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Registered number: 00979521






WELLCOM LONDON LIMITED

FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

 
WELLCOM LONDON LIMITED
 
 
 
COMPANY INFORMATION


 
Directors
Mr D Bridges 
Mr S Lee 
Mr I C Choi 




Company secretary
Mr A. Lumsden



Registered number
00979521



Registered office
1 Berry Place

London

England

EC1V 0JD




Independent auditors
Sayers Butterworth LLP
Chartered Accountants and Statutory Auditor

3rd Floor

12 Gough Square

London

EC4A 3DW




Bankers
Lloyds Bank
Holborn Circus

Thavies Inn House

6 Holborn Circus

London

EC1N 2HP




Solicitors
Excello Law
5 Chancery Lane

London

WC2A 1LG





 
WELLCOM LONDON LIMITED
 
 
 
CONTENTS



Page
Strategic report
 
1 - 2
Directors' report
 
3 - 4
Independent auditors' report
 
5 - 7
Statement of profit or loss and other comprehensive income
 
8
Statement of financial position
 
9 - 10
Statement of changes in equity
 
11 - 12
Statement of cash flows
 
13 - 14
Notes to the financial statements
 
15 - 42

 
WELLCOM LONDON LIMITED
 
 
 
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

Introduction
 
The directors present their Strategic Report for the year ended 31 December 2023. 

We aim to present a balanced and comprehensive review of the development and performance of our business during the period and its position at the period end. Our review is consistent with the size and non-complex nature of our business and is written in the context of the risks and uncertainties we face.

Business review, development and performance
 
The business made a profit before tax for the period of £383,307 against a profit before tax of £46,350 for the period ended 31 December 2022. Sales for the year were £15,460,315 against £15,693,482 for the year ended 31 December 2022, producing a value-added margin of £3,375,391 for 2023 (21.83%), and £3,000,295 for 2022 (19.12%) respectively. The business cash position remains positive.

Financial key performance indicators
 
The company's key performance indicators are sales, value added margin, and operating profit, while monitoring sales and gross profit for key clients. As shown in the Statement of Profit and Loss and Other Comprehensive Income, and above, there have been improvements in these indicators except for sales, both in absolute and percentage terms comparing with prior periods. This is  due to a combination of factors including an increase in retained work for some major clients but also significant project based work.
The directors are satisfied with the result for the year within the context of certain client changes in the year.
Table of KPI's:




2023
2022

%
%

Sales increase/(decrease)
(1.49)
6.80

Gross profit margin
21.83
19.12

Operating profit margin
2.86
0.74

Principal risks and uncertainties
 
Competitive pricing pressure within the sector and the economy generally is a key risk to the business as are potentially associated decisions, and strategic or creative decisions, by clients to consolidate or change supply, or supply in-house.
The effects of COVID-19, while not impacting the business materially financially for the period, does however bring new risks and uncertainties in regard to clients, staff, and operations the extent of which are dependent on numerous factors, including but not limited to, the length of any potential future lockdowns, government interventions, staff absence, virus recurrence, and any impact on general economic activity, client downturns in activity, and insolvencies.
The company seeks to mitigate and manage these risks by providing value added services, continually improving and extending service offerings, by maintaining strong client relationships, winning new business, and by continuing to invest in both people and technology.

Page 1

 
WELLCOM LONDON LIMITED
 
 
 
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Employees
 
Our employees are key to the operation and success of the business. We regularly review and benchmark our remuneration and benefits packages to ensure we are competitive with our industry. We also continue to review work life balance and resourcing to ensure that our employees' working environment is a happy one.

Environment

We are committed to improving the company's environmental efficiency in the workplace and have implemented several initiatives including a recycling program, responsibly disposing of electrical goods, adoption of 100% renewable energy supply, and other actions.
The company also encourages video conferencing as opposed to travel where possible and has an active cycle to work policy.
The company has ISO 14001 - Environmental Management - certification and looks to comply with all relevant environmental legislation.

Year end position

During the year ended 31 December 2023, the company has recognised a profit of £287,480 (year ended 31 December 2022: £36,900).
There are no immediate developments relevant at the year end.


This report was approved by the board on 18 March 2024 and signed on its behalf.



Mr D Bridges
Director

Page 2

 
WELLCOM LONDON LIMITED
 
 
 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

The directors present their report and the financial statements for the year ended 31 December 2023.

Principal activity

The principal activity of the company was that of the provision of marcomms creative production services.

Results and dividends

The profit for the year, after taxation, amounted to £287,480 (2022 - £36,900).

No dividends were paid during the year (2022: £1,000,000). The directors do not recommend the payment of a final dividend.

Directors

The directors who served during the year were:

Mr D Bridges 
Mr S Lee 
Mr I C Choi 

Directors' responsibilities statement

The directors are responsible for preparing the Strategic Report, Directors' Report, and financial statements in accordance with applicable law.

Company law requires the directors to prepare financial statements for each financial year. Under that law they have elected to prepare the financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the UK.

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 the financial statements, the directors are required to:

select suitable accounting policies and then apply them consistently;

make judgments and estimates that are reasonable and prudent;

state whether they have been prepared in accordance with IFRS as adopted by the UK, subject to any material departures disclosed and explained in the financial statements;

assess the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and

use the going concern basis of accounting unless they either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

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 responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the company and to prevent and detect fraud and other irregularities.

Page 3

 
WELLCOM LONDON LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Financial risk management objectives and policies

Details of the company's financial risk management objectives and policies are set out in note 22 to these financial statements.

Matters covered in the strategic report

Disclosures of strategic importance that would usually be contained in the Directors' Report are presented in the Strategic Report.

Disclosure of information to auditors

Each of the persons who are directors at the time when this directors' report is approved has confirmed that:
 
so far as the directors are aware, there is no relevant audit information of which the company's auditors are unaware, and

the directors have taken all the steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the company's auditors are aware of that information.

Post year end events

There have been no significant events affecting the company since the year end.

Auditors

The auditorsSayers Butterworth LLPwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board on 18 March 2024 and signed on its behalf.
 



Mr D Bridges
Director
Page 4

 
WELLCOM LONDON LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF WELLCOM LONDON LIMITED
 

Opinion


We have audited the financial statements of Wellcom London Limited for the year ended 31 December 2023 which comprise the Statement of Profit or Loss and Other Comprehensive Incomethe Statement of Financial Positionthe Statement of Cash Flowsthe Statement of Changes in Equity and the related notes, including a summary of significant accounting policies set out on pages 15 - 24. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the United Kingdom.

In our opinion the financial statements:

give a true and fair view of the state of the company's affairs as at 31 December 2023 and of its profit for the year then ended;

have been properly prepared in accordance with IFRSs as adopted by the United Kingdom; and

have been prepared in accordance with the requirements of the Companies Act 2006.


Basis for opinion


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.

Other information


The other information comprises the information included in the Annual Report, other than the financial statements and our auditors' report thereon. The directors are responsible for the other information contained within the Annual ReportOur 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.

Page 5

 
WELLCOM LONDON LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF WELLCOM LONDON LIMITED (CONTINUED)


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 year for which the financial statements are prepared is consistent with the financial statements; and

the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or 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.


Responsibilities of directors

As explained more fully in the directors' responsibilities statement on page 3, 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.

Auditors' 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.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Discussions were held with, and enquiries made of management and those charged with governance with a view to identifying those laws and regulations that could be expected to have a material impact on the financial statements. During the engagement team briefing, the outcome of these discussions and enquiries were shared with the team, as well as consideration as to where and how fraud may occur in the entity. 
 

Page 6

 
WELLCOM LONDON LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF WELLCOM LONDON LIMITED (CONTINUED)


The following laws and regulations were identified as being of significance to the entity:

Those laws and regulations considered to have a direct effect on the financial statements include UK Financial Reporting Standards, Company Law, GDPR, Employment, Tax, and Pension Legislation, and Distributable Profits Legislation. It is considered that there are no laws and regulations for which non-compliance may be fundamental to the operating aspects of the business.

Audit procedures undertaken in response to the potential risks relating to irregularities (which include fraud and non-compliance with laws and regulations) comprised of; inquiries of management and those charged with governance as to whether the entity complies with such laws and regulations; enquiries with the same concerning any actual or potential litigation or claims; inspection of relevant legal correspondence; testing the appropriateness of entries in the nominal ledger, including journal entries; reviewing transactions around the end of the reporting period; and the performance of analytical procedures to identify unexpected movements in account balances which may be indicative of fraud.

No instances of material non-compliance were identified. However, the likelihood of detecting irregularities, including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the entity's controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. As explained above, there is an unavoidable risk that material misstatement may not be detected, even though the audit has been planned and performed in accordance with ISAs (UK). 

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.

Use of our report

This report is made solely to the company's shareholder, 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 shareholder those matters we are required to state to them in an auditors' 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 shareholder, for our audit work, for this report, or for the opinions we have formed.




 
 
Hannah Clegg (Senior Statutory Auditor)
  
for and on behalf of
Sayers Butterworth LLP
 
Chartered Accountants and Statutory Auditor
  
3rd Floor
12 Gough Square
London
EC4A 3DW

18 March 2024
Page 7

 
WELLCOM LONDON LIMITED
 
 
 
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023


2023
2022
Note
£
£

  

Revenue
 2 
15,460,315
15,693,482

Cost of sales
  
(12,084,924)
(12,693,187)

Gross profit
  
3,375,391
3,000,295

  

Administrative expenses
  
(2,933,871)
(2,883,851)

Profit from operations
     3
441,520
116,444

  

Finance income
  
899
-

Finance expense
  
(59,112)
(70,094)

Profit before tax
  
383,307
46,350

  

Tax expense
 6 
(95,827)
(9,450)


Total comprehensive income
  
287,480
36,900

The notes on pages 15 to 42 form part of these financial statements.

Page 8

 
WELLCOM LONDON LIMITED
REGISTERED NUMBER: 00979521
 
 
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023


2023
2022
Note
£
£


Assets

Non-current assets
  

Goodwill
 7 
900,000
900,000

Property, plant and equipment
 8 
1,893,689
2,339,974

Trade and other receivables
 10 
126,707
126,707

  
2,920,396
3,366,681

Current assets
  

Inventories
 9 
164,469
331,789

Trade and other receivables
 10 
3,933,615
2,984,465

Cash and cash equivalents
 12 
592,976
754,378

  
4,691,060
4,070,632

  

Total assets

  

7,611,456
7,437,313

Liabilities

Non-current liabilities
  

Loans and borrowings
 14 
1,236,972
1,612,057

Provisions
 15 
100,000
100,000

Deferred tax liability
 6 
20,577
20,577

  
1,357,549
1,732,634

Current liabilities
  

Trade and other liabilities
 13 
2,407,858
2,128,269

Loans and borrowings
 14 
375,086
363,000

Provisions
 15 
38,513
68,440

  
2,821,457
2,559,709

  

Total liabilities
  
4,179,006
4,292,343

  

  

Net assets
  
3,432,450
3,144,970
Page 9

 
WELLCOM LONDON LIMITED
REGISTERED NUMBER: 00979521
 
 
STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 DECEMBER 2023


2023
2022
Note
£
£


Issued capital and reserves
  

Share capital
 16 
1,700
1,700

Capital redemption reserve
     18
300
300

Retained earnings
 19 
3,430,450
3,142,970

TOTAL EQUITY
  
3,432,450
3,144,970

The financial statements on pages 8 to 42 were approved and authorised for issue by the board of directors on 18 March 2024 and were signed on its behalf by:




Mr D Bridges
Director

The notes on pages 15 to 42 form part of these financial statements.

Page 10

 
WELLCOM LONDON LIMITED

 
 
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023



Share capital
Capital redemption reserve
Retained earnings
Total equity


£
£
£
£

At 1 January 2023
1,700
300
3,142,970
3,144,970

Comprehensive income for the year



Profit for the year
-
-
287,480
287,480

Total comprehensive income for the year
-
-
287,480
287,480

Contributions by and distributions to owners





At 31 December 2023
1,700
300
3,430,450
3,432,450

The notes on pages 15 to 42 form part of these financial statements.

Page 11

 
WELLCOM LONDON LIMITED

 
 
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022



Share capital
Capital redemption reserve
Retained earnings
Total equity


£
£
£
£

At 1 January 2022
1,700
300
4,106,070
4,108,070

Comprehensive income for the year



Profit for the year
-
-
36,900
36,900

Total comprehensive income for the year
-
-
36,900
36,900

Contributions by and distributions to owners





Dividends
-
-
(1,000,000)
(1,000,000)

Total contributions by and distributions to owners
-
-
(1,000,000)
(1,000,000)

At 31 December 2022
1,700
300
3,142,970
3,144,970

The notes on pages 15 to 42 form part of these financial statements.

Page 12

 
WELLCOM LONDON LIMITED

 
 
STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023


2023
2022
Note
£
£

Cash flows from operating activities
  

Profit for the year
  
287,480
36,900

Adjustments for
  

Depreciation of property, plant and equipment
 8 
507,888
524,413

Finance income
 5 
(899)
-

Finance expense
 5 
59,112
70,094

Loss on disposal of property, plant and equipment
  
-
10,105

Income tax expense
 6 
95,827
9,450

  
949,408
650,962

Movements in working capital:
  

(Increase)/decrease in trade and other receivables
  
(1,059,562)
351,901

Decrease in inventories
  
167,320
220,142

Increase/(decrease) in trade and other payables
  
183,762
(118,724)

(Decrease)/increase in provisions and employee benefits
  
(29,927)
13,167

Cash generated from operations
  
211,001
1,117,448

  

Income taxes paid
  
110,412
(72,004)

Net cash from operating activities

  
321,413
1,045,444
Page 13

 
WELLCOM LONDON LIMITED

 
 
STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023









2023
2022




£
£



Cash flows from investing activities
  

Purchases of property, plant and equipment
  
(61,603)
(96,528)

Interest received
  
899
-

Net cash used in investing activities

  
(60,704)
(96,528)

Cash flows from financing activities
  

Dividends paid to shareholders
 17 
-
(1,000,000)

Payment of lease liabilities
 14 
(422,111)
(421,396)

Net cash used in financing activities
  
(422,111)
(1,421,396)

Net decrease in cash and cash equivalents
  
(161,402)
(472,480)

  

Cash and cash equivalents at the beginning of year
  
754,378
1,226,858

Cash and cash equivalents at the end of the year
 12 
592,976
754,378

The notes on pages 15 to 42 form part of these financial statements.

Page 14

 
WELLCOM LONDON LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1.Accounting policies


1.1

Basis of preparation

The company’s financial statements have been prepared in accordance with UK adopted International Financial Reporting Standards (IFRSs) and as applied in accordance with the provisions of the Companies Act 2006.
The functional and presentational currency of the entity is UK Sterling and all values are rounded to the nearest pound (£) unless otherwise stated.
(i)     New and amended standards adopted by the company
None of the new standards and amendments to standards that are mandatory for the first time for the financial period beginning 1 January 2023 affected any of the amounts recognised in the current period or any prior period and are not likely to affect future periods.
(ii)     Early adoption of standards
The company has not elected to apply any pronouncements before their operative date in the reporting period beginning 1 January 2023.
(iii)     Historical cost convention
The financial report has been prepared on a historical cost basis unless otherwise stated.


1.2

General Information, statement of compliance with IFRS and going concern assumption

Wellcom London Limited is a Limited company incorporated and domiciled in England and Wales. The company was incorporated on 6 May 1970. The registered office of the company is 1 Berry Place, London, EC1V 0JD.
The company’s financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the ISAB and as adopted by the UK. They have been prepared under the assumption that the company operates on a going concern basis.


1.3

Significant accounting judgments, estimates and assumptions

The preparation of the financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts in the financial statements. Management continually evaluates its judgments and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgments and estimates on historical experience and on other various factors it believes to be reasonable under the circumstances, the result of which form the basis of the carrying values of assets and liabilities that are not readily apparent from other sources. 
Management has identified the following critical accounting policies for which significant judgments, estimates and assumptions are made. Actual results may differ from these estimates under different assumptions and conditions and may materially affect financial results or the financial position reported in future periods. Further details of the nature of these assumptions and conditions can be found in the relevant notes to the financial statements. 
(i) Significant accounting judgments
Impairment of non-financial assets other than goodwill
The company assesses impairment of all assets at each reporting date by evaluating conditions specific to the company and to the particular asset that may lead to impairment. These include product performance, technology, economic and political environments and future product expectations. If an impairment trigger exists the recoverable amount of the asset is determined. Management does not consider that the triggers
Page 15

 
WELLCOM LONDON LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1.Accounting policies (continued)

for impairment testing have been significant enough and as such these assets have not been tested for impairment in this financial period.
Determining incremental borrowing rates for property leases 
Management judgments are applied to determine incremental borrowing rates for property leases because implicit interest rates are not readily determinable for those arrangements. The rates are determined with reference to market based credit independently derived and reasonably reflect the credit risk of the lessee.
(ii) Significant accounting estimates and assumptions
Impairment of goodwill
The company determines whether goodwill is impaired at least on an annual basis. This requires an estimation of the recoverable amount of the cash-generating units, using a value in use discounted cash flow methodology, to which the goodwill is allocated. 
Estimation of useful lives of assets
The estimation of the useful lives of assets has been based on historical experience. In addition, the condition of the assets is assessed at least once per year and considered against the remaining useful life. Adjustments to useful lives are made when considered necessary.
Estimation of stage of completion of projects 
The company recognises revenue of projects ongoing at the year end with reference to the stage of completion and costs incurred to that year end date. This requires an estimation of the conditions in 1.6.
 


1.4

Changes in accounting policies and disclosures

New and amended standards and interpretations
The company has not adopted any new IFRSs in the financial period.


1.5

Accounting standards issued but not yet effective

New standards and interpretations not yet adopted
Certain new accounting standards and interpretations have been published that are not mandatory for 31 December 2023 reporting periods and have not been early adopted by the company.
There are no standards that are not yet effective and that would be expected to have a material impact on the financial statements of the company.

 
1.6

Revenue from contracts with customers - Revenue recognition

In accordance with IFRS 15 Revenue from Contracts with Customers, revenue arising from the company’s principal activity, the provision of creative production services, is recognised to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured.  All such revenue is reported net of discounts and value added and other sales taxes.
Revenue relating to services in progress but not yet completed at the year end is recognised to the extent that costs incurred are recoverable from the customer.
Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are
Page 16

 
WELLCOM LONDON LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1.Accounting policies (continued)


1.6
Revenue from contracts with customers - Revenue recognition (continued)

satisfied:
• the amount of revenue can be measured reliably;
• it is probably that the company will receive the consideration due under the contract;
• the stage of completion of the contract at the end of the reporting period can be measured reliably; and
• the costs incurred and the costs to complete the contract can be measured reliably.

The company does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, the company does not adjust any of the transaction prices for the time value of money.

If the services rendered by the company exceed the payment received from the customer, a contract assets (referred to as "inventories" and "work in progress") is recognised. If the payment exceeds the services rendered or work is billed in advance, a contract liability (referred to as "deferred income") is recognised.

Page 17

 
WELLCOM LONDON LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1.Accounting policies (continued)

 
1.7

Taxation

Income tax

The income tax expense for the period is the tax payable on the current period's taxable income based on the applicable income tax rate adjusted by changes in the deferred tax liability attributable to temporary differences.

Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting date.
Deferred tax
Deferred tax is provided in full, using the statement of financial position liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill and if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transactions affects neither accounting nor taxable profit or loss. Deferred tax is determined using the tax rates  and laws that have been enacted or substantively enacted by the end of the reporting period and are expected to apply when the related deferred tax asset is realised or liability is settled.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses. Deferred tax assets are reviewed each reporting period 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 deferred tax asset to be recovered.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority, and the company intends to settle its current tax assets and liabilities on a net basis. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends to either settle on a net basis, or to realise the asset and settle the liability simultaneously.
Current and deferred tax is recognised in the profit and loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity, respectively,

  
1.8

Retirement benefit costs

Contributions to defined contribution pension schemes are charged as an expense as the cost accrues.

 
1.9

Business combinations and goodwill

The acquisition method of accounting is used to account for all business combinations, regardless of whether equity instruments or other assets are acquired. The consideration transferred comprises the fair value of the assets transferred, the liabilities incurred and the equity interest issued by the company. The consideration transferred also includes the fair value of any contingent consideration arrangement and the fair value of any pre-existing equity interest in the acquisition. Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent assets assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date.
 
Page 18

 
WELLCOM LONDON LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1.Accounting policies (continued)


1.9
Business combinations and goodwill (continued)

On an acquisition-by-acquisition basis, the company recognises any non-controlling interest in the acquiree either at fair value or at the non-controlling interest's proportionate share of the acquiree's net identifiable assets.
The excess of consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the company's share of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of the net identifiable assets of the acquiree and the measurement of all amounts has been reviewed, the difference is recognised directly in the profit and loss as a bargain purchase. 
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value as at the date of exchange. The discount rate used is the entity's weighted average cost of capital, being the rate at which a similar borrowing could be obtained from an independent financier under comparable terms and conditions.
Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial liability are subsequently remeasured to fair value with changes in fair value recognised in the profit and loss account. 
Goodwill acquired in a business combination is measured as described above. Goodwill is carried at cost less any accumulated impairment losses. Goodwill is calculated as the excess of the sum of consideration transferred, any non-controlling interest and the acquisition date fair value of any previously held equity interest, over the acquisition date fair value of net identifiable assets acquired.
For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the company's cash-generating units, or groups of cash-generating units, that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the company are assigned to those units or groups of units.
Impairment is determined by assessing the recoverable amount of the cash-generating unit (or group of cash-generating units), to which the goodwill relates.
The company performs its impairment testing at the end of each reporting period using a value in use, discounted cash flow, methodology for cash generating units to which goodwill has been allocated. 
When the recoverable amount of the cash-generating unit (or group of cash-generating units) is less than the carrying amount, an impairment loss is recognised. When goodwill forms part of a cash-generating unit (or group of cash-generating units) and an operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this manner is measured based on the relative values of the operation disposed of and the portion of the cash-generating unit retained.
Any impairment is recognised immediately in the profit and loss and is not subsequently reversed.
Intangible assets with indefinite useful lives are tested for impairment annually either individually or at the cash-generating unit level. Such intangibles are not amortised. The useful life of an intangible asset with an indefinite life is reviewed at each reporting period to determine whether the indefinite life assessment continues to be supportable. If not, the change in the in the useful life assessment from indefinite to finite is accounted for as a change in an accounting estimate and is thus accounted for on a prospective basis.

Page 19

 
WELLCOM LONDON LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1.Accounting policies (continued)

 
1.10

Property, plant and equipment

Items of property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment losses. Costs include expenditure that is directly attributable to the acquisition of the item. In the event that settlement of all or part of the purchase consideration is deferred, cost is determined by discounting the amounts payable in the future to their present value as at the date of acquisition.

If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment.
An item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from its use or disposal. Any gain or loss arising on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the assets) is included in profit or loss in the year the asset is derecognised.
Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the company.

Depreciation is provided on items of property, plant and equipment so as to write off their carrying value over their expected useful economic lives to their residual value. It is provided at the following rates:

Short leasehold property improvements
Over the life of the lease or useful life of the assets, whichever is shorter, on a straight-line basis
Plant and equipment
Between 20% and 33%
Motor vehicles
At 25%
Fixtures and fittings
Between 20% and 25%
Right of use assets
Over the lease term on a straight-line basis

The estimated useful lives, residual values and depreciation methods are reviewed at the end of each annual reporting period.
The carrying values of property, plant and equipment are reviewed for impairment at each reporting date, with the recoverable amount being estimated when events or changes in circumstances indicate the carrying value may be impaired.
For assets that do not generate largely independent cash inflows, the recoverable amount is determined for the cash generating unit to which the asset belongs, unless the asset’s value in use can be estimated to be close to its fair value.
Impairment of assets
An impairment exists when the carrying value of an asset or cash-generating unit exceeds its estimated recoverable amount. The asset of cash-generating unit is then written down to its recoverable amount.
The carrying amount of tangible are reviewed annually 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 the asset does not generate cash flows that are independent from other assets, the recoverable amount of the cash-generating unit to which the asset belongs is estimated.

 
Page 20

 
WELLCOM LONDON LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1.Accounting policies (continued)


1.10
Property, plant and equipment (continued)

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 in the profit or loss immediately. Recoverable amount is the higher of value in use and fair value less cost to sell. 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 estimate of future cash flows have not been adjusted.
When 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 only to the extent 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 in the profit and loss immediately.

 
1.11

Financial instruments

Financial instruments are classified and accounted for according to the substance of the contractual   arrangement, as either financial assets, financial liabilities or equity instruments.
An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

 
1.12

Inventories

Inventories are valued at the lower of cost and net realisable value. Cost comprises direct materials, direct labour and an appropriate portion of variable and fixed overhead expenditure excluding the expected margin. Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.


1.13

Trade and other receivables

Trade receivables, which generally have 30 to 90 day terms, are recognised by the company and carried at the original invoice amount less any allowance for unelectable amounts.
The company applies the simplified approach to measuring expected credit losses (referred to as "doubtful debt") which uses a lifetime expected loss allowance for all trade receivables. To measure bad debts, trade receivables have been grouped based on shared credit risk characteristics and days past due. Trade receivables are written off when there is no reasonable expectation of recovery (referred to as "bad debt").
Other receivables are recognised at fair value.


1.14

Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and in hand and short term deposits. Short term deposits are defined as deposits with an initial maturity of three months or less.

Page 21

 
WELLCOM LONDON LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1.Accounting policies (continued)

 
1.15

Provisions

Provisions are recognised when the company has a present obligation (legal or constructive) that arises as a consequence of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle that obligation and the obligation can be reliably estimated. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.
When some or all of the economic benefits required to settle a provision are expected to be received from a third party, the receivable is recognised as an asset if it is virtually certain that recovery will be received and the amount of the receivable can be measured reliably.


1.16

Trade and other payables

Trade and other payables are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest rate method. 
Trade payables and other payables represent liabilities for goods and services provided to the company prior to the end of the financial year that are unpaid and arise when the company becomes obliged to make future payments in respect of the purchase of these goods and services. The amounts are unsecured and are usually paid within 30 days of recognition.

Page 22

 
WELLCOM LONDON LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1.Accounting policies (continued)

  
1.17

Leases

Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of fixed lease payments, less any lease incentives receivable, variable lease payments that are based on an index rate, initially measured using the index or rate as at the commencement date, amounts expected to be payable by the company under residual value guarantees, the exercise price of a purchase option if the company is reasonably certain to exercise that options, and payment of penalties for terminating the lease, if the lease term reflects the company exercising that option.
Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, the lessee's the company’s incremental borrowing rate is used, being the rate that the company would have to pay to borrow funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions.
If adjustments to lease payments take effect, the lease liability is reassessed and adjusted against the right-of-use asset.
The lease liability is subsequently measured at amortised cost using the effective interest method. Lease payments are allocated between principal and finance costs. The finance cost is charged to the profit and loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
The company recognises a right-of-use asset initially measured at cost, which comprises the initial amount of the lease liability, adjusted for any lease payments made at or before the commencement date, less any lease incentives received, plus any initial direct costs incurred and an estimate of the cost to restore the underlying asset at the end of the lease.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. If the company is reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over the underlying asset's useful life.
The company presents right-of-use assets that do not meet the definition of investment property in 'property, plant and equipment’ and lease liabilities in ‘loans and borrowings’ in the statement of financial position.


1.18

Foreign currency translation

All foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the date of the transaction. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the profit and loss account.

Page 23

 
WELLCOM LONDON LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1.Accounting policies (continued)


1.19

Employee benefits

Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled within 12 months after the end of the period in which the employees render the related services are recognised in respect of employees' services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled; usually the nominal value using the remuneration rate expected to apply at the time of settlement. The liability for annual leave is recognised in provisions for employee benefits expense. All other short-term employee benefit obligations are presented in payables.

 
1.20

Dividends

Dividends are recognised when they become legally payable. Dividends are classified as a distribution of profit in the financial statements.


2.


Revenue


The following is an analysis of the company's revenue for the year from continuing operations:


2023
2022
£
£


Rendering of services
15,460,315
15,693,482

15,460,315
15,693,482


Analysis of revenue by country of destination:

2023
2022
£
£


United Kingdom
10,598,350
12,925,271

Rest of the world
4,861,965
2,768,211

15,460,315
15,693,482

Timing of revenue recognition:

2023
2022
£
£

Services transferred over time
15,460,315
15,693,482

15,460,315
15,693,482



Page 24

 
WELLCOM LONDON LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

3.


Operating profit

Operating profit is stated after charging the following:


2023
2022
£
£

Loss on disposal of property, plant and equipment
-
10,105

Depreciation of property, plant and equipment
(507,888)
524,413

Net foreign currency differences
67,038
77,998

Auditor's remuneration
33,520
25,835

(407,330)
638,351

Included in cost of sales:

Change in inventories
167,320
220,141

Employee benefits expense
4,902,379
5,755,942

5,069,699
5,976,083

Included in administrative expenses:

Employee benefits expense
748,792
673,763

Depreciation
507,888
524,413

Net foreign currency exchange
67,038
77,998

1,323,718
1,276,174


Page 25

 
WELLCOM LONDON LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

4.


Employee benefit expenses

2023
2022
£
£

Employee benefit expenses (including directors) comprise:

Wages and salaries
4,829,941
5,440,076

Employment expense for defined contribution plans
280,449
323,095

Social security costs
540,781
666,532

5,651,171
6,429,703

Key management personnel compensation

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the company, including the directors of the company listed on page 3.


2023
2022
£
£


Salary
137,750
209,168

Company contributions to defined contribution pension plans
5,498
12,015

143,248
221,183

During the year, retirement benefits were accruing to 1 key management personnel (2022: 1) in respect of money purchase pension schemes.

The monthly average number of persons, including the directors, employed by the company during the year was as follows:


2023
2022
No.
No.

Administration
7
7

Sales and marketing
2
2

Production
73
98

82
107

Page 26

 
WELLCOM LONDON LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

5.


Finance income and expense

Recognised in profit or loss


2023
2022
£
£
Finance income



Other interest receivable
899
-

Total finance income

899
-

Finance expense

Finance leases (interest portion)
59,112
70,094

Total finance expense
59,112
70,094


Net finance expense recognised in profit or loss
(58,213)
(70,094)


The above financial income and expense include the following in respect of assets (liabilities) not at fair value through profit or loss:


2023
2022
£
£


Total interest expense on financial liabilities
(59,112)
(70,094)

(59,112)
(70,094)

Page 27

 
WELLCOM LONDON LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

6.


Tax expense

6.1 Income tax recognised in profit or loss



2023
2022
£
£

Current tax

Current tax on profits for the year
95,827
9,450

95,827
9,450


Total tax expense

Tax expense
95,827
9,450

95,827
9,450

The reasons for the difference between the actual tax charge for the year and the standard rate of corporation tax in the United Kingdom applied to profits for the year are as follows:


2023
2022
£
£


Profit for the year
287,480
36,900

Income tax expense (including income tax on associate, joint venture and discontinued operations)
95,827
9,450

Profit before income taxes
383,307
46,350


Tax using the Company's domestic tax rate of 25% (2022:19%)
95,827
8,807

Expenses not deductible for tax purposes, other than goodwill, amortisation and impairment
3,119
4,590

Capital allowances for the year in excess of depreciation
8,129
(5,748)

Changes in provisions leading to an increase/(decrease) in the tax charge
(130)
(545)

Other differences leading to an increase/(decrease) in the tax charge
(11,118)
2,346

Total tax expense
95,827
9,450

Deferred tax at the end of the reporting period of £20,577 (2022: £20,577) has been recognised in the balance sheet relating to timing differences. Deferred tax at the year end has been assessed at 25%, being the prevailing rate of tax for profits in excess of £250,000 per annum.



 

Page 28

 
WELLCOM LONDON LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

6.Tax expense (continued)


6.1 Income tax recognised in profit or loss (continued)

Changes in tax rates and factors affecting the future tax charges

At Budget 2021, the government announced that the main rate for Corporation Tax on non-ring fenced profits above £250,000 would increase from 19% to 25% from 1 April 2023. A small profits rate of 19% was also announced for profits below £50,000. Profits between the thresholds are taxed at the main rate reduced by marginal relief. 


7.


Goodwill

2023
2022
£
£

Carrying value
900,000
900,000

2023
2022
£
£

Cost

At 1 January
900,000
900,000

At 31 December

900,000
900,000

Accumulated impairment

At 31 December
-
-




7.1 Allocation of goodwill to cash generating units

Goodwill is allocated to the Company's cash generating unit as follows:


2023
2022
£
£


Wellcom London Limited - BBH
900,000
900,000

900,000
900,000

Page 29

 
WELLCOM LONDON LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

7.Goodwill (continued)


7.1 Allocation of goodwill to cash generating units (continued)

Wellcom London Limited - BBH

During the year ended 30 June 2012, the company acquired the trade and assets of Mission Possible (Create) Limited. Goodwill of £600,000 arose on the transaction. On 29 August 2015 the company acquired the trade assets of Space 66 Limited for full consideration of £300,000. 
As at 31 December 2023 the company held goodwill of £900,000 (31 December 2022: £900,000). In the opinion of the directors, this was not impaired at 31 December 2023.
Impairment testing of goodwill
Goodwill is allocated to the company’s cash-generating units according to operating segment. 
During the financial period, the company assessed the recoverable amount of goodwill. The recoverable amount of each cash-generating unit is determined by value-in-use calculations. These calculations use cash flow projections based on financial budgets approved by management covering a five-year period. Cash flows beyond the five-year period are extrapolated using steady estimated growth rates stated below. The growth rate does not exceed the long-term average growth rate for the business in which the cash-generating unit operates. The growth rate for the UK in 2023 is 2.5% (2022: 2.5%) and the discount rate in 2023 is 11.2% (2022: 9.3%).
In completing value-in-use calculations management determined budgeted gross margins based on past performance and its expectations for the future. The weighted average growth rates used are consistent with forecasts included in industry reports. Management believes the projected growth rate to be prudent and justified based on the company’s past and expected performance. The discount rates used reflect specific risks relating to the relevant segments.
Impact of possible changes in key assumptions
A reasonable change in key assumptions would not cause the cash-generating unit's carrying amounts to exceed their recoverable amount.

Page 30

 
WELLCOM LONDON LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

8.


Property, plant and equipment





Short leasehold property improvements
Plant and equipment
Fixtures and fittings
Right of use asset
Total

£
£
£
£
£



Cost or valuation







At 1 January 2022
610,798
1,906,594
137,450
3,067,945
5,722,787


Additions
-
96,528
-
-
96,528


Disposals
-
(64,758)
-
-
(64,758)



At 31 December 2022
610,798
1,938,364
137,450
3,067,945
5,754,557


Additions
11,474
50,129
-
-
61,603



At 31 December 2023
622,272
1,988,493
137,450
3,067,945
5,816,160


Short leasehold property improvements
Plant and machinery
Fixtures and fittings
Right of use asset
Total

£
£
£
£
£



Accumulated depreciation and impairment







At 1 January 2022
218,743
1,710,963
121,540
893,577
2,944,823


Charge owned for the year
61,080
97,106
8,795
357,432
524,413


Disposals
-
(54,653)
-
-
(54,653)



At 31 December 2022
279,823
1,753,416
130,335
1,251,009
3,414,583


Charge owned for the year
61,972
85,158
3,324
357,434
507,888



At 31 December 2023
341,795
1,838,574
133,659
1,608,443
3,922,471



Net book value


At 1 January 2022
392,055
195,631
15,910
2,174,368
2,777,964


At 31 December 2022
330,975
184,948
7,115
1,816,936
2,339,974


At 31 December 2023
280,477
149,919
3,791
1,459,502
1,893,689

Page 31

 
WELLCOM LONDON LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

9.


Inventories

2023
2022
£
£



Production supplies
20,016
20,016

Work in progress
144,453
311,773

164,469
331,789

Work in progress primarily relates to the company's rights to consideration for work completed but not billed at the reporting date on a stage of completion basis. Work in progress is transferred to receivables when the rights become unconditional. Work in progress represents a contract with customer balance.

The amount of work in progress that was transferred to receivables during 2023 was £167,320 (2022 - £220,142). There were no other material changes in inventories ('contract assets') or deferred income      (' contract liabilities') during the year.


10.


Trade and other receivables


2023
2022
£
£

Non-current

Other receivables
126,707
126,707

Total non-current trade and other receivables
126,707
126,707


Current

Trade receivables
3,098,560
2,181,859

Trade receivables - net
3,098,560
2,181,859

Receivables from related parties
15,406
62,165

Total financial assets other than cash and cash equivalents classified as loans and receivables
3,113,966
2,244,024

Prepayments and accrued income
817,051
622,953

Other receivables
2,598
117,488

Total current trade and other receivables
3,933,615
2,984,465

Amounts receivable from trade customers represent a contract with customer balance. They are non-interest bearing and are generally on 30-60 day terms.

Page 32

 
WELLCOM LONDON LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

11.


Bad debts relating to trade receivables

The movement in the allowance for bad debt provision in respect of trade receivables during the year was as follows.


2023
2022
£
£



At 1 January
37,319
47,883

Release of doubtful debt provision
(37,319)
(10,564)

At 31 December
-
37,319


12.

Notes supporting statement of cash flows

2023
2022
£
£


Cash at bank available on demand
581,018
749,597

Cash on hand
11,958
4,781

Cash and cash equivalents in the statement of financial position

592,976
754,378


Cash and cash equivalents in the statement of cash flows
592,976
754,378


13.


Trade and other payables


2023
2022
£
£


Current

Trade payables
728,765
504,333

Payables to related parties
331,973
460,009

Other payables
30,689
137,042

Accruals and deferred income
530,499
479,863

Other payables - tax and social security payments
785,932
547,022

Total current trade and other payables
2,407,858
2,128,269

The average credit period on purchases of goods and services is 30 days. No interest is charged on trade payables. The company has financial risk management policies in place to ensure that payables are paid within their credit terms. 

Page 33

 
WELLCOM LONDON LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

14.


Leases




(i) Leases as a lessee



The company has a lease for their offices which is now reflected on the balance sheet as a right-of-use asset (see Note 8) and a lease liability.


Lease liabilities are due as follows:

2023
2022
£
£

Contractual undiscounted cash flows due

Not later than one year
422,356
422,356

Between one year and five years
1,302,264
1,689,424

Later than five years
-
35,196

1,724,620
2,146,976


Lease liabilities included in the Statement of Financial Position at 31 December
1,612,058
1,975,057


Non-current
1,236,972
1,612,057

Current
375,086
363,000

The date of initial application for the company is 1 July 2019. At this date the asset and lease liability were recognised on a present value basis using a discount rate of 3.28%, being the company’s incremental borrowing rate.
At initial application the lease liability was recognised at £3,067,945 which is in excess of the total operating lease commitment disclosed at the end of the preceding reporting period. The difference being due to the company previously recognising the commitment up to the break clause date of 9 February 2023 only.
Lease payments are allocated between principal and finance cost. The finance cost is charge to the profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.


The following amounts in respect of leases have been recognised in profit or loss:

2023
2022
£
£

Interest expense on lease liabilities
59,112
70,094

Page 34

 
WELLCOM LONDON LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023


15.


Provisions




Leasehold dilapidations
Employee benefits
Total

£
£
£





At 1 January 2023
100,000
68,440
168,440


Other increases
-
29,927
29,927



At 31 December 2023
100,000
98,367
198,367



Due within one year or less
-
38,513
38,513


Due after more than one year
100,000
-
100,000



100,000
98,367
198,367

Leasehold dilapidations
Leasehold dilapidations relate to the estimated cost of returning the leasehold property to its original state at the end of the lease in accordance with the lease terms. The cost is recognised within the depreciation of the right-of-use asset over the remaining lease term.
Employee benefits provision
The annual leave provision of £38,513 is calculated on the basis of the employees' remuneration including benefits and pension that have accrued in regards to holiday accrued but not taken, and therefore unpaid, as at 31 December 2023.

Page 35

 
WELLCOM LONDON LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
16.


Share capital

Authorised

2023
2023
2022
2022
Number
£
Number
£

Shares treated as equity
Ordinary shares of £1.00 each

2,000

2,000

2,000
 
2,000
 
2,000

2,000

2,000
 
2,000
 

Issued and fully paid


2023
2023
2022
2022
Number
£
Number
£

Ordinary shares of £1.00 each

At 1 January and 31 December
1,700

1,700

1,700
 
1,700
 


17.


Dividends

2023
2022
£
£


Final dividend of 0 pence (2022: 58,824 pence) per Ordinary share proposed and paid during the year relating to the previous year's results
-
1,000,000

-
1,000,000

The directors have not proposed any dividends since the year end.


18.


Reserves

Capital redemption reserve
Capital redemption reserve stood at £300 (2022: £300) at the year end.
The capital redemption reserve represents the par value of shares purchased and cancelled by the company during the year ended 30 June 2000.

Page 36

 
WELLCOM LONDON LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

19.


Capital management

The company and the board policy is to maintain a strong capital base so as to maintain creditor and market confidence. Capital is defined as total business equity. The company has given responsibility of capital management to the board who have formulated capital management tools to service this requirement. Management of the capital structure is achieved by monitoring budgets and forecasts and actual cash flows.

The Company is not subject to any externally imposed capital requirements.

2023
2022
£
£


Issued share capital
1,700
1,700

Reserves
300
300

Retained profit
3,430,450
3,143,108

Total equity
3,432,450
3,145,108


20.


Controlling party

The immediate parent undertaking is Wellcom Group Pty Ltd, a company incorporated in Australia. 
The ultimate parent undertaking at 31 December 2023 is Innocean Worldwide Inc, a company incorporated in South Korea and listed on the Korea Exchange (KRX).
The smallest group of which the company is a member and consolidated financial statements are prepared is Wellcom Group Pty Ltd. Their registered office is 870 Lorimer St, Port Melbourne, Victoria, 3207 Australia. The largest group of which the company is a member and consolidated financial statements are prepared is Innocean Worldwide Inc. Their registered office is 308, Gangnam-daero, Gandgnam-gu, Seoul, South Korea.

Page 37

 
WELLCOM LONDON LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

21.


Related party transactions

Details of transactions between the Company and its related parties are disclosed below.
During the year Wellcom London Limited was recharged travel, freight, licences, technology and other costs directly attributable to the company from the parent undertaking of £74,968 (2022: £73,535) and the company recharged costs of £13,951 to the parent company (2022: £41,946). Wellcom London Limited was charged a management fee from the parent undertaking of £310,555 (2022: £201,535). Wellcom London Limited made payments to the parent undertaking, excluding dividends, of £422,341 (2022: £6,121), and made sales to the parent company of £6,379 (2022: £nil). Interest of £nil (2022: £nil) was charged by Wellcom London Limited on the loan outstanding due from the parent undertaking. The Directors consider that all transactions were arm’s length. As at the year end the amount due to the parent undertaking was £151,461 (2022: £203,100 due from the parent undertaking).  
During the year Wellcom London Limited charged web services, charges and other costs directly attributable by Wellcom Group Inc, a fellow subsidiary of Wellcom Group Pty Limited, of £6,053 (2022: £18,618). The company also recharged costs to Wellcom Group Inc of £76,366 (2022: £10,737) and made purchases of £36,511 (2022: £49,712). Wellcom London Limited received an intercompany transfer of £6,413 (2022: £7,016) from Wellcom Group Inc and received cash on its behalf of £nil (2022: £18,913). The Directors consider that all transactions were arm’s length. As at the year end the amount due to Wellcom Group Inc was £6,579 (31 December 2022: £46,074).
During the year Wellcom London Limited was charged £410,516 (2022: £572,485) in relation to software development and support by Wellcom Group Pte Limited and made payments to the fellow subsidiary of £439,369 (2022: £423,138). Wellcom London Limited also charged Wellcom group Pte Limited £42,867 (2022: £4,320) in relation to directly attributable costs and made sales of £nil (2022: £38,405). The Directors consider that all transactions were arm’s length. As at the year end the amount due to Wellcom Group Pte Limited was £101,340 (2022: £175,229).
During the year Wellcom London Limited was charged retouching costs by WellMalaysia Sdn Bhd, a subsidiary of Wellcom Group Limited, of £171,724 (2022: £74,223). Wellcom London Limited made payments to the fellow subsidiary of £132,690 (2022: £41,904) in respect of the retouching charges. The Company recharged costs to WellMalaysia Sdn Bhd of £1,415 (2022: £nil) and made sales of £1,564 to the subsidiary (2022: £nil). The Directors consider that all transactions were arm’s length. As at the year end the amount due to WellMalaysia Sdn Bhd was £72,593 (2022: £35,606).
During the year Wellcom London Limited charged costs directly attributable to the company to theLab LLC, a subsidiary of a fellow subsidiary, Wellcom Group Inc, of £nil (2022: £12,600), was charged directly attributable costs of £nil (2022: £nil) by theLab LLC and made sales to theLab LLC of £1,412 (2022: £50,732). Wellcom London Limited sent an intercompany transfer of £43,988 (2022: £17,741). The Directors consider that all transactions were arm’s length. As at the year end the amount due from  theLab LLC was £nil (2022: £44,239).
During the year Wellcom London Limited charged costs directly attributable to the company to Dippin' Sauce LLC, a subsidiary of a fellow subsidiary, Wellcom Group Inc, of £nil (2022: £3,280), was charged directly attributable costs of £19,054 (2022: £2,640) by Dippin' Sauce LLC and made sales to Dippin' Sauce LLC of £218,778 (2022: £45,107). Wellcom London Limited sent an intercompany transfer of £202,243 (2022: £27,821). The Directors consider that all transactions were arm’s length. As at the year end the amount due from Dippin' Sauce LLC was £15,406 (2022: £17,925).




 
Page 38

 
WELLCOM LONDON LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

21.Related party transactions (continued)


All balances due to/from related parties are payable/receivable upon demand.

 Loans to related parties


2023
2022
£
£


Amounts due to Wellcom Group Pte Ltd
101,340
175,229

Amounts due to WellMalaysia Sdn Bhd
72,593
35,606

Amounts due to parent undertaking
151,461
203,100

Amounts due to Wellcom Group Inc.
6,579
46,074

331,973
460,009

 Loans from related parties


2023
2022
£
£


Amounts due from the Lab LLC
-
44,239

Amounts due from Dippin' Sauce LLC
15,406
17,925

15,406
62,164


22.
Financial risk management objectives and policies

Financial risk management
The company has exposure to credit, liquidity and market risks from its use of financial instruments.
This note presents information about the company’s exposure to each of the above risks, its objectives, policies and processes for measuring and managing risk. 
The Board of directors has overall responsibility for the establishment, development and monitoring risk management policies.
Risk management policies are established to identify and analyse the risks faced by the company, to set out appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the company’s activities. The company, through training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.
Credit risk
Credit risk is the risk of financial loss to the company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the company’s receivables from customers and cash and cash equivalents held with financial institutions.
 
Page 39

 
WELLCOM LONDON LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

22.Financial risk management objectives and policies (continued)

Trade and other receivables
The company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the company’s customer base, including default risk of the industry and country in which the customers operate, has less of an influence on credit risk. Geographically there is no concentration of credit risk.  
The company has been transacting with the majority of its customers for a number of years, and losses have occurred infrequently. In monitoring customer credit risk, customers are grouped according to their credit characteristics, including whether they are an individual or legal entity, whether they are a wholesale, retail or end-user customer, geographic location, industry, ageing profile, maturity and existence of previous financial difficulties. The company does not require collateral in respect of trade and other receivables.
The company has established an allowance for impairment based on a specific loss component that relates to individually significant exposures. Note 16 includes a breakdown in the movements of the allowance for the year.
At 31 December 2023, the aging of trade receivables that held no bad debt provision was as follows:


2023
2022

£
£

Not due
1,443,442
1,224,018

Past due 1-30 days
1,543,873
761,232

Past due 31 - 60 days
110,301
101,811

Past due 61-90 days
944
9,922

Past due 91-120 days
-
84,876

Total trade receivables
3,098,560
2,181,859

Credit risk in relation to cash and cash equivalents is minimised by investing only with financial institutions that maintain a high credit rating.
Exposure to credit risk
The carrying amount of the company’s financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was:




2023
2022

£
£

Cash and cash equivalents
592,976
754,378

Trade receivables
3,098,560
2,181,859

Receivables from related parties
15,406
62,165

Other receivables
2,598
117,488

3,709,540
3,115,890

Page 40

 


 
WELLCOM LONDON LIMITED


 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Liquidity risk
Liquidity risk is the risk that the company will not be able to meet its financial obligations as they fall due. The company’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the company’s reputation.
Typically the company ensures that it has sufficient cash on demand to meet expected operational expenses for a period of 60 days, including the servicing of financial obligations; this excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters.
The following are the remaining contractual maturities of financial liabilities at the reporting date:

31 December 2023 (£)
  Carrying amount
     Total
2 months or less
        2-12              months
       1-2 years
                  3-5 years
Lease liabilities
1,612,058
1,612,058
61,664
313,422
788,056
448,916
Trade payables
728,765
728,765
728,765
-
-
-
Payable to related parties
331,973
331,973
331,973
-
-
-
Other payables
1,347,120
1,347,120
1,347,120
-
-
-
4,019,916
4,019,916
2,469,522
313,422
788,056
448,916


31 December 2022 (£)
Carrying amount
     Total
2 months or less
2-12 months
1-2 years
3-5 years
Lease liabilities 
1,975,057
1,975,057
59,677
303,323
762,661
849,396
Trade payables
504,333
504,333
504,333
-
-
-
Payable to related parties
460,009
460,009
460,009
-
-
-
Other payables
1,163,927
1,163,927
1,163,927
-
-
-
4,103,326
4,103,326
2,187,946
303,323
762,661
849,396
Page 41

 
WELLCOM LONDON LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

.



Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.
As the company’s exposure to market risk is low, no derivative or financial liabilities were entered into during the year ended 31 December 2023 or the year ended 31 December 2022 with the purpose of managing market risks. The Board will continue monitoring the company’s exposure to market risk and in the event that derivatives and/or financial liabilities are entered into, the Board will consider the costs and benefits of seeking to apply hedge accounting in order to manage volatility in profit and loss.
Currency risk
Material foreign currency transactions are settled within 30 days and relate primarily to one client. The costs related to this work are also mainly in foreign currency. This limits the exppsure to foreign exchange movements. The company also has material inter group transactions, which would give rise to receivables and payables in foreign currency. The parent company considers itself a long-term holder of the assets of Wellcom London Ltd, and as such does not consider the inter group balances to represent short-term currency risk exposure. 
Interest on borrowings is denominated in currencies that match the cash flows generated by the underlying operations of the company. The company held no borrowings as at 31 December 2023 and 31 December 2022.
As the company’s exposure to currency risk on commercial trading is not significant it has not entered into any hedge transactions or taken alternative measures to minimise fluctuations in the respective currencies.
Fair values
Fair values versus carrying amounts
Carrying amounts of assets and liabilities approximate fair value. No financial assets and financial liabilities are readily traded on organised markets in standardised form nor are any of them recorded at fair value, therefore no fair value hierarchy disclosure is required. 

Page 42