances:
£
£
Accelerated capital allowances
125,000
80,000
NETWORK MEDICAL PRODUCTS LIMITED
Network Medical Products Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
15
Deferred taxation
(Continued)
- 23 -
2021
Movements in the year:
£
Liability at 1 January 2021
80,000
Charge to profit or loss
16,991
Effect of change in tax rate - profit or loss
28,009
Liability at 31 December 2021
125,000
16
Retirement benefit schemes
2021
2020
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
36,920
44,604
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.
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
116,541
70,758
Between two and five years
366,147
260,000
In over five years
720,417
785,417
1,203,105
1,116,175
18
Related party transactions
The company has taken advantage of the disclosure exemptions of Section 33.1A of FRS 102 which permit it to not present details of its transactions with members of the group headed by SCP Medical Holdings (UK) Limited where relevant group companies are all wholly owned. During the year the company has been wholly owned and accordingly current year transactions are not disclosed above.
19
Ultimate controlling party
The immediate controlling party is SCP Medical Holdings (UK) Limited and the ultimate controlling party is Shore Capital Partners, LLC. The registered office of SCP Medical Holdings (UK) Limited is Winston & Strawn London LLP, Citypoint, 1 Ropemaker Street, London, EC2Y 9AW. The registered office of Shore Capital Partners, LLC is 1 East Wacker Drive, Suite 2900, Chicago, IL 60601, United States.
2021-12-312021-01-01falseCCH SoftwareCCH Accounts Production 2022.100Mr J R IshbiaMr D Pierce032095762021-01-012021-12-3103209576bus:Director12021-01-012021-12-3103209576bus:Director22021-01-012021-12-3103209576bus:RegisteredOffice2021-01-012021-12-31032095762021-12-31032095762020-01-012020-12-3103209576core:RetainedEarningsAccumulatedLosses2020-01-012020-12-3103209576core:RetainedEarningsAccumulatedLosses2021-01-012021-12-3103209576core:OtherResidualIntangibleAssets2021-12-3103209576core:OtherResidualIntangibleAssets2020-12-3103209576core:Goodwill2021-12-3103209576core:ComputerSoftware2021-12-3103209576core:Goodwill2020-12-3103209576core:ComputerSoftware2020-12-31032095762020-12-3103209576core:PlantMachinery2021-12-3103209576core:MotorVehicles2021-12-3103209576core:PlantMachinery2020-12-3103209576core:MotorVehicles2020-12-3103209576core:CurrentFinancialInstrumentscore:WithinOneYear2021-12-3103209576core:CurrentFinancialInstrumentscore:WithinOneYear2020-12-3103209576core:CurrentFinancialInstruments2021-12-3103209576core:CurrentFinancialInstruments2020-12-3103209576core:ShareCapital2021-12-3103209576core:ShareCapital2020-12-3103209576core:SharePremium2021-12-3103209576core:SharePremium2020-12-3103209576core:RetainedEarningsAccumulatedLosses2021-12-3103209576core:RetainedEarningsAccumulatedLosses2020-12-3103209576core:ShareCapital2019-12-3103209576core:SharePremium2019-12-3103209576core:RetainedEarningsAccumulatedLosses2019-12-31032095762019-12-3103209576core:Goodwill2021-01-012021-12-3103209576core:IntangibleAssetsOtherThanGoodwill2021-01-012021-12-3103209576core:ComputerSoftware2021-01-012021-12-3103209576core:PlantMachinery2021-01-012021-12-3103209576core:MotorVehicles2021-01-012021-12-310320957612021-01-012021-12-310320957612020-01-012020-12-3103209576core:UKTax2021-01-012021-12-3103209576core:UKTax2020-01-012020-12-3103209576core:Goodwill2020-12-3103209576core:ComputerSoftware2020-12-31032095762020-12-3103209576core:Goodwillcore:ExternallyAcquiredIntangibleAssets2021-01-012021-12-3103209576core:ComputerSoftwarecore:ExternallyAcquiredIntangibleAssets2021-01-012021-12-3103209576core:ExternallyAcquiredIntangibleAssets2021-01-012021-12-3103209576core:PlantMachinery2020-12-3103209576core:MotorVehicles2020-12-3103209576core:WithinOneYear2021-12-3103209576core:WithinOneYear2020-12-3103209576core:BetweenTwoFiveYears2021-12-3103209576core:BetweenTwoFiveYears2020-12-3103209576core:MoreThanFiveYears2021-12-3103209576core:MoreThanFiveYears2020-12-3103209576bus:PrivateLimitedCompanyLtd2021-01-012021-12-3103209576bus:FRS1022021-01-012021-12-3103209576bus:Audited2021-01-012021-12-3103209576bus:FullAccounts2021-01-012021-12-31xbrli:purexbrli:sharesiso4217:GBP