Company registration number 09353226 (England and Wales)
NOVOGENE (UK) COMPANY LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
NOVOGENE (UK) COMPANY LIMITED
COMPANY INFORMATION
Directors
J Wu
T T Zhou
Company number
09353226
Registered office
2nd Floor
Bio-Innovation Centre
25 Cambridge Science Park
Milton Road
Cambridge
CB4 0FW
Auditor
Alliotts LLP
Manfield House
1 Southampton Street
London
WC2R 0LR
NOVOGENE (UK) COMPANY LIMITED
CONTENTS
Page
Strategic report
1 - 4
Directors' report
5 - 6
Independent auditor's report
7 - 9
Statement of comprehensive income
10
Statement of financial position
11
Statement of changes in equity
12
Notes to the financial statements
13 - 25
NOVOGENE (UK) COMPANY LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

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

 

This strategic report sets out a review of the company’s business during the year, description of the principal risks and uncertainties relevant to the company, other matters that affect the business including environmental and employee matters as well as the performance and development of the company’s business during the financial year.

Principal activities

The company’s principal activities during the year were the supply of the following sequencing services to its customers:

Review of the business

During the year, the company announced the introduction of NovaSeq X Plus 25B flow cell (FC), a state-of-the-art sequencing platform with unmatched throughput capabilities. The 25B flow cell enables our work to step into the future of genomics with latest innovation. This remarkable high-density 25B flow cell empowers our work with unparalleled capabilities.

As well as the NovaSeq X Plus 25B flow cell (FC), the company continues to see improved performance from the deployment of Falcon II, an intelligent next-generation sequencing (NGS) platform that can automatically deliver multiple NGS services to our customers. Falcon II has been installed in our Cambridge Sequencing Centre to provide customers with improved services to meet their sequencing requirements across Europe.

Falcon II integrates 16 sets of precision instruments to support multiple NGS services, such as RNA Sequencing and Whole Genome Sequencing (WGS). It enables a fully automated end-to-end process that includes sample Quality Control (QC), library preparation, and library QC. It can run 24/7/365 providing continuous production.

Principal risks and uncertainties

Management continues to carry out a robust assessment of the emerging and principal risks facing the business including risks that would threaten our business model and strategy, solvency or liquidity and our business reputation.

The senior management team have put in place strategies that will manage risk to substantially reduce and mitigate the impact to levels that are not significant to the business.

Financial risks
The risks that the company could face financial difficulties in meeting its obligations contractual or otherwise. The senior management team continue to monitor the cash resources of the business and ensuring regular reviews of its strategic plans. If required, support is at hand from the ultimate parent company, Novogene Co, Ltd in China.

Credit risks
Credit risk is the risk of loss as a result of failure of any party to abide by the terms and conditions of a financial contract, principally a failure to discharge contractual obligations. The company has a policy of assessing all current and potential customers before allowing for credit terms. We also review our customer credit limits and aging balances on a regular basis.

Competitive risks
The risk that our closest competitors could introduce new technologies and channels that would respond better to the rapidly evolving scientific and technological developments in our industry. The company continues to invest heavily in research and development from group level down to business entity level to respond to challenges of new technological advancements. The company continues to invest significantly in the recruitment of sales staff throughout Europe to maintain and improve on the market position.

NOVOGENE (UK) COMPANY LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -

Foreign exchange risks
The directors and senior management team acknowledge the existence of foreign exchange risk within our business and the volatility therein. We have transactions denominated in foreign currencies including most major currencies. Foreign exchange risk is managed within group treasury team based in Beijing, China.

Cash flow risks
Novogene (UK) company limited is exposed to foreign exchange rate risks for which to some extent is outside the control of our business, however the company maintains sufficient cash reserves that should mitigate any risk coming from exchange rate volatilities. The company does not use financial instruments for speculative or trading purposes.

Liquidity risks
The company maintains cash reserves that are sufficient for the day to day running of the business and for all investments within the business, dividend payments to the parent company are agreed at group level.

Performance review

During the year to 31 December 2023, the business has grown its revenues by 23% to £38.5 mil (2022: increased by 30% to £31.4 mil). The increase in sales turnover is as a result of growth in demand within the UK market as well as in mainland Europe - which when combined account for over 95% of our total sales. The profit for the year before taxation decreased by 41% to £1.2 mil (2022: £2.1 mil) due to increased administrative expenses.

As at 31 December 2023, net current assets have decreased by 5% to £3.0 mil (2022: increased by 57% to £3.3 mil). Total net assets have increased by 8% to £6.0 mil (2023: 44% to £5.6 mil).

Management have expressed their satisfaction with the results for the year and are confident that there will be improvements in results in the future due to the increase automation in our Cambridge lab which should see increases in performance and reductions in production costs.

Future Developments

The business continues to invest in high-tech laboratory equipment in all our labs around the world including our Cambridge (UK) lab. This is expected to allow the company to keep up with technological advancements in the life science industry and to help us build on the success from the previous years.

NovaSeq X Plus
The NovaSeq X Plus System, loaded with 25B FC offers the unmatched throughput and accuracy needed to enable more data-intensive applications and deliver the most cost-effective solution. The NovaSeq X Plus is Illumina’s most powerful sequencing system yet, capable of generating up to 16 terabases (TB) of output (or up to 52 billion single reads) per dual 25B flow cell run. This represents a remarkable 2.5x increase from the 10B FC and an incredible 3x increase from the S4 FC (Table 1). The performance of the NovaSeq X Series reduces the cost per gigabase (Gb) by up to 60% compared to the NovaSeq 6000 System [1]. With the cutting-edge NovaSeq X Plus 25B sequencing, our customers can enjoy the most cost-effective sequencing service for their research.

Falcon II
Novogene’ s customer-focused approach is at the core of our commitment to become the world’s leading provider of genomic solutions and services. We are always striving to enhance the customer experience through innovation. Falcon II is an example of how Novogene is leading the industry to transform operations with huge improvements in digitalisation and automation, ultimately leading to improved services, reduced turnaround time and greater accuracy.

Falcon II integrates 16 sets of precision instruments to support multiple NGS services, such as RNA sequencing and whole genome sequencing (WGS). It enables a fully automated end-to-end process that includes sample quality control, library preparation, and library quality control. It can run 24/7/365 providing continuous production.

Illumina NovaSeq Platform - NovaSeq 6000
With the NovaSeq we are able to sequence up to 48 human whole genomes and produce 6Tb of data per single run as short as 40 hours. 850G raw data per lane, 3.4T raw data per flow cell, and 2 x 150 bp read length. 800M raw reads per flow cell and 2 x 250bp & 2 x 50 bp reads length.

NOVOGENE (UK) COMPANY LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
Other performance indicators

Employee & gender diversity
Management recognises that the employees of the company are its biggest and most important asset, the growth and success of the past years couldn’t have happened without the immense contributions from the employees.

Management recognises the importance of team building and open communications within the organisation, business team have organised different team events notably kick-off meetings to have the entire staff get together to foster team building and internal collaborations. Senior managers continue to have open communication with staff at all levels as we continue to have engagement and dialogue across all levels. The business recognises the contributions of its diverse workforce and the gender balance within. We have a recruitment policy based on diversity, gender equality and a fair and equal opportunity regardless of race, colour, religion, nationality, sex, age and disability. The company does not tolerate discrimination in any shape or form.

Business environment & trends
Life science industry continues to record significant growth and milestones within the European market, this has been and continue to be a positive trend for our business. From group level, our company continues to invest in this market to keep up with competition and improve the service delivery to our esteemed clientele. During the year the group celebrated the opening of its newest subsidiary Novogene GmbH in Munich, Germany with a high-tech lab that will complement the efforts of the UK lab.

We are very excited to join the IZB eco-system. This new lab will not only expand our capacity but also enable us to collaborate more closely with researchers and innovators in biotechnology across Europe.” Tingting Zhou, Managing Director & Vice President of Novogene Europe.

Our high-tech lab in Cambridge continues to record developments and improvements in capacity with support from our ultimate parent company in China. Our vision has been to be the global leader in providing genomic services and solution and to be the chosen partner for our researchers and partners in life science industry. Supported by our dedicated and experienced team our customers can expect reliable service that comes with competitive Turn-Around Time (TAT). We have real-time experiment tracking from sample QC to data delivery on our Customer Service System (CSS) that our researchers can rely on.

Development and Performance

The key performance indicators of the company were as follows:

2023 2022 Change

£’000 £’000 %

Turnover 38,526 31,415 +23%

Gross profit 14,453 11,101 +30%

Profit before taxation 1,221 2,121 -42%

Gross Assets 44,698 45,804 -2%

Net Assets 5,997 5,586 +7%

In conjunction with the management of costs and working capital to improve profit, the company uses a number of KPIs to monitor performance.

NOVOGENE (UK) COMPANY LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -

On behalf of the board

J Wu
Director
24 September 2024
NOVOGENE (UK) COMPANY LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 5 -

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

Results and dividends

The results for the year are set out on page 10.

Ordinary dividends were declared amounting to £3,459,159. The directors do not recommend payment of a further dividend.

Directors

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

J Wu
T T Zhou
Auditor

Alliotts LLP 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.

Statement of directors' responsibilities

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.

Strategic report

The company has chosen to disclose information regarding the future development opportunities for the company and financial instrument risk management policies in the strategic report rather than the directors' report.

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.

Medium-sized companies exemption

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

NOVOGENE (UK) COMPANY LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 6 -
On behalf of the board
J Wu
Director
24 September 2024
NOVOGENE (UK) COMPANY LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF NOVOGENE (UK) COMPANY LIMITED
- 7 -
Opinion

We have audited the financial statements of Novogene (UK) Company Limited (the 'company') for the year ended 31 December 2023 which comprise the statement of comprehensive income, the statement of financial position, the statement of changes in equity 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 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:

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:

NOVOGENE (UK) COMPANY LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF NOVOGENE (UK) COMPANY LIMITED (CONTINUED)
- 8 -
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.

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.

Extent to which the audit was considered capable of detecting irregularities, including fraud

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 as follows:

NOVOGENE (UK) COMPANY LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF NOVOGENE (UK) COMPANY LIMITED (CONTINUED)
- 9 -

We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

To address the risk of fraud through management bias and override of controls, we:

Audit respsonse to risks identified

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

 

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 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.

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.

Nicholas Nicolaou FCCA
Senior Statutory Auditor
For and on behalf of Alliotts LLP
25 September 2024
Chartered Accountant
Statutory Auditor
Manfield House
1 Southampton Street
London
WC2R 0LR
NOVOGENE (UK) COMPANY LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
2023
2022
Notes
£
£
Turnover
3
38,526,103
31,414,846
Cost of sales
(24,073,049)
(20,314,094)
Gross profit
14,453,054
11,100,752
Administrative expenses
(14,370,410)
(9,178,678)
Operating profit
4
82,644
1,922,074
Interest receivable and similar income
7
1,138,527
199,057
Profit before taxation
1,221,171
2,121,131
Tax on profit
8
(298,827)
(401,595)
Profit for the financial year
922,344
1,719,536

The income statement has been prepared on the basis that all operations are continuing operations.

The notes on pages 13 to 25 form part of these financial statements.

NOVOGENE (UK) COMPANY LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2023
31 December 2023
- 11 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
10
3,622,186
2,781,455
Current assets
Stocks
12
1,495,789
1,432,021
Debtors
13
3,877,856
2,385,074
Investments
14
30,522,862
-
0
Cash at bank and in hand
5,179,222
39,205,020
41,075,729
43,022,115
Creditors: amounts falling due within one year
15
(38,042,876)
(39,733,741)
Net current assets
3,032,853
3,288,374
Total assets less current liabilities
6,655,039
6,069,829
Provisions for liabilities
Deferred tax liability
16
657,319
483,690
(657,319)
(483,690)
Net assets
5,997,720
5,586,139
Capital and reserves
Called up share capital
18
2,959,315
10,000
Other reserves
-
0
919
Profit and loss reserves
3,038,405
5,575,220
Total equity
5,997,720
5,586,139

The notes on pages 13 to 25 form part of these financial statements.

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.

The financial statements were approved by the board of directors and authorised for issue on 24 September 2024 and are signed on its behalf by:
J Wu
Director
Company registration number 09353226 (England and Wales)
NOVOGENE (UK) COMPANY LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
Share capital
Other Reserves
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 January 2022
10,000
693
3,855,684
3,866,377
Year ended 31 December 2022:
Profit and total comprehensive income
-
-
1,719,536
1,719,536
Other movements
-
226
-
226
Balance at 31 December 2022
10,000
919
5,575,220
5,586,139
Year ended 31 December 2023:
Profit and total comprehensive income
-
-
922,344
922,344
Issue of share capital
18
2,949,315
-
-
2,949,315
Dividends
9
-
-
(3,459,159)
(3,459,159)
Other movements
19
-
(919)
-
(919)
Balance at 31 December 2023
2,959,315
-
3,038,405
5,997,720

The notes on pages 13 to 25 form part of these financial statements.

NOVOGENE (UK) COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 13 -
1
Accounting policies
Company information

Novogene (UK) Company Limited is a private company limited by shares incorporated in England and Wales. The registered office is 2nd Floor, Bio-Innovation Centre, 25 Cambridge Science Park, Milton Road, Cambridge, CB4 0FW.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

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.

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:

 

 

The financial statements of the company are consolidated in the financial statements of Novogene Co., Ltd. These consolidated financial statements are available from its registered office, Building 301, Zone A10 Jiuxiangqiao North Road, Chaoyang District, Beijing, P.R.China.

1.2
Going concern

The company meets its day-to-day working capital requirements through its cash at bank. The company's forecasts and projections show that the company will continue to make profits and have enough cash reserve to meet its liabilities. Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company 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
Turnover

Revenue is measured at the fair value of the consideration received or receivable and represents the amount receivable for services rendered, net of discounts and rebates allowed by the company and value added taxes. The following criteria must also be met before revenue is recognised:

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

NOVOGENE (UK) COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -

Rendering of services

Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:

 

 

For performance obligations fulfilled at a certain point in time, the company recognises revenue at the point in time when the customer obtains control over the relevant goods or services. The timing of revenue recognition for major products is as follows:

 

Testing service: After completing the sequencing of each batch of samples, the company sends the sequencing analysis results, and obtains the customer confirmation, which indicates the number of related income that can be reliably measured, the relevant economic benefits are likely to flow up into the company, and the transaction has occurred and the incurred costs can be reliably measured, then the revenue will be recognised according to the service volume and service price provided in the contract.

1.4
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses. Cost includes the original purchase price, costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by the management.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimate useful lives, using the straight-line method. All assets are considered to have a residual value of 5% of their original cost.

 

Depreciation is provided on the following basis:

Plant and equipment
5 years straight line
Computers
3 years straight line

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 credited or charged to profit or loss.

1.5
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible 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.

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.

NOVOGENE (UK) COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. 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.

1.6
Stocks

Inventories are classified into: raw material and work in progress. Inventories are stated at the lower of cost and estimating selling price less costs to complete and sell. Inventories are recognised as an expense in the period in which the related revenue is recognised.

Cost is determined on the Weighted Average Cost (WAC) method. Cost includes the purchase price, taxes and transport, duties, and handling directly attributable to bringing the inventory to its present location and condition. The cost of work in progress includes raw materials, direct labour, other direct costs and related production overheads.

At the end of each reporting period, inventories are assessed for impairment. If an item of inventory is impaired, an impairment charge is recognised in the profit and loss account. Where a reversal of the impairment is recognised, the impairment charge is reversed, up to the original impairment loss, and is recognised as a credit in the profit and loss account.

1.7
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and 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.

1.8
Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

NOVOGENE (UK) COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities, including creditors and amounts owed by fellow group companies, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

NOVOGENE (UK) COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 17 -
1.9
Equity instruments

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

1.10
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.

Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and 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. Such assets and liabilities are not recognised if the timing 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.

1.11
Retirement benefits

The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme as they are charged to profit or loss in the period to which they relate.

1.12
Share-based payments

Equity settled share awards are recognised as an expense based on their fair value at the date of grant. The fair value of the awards is expensed over the period between the date of grant and the estimated vesting date.

On 7 July 2021, the Company's ultimate parent company, Novogene Co. Ltd, granted a restricted share incentive scheme (the "Scheme") for the primary purpose of providing incentives to director and eligible employees, and will expire on completion of listing of its shares or on the date after three years of its implementation, whichever is shorter. The sales of these restricted shares were prohibited until twelve months after the date of listing of Novogene Co. Ltd, in accordance with the laws and regulations of the relevant regulatory authority and stock exchange. Novogene Co. Ltd listed on 13 March 2023.

1.13
Leases

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

NOVOGENE (UK) COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
2
Judgements and key sources of estimation uncertainty

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Impairment of the company's tangible assets

Determine whether there are indicators of impairment of the company's tangible assets. Factors taken into consideration in reaching such a decision include the economic viability and expected future financial performance of the asset, and where it is a component of a larger cash-generating unit, the viability and expected future performance of that unit.

Impairment of obsolescence of stock

Determine whether there are indicators of impairment of obsolescence of stock. Factors taken into consideration in reaching such a decision include the trading environment, the expected future sales of the product and expiration dates.

Key sources of estimation uncertainty

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Recoverability of trade debtors

The recoverability of trade debtors is regularly reviewed in the light of available economic information specific to each debtor and specific provisions are recognised for balances considered to be irrecoverable.

3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Genomic sequencing services
38,526,103
31,414,846
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
11,906,863
8,489,123
Europe
26,572,418
22,128,789
United States of America
-
20,471
Asia
40,813
767,968
Rest of world
6,009
8,495
38,526,103
31,414,846
NOVOGENE (UK) COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
3
Turnover and other revenue
(Continued)
- 19 -
2023
2022
£
£
Other revenue
Interest income
21,636
6,723
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses/(gains)
141,830
(397,854)
Fees payable to the company's auditor for the audit of the company's financial statements
31,000
36,900
Depreciation of owned tangible fixed assets
1,097,049
827,419
(Profit)/loss on disposal of tangible fixed assets
(18)
347
Share-based payments
(919)
226
Operating lease charges
133,433
257,704
5
Employees

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

2023
2022
Number
Number
86
92

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
3,489,292
3,154,244
Social security costs
344,552
357,084
Pension costs
67,903
49,237
3,901,747
3,560,565
6
Directors' remuneration

The directors have no direct service contract with the company and are instead employed by the group. No portion of their remuneration can be specifically attributed to their services to the company.

NOVOGENE (UK) COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
21,636
6,723
Income from fixed asset investments
Income from other fixed asset investments
1,116,891
192,334
Total income
1,138,527
199,057
8
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
125,198
169,212
Deferred tax
Origination and reversal of timing differences
173,629
232,383
Total tax charge
298,827
401,595

The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

2023
2022
£
£
Profit before taxation
1,221,171
2,121,131
Expected tax charge based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
287,219
403,015
Tax effect of expenses that are not deductible in determining taxable profit
330,857
34,182
Effect of change in corporation tax rate
(189)
-
0
Permanent capital allowances in excess of depreciation
(492,408)
(267,985)
Share based payment charge
(216)
-
0
Deferred tax
173,564
232,383
Taxation charge for the year
298,827
401,595
9
Dividends
2023
2022
£
£
Final paid
3,459,159
-
0
NOVOGENE (UK) COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
10
Tangible fixed assets
Plant and equipment
Computers
Total
£
£
£
Cost
At 1 January 2023
5,354,193
209,205
5,563,398
Additions
1,928,129
15,192
1,943,321
Disposals
(17,505)
(1,486)
(18,991)
At 31 December 2023
7,264,817
222,911
7,487,728
Depreciation and impairment
At 1 January 2023
2,631,379
150,564
2,781,943
Depreciation charged in the year
1,069,960
27,089
1,097,049
Eliminated in respect of disposals
(12,521)
(929)
(13,450)
At 31 December 2023
3,688,818
176,724
3,865,542
Carrying amount
At 31 December 2023
3,575,999
46,187
3,622,186
At 31 December 2022
2,722,814
58,641
2,781,455
11
Financial instruments
2023
2022
£
£
Carrying amount of financial assets
Instruments measured at fair value through profit or loss
30,522,862
-
12
Stocks
2023
2022
£
£
Raw materials and consumables
818,227
587,591
Work in progress
677,562
844,430
1,495,789
1,432,021
13
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
1,646,078
980,394
Corporation tax recoverable
233,252
-
0
Amounts owed by group undertakings
599,245
860,906
Other debtors
520,697
190,971
Prepayments and accrued income
878,584
352,803
3,877,856
2,385,074
NOVOGENE (UK) COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
13
Debtors
(Continued)
- 22 -

All amounts owed by group undertakings are unsecured, interest free and repayable on demand.

14
Current asset investments
2023
2022
£
£
Unlisted investments
30,522,862
-
0

The investments represent funds held in an asset management portfolio. These investments are managed by a third-party asset management company and measured at market value.

15
Creditors: amounts falling due within one year
2023
2022
£
£
Payments received on account
18,841,347
15,649,720
Trade creditors
1,260,264
1,400,121
Amounts owed to group undertakings
17,664,525
22,012,218
Corporation tax
-
0
93,801
Other taxation and social security
-
0
174,108
Other creditors
234,314
317,404
Accruals and deferred income
42,426
86,369
38,042,876
39,733,741

All amounts owed to group undertakings are unsecured, interest free and payable on demand.

16
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
732,940
483,690
Other timing differences
(75,621)
-
657,319
483,690
NOVOGENE (UK) COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
16
Deferred taxation
(Continued)
- 23 -
2023
Movements in the year:
£
Liability at 1 January 2023
483,690
Charge to profit or loss
173,629
Liability at 31 December 2023
657,319

Short term timing differences set out above are expected to reverse within 12 months. Accelerated capital allowances are expected to reverse within 12 months to 60 months.

17
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
67,903
49,237

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.

18
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
2,959,315
10,000
2,959,315
10,000

There is a single class of Ordinary shares, all of which have full rights in the company with respect to voting, dividends and capital distributions.

On 21 December 2023, the company allotted 2,949,315 Ordinary shares of £1 par value per share for consideration of £1 per share. No share premium arose on the issue and all such shares were fully paid up at the reporting date.

19
Other reserves

During 2023, the management of the ultimate holding company Novogene Co. Ltd, has assessed the completion of listing would be 3 years after grant, as a result of this, the revaluation of £919 (2022 expenses: £226) has been recognised during the year.

NOVOGENE (UK) COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
20
Operating lease commitments
Lessee

Minimum lease payments under non-cancellable operating leases fall due as follows:

2023
2022
£
£
Within one year
397,280
397,280
Between two and five years
237,280
634,560
634,560
1,031,840
21
Related party transactions
2023
2022
Amounts due to related parties
£
£
Entities with control, joint control or significant influence over the company
14,719,869
21,749,580
Other related parties
2,944,656
262,638

The following amounts were outstanding at the reporting end date:

2023
2022
Amounts due from related parties
£
£
Entities with control, joint control or significant influence over the company
41,892
69,802
Other related parties
557,353
791,104
Other information

The company has taken advantage of the exemption under FRS 102, para 33.1A, stating that details need not be given in respect of transactions entered into between two or more members of a group, provided that any subsidiary which is a party to the transaction is wholly-owned by such a member.

NOVOGENE (UK) COMPANY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 25 -
22
Ultimate controlling party

The ultimate controlling party is R Li.

 

The company's immediate parent is Novogene (NL) International Holding B.V, a company incorporated in Netherlands.

 

The ultimate parent company is Novogene Co. Ltd, a company incorporated in P.R. China. The largest and smallest group into which the result of the company are consolidated is headed by Novogene Co. Ltd, the consolidated financial statements are available from: Building 301, Zone A10 Jiuxianqiao North Road, Chaoyang District, Beijing, P.R, China.

 

 

 

 

 

 

 

 

 

 

 

2023-12-312023-01-01falseCCH SoftwareCCH Accounts Production 2024.200J WuT T Zhoufalsefalse093532262023-01-012023-12-3109353226bus:Director12023-01-012023-12-3109353226bus:Director22023-01-012023-12-3109353226bus:RegisteredOffice2023-01-012023-12-31093532262023-12-31093532262022-01-012022-12-3109353226core:RetainedEarningsAccumulatedLosses2022-01-012022-12-3109353226core:RetainedEarningsAccumulatedLosses2023-01-012023-12-31093532262022-12-3109353226core:PlantMachinery2023-12-3109353226core:ComputerEquipment2023-12-3109353226core:PlantMachinery2022-12-3109353226core:ComputerEquipment2022-12-3109353226core:CurrentFinancialInstrumentscore:WithinOneYear2023-12-3109353226core:CurrentFinancialInstrumentscore:WithinOneYear2022-12-3109353226core:CurrentFinancialInstruments2023-12-3109353226core:CurrentFinancialInstruments2022-12-3109353226core:ShareCapital2023-12-3109353226core:ShareCapital2022-12-3109353226core:OtherMiscellaneousReserve2023-12-3109353226core:OtherMiscellaneousReserve2022-12-3109353226core:RetainedEarningsAccumulatedLosses2023-12-3109353226core:RetainedEarningsAccumulatedLosses2022-12-3109353226core:ShareCapital2021-12-3109353226core:RetainedEarningsAccumulatedLosses2021-12-3109353226core:ShareCapital2023-01-012023-12-3109353226core:PlantMachinery2023-01-012023-12-3109353226core:ComputerEquipment2023-01-012023-12-310935322612023-01-012023-12-310935322612022-01-012022-12-3109353226core:UKTax2023-01-012023-12-3109353226core:UKTax2022-01-012022-12-310935322622023-01-012023-12-310935322622022-01-012022-12-3109353226core:PlantMachinery2022-12-3109353226core:ComputerEquipment2022-12-31093532262022-12-3109353226core:CurrentFinancialInstrumentscore:UnlistedNon-exchangeTraded2023-12-3109353226core:CurrentFinancialInstrumentscore:UnlistedNon-exchangeTraded2022-12-3109353226core:WithinOneYear2023-12-3109353226core:WithinOneYear2022-12-3109353226core:BetweenTwoFiveYears2023-12-3109353226core:BetweenTwoFiveYears2022-12-3109353226core:EntitiesWithJointControlOrSignificantInfluenceOverReportingEntity2023-12-3109353226bus:PrivateLimitedCompanyLtd2023-01-012023-12-3109353226bus:FRS1022023-01-012023-12-3109353226bus:Audited2023-01-012023-12-3109353226bus:FullAccounts2023-01-012023-12-31xbrli:purexbrli:sharesiso4217:GBP