Company registration number 10975744 (England and Wales)
MEDLINE OPERATIONS LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
MEDLINE OPERATIONS LTD
COMPANY INFORMATION
Directors
Mrs C V Martin-Hondarza Sobrino
Mr T Warburg
Company number
10975744
Registered office
3rd Floor
Quayside Wilderspool Business Park
Greenalls Avenue
Warrington
Cheshire
WA4 6HL
Auditor
Ernst & Young LLP
Chartered Accountants & Statutory Auditors
Edward Pavilion
Royal Albert Dock
Liverpool
L3 4AF
Bankers
Deutsche Bank AG London
1 Great Winchester Street
London
EC2N 2DB
JP Morgan Chase Bank
25 Bank Street
Canary Wharf
London
E14 5JP
MEDLINE OPERATIONS LTD
CONTENTS
Page
Directors' report
1 - 3
Independent auditor's report
4 - 6
Statement of comprehensive income
7
Balance sheet
8
Statement of changes in equity
9
Notes to the financial statements
10 - 18
MEDLINE OPERATIONS LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 1 -
The directors present their annual report and financial statements for the year ended 31 December 2022.
Principal activities
The principal activity of the company is provide the provision of the management and admin function for the distribution of medical equipment in the UK, the company incurs all costs and these costs are recharged to a related party at cost plus for a fixed margin.
Results and dividends
The profit for the year, after taxation, amounted to £112,681 (2021: loss £57,020)
No dividends were paid or received during 2022.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mrs C V Martin-Hondarza Sobrino
Mr F Seehausen
(Resigned 12 July 2022)
Mr T Warburg
(Appointed 30 November 2023)
Principal risks and uncertainties
The company’s operations expose it to a variety of financial and other risks:
Liquidity risk
The company’s objective is to maintain an appropriate level of funding to support current operations. The cash flow is adequate to sustain operations in the short term. In addition, the company’s ultimate parent is committed to providing funding that may be required by the company to continue operations and take advantage of future growth opportunities.
Price risk
The company has a contract that results in all costs incurred been recharged at a fixed margin so eliminates all price risk.
Currency risk
The company has limited exposure to currency risk, sales are invoiced in Sterling and the majority of direct costs are incurred in GBP, whilst we do have some in Euros, as a result the company is not exposed to significant exchange variances between sterling and Euros.
Future developments
No expected charges to the business model.
MEDLINE OPERATIONS LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 2 -
Statement of directors' responsibilities
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The directors are responsible for the maintenance and integrity of the corporate and financial information included on the company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
Qualifying third party indemnity provisions
The company granted an indemnity to one or more directors against liability in respect of proceedings brought by third parties, subject to the conditions set out in the Companies Act 2006. Such qualifying third party indemnity provision remains in force as at the date of approving the director’s report.
Going concern
The company's business activities, together with the factors likely to affect its future development and principal risks and uncertainties are described in the report.
Cash flow forecasts are prepared at a consolidated Medline group basis, using planning inputs from each of the individual entities within the group. The forecast is then subject to review, challenge and sign off at a group level.
Due to the company's cash flows being linked to the performance of the wider Medline group and the cash flows being prepared on a consolidated basis, the Directors have received a letter of support from the Company's ultimate parent company, Mozart Holdings, LP. The letter confirms ongoing financial support, should it be required, for a period of 12 months from the date of signing the financial statements. The Directors have satisfied themselves that Mozart Holdings, LP can provide this support to the Company should it be required following enquiries with the parent company directors and review of the Mozart Holdings, LP financial position. As a result the financial statements are prepared on a going concern basis.
Statement of disclosure to auditor
The directors confirm that:
so far as each director is aware, there is no relevant audit information of which the company's auditor is unaware, and
the directors have taken all the steps that they ought to have taken as directors in order to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information.
MEDLINE OPERATIONS LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 3 -
Auditor
The auditors, Ernst & Young LLP, was appointed post year end and will be reappointed in accordance with section 485 of the Company Act 2006.
Small companies note
In preparing this report, the directors have taken advantage of the small companies exemptions provided by section 415A of the Companies Act 2006.
On behalf of the board
Mrs C V Martin-Hondarza Sobrino
Director
6 March 2024
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF MEDLINE OPERATIONS LTD
- 4 -
Opinion
We have audited the financial statements of Medline Operations Ltd (the 'company') for the year ended 31 December 2022 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 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 2022 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of 12 months from the date of signing the financial statements.
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 directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the directors' report has been prepared in accordance with applicable legal requirements.
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF MEDLINE OPERATIONS LTD
- 5 -
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 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 remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit; or
the directors were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemption in preparing the directors' report and from the requirement to prepare a strategic report.
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.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
The auditor’s assessment of the susceptibility of the entity’s financial statements to material misstatement, including how fraud might occur.
Which laws and regulations the auditor identified as being of significance in the context of the entity.
The auditor’s explanation of its audit response will depend on the risks identified but may include:
- Enquiry of management, those charged with governance and the entity’s solicitors (or in-house legal team) around actual and potential litigation and claims.
- Enquiry of entity staff in tax and compliance functions to identify any instances of non-compliance with laws and regulations.
- Reviewing minutes of meetings of those charged with governance.
- Reviewing internal audit reports.
- Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.
- Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business.
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF MEDLINE OPERATIONS LTD
- 6 -
The auditor’s explanation of its audit response will depend on the risks identified but may include:
- Enquiry of management, those charged with governance and the entity’s solicitors (or in-house legal team) around actual and potential litigation and claims.
- Enquiry of entity staff in tax and compliance functions to identify any instances of non-compliance with laws and regulations.
- Reviewing minutes of meetings of those charged with governance.
- Reviewing internal audit reports.
- Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.
- Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
This report is made solely to the company's 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.
Michael Harvey
Senior Statutory Auditor
For and on behalf of Ernst & Young LLP
6 March 2024
Chartered Accountants
Statutory Auditor
Edward Pavilion
Royal Albert Dock
Liverpool
L3 4AF
MEDLINE OPERATIONS LTD
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2022
- 7 -
2022
2021
Notes
£
£
Turnover
3
2,309,893
2,006,742
Distribution costs
(140,409)
(94,391)
Administrative expenses
(1,846,926)
(1,639,804)
Operating profit
4
322,558
272,547
Interest receivable and similar income
7
4,183
Interest payable and similar expenses
8
(104,961)
(172,299)
Profit before taxation
221,780
100,248
Tax on profit
9
(109,099)
(157,269)
Profit/(loss) and total comprehensive income for the financial year
112,681
(57,021)
The profit and loss account has been prepared on the basis that all operations are continuing operations.
The notes on pages 10 to 18 form part of these financial statements.
MEDLINE OPERATIONS LTD
BALANCE SHEET
AS AT
31 DECEMBER 2022
31 December 2022
- 8 -
2022
2021
Notes
£
£
£
£
Fixed assets
Tangible assets
10
11,587,866
12,224,545
Current assets
Debtors
11
783,416
654,704
Cash at bank and in hand
2,857,524
2,222,947
3,640,940
2,877,651
Creditors: amounts falling due within one year
12
(810,810)
(750,068)
Net current assets
2,830,130
2,127,583
Total assets less current liabilities
14,417,996
14,352,128
Creditors: amounts falling due after more than one year
13
(11,765,856)
(11,765,856)
Provisions for liabilities
Deferred tax liability
14
203,768
250,581
(203,768)
(250,581)
Net assets
2,448,372
2,335,691
Capital and reserves
Called up share capital
16
10,000
10,000
Share premium account
4,979,215
4,979,215
Profit and loss reserves
17
(2,540,843)
(2,653,524)
Total equity
2,448,372
2,335,691
The notes on pages 10 to 18 form part of these financial statements.
These financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements were approved by the board of directors and authorised for issue on 6 March 2024 and are signed on its behalf by:
Mrs C V Martin-Hondarza Sobrino
Director
Company Registration No. 10975744
MEDLINE OPERATIONS LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
- 9 -
Share capital
Share premium account
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 January 2021
10,000
2,479,215
(2,596,503)
(107,288)
Year ended 31 December 2021:
Loss and total comprehensive income for the year
-
-
(57,021)
(57,021)
Capital Contribution from Medline Stellar
2,500,000
2,500,000
Balance at 31 December 2021
10,000
4,979,215
(2,653,524)
2,335,691
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
-
112,681
112,681
Balance at 31 December 2022
10,000
4,979,215
(2,540,843)
2,448,372
The notes on pages 10 to 18 form part of these financial statements.
MEDLINE OPERATIONS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
- 10 -
1
Accounting policies
Company information
Medline Operations Ltd is a private company limited by shares incorporated in England and Wales. The registered office is 3rd Floor, Quayside Wilderspool Business Park, Greenalls Avenue, Warrington, Cheshire, WA4 6HL.
The principal activity of the company is provide the provision of the management and admin function for the distribution of medical equipment in the UK, the company incurs all costs and these costs are recharged to a related party at cost plus for a fixed margin.
1.1
Basis of preparation of financial statements
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
1.2
Going concern
The company's business activities, together with the factors likely to affect its future development and principal risks and uncertainties are described in the report. true
Cash flow forecasts are prepared at a consolidated Medline group basis, using planning inputs from each of the individual entities within the group. The forecast is then subject to review, challenge and sign off at a group level.
Due to the company's cash flows being linked to the performance of the wider Medline group and the cash flows being prepared on a consolidated basis, the Directors have received a letter of support from the Company's ultimate parent company, Mozart Holdings, LP. The letter confirms ongoing financial support, should it be required, for a period of 12 months from the date of signing the financial statements. The Directors have satisfied themselves that Mozart Holdings, LP can provide this support to the Company should it be required following enquiries with the parent company directors and review of the Mozart Holdings, LP financial position. As a result the financial statements are prepared on a going concern basis.
1.3
Revenue
Revenue is derived from all costs incurred recharged with a cost plus fixed margin, and is shown net of VAT and other sales related taxes.
1.4
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:
Buildings
30 years
Short-term leasehold property
10 years
Machinery
5 years
Fixtures and fittings
5 years
Computers equipment
5 years
MEDLINE OPERATIONS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 11 -
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.
1.5
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.6
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.
1.7
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
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.
1.8
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.
1.9
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
MEDLINE OPERATIONS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 12 -
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.
1.10
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
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.
1.11
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.12
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to 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.
MEDLINE OPERATIONS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 13 -
1.13
Foreign currency translation
Functional and presentation currency
The company's functional and presentational currency is GBP.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Nonmonetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.
Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the statement of comprehensive income within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.
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.
The useful expected lives of property, plant and equipment - estimation is required to assess the expected period in which economic benefit shall be provided by categories of property, plant and equipment.
Accounting treatment of leasehold property occupied by group entities - judgement is required in determining the appropriate accounting treatment to be the classification of leasehold property as property, plant and equipment rather than investment property, as the asset is considered by management to be owner occupied on consolidation at Group level.
3
Turnover
2022
2021
£
£
Turnover analysed by geographical market
United Kingdom
2,309,893
2,006,742
MEDLINE OPERATIONS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 14 -
4
Operating profit
2022
2021
Operating profit for the year is stated after charging:
£
£
Exchange losses
199
102
Depreciation of owned tangible fixed assets
667,011
661,642
Operating lease charges
28,606
30,598
5
Auditor's remuneration
2022
2021
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
29,400
10,300
For other services
Other assurance services
1,000
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2022
2021
Number
Number
Warehouse
19
10
During the year, no directors received any emoluments from the company.
Their aggregate remuneration comprised:
2022
2021
£
£
Wages and salaries
568,035
375,993
Social security costs
40,982
22,922
Pension costs
8,510
4,734
617,527
403,649
7
Interest receivable and similar income
2022
2021
£
£
Interest income
Interest on bank deposits
4,183
MEDLINE OPERATIONS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 15 -
8
Interest payable and similar expenses
Note
2022
2021
£
£
Interest on financial liabilities measured at amortised cost:
Interest on loans
13
104,961
172,299
9
Taxation
2022
2021
£
£
Current tax
UK corporation tax on profits for the current period
155,755
128,885
Adjustments in respect of prior periods
(10)
Total current tax
155,745
128,885
Deferred tax
Origination and reversal of timing differences
(35,578)
(32,140)
Changes in tax rates
(11,235)
60,139
Adjustment in respect of prior periods
167
385
Total deferred tax
(46,646)
28,384
Total tax charge
109,099
157,269
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2022
2021
£
£
Profit before taxation
221,780
100,248
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
42,138
19,047
Tax effect of expenses that are not deductible in determining taxable profit
79,099
79,100
Tax effect of income not taxable in determining taxable profit
(1,060)
(1,401)
Adjustments in respect of prior years
157
385
Effect of change in corporation tax rate
(11,235)
60,138
Taxation charge for the year
109,099
157,269
In the Spring Budget 2021, the Government announced that from 1 April 2023 the Corporation tax rate will increase to 25%. Since the proposal to increase the rate to 25% this has been enacted at the balance sheet date and its effects are included in these financial statements as deferred taxation has been calculated at this rate.
MEDLINE OPERATIONS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 16 -
10
Tangible fixed assets
Buildings
Short-term leasehold property
Machinery
Fixtures and fittings
Computers equipment
Total
£
£
£
£
£
£
Cost
At 1 January 2022
12,489,265
1,512,065
130,212
311,952
120,677
14,564,171
Additions
11,743
12,649
5,940
30,332
At 31 December 2022
12,489,265
1,523,808
130,212
324,601
126,617
14,594,503
Depreciation and impairment
At 1 January 2022
1,663,296
458,550
49,945
92,434
75,401
2,339,626
Depreciation charged in the year
416,307
156,209
26,224
43,244
25,027
667,011
At 31 December 2022
2,079,603
614,759
76,169
135,678
100,428
3,006,637
Carrying amount
At 31 December 2022
10,409,662
909,049
54,043
188,923
26,189
11,587,866
At 31 December 2021
10,825,969
1,053,515
80,267
219,518
45,276
12,224,545
11
Debtors
2022
2021
Amounts falling due within one year:
£
£
Trade debtors
166,157
78,654
Amounts owed by group undertakings
520,981
332,912
Other debtors
1,501
Prepayments and accrued income
94,777
243,138
783,416
654,704
Amounts owed by group undertakings are unsecured, interest free, have no fixed date of repayment and repayable on demand.
12
Creditors: amounts falling due within one year
2022
2021
£
£
Trade creditors
269,449
278,589
Amounts owed to group undertakings
104,961
65,641
Corporation tax
284,630
128,885
Other taxation and social security
73,208
20,911
Other creditors
11,822
Accruals and deferred income
78,562
244,220
810,810
750,068
MEDLINE OPERATIONS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
12
Creditors: amounts falling due within one year
(Continued)
- 17 -
Amounts owed to group undertakings are unsecured with the loan interest accruing at 0.89% payable annually in arrears in May.
13
Creditors: amounts falling due after more than one year
2022
2021
£
£
Amounts owed to group undertakings
11,765,856
11,765,856
Amounts owed to group undertakings are unsecured, accruing interest at 0.89% and with principal fully repayable on maturity in 2027. During the year, there was a repayment of £nil and £104,961 in interest of the intercompany loan.
14
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2022
2021
Balances:
£
£
Accelerated capital allowances
203,559
250,414
Short term timing differences
209
167
203,768
250,581
2022
Movements in the year:
£
Liability at 1 January 2022
250,581
Credit to profit or loss
(46,813)
Liability at 31 December 2022
203,768
The deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.
MEDLINE OPERATIONS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 18 -
15
Retirement benefit schemes
2022
2021
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
8,510
4,734
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.
16
Share capital
2022
2021
2022
2021
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
10,000
10,000
10,000
10,000
17
Profit and loss reserves
Includes all current and prior period retained profits and losses.
18
Related party transactions
The company has taken advantages of the exemption in paragraph 33.1A of FRS 102 and not disclosed transactions with wholly-owned group undertakings.
19
Ultimate controlling party
The immediate parent undertaking is Medline Stellar UK Limited, a company registered in England and Wales. The financial statements can be obtained from Companies House.
The ultimate parent undertaking and controlling party is Mozart Holdings,LP, a company registered in the United States of America. The financial statements of the ultimate parent are available on request by writing to Medline Operations Limited at the registered address.
20
Subsequent events
On 02/11/23, 1 Ordinary share capital of £1 was issued for a consideration of £1,000,000. The consideration was settled via bank transfer.
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