Registered number: 06465874
Optigene Limited
Annual report and financial statements
For the year ended 30 November 2023
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Optigene Limited
Company Information
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Statutory Auditor & Chartered Accountants
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Optigene Limited
Contents
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Independent auditor's report
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Consolidated statement of comprehensive income
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Consolidated balance sheet
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Consolidated statement of changes in equity
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Company statement of changes in equity
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Consolidated statement of cash flows
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Notes to the financial statements
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Optigene Limited
Group strategic report
For the year ended 30 November 2023
The directors present their report with the financial statements of the Group for the year ended 30 November 2023.
Business review and future developments
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Following the conclusion of the Group’s contract with the DHSC in the previous year, the volume of trade has continued to fall to levels more comparable with pre-pandemic results. That being said, the Group continues to make strong profits prior to charity donations, and this is not expected to change significantly in the coming years.
Following the successful formation of a charitable trust known as the OptiGene Foundation in the previous year, a donation of £1 million was made by the company in the current year. The Group has now donated a total of £2 million to the OptiGene Foundation to provide funds for a range of charities. There has not yet been a formal decision to add to this, though this is likely in the future. In any case, the Group does expect to generate profits and expand its operations going forwards.
During 2023, the directors of the Group decided to further develop the business by securing the services of a Chief Commercial Officer. Having chosen a suitable candidate, we offered a three-month trial contract before making the decision to make a formal offer of employment. The new CCO took up his post at the beginning of 2024 and has been tasked with promoting the products and services of OptiGene around the world, with particular emphasis on the USA.
Principal risks and uncertainties
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Financial risks are covered in the financial instruments of the section of the directors’ report. In addition to the financial risks, the company is exposed to normal commercial risks associated with a business of this nature. These are mitigated by a number of factors; whilst the company only uses a small number of suppliers, these suppliers are closely related to the company and are considered to be highly reliable as a result. Furthermore, the company sells to a large and diverse customer base and as such it is not heavily reliant on a small number of companies for its trade.
Financial key performance indicators
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The directors consider the key performance indicators to be sales, gross profit margin and EBITDA (earnings before interest, taxes, depreciation and amortisation).
The numbers are as follows:
Other key performance indicators
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The directors do not consider there to be any other key performance indicators relevant to the company.
Page 1
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Optigene Limited
Group strategic report (continued)
For the year ended 30 November 2023
Directors' statement of compliance with duty to promote the success of the Group
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A director of a company must act in the way he considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole, and in doing so must have regard (amongst other matters) for factors (a) to (f) in s172 of the Companies Act 2006. The interest of the directors and shareholders have aligned as all shareholders are also directors of the business and/or are actively involved in management.
While the Group had grown to a considerable size in recent years, the culture has remained that of a small company and, with the absence of external investors or debt providers, the approach to decision making has always been for the long term, evidenced by the significant investments made in recent years. Again, with regard to the long-standing position of the Group in the industry, the interests of suppliers and customers have always been critical, with the majority of suppliers having a long-standing relationship with the Group.
This report was approved by the board and signed on its behalf.
Page 2
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Optigene Limited
Directors' report
For the year ended 30 November 2023
The directors present their report and the financial statements for the year ended 30 November 2023.
Directors' responsibilities statement
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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 2006. They 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.
The Group's principal activity during the year was the continued manufacture and supply of DNA isothermal amplication units along with other scientific measuring and testing equipment.
The loss for the year, after taxation, amounted to £303,246 (2022 - loss £1,692,031).
During the year the directors declared a dividend of £4,360,000 (2022 - £4,370,000).
The directors who served during the year were:
Page 3
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Optigene Limited
Directors' report (continued)
For the year ended 30 November 2023
The Group is funded from internal resources with no external debt, and as such there is no exposure to interest rate risk. The Group is exposed to liquidity and cash flow risk, however in normal times these have relatively low variability, and the risk is mitigated by the group maintaining significant cash reserves, the level of which had been increased substantially in recent years.
The Group is exposed to normal commerical risks in terms of pricing pressure, however given the nature of the products involved much of this risk can be transferred onto the customers and as such the sales price is relatively elastic.
Finally, the Group is exposed to foreign exchange risk and there are currently no hedging techniques deployed by the Group to mitigate this. However, the majority of the Group's trade is and has always been derived from the UK and as such the bulk of transactions are entered into in sterling. Should this change in the future, there could be a heightened risk here.
Engagement with suppliers, customers and others
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The Group places particular importance in maintaining positive relations with all suppliers, in particular aiming to comply with suppliers' credit terms.
Greenhouse gas emissions, energy consumption and energy efficiency action
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The Group has not disclosed information in respect of greenhouse gas emissions, energy consumption and energy efficiency action as its energy consumption in the United Kingdom for the year is 40,000kWh or lower.
Disclosure of information to auditor
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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
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There have been no significant events affecting the Group since the year end.
The auditor, Kreston Reeves LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board on 14 August 2024 and signed on its behalf.
Page 4
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Optigene Limited
Independent auditor's report to the members of Optigene Limited
We have audited the financial statements of Optigene Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 30 November 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 policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
∙give a true and fair view of the state of the Group's and of the parent Company's affairs as at 30 November 2023 and of the Group's loss for the year then ended;
∙have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
∙have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the 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
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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.
Page 5
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Optigene Limited
Independent auditor's report to the members of Optigene Limited (continued)
The other information comprises the information included in the Annual Report other than the financial statements and our Auditor's report thereon. The directors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinion on other matters prescribed by the Companies Act 2006
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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
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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
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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
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Optigene Limited
Independent auditor's report to the members of Optigene Limited (continued)
Auditor's responsibilities for the audit of the financial statements
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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.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
Capability of the audit in detecting irregularities, including fraud:
Based on our understanding of the Group and industry, and through discussion with the directors and other management (as required by auditing standards), we identified that the principal risks of non-compliance with laws and regulations related to health and safety and employment law. We considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006 and taxation legislation. We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls) and determined that the principal risks were related to posting inappropriate journal entries to revenue or expenditure, management bias in accounting estimates and judgemental areas of the financial statements. Audit procedures performed by the engagement team included:
∙Discussions with management and assessment of known or suspected instances of non-compliance with laws and regulations (including health and safety) and fraud, and review of the reports made by management; and
∙Assessment of identified fraud risk factors; and
∙Challenging assumptions and judgements made by management in its significant accounting estimates; and
∙Identifying key contracts and confirming that all required procurement and tendering procedures have been followed; and
∙Performing analytical procedures to identify any unusual or unexpected relationships, including related party transactions, that may indicate risks of material misstatement due to fraud; and
∙Confirmation of related parties with management, and review of transactions throughout the period to identify any previously undisclosed transactions with related parties outside the normal course of business; and
∙Reading minutes of meetings of those charged with governance and reviewing correspondence with relevant tax and regulatory authorities; and
∙Review of significant and unusual transactions and evaluation of the underlying financial rationale supporting the transactions; and
∙Identifying and testing journal entries, in particular any manual entries made at the year-end for financial statement preparation.
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.
Page 7
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Optigene Limited
Independent auditor's report to the members of Optigene Limited (continued)
As part of an audit in accordance with ISAs (UK), we exercise professional judgement and maintain professional scepticism throughout the audit. We also:
∙Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
∙Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion of the effectiveness of the Company's internal control.
∙Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
∙Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our Auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our Auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.
∙Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
∙Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
Allan Pinner FCCA (Senior statutory auditor)
for and on behalf of
Kreston Reeves LLP
Statutory Auditor
Chartered Accountants
Horsham
20 August 2024
Page 8
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Optigene Limited
Consolidated statement of comprehensive income
For the year ended 30 November 2023
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Income from fixed assets investments
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Gain/(loss) on disposal of investments
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Interest receivable and similar income
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Interest payable and similar expenses
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Loss for the financial year
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Profit for the year attributable to:
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Owners of the parent company
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There was no other comprehensive income for 2023 (2022:£NIL).
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The notes on pages 15 to 31 form part of these financial statements.
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Page 9
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Optigene Limited
Registered number: 06465874
Consolidated balance sheet
As at 30 November 2023
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Provisions for liabilities
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Capital redemption reserve
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The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 15 to 31 form part of these financial statements.
Page 10
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Optigene Limited
Registered number: 06465874
Company balance sheet
As at 30 November 2023
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Provisions for liabilities
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Capital redemption reserve
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The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 15 to 31 form part of these financial statements.
Page 11
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Optigene Limited
Consolidated statement of changes in equity
For the year ended 30 November 2023
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Capital redemption reserve
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Equity attributable to owners of parent Company
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The notes on pages 15 to 31 form part of these financial statements.
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Page 12
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Optigene Limited
Company statement of changes in equity
For the year ended 30 November 2023
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Capital redemption reserve
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The notes on pages 15 to 31 form part of these financial statements.
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Page 13
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Optigene Limited
Consolidated statement of cash flows
For the year ended 30 November 2023
Cash flows from operating activities
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Loss for the financial year
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Depreciation of tangible assets
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Impairments of fixed assets
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(Profit)/loss on sale of listed investments
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(Increase)/decrease in stocks
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Increase/(decrease) in creditors
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(Decrease) in amounts owed to related parties
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Net fair value (gains)/losses recognised in P&L
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Net cash generated from operating activities
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Cash flows from investing activities
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Purchase of tangible fixed assets
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Purchase of listed investments
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Sale of listed investments
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Net cash from investing activities
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Cash flows from financing activities
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Net cash used in financing activities
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Net (decrease) in cash and cash equivalents
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Cash and cash equivalents at beginning of year
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Cash and cash equivalents at the end of year
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Cash and cash equivalents at the end of year comprise:
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Page 14
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Optigene Limited
Notes to the financial statements
For the year ended 30 November 2023
The company is a private company limited by share capital and incorporated in England and Wales. The registered office of the company is Unit 5 Blatchford Road, Horsham, West Sussex, RH13 5QR.
The nature of the Group's operations and its principal activity are set out in the Directors' report.
2.Accounting policies
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Basis of preparation of financial statements
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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 financial statements are presented in sterling which is the functional currency of the company and rounded to the nearest £1.
The following principal accounting policies have been applied:
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.
Page 15
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Optigene Limited
Notes to the financial statements
For the year ended 30 November 2023
2.Accounting policies (continued)
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Foreign currency translation
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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 the Consolidated statement of comprehensive income within 'Administrative expenses'.
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:
Sale of goods
Revenue from the sale of goods is recognised when all of the following conditions are satisfied:
∙the Group has transferred the significant risks and rewards of ownership to the buyer;
∙the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
∙the amount of revenue can be measured reliably;
∙it is probable that the Group will receive the consideration due under the transaction; and
∙the costs incurred or to be incurred in respect of the transaction can be measured reliably.
For all sales in the period, the Company deemed that the risks and rewards of ownership were transferred on the physical delivery of goods.
Interest income is recognised in profit or loss using the effective interest method.
Page 16
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Optigene Limited
Notes to the financial statements
For the year ended 30 November 2023
2.Accounting policies (continued)
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 profit or loss 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.
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Current and deferred taxation
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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.
Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
The estimated useful lives range as follows:
Page 17
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Optigene Limited
Notes to the financial statements
For the year ended 30 November 2023
2.Accounting policies (continued)
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.
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:
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.
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Impairment of fixed assets and goodwill
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Assets that are subject to depreciation or amortisation are assessed at each balance sheet date to determine whether there is any indication that the assets are impaired. Where there is any indication that an asset may be impaired, the carrying value of the asset (or cash-generating unit to which the asset has been allocated) is tested for impairment. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's (or CGU's) fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (CGUs). Non-financial assets that have been previously impaired are reviewed at each balance sheet date to assess whether there is any indication that the impairment losses recognised in prior periods may no longer exist or may have decreased.
Investments in listed company shares are remeasured to market value at each balance sheet date. Gains and losses on remeasurement are recognised in profit or loss for the period.
Page 18
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Optigene Limited
Notes to the financial statements
For the year ended 30 November 2023
2.Accounting policies (continued)
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Associates and joint ventures
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An entity is treated as a joint venture where the Group is a party to a contractual agreement with one or more parties from outside the Group to undertake an economic activity that is subject to joint control.
An entity is treated as an associated undertaking where the Group exercises significant influence in that it has the power to participate in the operating and financial policy decisions.
In the consolidated accounts, interests in associated undertakings are accounted for using the equity method of accounting. Under this method an equity investment is initially recognised at the transaction price (including transaction costs) and is subsequently adjusted to reflect the investors share of the profit or loss, other comprehensive income and equity of the associate. The Consolidated statement of comprehensive income includes the Group's share of the operating results, interest, pre-tax results and attributable taxation of such undertakings applying accounting policies consistent with those of the Group. In the Consolidated balance sheet, the interests in associated undertakings are shown as the Group's share of the identifiable net assets, including any unamortised premium paid on acquisition.
Any premium on acquisition is dealt with in accordance with the goodwill policy.
Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis.
At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.
Short-term debtors are measured at transaction price, less any impairment.
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Cash and cash equivalents
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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.
Short-term creditors are measured at the transaction price.
Page 19
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Optigene Limited
Notes to the financial statements
For the year ended 30 November 2023
2.Accounting policies (continued)
The Group has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.
The Group has elected to apply the recognition and measurement provisions of IFRS 9 Financial Instruments (as adopted by the UK Endorsement Board) with the disclosure requirements of Sections 11 and 12 and the other presentation requirements of FRS 102.
Financial instruments are recognised in the Group's Balance sheet when the Group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Discounting is omitted where the effect of discounting is immaterial. The Group's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.
Other financial assets
Other financial assets, which includes investments in equity instruments which are not classified as subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the recognised transaction price. Such assets are subsequently measured at fair value with the changes in fair value being recognised in the profit or loss. Where other financial assets are not publicly traded, hence their fair value cannot be measured reliably, they are measured at cost less impairment.
Impairment of financial assets
Financial assets are assessed for indicators of impairment at each reporting date.
Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.
If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.
Financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Group after the deduction of all its liabilities.
Page 20
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Optigene Limited
Notes to the financial statements
For the year ended 30 November 2023
2.Accounting policies (continued)
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Financial instruments (continued)
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Basic financial liabilities, which include trade and other payables, bank loans, other loans and loans due to fellow group companies are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.
Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.
Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.
Other financial instruments
Derivatives, including forward exchange contracts, futures contracts and interest rate swaps, are not classified as basic financial instruments. These are initially recognised at fair value on the date the derivative contract is entered into, with costs being charged to the profit or loss. They are subsequently measured at fair value with changes in the profit or loss.
Debt instruments that do not meet the conditions as set out in FRS 102 paragraph 11.9 are subsequently measured at fair value through the profit or loss. This recognition and measurement would also apply to financial instruments where the performance is evaluated on a fair value basis as with a documented risk management or investment strategy.
Derecognition of financial instruments
Derecognition of financial assets
Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Group transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Group will continue to recognise the value of the portion of the risks and rewards retained.
Derecognition of financial liabilities
Financial liabilities are derecognised when the Group's contractual obligations expire or are discharged or cancelled.
Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.
Page 21
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Optigene Limited
Notes to the financial statements
For the year ended 30 November 2023
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Judgements in applying accounting policies and key sources of estimation uncertainty
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The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectation of future events that are believed to be reasonable under the circumstances, however, by their nature they will rarely equal the related actual outcome.
The following judgements and estimates have had the most significant impact on the amounts recognised in the financial statements:
Impairment of stock
In determining the value of stock the directors must make judgements to arrive at net realisable value.
Determining the net realisable value of the range of products requires judgement to be applied to determine the likely saleability of the product and the potential price that can be achieved. In arriving at any provision for net realisable value, the directors take into account the age, condition and quality of the inventory lines as well as the recent trends in sales.
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An analysis of turnover by class of business is as follows:
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Analysis of turnover by country of destination:
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The operating loss is stated after charging:
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Other operating lease rentals
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Page 22
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Optigene Limited
Notes to the financial statements
For the year ended 30 November 2023
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During the year, the Group obtained the following services from the Company's auditor:
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Audit-related assurance services
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Staff costs were as follows:
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Cost of defined contribution scheme
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The average monthly number of employees other than the directors (who did not receive any remuneration) during the year was as follows:
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Income from fixed asset investments
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Other interest receivable
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Page 23
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Optigene Limited
Notes to the financial statements
For the year ended 30 November 2023
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Interest payable and similar expenses
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Current tax on profits for the year
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Adjustments in respect of previous periods
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Origination and reversal of timing differences
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Taxation on loss on ordinary activities
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Factors affecting tax charge for the year
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The tax assessed for the period is lower than (2022 - higher than) the standard rate of corporation tax in the UK of 19% (2022 - 19%). The differences are explained below:
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Loss on ordinary activities before tax
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Loss on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2022 - 19%)
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Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
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Capital allowances for year in excess of depreciation
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Adjustments to tax charge in respect of prior periods
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Unrelieved tax losses carried forward
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Deferred tax asset recognised on losses carried forward
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Other differences leading to an increase (decrease) in the tax charge
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Total tax charge for the year
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Page 24
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Optigene Limited
Notes to the financial statements
For the year ended 30 November 2023
11.Taxation (continued)
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Factors that may affect future tax charges
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There are trade losses of £755,937 (2022 - £nil) and unutilised management expenses of £1,140,584 (2022 - £226,927) available to carry forward against future taxable profits of the company.
It is the judgement of the directors that 60% of these losses will be recoverable and utilised against taxable profits in the foreseeable future, and as such a deferred tax asset has been recognised accordingly. This asset has been recognised at the corporation tax rate of 25% that is expected to be charged on future profits.
Page 25
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Optigene Limited
Notes to the financial statements
For the year ended 30 November 2023
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Charge for the year on owned assets
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Page 26
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Optigene Limited
Notes to the financial statements
For the year ended 30 November 2023
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Investments in subsidiary companies
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The following was a subsidiary undertaking of the Company:
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2140 South Dupont Highway, Camden, Kent, 19934
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There is no material difference between the purchase price of stocks and their replacement costs.
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Page 27
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Optigene Limited
Notes to the financial statements
For the year ended 30 November 2023
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Amounts owed by group undertakings
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Prepayments and accrued income
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Cash and cash equivalents
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Creditors: Amounts falling due within one year
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Amounts owed to related undertakings
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Other taxation and social security
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Accruals and deferred income
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Page 28
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Optigene Limited
Notes to the financial statements
For the year ended 30 November 2023
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Financial assets that are debt instruments measured at amortised cost
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Financial liabilities that are debt instruments measured at amortised cost
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Financial assets measured at fair value through profit or loss comprise cash, trade debtors and other debtors.
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Financial liabilities measured at amortised cost comprise trade creditors, amounts owed to related undertakings, other creditors and accruals.
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Charged to profit or loss
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Charged to profit or loss
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Accelerated capital allowances
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Tax losses carried forward
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Page 29
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Optigene Limited
Notes to the financial statements
For the year ended 30 November 2023
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Allotted, called up and fully paid
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837 (2022 - 872) Ordinary shares of £1.00 each
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Purchase of own shares
During the year the company purchased 35 of its Ordinary shares. The Ordinary shares were purchased for a consideration of £834,041 and represent 4% of the called up share capital.
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Capital redemption reserve
This reserve represents the par value of shares repurchased by the company.
Profit and loss account
This includes the current and prior period retained profits and losses.
The Company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £1,230 (2022 - £1,502) . Contributions totalling £106 (2022 - £Nil) were payable to the fund at the balance sheet date.
Page 30
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Optigene Limited
Notes to the financial statements
For the year ended 30 November 2023
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Related party transactions
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During the year the company entered into the following related party transactions:
Directors
The company declared and paid dividends of £3,750,000 (2022 - £3,750,000) to the directors, who are also shareholders.
Optisense Limited
(Optigene Limited is jointly controlled by personnel also deemed to have joint control over Optisense Limited)
The company purchased goods totalling £1,041,257 (2022 - £2,594,599). There was an outstanding balance held in amounts owed to related undertakings at the balance sheet date at a total of £450,252 (2022 - £656,313).
GeneSys Biotech Limited
(Optigene Limited is jointly controlled by personnel also deemed to have significant influence over GeneSys Biotech Limited)
The company purchased goods totalling £2,902,777 (2022 - £4,281,806). There was an outstanding balance held in trade creditors at the balance sheet date at a total of £2,374,131 (2022 - £236,006).
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The company is jointly controlled by M Andreou and D Clark.
Page 31
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