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Registered number: 06892124










RE:COGNITION HEALTH LIMITED










ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023



 
RE:COGNITION HEALTH LIMITED
 

COMPANY INFORMATION


Directors
T S Dent 
K P Doyle 
Dr J E Macsweeney 




Registered number
06892124



Registered office
77 Wimpole Street
London

W1G 9RU




Independent auditor
James Cowper Kreston Audit
Chartered Accountants and Statutory Auditor

Reading Bridge House

George Street

Reading

Berkshire

RG1 8LS





 
RE:COGNITION HEALTH LIMITED
 

CONTENTS



Page
Group strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 8
Consolidated statement of comprehensive income
9
Consolidated balance sheet
10
Company balance sheet
11
Consolidated statement of changes in equity
12
Company statement of changes in equity
13
Consolidated statement of cash flows
14
Notes to the financial statements
15 - 28


 
RE:COGNITION HEALTH LIMITED
 

GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

Business review
 
The Group is a specialist service provider of clinical trials, disease management and diagnostics for conditions impacting the brain, mind and central nervous system.
The group offers these services both in the United Kingdom and in the United States.
Performance in 2023 showed an increase in revenue by 54%, largely as a result of the increased activity in the United Kingdom and United States, opening three additional clinical sites across both countries.

Financial key performance indicators
 
The key performance indicators of the group are; -
• Sales Revenues – £17.7m (2022 - £11.5m) – 54% increase
• Gross Profit and Margin – £9.1m/52% (2022 – £6.1m/53%) – 51% increase
• Profit Before Tax – £2,769k (2022 - £1,307k) – 64% increase
• Net Assets - £7.8m (2022 - £6.9m) – 13% increase

Principal risks and uncertainties
 
The Group faces normal technological, competitive and economic challenges. Plans are in place to deal with these challenges as they arise.
In addition, the Group faces the risk of sponsors underlying technology having unsuccessful trials. The Group mitigates this risk by covering a multitude of conditions and diseases, undertaking a portfolio of trials and never being reliant on a single trial or product.

Page 1

 
RE:COGNITION HEALTH LIMITED
 

GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Financial risk management objectives and policies
 
The Group’s principal financial instruments comprise cash and cash equivalents, bank loan facilities and operating leases. The Group has other financial instruments such as trade receivables and payables, which arise from its operations.
The Group is exposed to a variety of financial risks which result from its operating activities. The management team are responsible for coordinating the Group’s risk management and focus on actively securing the Group’s short- and medium-term cash flows. The Group does not actively engage in the trading of financial assets and has no financial derivatives. The most significant risks to which the Group is exposed are described by; -
Liquidity & Credit Risk – The Group seeks to ensure enough liquidity is available to meet its foreseeable needs. Management prepare cash flow forecasts on a monthly basis to identify any funding difficulties at an early stage. The Group’s credit risk is primarily attributable to its trade debtors. The amounts presented in the Balance Sheet are net of any allowance for doubtful receivables. Management include consideration to timing and collectability of debtor amounts in the cash flow forecasts. Trade debtors are not typically concentrated in one customer account.

Currency risk – The Group maintains sufficient working capital for its US subsidiary in US Dollars. It does not hold any foreign exchange financial instruments or derivatives.
Disabled employees
Applications for employment by disabled persons are given full and fair consideration for all vacancies in accordance with their aptitudes and abilities. In the event of an employee becoming disabled, every effort will be made to retain them in order that their employment within the Group may continue.
Key Accounting Policies
Principal accounting policies are included in pages 15-19.


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



K P Doyle
Director
Date: 17 July 2024

Page 2

 
RE:COGNITION HEALTH 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.

Directors

The directors who served during the year were:

T S Dent 
K P Doyle 
Dr J E Macsweeney 

Directors' responsibilities statement

The directors are responsible for preparing the Group strategic report, the Directors' report and the consolidated 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 the Group and of the profit or loss of the Group for that period.

 In preparing these financial statements, the directors are required to:


select suitable accounting policies for the Group's financial statements 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 Group 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 the Group and to enable them to ensure that the financial statements comply with the Companies Act 2006They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Results and dividends

The profit for the year, after taxation, amounted to £1,935,023 (2022 - £1,145,074).

Dividends of £Nil (2021: £Nil) were paid during the year.

Disclosure of information to auditor

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

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company and the Group's auditor is aware of that information.

Post balance sheet events

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

Page 3

 
RE:COGNITION HEALTH LIMITED
 

 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023


Auditor

The auditor, James Cowper Kreston Auditwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

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





K P Doyle
Director
Date: 17 July 2024

Page 4

 
RE:COGNITION HEALTH LIMITED
 

 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF RE:COGNITION HEALTH LIMITED
 

Opinion


We have audited the financial statements of Re:Cognition Health Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2023, which comprise the Consolidated statement of comprehensive income, the Consolidated Balance Sheet, the Company Balance Sheet, the Consolidated Statement of Cash Flows, the Consolidated Statement of Changes in Equity, the Company Statement of Changes in Equity and the related notes, including a summary of significant accounting policiesThe 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 Group's and of the parent Company's affairs as at 31 December 2023 and of the Group's 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.


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 Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the Group 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 Group's or the parent 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 Auditor's 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

 
RE:COGNITION HEALTH LIMITED
 

 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF RE:COGNITION HEALTH 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 Group 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 Group 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 Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group 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 by the parent Company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent Company 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 set out 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 Group's and the parent 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 Group or the parent Company or to cease operations, or have no realistic alternative but to do so.


Page 6

 
RE:COGNITION HEALTH LIMITED
 

 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF RE:COGNITION HEALTH LIMITED (CONTINUED)


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 Group financial statements.


Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance.
The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
The specific procedures for this engagement that we designed and performed to detect material misstatements in respect of irregularities, including fraud, were as follows:
 
Enquiry of management and those charged with governance around actual and potential litigation and             claims;
Enquiry of management and those charged with governance to identify any material instances of non-       compliance with laws and regulations; 
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations; 
Performing audit work to address the risk of irregularities due to management override of controls,                    including testing of journal entries and other adjustments for appropriateness, evaluating the business                rationale of significant transactions outside the normal course of business and reviewing accounting                   estimates for evidence of bias. 
 
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 Auditor's report.


Page 7

 
RE:COGNITION HEALTH LIMITED
 

 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF RE:COGNITION HEALTH LIMITED (CONTINUED)


Use of our 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 2006Our 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.





Alan Poole BA (Hons) FCA (Senior Statutory Auditor)
  
for and on behalf of
James Cowper Kreston Audit
 
Chartered Accountants and Statutory Auditor
  
Reading Bridge House
George Street
Reading
Berkshire
RG1 8LS

19 July 2024
Page 8

 
RE:COGNITION HEALTH LIMITED
 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023

2023
2022
Note
£
£

  

Turnover
 4 
17,672,558
11,505,459

Cost of sales
  
(8,528,982)
(5,452,239)

Gross profit
  
9,143,576
6,053,220

Administrative expenses
  
(7,033,605)
(5,103,902)

Other operating income
 5 
622,994
338,130

Operating profit
 6 
2,732,965
1,287,448

Interest receivable and similar income
 10 
72,109
19,879

Interest payable and similar expenses
  
(35,932)
-

Profit before taxation
  
2,769,142
1,307,327

Tax on profit
 11 
(834,119)
(162,253)

Profit for the financial year
  
1,935,023
1,145,074

  

Foreign exchange loss
  
(1,037,263)
(59,038)

Other comprehensive income for the year
  
(1,037,263)
(59,038)

  

Total comprehensive income for the year
  
897,760
1,086,036

Profit for the year attributable to:
  

Owners of the parent Company
  
1,935,023
1,145,074

  
1,935,023
1,145,074

There were no recognised gains and losses for 2023 or 2022 other than those included in the consolidated statement of comprehensive income.

The notes on pages 15 to 28 form part of these financial statements.

Page 9

 
RE:COGNITION HEALTH LIMITED
REGISTERED NUMBER: 06892124

CONSOLIDATED BALANCE SHEET
AS AT 31 DECEMBER 2023

2023
2022
Note
£
£

Fixed assets
  

Tangible assets
 12 
1,079,718
912,903

  
1,079,718
912,903

Current assets
  

Debtors: amounts falling due within one year
 14 
3,923,068
4,045,027

Cash at bank and in hand
 15 
8,589,429
5,081,377

  
12,512,497
9,126,404

Creditors: amounts falling due within one year
 16 
(5,709,822)
(3,069,050)

Net current assets
  
 
 
6,802,675
 
 
6,057,354

Total assets less current liabilities
  
7,882,393
6,970,257

Provisions for liabilities
  

Deferred taxation
 18 
(119,437)
(105,061)

  
 
 
(119,437)
 
 
(105,061)

Net assets
  
7,762,956
6,865,196


Capital and reserves
  

Called up share capital 
 19 
1,715
1,715

Share premium account
 20 
1,825,743
1,825,743

Foreign exchange reserve
 20 
(1,149,323)
(112,060)

Profit and loss account
 20 
7,084,821
5,149,798

  
7,762,956
6,865,196


The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 




K P Doyle
Director
Date: 17 July 2024

The notes on pages 15 to 28 form part of these financial statements.

Page 10

 
RE:COGNITION HEALTH LIMITED
REGISTERED NUMBER: 06892124

COMPANY BALANCE SHEET
AS AT 31 DECEMBER 2023

2023
2022
Note
£
£

Fixed assets
  

Tangible assets
 12 
831,349
862,840

Investments
 13 
3,091
3,091

  
834,440
865,931

Current assets
  

Debtors: amounts falling due within one year
 14 
8,509,330
6,091,710

Cash at bank and in hand
 15 
6,371,125
4,199,337

  
14,880,455
10,291,047

Creditors: amounts falling due within one year
 16 
(4,350,033)
(2,569,478)

Net current assets
  
 
 
10,530,422
 
 
7,721,569

Total assets less current liabilities
  
11,364,862
8,587,500

  

Provisions for liabilities
  

Deferred taxation
 18 
(119,437)
(105,061)

  
 
 
(119,437)
 
 
(105,061)

Net assets excluding pension asset
  
11,245,425
8,482,439

Net assets
  
11,245,425
8,482,439


Capital and reserves
  

Called up share capital 
 19 
1,715
1,715

Share premium account
 20 
1,825,743
1,825,743

Profit and loss account
 20 
9,417,967
6,654,981

  
11,245,425
8,482,439


The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 




K P Doyle
Director
Date: 17 July 2024

The notes on pages 15 to 28 form part of these financial statements.

Page 11

 
RE:COGNITION HEALTH LIMITED
 

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


Called up share capital
Share premium account
Foreign exchange reserve
Profit and loss account
Total equity

£
£
£
£
£

At 1 January 2023
1,715
1,825,743
(112,060)
5,149,798
6,865,196


Comprehensive income for the year

Profit for the year
-
-
-
1,935,023
1,935,023

Foreign exchange loss
-
-
(1,037,263)
-
(1,037,263)


At 31 December 2023
1,715
1,825,743
(1,149,323)
7,084,821
7,762,956


The notes on pages 15 to 28 form part of these financial statements.


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


Called up share capital
Share premium account
Foreign exchange reserve
Profit and loss account
Total equity

£
£
£
£
£

At 1 January 2022
1,715
1,825,743
(53,022)
4,004,724
5,779,160


Comprehensive income for the year

Profit for the year
-
-
-
1,145,074
1,145,074

Foreign exchange loss
-
-
(59,038)
-
(59,038)


At 31 December 2022
1,715
1,825,743
(112,060)
5,149,798
6,865,196


The notes on pages 15 to 28 form part of these financial statements.

Page 12

 
RE:COGNITION HEALTH LIMITED
 

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


Called up share capital
Share premium account
Profit and loss account
Total equity

£
£
£
£

At 1 January 2023
1,715
1,825,743
6,654,981
8,482,439


Comprehensive income for the year

Profit for the year
-
-
2,762,986
2,762,986


At 31 December 2023
1,715
1,825,743
9,417,967
11,245,425


The notes on pages 15 to 28 form part of these financial statements.


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


Called up share capital
Share premium account
Profit and loss account
Total equity

£
£
£
£

At 1 January 2022
1,715
1,825,743
5,793,399
7,620,857


Comprehensive income for the year

Profit for the year
-
-
861,582
861,582


At 31 December 2022
1,715
1,825,743
6,654,981
8,482,439


The notes on pages 15 to 28 form part of these financial statements.

Page 13

 
RE:COGNITION HEALTH LIMITED
 

CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023

2023
2022
£
£

Cash flows from operating activities

Profit for the financial year
1,935,023
1,145,074

Adjustments for:

Depreciation of tangible assets
289,551
300,321

Interest received
(72,109)
(19,879)

Taxation charge
834,119
(102,423)

(Increase) in debtors
(506,563)
(511,136)

Increase in creditors
1,855,495
1,229,185

Corporation tax received
637,754
150,071

Foreign exchange
(1,074,016)
(60,755)

Net cash generated from operating activities

3,899,254
2,130,458


Cash flows from investing activities

Purchase of tangible fixed assets
(463,311)
(860,759)

Interest received
72,109
19,879

Net cash from investing activities

(391,202)
(840,880)


Net increase in cash and cash equivalents
3,508,052
1,289,578

Cash and cash equivalents at beginning of year
5,081,377
3,791,799

Cash and cash equivalents at the end of year
8,589,429
5,081,377


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
8,589,429
5,081,377

8,589,429
5,081,377


The notes on pages 15 to 28 form part of these financial statements.

Page 14

 
RE:COGNITION HEALTH LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1.


General information

Re:Cognition Health Limited is a private company, limited by shares, registered in England and Wales. The Company's registered number and registered office address can be found on the Company Information page.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgement in applying the Group's accounting policies (see note 3).

The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of comprehensive income in these financial statements.

The following principal accounting policies have been applied:

 
2.2

Basis of consolidation

The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated statement of comprehensive income from the date on which control is obtained. They are deconsolidated from the date control ceases.
 
 
2.3

Going concern

Despite the challenges presented by the undercurrents in the global and domestic economy, the company utilised the dynamic period of healthcare provided by significant scientific and pharmaceutical advances in diagnostic biomarkers and new drug development, and had returned to pre-COVID-19 activity level as well as improved its profitability meanwhile maintaining its cash reserves, therefore being in a solid financial position.
Accordingly, the directors are satisfied that the company has ample financial resources to continue operating for the foreseeable future as well as further expand its operations, and hence the financial statements continue to be prepared on a going concern basis.

Page 15

 
RE:COGNITION HEALTH LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.4

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. Non-monetary 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.

On consolidation, the results of overseas operations are translated into Sterling at rates approximating to those ruling when the transactions took place. All assets and liabilities of overseas operations are translated at the rate ruling at the reporting date. Exchange differences arising on translating the opening net assets at opening rate and the results of overseas operations at actual rate are recognised in other comprehensive income.

  
2.5

Turnover

Turnover is measured at the fair value of the consideration received or receivable for services provided during the year, excluding discounts, rebates, value added tax and other sales taxes. Due to the nature of the different services provided by the company, revenue recognition differs between business lines. Regarding private practice and clinical trials visits, turnover is recognised at the time an appointment is completed, while medico-legal services are recognised when a report is completed.

 
2.6

Operating leases: the Group as lessee

Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.

Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.

 
2.7

Government grants

Grants are accounted under the accruals model as permitted by FRS 102. Grants relating to expenditure on tangible fixed assets are credited to profit or loss at the same rate as the depreciation on the assets to which the grant relates. The deferred element of grants is included in creditors as deferred income.
Grants of a revenue nature are recognised in the Consolidated statement of comprehensive income in the same period as the related expenditure.

Page 16

 
RE:COGNITION HEALTH LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.8

Interest income

Interest income is recognised in profit or loss using the effective interest method.

 
2.9

Pensions

Defined contribution pension plan
The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations.
The contributions are recognised as an expense in the Consolidated profit and loss account when they fall due. Amounts not paid are shown in accruals as a liability in the Balance sheet. The assets of the plan are held separately from the Group in independently administered funds.

 
2.10

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company and the Group operate and generate income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits;
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met; and
Where they relate to timing differences in respect of interests in subsidiaries, associates, branches and joint ventures and the Group can control the reversal of the timing differences and such reversal is not considered probable in the foreseeable future.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

 
2.11

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Page 17

 
RE:COGNITION HEALTH LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)


2.11
Tangible fixed assets (continued)

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following basis:

Long-term leasehold property
-
over the length of the lease
Plant and machinery
-
50% on cost and 33% on cost

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

 
2.12

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

 
2.13

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

 
2.14

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

In the Consolidated statement of cash flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Group's cash management.

 
2.15

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

 
2.16

Provisions for liabilities

Provisions are recognised when an event has taken place that gives rise to a legal or constructive obligation, a transfer of economic benefits is probable and a reliable estimate can be made.
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
 
Increases in provisions are generally charged as an expense to profit or loss.

Page 18

 
RE:COGNITION HEALTH LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

  
2.17

Financial instruments

The Group only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.


3.


Judgements in applying accounting policies and key sources of estimation uncertainty

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported for assets and liabilities as at the balance sheet date and the amounts reported for revenues and expenses during the year. However, the nature of estimation means that actual outcomes could differ from those estimates. The following judgements have had the most significant effect on amounts recognised in the financial statements.
Trade debtors
The nature of the operations and the relationships with customers and sponsors means that the period from revenue recognition to cash collection can be quite long. This means that at the time of approving the financial statements a material amount of trade debtors relating to the reporting year remain outstanding. The company makes a significant provision against the trade debtors to reflect the risk of non-recovery. The provision is based on historic experience and takes account of any known recoverability issues but, by definition, the provision is an estimate and the actual amount recovered could be significantly different to expectations. 


4.


Turnover

Analysis of turnover by country of destination:

2023
2022
£
£

United Kingdom
13,653,470
8,696,878

United States of America
4,019,088
2,808,581

17,672,558
11,505,459



5.


Other operating income

2023
2022
£
£

R&D tax credit receivable
622,994
338,130

622,994
338,130


Page 19

 
RE:COGNITION HEALTH LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

6.


Operating profit

The operating profit is stated after charging:

2023
2022
£
£

Depreciation
289,551
300,321

Operating lease rentals
1,234,223
1,039,018

Defined contribution pension cost
81,088
34,653


7.


Auditor's remuneration

During the year, the Group obtained the following services from the Company's auditor:


2023
2022
£
£

Fees payable to the Company's auditor for the audit of the consolidated and parent Company's financial statements
19,000
15,000

Fees payable to the Company's auditor and its associates in respect of taxation compliance services
2,350
2,200

Fees payable to the Company's auditor and its associates in respect of statutory financial statements services
2,150
2,000


8.


Employees

Staff costs, including directors' remuneration, were as follows:


Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£


Wages and salaries
3,675,580
2,709,006
3,675,580
2,551,516

Social security costs
74,724
296,934
74,724
296,934

Cost of defined contribution scheme
231,746
34,653
231,746
34,653

3,982,050
3,040,593
3,982,050
2,883,103


The average monthly number of employees, including the directors, during the year was as follows:



Group
Group
Company
Company
        2023
        2022
        2023
        2022
            No.
            No.
            No.
            No.









Average number of employees
98
87
83
74

Page 20

 
RE:COGNITION HEALTH LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

9.


Directors' remuneration

2023
2022
£
£

Directors' emoluments
384,919
374,320


The highest paid director received remuneration of £378,919 (2022 - £374,320).

The value of the Group's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £NIL (2022 - £NIL).


10.


Interest receivable

2023
2022
£
£


Other interest receivable
72,109
19,879


11.


Taxation


2023
2022
£
£

Corporation tax


Current tax on profits for the year
785,277
99,789

Adjustments in respect of previous periods
-
1,523


785,277
101,312

Foreign tax


Foreign tax on income for the year
34,466
4,058

Total current tax
819,743
105,370

Deferred tax


Origination and reversal of timing differences
14,376
56,883

Total deferred tax
14,376
56,883


Taxation on profit on ordinary activities
834,119
162,253
Page 21

 
RE:COGNITION HEALTH LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
 
11.Taxation (continued)


Factors affecting tax charge for the year

The tax assessed for the year is higher than (2022 - lower than) the standard rate of corporation tax in the UK of 23.52% (2022 - 19%). The differences are explained below:

2023
2022
£
£


Profit on ordinary activities before tax
2,769,142
1,307,327


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of  23.52% (2022 - 19%)
651,302
248,392

Effects of:


Tax on foreign profits
34,466
4,058

Other differences
61,731
(110,094)

Capital allowances for year in excess of depreciation
-
1,523

Fixed asset differences
5,490
(5,692)

Expenses not deductible for tax purposes
553
1,727

Enhanced deduction for qualifying R&D expenditure
(65,539)
(49,734)

R&D tax credit recognised in other operating income
146,532
58,421

Remeasurement of deferred tax for changes in tax rates
(416)
13,652

Total tax charge for the year
834,119
162,253

Page 22

 
RE:COGNITION HEALTH LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

12.


Tangible fixed assets

Group






Long-term leasehold property
Plant and machinery
Total

£
£
£



Cost or valuation


At 1 January 2023
1,430,292
1,075,316
2,505,608


Additions
114,008
349,303
463,311


Exchange adjustments
(1,814)
(10,677)
(12,491)



At 31 December 2023

1,542,486
1,413,942
2,956,428



Depreciation


At 1 January 2023
726,102
866,603
1,592,705


Charge for the year on owned assets
133,157
156,394
289,551


Exchange adjustments
(377)
(5,169)
(5,546)



At 31 December 2023

858,882
1,017,828
1,876,710



Net book value



At 31 December 2023
683,604
396,114
1,079,718



At 31 December 2022
704,190
208,713
912,903

Page 23

 
RE:COGNITION HEALTH LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

           12.Tangible fixed assets (continued)


Company






Long-term leasehold property
Plant and machinery
Total

£
£
£

Cost or valuation


At 1 January 2023
1,422,843
947,780
2,370,623


Additions
46,243
160,855
207,098



At 31 December 2023

1,469,086
1,108,635
2,577,721



Depreciation


At 1 January 2023
721,308
786,475
1,507,783


Charge for the year on owned assets
127,275
111,314
238,589



At 31 December 2023

848,583
897,789
1,746,372



Net book value



At 31 December 2023
620,503
210,846
831,349



At 31 December 2022
701,535
161,305
862,840






Page 24

 
RE:COGNITION HEALTH LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

13.


Fixed asset investments

Company





Investments in subsidiary companies

£



Cost or valuation


At 1 January 2023
3,091



At 31 December 2023
3,091






Subsidiary undertaking


The following was an indirect subsidiary undertaking of the Company:

Name

Registered office

Class of shares

Holding

Re:Cognition Health Corporation
USA
Ordinary Shares
100%


14.


Debtors

Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£


Trade debtors
2,766,982
3,461,481
2,081,159
2,497,219

Amounts owed by group undertakings
-
-
5,437,586
3,037,047

Other debtors
798,094
295,102
653,384
278,216

Prepayments and accrued income
357,992
288,444
337,201
279,228

3,923,068
4,045,027
8,509,330
6,091,710



15.


Cash and cash equivalents

Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£

Cash at bank and in hand
8,589,429
5,081,377
6,371,125
4,199,337


Page 25

 
RE:COGNITION HEALTH LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

16.


Creditors: Amounts falling due within one year

Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£

Bank loans
1,297,125
481,093
489,908
481,093

Trade creditors
1,709,512
1,224,844
1,249,293
968,407

Corporation tax
785,277
-
785,277
-

Other taxation and social security
197,352
179,029
197,352
179,029

Other creditors
25,171
10,004
25,171
10,004

Accruals and deferred income
1,695,385
1,174,080
1,603,032
930,945

5,709,822
3,069,050
4,350,033
2,569,478



17.


Financial instruments

Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£

Financial assets

Cash and cash equivalents
8,589,429
5,081,377
6,371,125
4,199,337

Financial assets that are debt instruments measured at amortised cost
3,877,711
4,445,565
-
5,574,142

12,467,140
9,526,942
6,371,125
9,773,479


Financial liabilities

Financial liabilities measured at amortised cost
(4,727,193)
(2,890,021)
-
(2,374,858)


Financial assets that are debt instruments measured at amortised cost comprise of trade debtors, amounts owed by group undertakings, and other debtors.


Financial liabilities measured at amortised cost comprise of bank loans, trade creditors, other creditors, and accruals.

Page 26

 
RE:COGNITION HEALTH LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

18.


Deferred taxation


Group



2023
2022


£

£






At beginning of year
(105,061)
(48,178)


Charged to profit or loss
(14,376)
(56,883)



At end of year
(119,437)
(105,061)

Company


2023
2022


£

£






At beginning of year
(105,061)
(48,178)


Charged to profit or loss
(14,376)
(56,883)



At end of year
(119,437)
(105,061)

The provision for deferred taxation is made up as follows:

Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£

Accelerated capital allowances
(119,437)
(105,061)
(119,437)
(105,061)


19.


Share capital

2023
2022
£
£
Allotted, called up and fully paid



171,500 (2022 - 171,500) Ordinary shares of £0.01 each
1,715
1,715


Page 27

 
RE:COGNITION HEALTH LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

20.


Reserves

Share premium account

This reserve records the amount above the nominal value received for shares sold, less transaction
costs.

Foreign exchange reserve

The foreign exchange reserve is the accumulated exchange gains or losses on translation of foreign
subsidiaries during consolidation at the year end date.

Profit and loss account

The profit and loss account is the Group's accumulated profits or losses at the year end date.


21.


Pension commitments

The Group operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Group in an independently administered fund. The pension cost charge represents contributions payable by the Group to the fund and amounted to £282,001 (2022: £34,653). Contributions totalling £12,246 (2022: £10,004) were payable to the fund at the balance sheet date and are included in creditors.


22.


Commitments under operating leases

At 31 December 2023 the Group and the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:


Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£

Not later than 1 year
738,547
675,171
370,395
491,124

Later than 1 year and not later than 5 years
1,665,465
1,547,879
806,498
982,184

Later than 5 years
1,081,836
196,551
174,110
188,761

3,485,848
2,419,601
1,351,003
1,662,069


23.


Related party transactions

The Group has not disclosed transactions within the Group that eliminate on consolidation, as permitted by FRS 102. Key management personnel are the Directors of the Company. Directors' emoluments are disclosed in note 9. During the year, the Company made purchases of £31,200 (2022: £28,800) from Layercake Limited, a Company related to a director of the parent Company. As at 31 December 2023 £600 (2022: £3,600) was due to Layercake Limited.

Page 28