Company registration number 13095376 (England and Wales)
NEWFOUNDLAND DIAGNOSTICS LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
NEWFOUNDLAND DIAGNOSTICS LTD
COMPANY INFORMATION
Directors
Mr F Manduca
Mr M Hodnett
Company number
13095376
Registered office
3A Station Road
Amersham
Buckinghamshire
HP7 0BQ
Auditor
Whitley Stimpson Limited
29-31 Castle Street
High Wycombe
Buckinghamshire
HP13 6RU
Accountants
Amersham Accountancy
3A Station Road
Amersham
Buckinghamshire
HP7 0BQ
NEWFOUNDLAND DIAGNOSTICS LTD
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 8
Income statement
9
Statement of financial position
10
Statement of changes in equity
11
Statement of cash flows
12
Notes to the financial statements
13 - 25
NEWFOUNDLAND DIAGNOSTICS LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

The directors present the strategic report for the year ended 31 December 2023.

Financial Performance

The Company has sought to follow any UK Government advice with regard to working arrangements over the previous year and will continue to do so. The Company has continued to supply COVID-19 test-kits globally.

 

The Company’s profit before tax for the period was £1,534,663.

 

 

Principal risks and uncertainties

The Directors are responsible for the identification of key business risks and their management. The Directors monitor the Company’s activities on a regular basis to manage any risks which the Company faces.

 

The Company faces the following categories of key risks:

 

1.    Exposure to foreign currency risk

 

The Company is exposed to this risk when it transacts in international denominations which differ from its functional currency. To mitigate this risk the Company outsources its foreign exchange transactions to a third party to ensure optimum rates are achieved. The Company also consults with specialists regarding the utilisation of foreign exchange products to reduce exposure to currency fluctuations.

 

2.    Exposure to credit risk

 

Credit risk refers to the risk that a counterparty will default on its contractual obligations, resulting in financial loss to the Company. The maximum exposure to credit risk at the reporting date is the carrying amount of recognised financial assets, net any provisions for doubtful debts, as disclosed in the financial statements. The Company seeks to minimize such loss, with its credit control function.

 

3.    Cash flow risk

 

The Company manages its cash resources by considering the forecasting of cashflows from receipts and payments, which is regularly reviewed by the directors. This is to ensure the Company can meet its day to day requirements.

 

4.    Market risk

 

The company operates in a competitive environment. Furthermore, the company also operates in an ever-changing environment as demand for test kits fluctuates. The Company also faces economic risks in relation to people’s buying habits.

 

Key performance indicators

The company uses turnover as a key performance indicator. Turnover for the year ended 2023 was £12,574,885.

Section 172 (1) Statement

Section 172 of the Companies Act 2006 requires the Directors to take into consideration the interests of all stakeholders in promoting the success of the Company and, in doing, to have regards to a range of matters, including:

•    The long-term consequence of any decision

•    The interests of 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 environment

•    The desirability of the company maintaining a reputation for high standards of business conduct, and

•    The need to act fairly as between members of the company

NEWFOUNDLAND DIAGNOSTICS LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -

On behalf of the board

Mr M Hodnett
Director
5 September 2024
NEWFOUNDLAND DIAGNOSTICS LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -

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

Principal activities

The principal activity of the company continued to be the provider of healthcare solutions globally, covering both Wholesale and Retail activities.

Results and dividends

The results for the year are set out on page 9.

Ordinary dividends were paid amounting to £1,350,000. The directors do not recommend payment of a final dividend.

No preference dividends were paid. The directors do not recommend payment of a final dividend.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

Mr F Manduca
Mr M Hodnett
Future developments

The Company maintains its focus on executing a strategy around utilising the strength of our relationships to deliver effective healthcare solutions globally, whilst managing all aspects of our operations to achieve and maintain leading results.

Auditor

Whitley Stimpson Limited were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.

Energy and carbon report

As the company has not consumed more than 40,000 kWh of energy in this reporting period, it qualifies as a low energy user under these regulations and is not required to report on its emissions, energy consumption or energy efficiency activities.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

On behalf of the board
Mr M Hodnett
Director
5 September 2024
NEWFOUNDLAND DIAGNOSTICS LTD
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

 

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.

NEWFOUNDLAND DIAGNOSTICS LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF NEWFOUNDLAND DIAGNOSTICS LTD
- 5 -
Opinion

We have audited the financial statements of Newfoundland Diagnostics Ltd (the 'company') for the year ended 31 December 2023 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows the income statement, the statement of financial position, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 101 Reduced Disclosure Framework (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

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.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

 

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

NEWFOUNDLAND DIAGNOSTICS LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF NEWFOUNDLAND DIAGNOSTICS LTD
- 6 -
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:

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

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

 

As auditors, we are required to report on our assessment of the susceptible of Newfoundland Diagnostics Ltd financial statements to material misstatement. We believe that our tests completed which are not limited to the tests detailed below are sufficient to detecting material misstatement. Our approach has been purely substantial, and risk based.

 

Irregularities include fraud which is also a form of non-compliance with laws and regulations. Fraud is however assumed to be concealed and therefore more difficult to detect, and therefore special attention has been given to transactions with related parties.

 

There were no specific laws or regulations to this industry which we believe to be significant to the audit.

 

NEWFOUNDLAND DIAGNOSTICS LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF NEWFOUNDLAND DIAGNOSTICS LTD
- 7 -

As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also carried out the following audit procedures;

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

 

 

A further description of our responsibilities is available on the Financial Reporting Council's website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

NEWFOUNDLAND DIAGNOSTICS LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF NEWFOUNDLAND DIAGNOSTICS LTD
- 8 -

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.

Jonathan Walton BFP FCA FCCA
Senior Statutory Auditor
For and on behalf of Whitley Stimpson Limited
6 September 2024
Chartered Accountants
Statutory Auditor
29-31 Castle Street
High Wycombe
Buckinghamshire
HP13 6RU
NEWFOUNDLAND DIAGNOSTICS LTD
INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
2023
2022
Notes
£
£
Revenue
2
12,574,885
67,730,528
Cost of sales
(9,284,457)
(56,463,375)
Gross profit
3,290,428
11,267,153
Administrative expenses
(1,760,277)
(5,306,618)
Operating profit
3
1,530,151
5,960,535
Investment income
6
52,142
-
Finance costs
7
(47,630)
(3,276)
Profit before taxation
1,534,663
5,957,259
Tax on profit
8
(362,447)
(1,156,901)
Profit and total comprehensive income for the financial year
1,172,216
4,800,358
NEWFOUNDLAND DIAGNOSTICS LTD
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
31 December 2023
- 10 -
2023
2022
Notes
£
£
£
£
Non-current assets
Intangible assets
10
70,908
78,831
Property, plant and equipment
11
182,401
236,248
253,309
315,079
Current assets
Inventories
12
3,679,560
3,794,012
Trade and other receivables
13
6,781,982
2,421,527
Cash and cash equivalents
853,594
1,946,179
11,315,136
8,161,718
Current liabilities
14
(5,112,160)
(1,829,515)
Net current assets
6,202,976
6,332,203
Total assets less current liabilities
6,456,285
6,647,282
Provisions for liabilities
Deferred tax liabilities
17
(44,470)
(57,683)
Net assets
6,411,815
6,589,599
Equity
Called up share capital
20
100
100
Retained earnings
6,411,715
6,589,499
Total equity
6,411,815
6,589,599
The financial statements were approved by the board of directors and authorised for issue on 5 September 2024 and are signed on its behalf by:
Mr M Hodnett
Director
Company registration number 13095376 (England and Wales)
NEWFOUNDLAND DIAGNOSTICS LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
Share capital
Retained earnings
Total
Notes
£
£
£
Balance at 1 January 2022
100
2,047,141
2,047,241
Year ended 31 December 2022:
Profit and total comprehensive income
-
4,800,358
4,800,358
Transactions with owners:
Dividends
9
-
(258,000)
(258,000)
Balance at 31 December 2022
100
6,589,499
6,589,599
Year ended 31 December 2023:
Profit and total comprehensive income
-
1,172,216
1,172,216
Transactions with owners:
Dividends
9
-
(1,350,000)
(1,350,000)
Balance at 31 December 2023
100
6,411,715
6,411,815
NEWFOUNDLAND DIAGNOSTICS LTD
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
23
2,041,908
(1,596,776)
Interest paid
(47,630)
(3,276)
Income taxes paid
(1,766,633)
(505,374)
Net cash inflow/(outflow) from operating activities
227,645
(2,105,426)
Investing activities
Purchase of intangible assets
(14,688)
(83,095)
Purchase of property, plant and equipment
(7,684)
(43,743)
Interest received
52,142
-
Net cash generated from/(used in) investing activities
29,770
(126,838)
Financing activities
Dividends paid
(1,350,000)
(258,000)
Net cash used in financing activities
(1,350,000)
(258,000)
Net decrease in cash and cash equivalents
(1,092,585)
(2,490,264)
Cash and cash equivalents at beginning of year
1,946,179
4,436,443
Cash and cash equivalents at end of year
853,594
1,946,179
NEWFOUNDLAND DIAGNOSTICS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 13 -
1
Accounting policies
Company information

Newfoundland Diagnostics Ltd is a private company limited by shares incorporated in England and Wales. The registered office is 3A Station Road, Amersham, Buckinghamshire, HP7 0BQ. The company's principal activities and nature of its operations are disclosed in the directors' report.

1.1
Accounting convention

The financial statements have been prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework (FRS 101) and in accordance with applicable accounting standards.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

1.2
Going concern

The directors have at the time of approving the financial statements, a reasonable expectation that the truecompany has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

1.3
Revenue

Revenue is measured based on the consideration specified in a contract with a customer and excludes amounts collected on behalf of third parties. The company recognises revenue when it transfers control of a product or service to a customer.

 

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

The nature, timing of satisfaction of performance obligations and significant payment terms of the company's major sources of revenue are as follows:

1.4
Intangible assets other than goodwill

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

 

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

 

Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

NEWFOUNDLAND DIAGNOSTICS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
1.5
Property, plant and equipment

Property, plant and equipment are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Fixtures and fittings
25% on reducing balance
Computers
33.33% on reducing balance
Motor vehicles
25% on reducing balance

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the income statement.

1.6
Impairment of tangible and intangible assets

At each reporting end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment annually, and whenever there is an indication that the asset may be impaired.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

 

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.7
Inventories

Inventories are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition.

 

Inventories held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

Net realisable value is the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution.

NEWFOUNDLAND DIAGNOSTICS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
1.8
Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.9
Financial assets

Financial assets are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument. Financial assets are classified into specified categories, depending on the nature and purpose of the financial assets.

 

At initial recognition, financial assets classified as fair value through profit and loss are measured at fair value and any transaction costs are recognised in profit or loss. Financial assets not classified as fair value through profit and loss are initially measured at fair value plus transaction costs.

Financial assets at fair value through profit or loss

When any of the above-mentioned conditions for classification of financial assets is not met, a financial asset is classified as measured at fair value through profit or loss. Financial assets measured at fair value through profit or loss are recognized initially at fair value and any transaction costs are recognised in profit or loss when incurred. A gain or loss on a financial asset measured at fair value through profit or loss is recognised in profit or loss, and is included within finance income or finance costs in the statement of income for the reporting period in which it arises.

Financial assets held at amortised cost

Financial instruments are classified as financial assets measured at amortised cost where the objective is to hold these assets in order to collect contractual cash flows, and the contractual cash flows are solely payments of principal and interest. They arise principally from the provision of goods and services to customers (eg trade receivables). They are initially recognised at fair value plus transaction costs directly attributable to their acquisition or issue, and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment where necessary.

Financial assets at fair value through other comprehensive income

Debt instruments are classified as financial assets measured at fair value through other comprehensive income where the financial assets are held within the company’s business model whose objective is achieved by both collecting contractual cash flows and selling financial assets, and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

 

A debt instrument measured at fair value through other comprehensive income is recognised initially at fair value plus transaction costs directly attributable to the asset. After initial recognition, each asset is measured at fair value, with changes in fair value included in other comprehensive income. Accumulated gains or losses recognised through other comprehensive income are directly transferred to profit or loss when the debt instrument is derecognised.

The company has made an irrevocable election to recognize changes in fair value of investments in equity instruments through other comprehensive income, not through profit or loss. A gain or loss from fair value changes will be shown in other comprehensive income and will not be reclassified subsequently to profit or loss. Equity instruments measured at fair value through other comprehensive income are recognized initially at fair value plus transaction cost directly attributable to the asset. After initial recognition, each asset is measured at fair value, with changes in fair value included in other comprehensive income. Accumulated gains or losses recognized through other comprehensive income are directly transferred to retained earnings when the equity instrument is derecognized or its fair value substantially decreased. Dividends are recognized as finance income in profit or loss.

NEWFOUNDLAND DIAGNOSTICS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
Impairment of financial assets

Financial assets carried at amortised cost and FVOCI are assessed for indicators of impairment at each reporting end date.

 

The expected credit losses associated with these assets are estimated on a forward-looking basis. A broad range of information is considered when assessing credit risk and measuring expected credit losses, including past events, current conditions, and reasonable and supportable forecasts that affect the expected collectability of the future cash flows of the instrument.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity.

1.10
Financial liabilities

The company recognises financial debt when the company becomes a party to the contractual provisions of the instruments. Financial liabilities are classified as either 'financial liabilities at fair value through profit or loss' or 'other financial liabilities'.

Other financial liabilities

Other financial liabilities, including borrowings, trade payables and other short-term monetary liabilities, are initially measured at fair value net of transaction costs directly attributable to the issuance of the financial liability. They are subsequently measured at amortised cost using the effective interest method. For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding.

Derecognition of financial liabilities

Financial liabilities are derecognised when, and only when, the company’s obligations are discharged, cancelled, or they expire.

1.11
Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

1.12
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

NEWFOUNDLAND DIAGNOSTICS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 17 -
Deferred tax

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.13
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of inventories or non-current assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.14
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.15
Leases

At inception, the company assesses whether a contract is, or contains, a lease within the scope of IFRS 16. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Where a tangible asset is acquired through a lease, the company recognises a right-of-use asset and a lease liability at the lease commencement date. Right-of-use assets are included within property, plant and equipment, apart from those that meet the definition of investment property.

The company has elected not to recognise right-of-use assets and lease liabilities for short-term leases of machinery that have a lease term of 12 months or less, or for leases of low-value assets including IT equipment. The payments associated with these leases are recognised in profit or loss on a straight-line basis over the lease term.

2
Revenue

An analysis of the company's revenue is as follows:

2023
2022
£
£
Revenue analysed by class of business
Sales of goods
12,574,885
67,730,528
NEWFOUNDLAND DIAGNOSTICS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
2
Revenue
(Continued)
- 18 -
2023
2022
£
£
Revenue analysed by geographical market
United Kingdom
11,679,470
45,427,359
Isle of Man
-
2,029,000
Ireland
183,484
5,389,246
Rest of Europe
91,675
389,141
Rest of the world
620,256
14,495,782
12,574,885
67,730,528
3
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange (gains)/losses
(50,559)
755,948
Fees payable to the company's auditor for the audit of the company's financial statements
22,000
16,000
Depreciation of property, plant and equipment
61,532
71,915
(Profit)/loss on disposal of property, plant and equipment
-
10,752
Amortisation of intangible assets (included within administrative expenses)
22,611
4,264
Cost of inventories recognised as an expense
8,505,237
56,462,595
Write downs of inventories recognised as an expense
628,355
-
0
4
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2023
2022
Number
Number
7
5

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
435,538
262,762
Social security costs
47,457
25,603
Pension costs
75,876
13,568
558,871
301,933
NEWFOUNDLAND DIAGNOSTICS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
5
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
18,192
18,060
Company pension contributions to defined contribution schemes
70,000
10,000
88,192
28,060
6
Investment income
2023
2022
£
£
Interest income
Interest on bank deposits
52,142
-
0
7
Finance costs
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
-
3,276
Interest on other loans
47,630
-
0
47,630
3,276
8
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
375,729
1,166,264
Adjustments in respect of prior periods
(68)
65
Total UK current tax
375,661
1,166,329
Deferred tax
Origination and reversal of temporary differences
(13,214)
(9,428)
Total tax charge
362,447
1,156,901
NEWFOUNDLAND DIAGNOSTICS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
8
Taxation
(Continued)
- 20 -

The charge for the year can be reconciled to the profit per the income statement as follows:

2023
2022
£
£
Profit before taxation
1,534,663
5,957,259
Expected tax charge based on a corporation tax rate of 25.00% (2022: 19.00%)
383,666
1,131,879
Effect of expenses not deductible in determining taxable profit
2,475
27,976
Effect of change in UK corporation tax rate
(23,626)
(2,263)
Permanent capital allowances in excess of depreciation
-
0
(757)
Under/(over) provided in prior years
(68)
66
Taxation charge for the year
362,447
1,156,901
9
Dividends
2023
2022
2023
2022
Amounts recognised as distributions:
per share
per share
Total
Total
£
£
£
£
Ordinary shares
Interim dividend paid
13,500.00
814.50
1,350,000
81,450
Interim dividend paid
-
1,765.50
-
176,550
Total dividends
Interim dividends paid
1,350,000
258,000
10
Intangible fixed assets
Software
Patents & licences
Other intangibles
Total
£
£
£
£
Cost
At 31 December 2022
22,400
5,935
54,760
83,095
Additions - internally generated
7,280
-
0
7,408
14,688
At 31 December 2023
29,680
5,935
62,168
97,783
NEWFOUNDLAND DIAGNOSTICS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
10
Intangible fixed assets
Software
Patents & licences
Other intangibles
Total
£
£
£
£
(Continued)
- 21 -
Amortisation and impairment
At 31 December 2022
1,285
730
2,249
4,264
Charge for the year
5,994
1,484
15,133
22,611
At 31 December 2023
7,279
2,214
17,382
26,875
Carrying amount
At 31 December 2023
22,401
3,721
44,786
70,908
At 31 December 2022
21,115
5,205
52,511
78,831
11
Property, plant and equipment
Fixtures and fittings
Computers
Motor vehicles
Total
£
£
£
£
Cost
At 1 January 2023
22,639
16,027
273,815
312,481
Additions
-
0
7,684
-
0
7,684
At 31 December 2023
22,639
23,711
273,815
320,165
Accumulated depreciation and impairment
At 1 January 2023
673
4,067
71,493
76,233
Charge for the year
5,828
5,123
50,581
61,532
At 31 December 2023
6,501
9,189
122,074
137,764
Carrying amount
At 31 December 2023
16,138
14,522
151,741
182,401
At 31 December 2022
21,966
11,960
202,322
236,248
12
Inventories
2023
2022
£
£
Finished goods
3,679,560
3,794,012
NEWFOUNDLAND DIAGNOSTICS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
13
Trade and other receivables
2023
2022
£
£
Trade receivables
4,969,773
1,877,949
Provision for bad and doubtful debts
(11,443)
(359,858)
4,958,330
1,518,091
Corporation tax recoverable
224,709
-
VAT recoverable
-
757,392
Amounts owed by related parties
363,358
-
Other receivables
62,368
18,119
Prepayments and accrued income
1,173,217
127,925
6,781,982
2,421,527
14
Liabilities
2023
2022
Notes
£
£
Borrowings
15
-
0
28,151
Trade and other payables
16
3,045,233
634,104
Corporation tax
-
1,166,264
Other taxation and social security
911,317
-
Deferred income
18
1,155,610
996
5,112,160
1,829,515
15
Borrowings
2023
2022
£
£
Borrowings held at amortised cost:
Directors' loans
-
28,151

Loans from directors are unsecured and repayable on demand.

16
Trade and other payables
2023
2022
£
£
Trade payables
2,844,378
444,076
Accruals and deferred income
200,855
190,028
3,045,233
634,104
NEWFOUNDLAND DIAGNOSTICS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
17
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon during the current and prior reporting period.

ACAs
£
Liability at 1 January 2022
67,111
Deferred tax movements in prior year
Charge/(credit) to profit or loss
(9,428)
Liability at 1 January 2023
57,683
Deferred tax movements in current year
Charge/(credit) to profit or loss
(13,213)
Liability at 31 December 2023
44,470
18
Deferred revenue
2023
2022
£
£
Arising from
1,155,610
996
19
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
75,876
13,568

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

20
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
100
100
100
100
NEWFOUNDLAND DIAGNOSTICS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
21
Other leasing information
Lessee

The company has an operating lease commitment of £18,116 (2022: £60,052) for the office rental.

 

2023
2022
£
£
Expense relating to short-term leases
79,915
69,603
22
Related party transactions
Remuneration of key management personnel

The remuneration of key management personnel, including directors, is set out below in aggregate for each of the categories specified in IAS 24 Related Party Disclosures.

Other transactions with related parties

During the year, a loan of £1,443,950 was made to a third party related to a director in May 2023 and was repaid in full in September 2023.

 

The loan bears an interest rate of 2.25% and the total interest income received amounted to £11,095.

The following amounts were outstanding at the reporting end date:

2023
2022
Amounts due from related parties
£
£
Entities with joint control or significant influence over the company
315,906
-
Other related parties
47,452
-
363,358
-
NEWFOUNDLAND DIAGNOSTICS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 25 -
23
Cash generated from/(absorbed by) operations
2023
2022
£
£
Profit for the year before income tax
1,534,663
5,957,259
Adjustments for:
Finance costs
47,630
3,276
Investment income
(52,142)
-
0
(Gain)/loss on disposal of property, plant and equipment
-
10,752
Amortisation and impairment of intangible assets
22,611
4,264
Depreciation and impairment of property, plant and equipment
61,532
71,915
Movements in working capital:
Decrease/(increase) in inventories
114,452
(2,182,507)
(Increase)/decrease in trade and other receivables
(4,893,138)
10,522,072
Increase/(decrease) in trade and other payables
4,051,686
(14,735,700)
Increase/(decrease) in deferred revenue outstanding
1,154,614
(1,248,107)
Cash generated from/(absorbed by) operations
2,041,908
(1,596,776)
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