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COMPANY REGISTRATION NUMBER: 12657158
CIGNPOST DIAGNOSTICS LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31 March 2023
CIGNPOST DIAGNOSTICS LIMITED
FINANCIAL STATEMENTS
YEAR ENDED 31 MARCH 2023
Contents
Page
Officers and professional advisers
1
Strategic report
2
Directors' report
5
Independent auditor's report to the members
8
Statement of income and retained earnings
12
Statement of financial position
13
Statement of cash flows
14
Notes to the financial statements
16
CIGNPOST DIAGNOSTICS LIMITED
OFFICERS AND PROFESSIONAL ADVISERS
The board of directors
S Whatley
N Markham (Resigned 24 September 2022)
I J Axe (Resigned 6 January 2023)
J C Kilgour (Served from 3 January 2023 to 31 May 2024)
M A Jones (Served from 3 January 2023 to 25 April 2023)
A M Bascombe (Appointed 29 July 2024)
D F Kinane (Served from 1 June 2024 to 10 July 2024)
Registered office
Building X92
Cody Technology Park
Farnborough
Hampshire
United Kingdom
GU14 0LX
Auditor
Streets Audit LLP
Chartered accountants & statutory auditor
Windsor House
A1 Business Park at
Long Bennington
Notts
NG23 5JR
Bankers
National Westminster Bank Plc
31-37 Victoria Road
Farnborough
Hants
GU14 7NR
Nat West Bank Plc
1 Water Lane
Bakewell
Derbs
DE45 1YY
CIGNPOST DIAGNOSTICS LIMITED
STRATEGIC REPORT
YEAR ENDED 31 MARCH 2023
We aim to present a balanced and comprehensive view of the development and performance of our business during the period and its position at the year end. Business review The board of directors realised in early 2022 that the government and global attitude to testing was becoming much more akin to a flu epidemic rather than a pandemic. All the indicators from the press and regulatory bodies implied that dedicated Covid testing was going to halt or be so minimal that it only applied to secure sites such as certain hospital wards. With this in mind, the company decided very early on to move forward on its plans to take its unique assets of mobile laboratories and rapid deployment capability and apply this to other types of testing. This was the Pivot the company would strive to achieve. In order to facilitate this, management retained a large number of staff and dedicated them to research and development in order to apply the transformational advancements achieved in Covid testing to other diagnostic tests in a mobile lab environment. This would deliver on our key advantages, such as speed of test results, flexible testing at point of care locations and stretching the use of existing lab processes to safely accomplish tasks outside of the original equipment manufacturers' specifications in a mobile lab environment. The company would seek to apply these developments in other areas such as animal diseases, other human pandemics such as Monkey Pox, and tracking and identifying disease from groups of people impacted by natural or man-made disasters. To support this, the company contracted with the Boston Consulting Group to review the business operations and achievements and to work with our science team to determine the best markets for the Company to deploy its expertise and specialist mobile labs and equipment. Operating performance Revenue for the period under review was £45.2 million vs the £265.9 million achieved in the prior year. The operating loss achieved amounted to £18.1 million (£18.7 million opertaing profit, 2021/22) and after-tax earnings for the period amounted to (£14.5) million (£16.8 million, 2021/22). Principal risks and uncertainties The company continually reviews risks and investigates opportunities in the health & wellness fields. We operate in a highly regulated sector. Compliance with regulations applicable to our activities may increase operating costs or restrict activities and failure to comply with such regulations may lead to administrative, disciplinary, or criminal sanctions. The key risks, to the extent possible, have been mitigated through the introduction of a number of contingency measures which are monitored on a continuous basis by management. Strategy execution The company's core strategy entailed: - Collaborate with customer teams to create tailored solutions to their specific business needs. - Accelerating innovation and digital transformation initiatives. - General Key Performance Indicators are aligned to testing numbers, efficiency and productivity. Section 172(1) Statement During the period ending 31 March 2023 the Board of Cignpost Diagnostics Limited considers as individuals and collectively that it has acted in a way it considers, in good faith, would most likely promote the success of the Company for the benefit of its members, as a whole by having regard, among other matters to; - The likely consequences of any decision in the long term, - The interests of the Company's employees, - The need to foster the Company's business relationships with suppliers, customers, and others, - The impact of the Company's operations on the community and the environment, - The desirability of the Company maintaining a reputation for high standards of business conduct, & - The need to act fairly as between members of the Company. Directors' duties Directors have been briefed on their duties with access to professional advice from the Company's professional advisors. On Company Secretarial matters, where necessary, they have been supported by external independent advisors. The Directors fulfil their duties in part through a governance framework that includes delegation of certain day-to-day decision making to senior employees, and various management committees. Risk Management Due to the rapidly changing nature of the Company's business environment the management of its business and risk is accordingly changing in response. It is therefore necessary for the Company's long-term success that it identifies, evaluates, manages, and mitigates effectively the risks that it faces and that it continues to evolve its approach to risk management. The potential risks and uncertainties that could have a material impact on the performance of the Company are: Competition Risk The Directors regularly identify, monitor, and ensure appropriate processes are in place to mitigate potential risks and uncertainties arising from the company's competitors. Financial and liquidity Risk The Directors regularly undertake forecasting to identify the Company's liquidity requirements, and these are reviewed regularly to ensure that sufficient financial headroom exists for at least a 12-month period. Economic Risk There is always the possibility that an economic downturn or changes to regulation in the environment that the Company operates in could negatively impact the results for the business. The Directors regularly identify, monitor, and ensure appropriate processes and actions are in place to mitigate potential risks and uncertainties to economic downturns. Credit Risk The Company monitors credit risk closely and considers that its current policies of credit checks and applications of credit limits on all new customers meets its objectives of managing exposure to credit risk. The Company has no significant concentrations of credit risk. Amounts shown in the balance sheet best represent the maximum credit risk exposure in the event other parties fail to perform their obligations. Regulatory Risk The Company monitors regulatory risk on an ongoing basis and has a team of specialists that regularly audit the Company's processes, standards, and compliance to meet its own and international standard. Investors The Board meet informally at least monthly and have formal meetings when required from a legal or business perspective. The Board recognises the importance of continuing an effective and transparent dialogue with shareholders and ensuring that all individuals understand and support the Group's strategy and objectives. Suppliers, customers and others The Company is committed to acting ethically and with integrity in all business dealings and relationships. Fostering business relationships with key stakeholders, customers, limited partners, and suppliers is important to the Company's success. The Board looks to implement and enforce effective systems and controls to ensure its supply chains are maintaining the highest standard of business conduct in line with best practice including in relation to anti-bribery and modern slavery. The Board regularly re-evaluates who the Group's key stakeholders are, in part taking in feedback from its employees, who engage with these stakeholders accordingly. The interests of the Company's employees The Board promotes effective engagement with the company's workforce. The Board regularly interacts with all senior executives to gain insights into Company affairs and to offer direction and advice as and when required. Regular briefing meetings are held to keep employees abreast of Company results and performance, new developments, department overviews and insights.
This report was approved by the board of directors on 5 September 2024 and signed on behalf of the board by:
S Whatley
Director
Registered office:
Building X92
Cody Technology Park
Farnborough
Hampshire
United Kingdom
GU14 0LX
CIGNPOST DIAGNOSTICS LIMITED
DIRECTORS' REPORT
YEAR ENDED 31 MARCH 2023
The directors present their report and the financial statements of the company for the year ended 31 March 2023 .
Directors
The directors who served the company during the year were as follows:
S Whatley
J C Kilgour
(Appointed 3 January 2023)
M A Jones
(Appointed 3 January 2023)
N Markham
(Resigned 24 September 2022)
I J Axe
(Resigned 6 January 2023)
Dividends
Particulars of recommended dividends are detailed in note 12 to the financial statements.
Greenhouse gas emissions and energy consumption
Unit
2023
2022
Emissions resulting from the purchase of electricity by the company for its own use
tCO2e
14
41
Emissions resulting from the use of owned transport by the company for its own use
tCO2e
4
7
----
----
Total emissions
tCO2e
18
48
Total energy consumption
kWh
60,563
158,319
Intensity metric - tonnes of CO2 per FTE
0.06
0.03
---------
----------
Methodologies for energy and emissions calculations
We have followed the 2019 HM Government Environmental Reporting Guidelines. We have also used the GHG Reporting Protocol - Corporate Standard and have used the 2020 UK Government's Conversion Factors for Company Reporting.
Principal measures taken to increase energy efficiency
- As the vans used for our operations reach the end of their useful life, we have committed to replacing them with energy efficient vehicles such as electric where practical. - Our clinical waste goes to incinerating facilities which generates electricity. - We are currently exploring energy efficient lighting for all locations. - The oil fired boilers located at the central office have recently been serviced to ensure maximum efficiency; but we are currently unable to replace these as they are landlord controlled. - We are looking at switching as much heating as possible to electricity, buying from green and renewably generated sources. Intensity measurement The chosen intensity measurement ratio is total gross emissions in metric tonnes CO2e per FTE staff member.
Employment of disabled persons
The directors recognise their responsibilities towards disabled persons and do not discriminate against them, either in terms of job offers of career prospects. If employees become disabled, every effort is made to ensure their continued employment.
Employee involvement
The Board promotes effective engagement with the company's workforce. The Board regularly interacts with all senior executives to gain insights into Company affairs and to offer direction and advice as and when required. Regular briefing meetings are held to keep employees abreast of Company results and performance, new developments, department overviews and insights. The Directors are able to monitor this engagement as they sit amongst the employees located at the company's central office located in in Farnborough where a COVID-19 safe environment has been created for employees on site. A range of additional employee benefits such as a medical scheme, enhanced maternity and paternity benefits, and schemes introduced that promote both physical and mental health to ensure that employees are well looked after, both physically and mentally.
Events after the end of the reporting period
Particulars of events after the reporting date are detailed in note 25 to the financial statements.
Disclosure of information in the strategic report
The company has chosen in accordance with section 414C(11) of the Companies Act 2006 (Strategic Report and Directors' Report) Regulations 2013 to set out in the company's strategic report information required by schedule 7 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008.
Directors' responsibilities statement
The directors are responsible for preparing the strategic report, directors' report and the financial statements in accordance with applicable law and regulations. Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and the profit or loss of the company for that period. In preparing these financial statements, the directors are required to: - select suitable accounting policies and then apply them consistently; - make judgments and accounting estimates that are reasonable and prudent. The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. Auditor
Each of the persons who is a director at the date of approval of this report confirms that:
- so far as they are aware, there is no relevant audit information of which the company's auditor is unaware; and - they have taken all steps that they ought to have taken as a director to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information.
This report was approved by the board of directors on 5 September 2024 and signed on behalf of the board by:
S Whatley
Director
Registered office:
Building X92
Cody Technology Park
Farnborough
Hampshire
United Kingdom
GU14 0LX
CIGNPOST DIAGNOSTICS LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF CIGNPOST DIAGNOSTICS LIMITED
YEAR ENDED 31 MARCH 2023
Opinion
We have audited the financial statements of Cignpost Diagnostics Limited (the 'company') for the year ended 31 March 2023 which comprise the statement of income and retained earnings, statement of financial position, statement of cash flows 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 FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice). In our opinion the financial statements: - give a true and fair view of the state of the company's affairs as at 31 March 2023 and of its loss for the year then ended; - have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; - 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 company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Material uncertainty related to going concern
We draw attention to note 3 in the financial statements, which indicates that the company is forecast to incur losses in the shorter term, though the Directors and management team continue to develop non-Covid sources of income. As stated in note 3, these events or conditions, along with the other matters as set forth in note 3, indicate that a material uncertainty exists that may cast significant doubt on the company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.
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. 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. In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
- the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
- the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion: - adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or - the financial statements are not in agreement with the accounting records and returns; or - certain disclosures of directors' remuneration specified by law are not made; or - we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. 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: Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was that we identified the material laws and regulations applicable to the company through discussions with management, and from our commercial knowledge and experience of the company and various sectors in which it operates. We then assessed the extent of compliance with these laws and regulations through making enquiries of of management. We then assessed the susceptibility of the company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations. To address the risk of fraud through management bias and override of controls we tested journal entries to identify unusual transactions, we assessed whether judgements and assumptions made in determining the accounting estimates set out in Note 3 were indicative of potential bias; and we investigated the rationale behind significant or unusual transactions. In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to agreeing financial statement disclosures to underlying supporting documentation, reading the minutes of meetings of those charged with governance, reviewing correspondence with HMRC and relevant regulators. There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any. Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion. 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. 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 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.
Georgina Gale
(Senior Statutory Auditor)
For and on behalf of
Streets Audit LLP
Chartered accountants & statutory auditor
Windsor House
A1 Business Park at
Long Bennington
Notts
NG23 5JR
5 September 2024
CIGNPOST DIAGNOSTICS LIMITED
STATEMENT OF INCOME AND RETAINED EARNINGS
YEAR ENDED 31 MARCH 2023
Period from
Year to
1 Apr 21 to
31 Mar 23
29 Mar 22
Note
£
£
Turnover
4
45,205,290
265,891,319
Cost of sales
( 26,821,745)
( 147,466,347)
---------------
---------------
Gross profit
18,383,545
118,424,972
Distribution costs
( 2,427,654)
( 14,500,232)
Administrative expenses
( 36,064,238)
( 83,352,287)
Other operating income
5
813,626
Restructuring transactions
1,224,766
( 1,872,719)
---------------
---------------
Operating (loss)/profit
6
( 18,069,955)
18,699,734
Income from shares in group undertakings
9
822,609
Interest payable and similar expenses
10
( 17,763)
( 23,955)
---------------
---------------
(Loss)/profit before taxation
( 17,265,109)
18,675,779
Tax on (loss)/profit
11
2,766,951
( 1,881,912)
---------------
---------------
(Loss)/profit for the financial year and total comprehensive income
( 14,498,158)
16,793,867
---------------
---------------
Dividends paid and payable
12
( 6,000,000)
Retained earnings at the start of the year
21,090,853
10,296,986
---------------
---------------
Retained earnings at the end of the year
6,592,695
21,090,853
---------------
---------------
All the activities of the company are from continuing operations.
CIGNPOST DIAGNOSTICS LIMITED
STATEMENT OF FINANCIAL POSITION
31 March 2023
2023
2022
Note
£
£
Fixed assets
Intangible assets
13
792,266
Tangible assets
14
2,503,220
4,673,210
Investments
15
3
3
-------------
-------------
2,503,223
5,465,479
Current assets
Stocks
16
131,775
3,401,628
Debtors
17
13,842,210
57,249,331
Cash at bank and in hand
97,610
2,976,019
---------------
---------------
14,071,595
63,626,978
Creditors: amounts falling due within one year
18
( 9,226,947)
( 46,784,521)
---------------
---------------
Net current assets
4,844,648
16,842,457
-------------
---------------
Total assets less current liabilities
7,347,871
22,307,936
Provisions
19
( 754,569)
( 1,216,476)
-------------
---------------
Net assets
6,593,302
21,091,460
-------------
---------------
Capital and reserves
Called up share capital
22
607
607
Profit and loss account
6,592,695
21,090,853
-------------
---------------
Shareholders funds
6,593,302
21,091,460
-------------
---------------
These financial statements have been prepared in accordance with the provisions applicable to companies subject to the medium companies regime.
These financial statements were approved by the board of directors and authorised for issue on 5 September 2024 , and are signed on behalf of the board by:
S Whatley
Director
Company registration number: 12657158
CIGNPOST DIAGNOSTICS LIMITED
STATEMENT OF CASH FLOWS
YEAR ENDED 31 MARCH 2023
2023
2022
£
£
Cash flows from operating activities
(Loss)/profit for the financial year
( 14,498,158)
16,793,867
Adjustments for:
Depreciation of tangible assets
2,062,736
2,166,396
Impairment of tangible assets
( 539,036)
616,075
Amortisation of intangible assets
707,170
1,087,841
Impairment of intangible assets
4,489,506
Income from shares in group undertakings
( 822,609)
Interest payable and similar expenses
17,763
23,955
Loss on disposal of tangible assets
800,219
Loss on disposal of intangible assets
85,095
Tax on (loss)/profit
( 2,766,951)
1,881,912
Accrued (income)/expenses
( 17,536,835)
10,769,106
Changes in:
Stocks
3,269,853
( 1,029,376)
Trade and other debtors
43,407,121
1,955,463
Trade and other creditors
( 20,307,277)
15,133,928
Provisions and employee benefits
533,128
221,441
---------------
---------------
Cash generated from operations
( 5,587,781)
54,110,114
Interest paid
( 17,763)
( 23,955)
Tax received/(paid)
142,373
( 1,650,045)
-------------
---------------
Net cash (used in)/from operating activities
( 5,463,171)
52,436,114
-------------
---------------
Cash flows from investing activities
Purchase of tangible assets
( 153,928)
( 5,133,280)
Purchase of intangible assets
( 6,327,460)
Dividends received
822,609
-------------
---------------
Net cash from/(used in) investing activities
668,681
( 11,460,740)
-------------
---------------
Cash flows from financing activities
Proceeds from loans from group undertakings
1,916,081
2,572,391
Repayments of loans from group undertakings
( 48,651,755)
Dividends paid
( 6,000,000)
-------------
---------------
Net cash from/(used in) financing activities
1,916,081
( 52,079,364)
-------------
---------------
CIGNPOST DIAGNOSTICS LIMITED
STATEMENT OF CASH FLOWS (continued)
YEAR ENDED 31 MARCH 2023
2023
2022
Note
£
£
Net decrease in cash and cash equivalents
( 2,878,409)
( 11,103,990)
Cash and cash equivalents at beginning of year
2,976,019
14,080,009
-------------
---------------
Cash and cash equivalents at end of year
97,610
2,976,019
-------------
---------------
CIGNPOST DIAGNOSTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 MARCH 2023
1. General information
The company is a private company limited by shares, registered in England and Wales. The address of the registered office is Building X92, Cody Technology Park, Farnborough, Hampshire, GU14 0LX, United Kingdom.
2. Statement of compliance
These financial statements have been prepared in compliance with FRS 102, 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland'.
3. Accounting policies
Basis of preparation
The financial statements have been prepared on the historical cost basis. The financial statements are prepared in sterling, which is the functional currency of the entity.
Going concern
The Company continues to trade in health and wellness as it grows non-Covid sources of revenue. Given this significant change, the Company has incurred losses and is forecast to incur losses in the shorter-term. While the cessation of trading would completely eliminate the potential for future losses, the Directors and management team continue to develop future plans for the business benefiting from high value tangible and intangible assets including brand name and medical testing IP and supported by by substantial group cash reserves. The directors are therefore satisfied that the use of the going concern basis is appropriate in the preparation of these financial statements.
Consolidation
The entity has taken advantage of the exemption from preparing consolidated financial statements contained in Section 400 of the Companies Act 2006 on the basis that it is a subsidiary undertaking and its immediate parent undertaking is established under the law of an EEA State.
Judgements 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. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Significant judgements The judgements (apart from those involving estimations) that management have made in the process of applying the entity's accounting policies and that have the most significant effect on the amounts recognised in the financial statements are as follows: (i) Provisions The directors have applied consideration to actual and potential provisions in line with the accounting policy and Note 19 to the financial statements. (ii) Impairment of intangible fixed assets The directors have made assessments on the remaining value of website and software. In making their assessment, the directors have considered usage statistics and booking volumes, both historical and expected. (iii) Impairment of stock The directors make an estimate for certain stock lines for which the cost price may not be recoverable and provisioning may be required. Management considers the nature and condition of the stocks when making their assessment. Key sources of estimation uncertainty Accounting estimates and assumptions are made concerning the future and, by their nature, will rarely equal the related actual outcome. The key assumptions and other sources of estimation uncertainty that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are as follows: (i) Useful economic lives of intangible and tangible assets The annual charge for amortisation for intangible assets and depreciation for tangible assets is sensitive to changes in the useful economic lives of the assets. The useful economic lives are re-assessed annually and obsolete items impaired or written off accordingly based upon the physical condition of the assets. See Notes 13 & 14 for the carrying amounts of intangible and tangible assets, and the associated accounting policy for the useful economic lives for each class of asset.
Revenue recognition
Turnover is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods supplied and services rendered, stated net of discounts and of Value Added Tax. Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have transferred to the buyer, usually on despatch of the goods. Revenue for the rendering of services is recognised in the accounting period in which the services are rendered and at the point at which the company has fulfilled its contractual obligations and the risks and rewards attaching to the sale have been transferred to the customer. For business to business income, when the outcome of a transaction involving the rendering of services can be reliably estimated, revenue is measured by reference to the stage of completion of the service transaction at the end of the reporting period. This is measured by number of tests completed in the period. For consumer testing income, revenue is recognised upon completion of the test. Revenue from the rendering of services is measured by reference to the stage of completion of the service transaction at the end of the reporting period provided that the outcome can be reliably estimated. When the outcome cannot be reliably estimated, revenue is recognised only to the extent that it is probable the expenses recognised will be recovered.
Income tax
The taxation expense represents the aggregate amount of current and deferred tax recognised in the reporting period. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, tax is recognised in other comprehensive income or directly in equity, respectively. Current tax is recognised on taxable profit for the current and past periods. Current tax is measured at the amounts of tax expected to pay or recover using the tax rates and laws that have been enacted or substantively enacted at the reporting date. Deferred tax is recognised in respect of all material timing differences at the reporting date. Unrelieved tax losses and other deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date that are expected to apply to the reversal of the timing difference.
Foreign currencies
Foreign currency transactions are initially recorded in the functional currency, by applying the spot exchange rate as at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the exchange rate ruling at the reporting date, with any gains or losses being taken to the profit and loss account.
Operating leases
Lease payments are recognised as an expense over the lease term on a straight-line basis. The aggregate benefit of lease incentives is recognised as a reduction to expense over the lease term, on a straight-line basis.
Intangible assets
Intangible assets are initially recorded at cost, and are subsequently stated at cost less any accumulated amortisation and impairment losses.
Amortisation
Amortisation is calculated so as to write off the cost of an asset, less its estimated residual value, over the useful life of that asset as follows:
Website costs
-
Straight line over 36 months
If there is an indication that there has been a significant change in amortisation rate, useful life or residual value of an intangible asset, the amortisation is revised prospectively to reflect the new estimates.
Tangible assets
Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and impairment losses.
Depreciation
Depreciation is calculated so as to write off the cost or valuation of an asset, less its residual value, over the useful economic life of that asset as follows:
Leasehold property improvements
-
Straight line over 36 months
Medical equipment
-
Straight line over 36 months
Fixtures and fittings
-
Straight line over 36 months
Motor vehicles
-
Straight line over 36 months
Computer equipment
-
Straight line over 36 months
Investments
Fixed asset investments are initially recorded at cost, and subsequently stated at cost less any accumulated impairment losses.
Impairment of fixed assets
A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date.
Stocks
Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell. Cost includes all costs of purchase, costs of conversion and other costs incurred in bringing the stock to its present location and condition.
Provisions
Provisions are recognised when the entity has an obligation at the reporting date as a result of a past event, it is probable that the entity will be required to transfer economic benefits in settlement and the amount of the obligation can be estimated reliably. Provisions are recognised as a liability in the statement of financial position and the amount of the provision as an expense. Provisions are initially measured at the best estimate of the amount required to settle the obligation at the reporting date and subsequently reviewed at each reporting date and adjusted to reflect the current best estimate of the amount that would be required to settle the obligation. Any adjustments to the amounts previously recognised are recognised in profit or loss unless the provision was originally recognised as part of the cost of an asset. When a provision is measured at the present value of the amount expected to be required to settle the obligation, the unwinding of the discount is recognised as a finance cost in profit or loss in the period it arises.
Financial instruments
The company only holds basic financial instruments as defined in FRS 102. The financial assets and financial liabilities of the company and their measurement basis are as follows: Financial assets - trade and other debtors are basic financial instruments and are debt instruments measured at amortised cost. Prepayments are not financial instruments. Cash at bank is classified as a basic financial instrument and is measured at face value. Financial liabilities - trade creditors and other creditors are financial instruments, and are measured at amortised cost. Taxation and social security are not included in the financial instruments disclosure definition.
Defined contribution plans
Contributions to defined contribution plans are recognised as an expense in the period in which the related service is provided. Prepaid contributions are recognised as an asset to the extent that the prepayment will lead to a reduction in future payments or a cash refund.
4. Turnover
Turnover arises from:
Period from
Year to
1 Apr 21 to
31 Mar 23
29 Mar 22
£
£
Sale of goods
278,794
429,190
Rendering of services
44,926,496
265,462,129
---------------
---------------
45,205,290
265,891,319
---------------
---------------
The whole of the turnover is attributable to the principal activity of the company wholly undertaken in the United Kingdom.
5. Other operating income
Period from
Year to
1 Apr 21 to
31 Mar 23
29 Mar 22
£
£
Management charges receivable
813,626
----------
----
6. Operating (loss)/profit
Operating profit or loss is stated after charging/crediting:
Period from
Year to
1 Apr 21 to
31 Mar 23
29 Mar 22
£
£
Amortisation of intangible assets
707,170
1,087,841
Depreciation of tangible assets
2,062,736
2,166,396
Impairment of intangible assets recognised in:
Administrative expenses
4,489,506
Impairment of tangible assets recognised in:
Administrative expenses
(539,036)
616,075
Loss on disposal of tangible assets
800,219
Loss on disposal of intangible assets
85,095
Impairment of trade debtors
121,863
Foreign exchange differences
92,087
( 5,118)
Operating lease costs
330,036
338,637
-------------
-------------
7. Auditor's remuneration
Period from
Year to
1 Apr 21 to
31 Mar 23
29 Mar 22
£
£
Fees payable for the audit of the financial statements
32,500
40,000
---------
---------
Fees payable to the company's auditor and its associates for other services:
Taxation advisory services
20,943
15,206
Other non-audit services
2,500
---------
---------
20,943
17,706
---------
---------
8. Staff costs
The average number of persons employed by the company during the year, including the directors, amounted to:
2023
2022
No.
No.
Production staff
275
356
Administrative staff
37
155
Management staff
2
8
----
----
314
519
----
----
The aggregate payroll costs incurred during the year, relating to the above, were:
Period from
Year to
1 Apr 21 to
31 Mar 23
29 Mar 22
£
£
Wages and salaries
16,226,787
20,213,218
Social security costs
1,426,016
2,470,454
Other pension costs
514,776
573,525
---------------
---------------
18,167,579
23,257,197
---------------
---------------
9. Income from shares in group undertakings
Period from
Year to
1 Apr 21 to
31 Mar 23
29 Mar 22
£
£
Income from group undertakings
822,609
----------
----
10. Interest payable and similar expenses
Period from
Year to
1 Apr 21 to
31 Mar 23
29 Mar 22
£
£
Other interest payable and similar charges
17,763
23,955
---------
---------
11. Tax on (loss)/profit
Major components of tax (income)/expense
Period from
Year to
1 Apr 21 to
31 Mar 23
29 Mar 22
£
£
Current tax:
UK current tax (income)/expense
( 937,589)
931,279
Adjustments in respect of prior periods
( 691,954)
Receipt for surrender of group losses
(183,503)
-------------
----------
Total UK current tax
( 1,813,046)
931,279
Foreign current tax expense
41,130
-------------
----------
Total current tax
( 1,771,916)
931,279
-------------
----------
Deferred tax:
Origination and reversal of timing differences
( 995,035)
756,227
Impact of change in tax rate
194,406
----------
----------
Total deferred tax
( 995,035)
950,633
-------------
-------------
Tax on (loss)/profit
( 2,766,951)
1,881,912
-------------
-------------
Reconciliation of tax (income)/expense
The tax assessed on the (loss)/profit on ordinary activities for the year is higher than (2022: lower than) the standard rate of corporation tax in the UK of 25 % (2022: 19 %).
Period from
Year to
1 Apr 21 to
31 Mar 23
29 Mar 22
£
£
(Loss)/profit on ordinary activities before taxation
( 17,265,109)
18,675,779
---------------
---------------
(Loss)/profit on ordinary activities by rate of tax
( 3,280,371)
3,548,398
Effect of expenses not deductible for tax purposes
64,098
9,048
Effect of capital allowances and depreciation
141,757
( 536,555)
Effect of revenue exempt from tax
( 156,296)
Effect of different UK tax rates on some earnings
(189,900)
194,406
Effect of research and development
(691,954)
(1,333,385)
Movement in deferred tax not recognised
1,304,585
Foreign current tax expense
41,130
---------------
---------------
Tax on (loss)/profit
( 2,766,951)
1,881,912
---------------
---------------
12. Dividends
2023
2022
£
£
Dividends proposed before the year end and recognised as a liability
6,000,000
----
-------------
13. Intangible assets
Website Costs
£
Cost
At 30 March 2022
6,369,613
Additions
Disposals
( 107,247)
-------------
At 31 March 2023
6,262,366
-------------
Amortisation
At 30 March 2022
5,577,347
Charge for the year
707,170
Disposals
( 22,151)
-------------
At 31 March 2023
6,262,366
-------------
Carrying amount
At 31 March 2023
-------------
At 29 March 2022
792,266
-------------
14. Tangible assets
Short leasehold property
Plant and machinery
Fixtures and fittings
Motor vehicles
Equipment
Total
£
£
£
£
£
£
Cost
At 30 Mar 2022
44,086
4,695,407
135,113
1,935,224
972,559
7,782,389
Additions
146,798
7,130
153,928
Disposals
( 1,238,375)
( 613)
( 749)
( 132,477)
( 1,372,214)
---------
-------------
----------
-------------
----------
-------------
At 31 Mar 2023
44,086
3,603,830
134,500
1,934,475
847,212
6,564,103
---------
-------------
----------
-------------
----------
-------------
Depreciation
At 30 Mar 2022
9,511
2,126,374
31,816
681,975
259,503
3,109,179
Charge for the year
14,761
1,072,352
45,459
645,514
284,650
2,062,736
Disposals
( 527,163)
( 44,833)
( 571,996)
Impairment losses
19,814
( 616,075)
57,225
( 539,036)
---------
-------------
----------
-------------
----------
-------------
At 31 Mar 2023
44,086
2,055,488
134,500
1,327,489
499,320
4,060,883
---------
-------------
----------
-------------
----------
-------------
Carrying amount
At 31 Mar 2023
1,548,342
606,986
347,892
2,503,220
---------
-------------
----------
-------------
----------
-------------
At 29 Mar 2022
34,575
2,569,033
103,297
1,253,249
713,056
4,673,210
---------
-------------
----------
-------------
----------
-------------
15. Investments
Shares in group undertakings
£
Cost
At 30 March 2022 and 31 March 2023
3
----
Impairment
At 30 March 2022 and 31 March 2023
----
Carrying amount
At 31 March 2023
3
----
At 29 March 2022
3
----
Following a group restructure during the year several subsidiaries were transferred to the ownership of Cignpost Investments Limited which is the ultimate holding company for the group.
The principal activity of all subsidiaries is the provision of accurate and timely healthcare testing to promote early disease detection, prevention and intervention.
Cignpost Diagnostics (NI) Limited was incorporated on 6 October 2021 and is based in Northern Ireland and its registered office is Blick Shared Studios, 3rd Floor, Front, 51 Malone Road, Belfast, County Antrim, Northern Ireland, BT9 6RY.
Cignpost Diagnostics (Scotland) Limited was incorporated on 19 November 2021 and is based in Scotland and its registered office is Radleigh House, 1 Golf Road, Clarkston, Glasgow, Scotland, G76 7HU.
Cignpost Diagnostics (Irl) Limited was incorporated on 17 April 2020 and is based in Ireland and its registered office is 6th Floor, South Bank House, Barrow Street Dublin 4, Ireland.
Subsidiaries, associates and other investments
Class of share
Percentage of shares held
Subsidiary undertakings
Cignpost Diagnostics (Irl) Limited
Ordinary
100
Cignpost Diagnostics (NI) Limited
Ordinary
100
Cignpost Diagnostics (Scotland) Limited
Ordinary
100
16. Stocks
2023
2022
£
£
Raw materials and consumables
131,775
3,401,628
----------
-------------
17. Debtors
2023
2022
£
£
Trade debtors
610,075
6,188,518
Amounts owed by group undertakings
10,273,314
48,651,755
Prepayments and accrued income
318,246
1,488,965
Corporation tax repayable
2,264,516
Other debtors
376,059
920,093
---------------
---------------
13,842,210
57,249,331
---------------
---------------
18. Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
1,722,066
9,822,032
Amounts owed to group undertakings
4,506,550
2,590,469
Accruals and deferred income
2,818,101
20,354,936
Corporation tax
1,629,543
Social security and other taxes
179,653
4,290,804
Other creditors
577
8,096,737
-------------
---------------
9,226,947
46,784,521
-------------
---------------
Included within accruals and deferred income are £1,335,945 (2022 - £7,221,103) of vouchers. Of this amount, £1,253,353 (2022 - £6,239,981) of vouchers expired after the period end prior to their redemption.
19. Provisions
Deferred tax (note 20)
Other provisions
Total
£
£
£
At 30 March 2022
995,035
221,441
1,216,476
Additions
533,128
533,128
Charge against provision
( 995,035)
( 995,035)
----------
----------
-------------
At 31 March 2023
754,569
754,569
----------
----------
-------------
20. Deferred tax
The deferred tax included in the statement of financial position is as follows:
2023
2022
£
£
Included in provisions (note 19)
995,035
----
----------
The deferred tax account consists of the tax effect of timing differences in respect of:
2023
2022
£
£
Accelerated capital allowances
1,007,556
Provisions
( 12,521)
----
-------------
995,035
----
-------------
21. Employee benefits
Defined contribution plans
The amount recognised in profit or loss as an expense in relation to defined contribution plans was £ 514,776 (2022: £ 573,525 ).
22. Called up share capital
Issued, called up and fully paid
2023
2022
No.
£
No.
£
Ordinary shares of £ 0.02 each
30,340
607
30,340
607
---------
----
---------
----
23. Analysis of changes in net debt
At 30 Mar 2022
Cash flows
At 31 Mar 2023
£
£
£
Cash at bank and in hand
2,976,019
(2,878,409)
97,610
Debt due within one year
(2,590,469)
(1,916,081)
(4,506,550)
-------------
-------------
-------------
385,550
( 4,794,490)
( 4,408,940)
-------------
-------------
-------------
24. Operating leases
The total future minimum lease payments under non-cancellable operating leases are as follows:
2023
2022
£
£
Not later than 1 year
200,133
116,138
Later than 1 year and not later than 5 years
345,848
152,730
----------
----------
545,981
268,868
----------
----------
25. Events after the end of the reporting period
Subsequent to the financial year end the Company's parent (Cody Management Services Ltd) was the subject of an MBO by some of the group's management team.
26. Related party transactions
The following related party transactions took place, at arm's length and under normal terms, during the period:- Transactions with directors and shareholders During the year, the company paid for services from companies with common shareholders amounting to £13,890,390 (2022 - £24,532,354). An amount of £30,529 (2022 - £8,441,510) remained outstanding at the year end. During the year, the company also paid for services from companies with common directors. This amounted to £142,563 (2022 - £166,613) during the period, with £nil (2022 - £nil) outstanding at the year end. Transactions with key management personnel The group also paid for services from companies under the control of key management personnel totalling £35,524 (2022 - £265,963). An amount of £nil (2022 - £31,153) remained outstanding at the year end. The company is exempt from disclosing other related party transactions as they are with other companies that are wholly owned within the Group.
27. Controlling party
The parent undertaking was Cody Management Services Limited . This is the smallest and largest group to consolidate these financial statements. Copies of the consolidated financial statements are available from Building X92, Cody Technology Park, Old Ively Road, Farnborough, Hampshire, GU14 0LX .