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Company registration number: 03850289
Genesis Pharmaceuticals Limited
Financial statements
31 December 2023
Genesis Pharmaceuticals Limited
Contents
Directors and other information
Strategic report
Directors report
Independent auditor's report to the members
Statement of comprehensive income
Statement of financial position
Statement of changes in equity
Statement of cash flows
Notes to the financial statements
Genesis Pharmaceuticals Limited
Directors and other information
Directors Dr D Solomon
Mr N P Mehta
Mr P A Chubb
Mr Sidharth Mehta (Appointed 8 August 2023)
Mr B P Mehta (Resigned 8 August 2023)
Secretary Mr N P Mehta
Company number 03850289
Registered office Scottish Provident House, 3rd Floor
76 - 80 College Road
Harrow
Middlesex
HA1 1BQ
Auditor Anderson Shaw
Chartered Certified Accountants
Statutory Auditors
Scottish Provident House
76 - 80 College Road
Harrow
Middlesex
HA1 1BQ
Genesis Pharmaceuticals Limited
Strategic report
Year ended 31 December 2023
Business review
The company's principal activity is that of providing a comprehensive service for marketing, warehousing, distribution and financing of sales of pharmaceutical products into the UK market including the undertaking of credit risk of supplying the customers. Sales are undertaken with no margin; the company receives fees for the provision of the services.
The results of the company for the year ended 31 December 2023 shows a Gross Profit of £2,593,800 (2022: £2,359,800), an increase of 10% compared to last year. Turnover for the year was £50,535,632 (2022: £53,134,583). The service fee income relating to the principal activity of the company was £2,593,800 (2022: £2,359,800) for the year.
Principal risks and uncertainties facing company
The company is exposed to competition risk. The management is mitigating this risk by regular review of its commercial strategy, through negotiation with suppliers and ensuring product availability.
The company operations expose it to customer credit risk. The company has a robust credit monitoring process and has credit insurance in place to mitigate this risk.
Working capital and cashflow requirements are monitored by the management on a regular basis to mitigate any liquidity risks.
The management closely monitors changes in law and regulations including those changes being addressed by the government following Brexit. The company is well positioned to understand the changes and to take appropriate measures to implement them.
The management continue to monitor closely the impact of the macroeconomic uncertainties, the conflicts in Ukraine and Gaza on the company's financial position. These have not significantly impacted the company.
Future developments
The company continues to work towards introducing new products and towards increasing its customer base.
Key performance indicators
The company uses a number of key performance indicators to monitor progress including turnover £50,535,632 (2022: £53,134,583), gross profit £2,593,800 (2022: £2,359,800) and administrative costs £2,268,653 (2022: 2,106,637).
This report was approved by the board of directors on 24 September 2024 and signed on behalf of the board by:
Mr N P Mehta
Director
Genesis Pharmaceuticals Limited
Directors report
Year ended 31 December 2023
The directors present their report and the financial statements of the company for the year ended 31 December 2023.
Directors
The directors who served the company during the year were as follows:
Dr D Solomon
Mr N P Mehta
Mr P A Chubb
Mr Sidharth Mehta (Appointed 8 August 2023)
Mr B P Mehta (Resigned 8 August 2023)
Dividends
The directors do not recommend the payment of a dividend.
Future developments
See details included in the Strategic report.
Financial instruments
Details of the company's financial risk management objectives and policy are included in note 3 to the financial statements.
Disclosure of information in the strategic report.
The company has chosen in accordance with section 414C(11) of the Companies Act 2006 (Strategic Report and Directors' Report) Regulations 2013 to set out in the company's strategic report information required by schedule 7 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008.
Directors responsibilities statement
The directors are responsible for preparing the strategic report, directors report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and the profit or loss of the company for that period.
In preparing these financial statements, the directors are required to:
- select suitable accounting policies and then apply them consistently;
- make judgments and accounting estimates that are reasonable and prudent; and
- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Auditor
Each of the persons who is a director at the date of approval of this report confirms that:
- so far as they are aware, there is no relevant audit information of which the company's auditor is unaware; and - they have taken all steps that they ought to have taken as a director to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information.
The auditor is deemed to have been re-appointed in accordance with section 487 of the Companies Act 2006.
This report was approved by the board of directors on 24 September 2024 and signed on behalf of the board by:
Mr N P Mehta
Director
Genesis Pharmaceuticals Limited
Independent auditor's report to the members of
Genesis Pharmaceuticals Limited
Year ended 31 December 2023
Opinion
We have audited the financial statements of Genesis Pharmaceuticals Limited (the 'company') for the year ended 31 December 2023 which comprise the statement of comprehensive income, statement of financial position, statement of changes in equity, statement of cash flows and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice). In our opinion, the financial statements: - give a true and fair view of the state of the company's affairs as at 31 December 2023 and of its profit for the year then ended; - have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and - have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the 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. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
- the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
- the strategic report and the directors' report has been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report. We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: - adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or - the financial statements are not in agreement with the accounting records and the returns; or - certain disclosures of directors' remuneration specified by law are not made; or - we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: As part of our planning process: We enquired with management of the systems and controls the company has in place, the areas of the financial statements that are mostly susceptible to the risk of irregularities and fraud, and whether there was any known, suspected or alleged fraud. We obtained an understanding of the legal and regulatory frameworks applicable to the company. We determined that the following were most relevant: all laws and regulations relating to wholesale and distribution of pharmaceuticals products in the UK, accounting standards (FRS 102), company laws (Companies Act 2006), UK tax laws and regulations, employment laws and health & safety laws and regulations. We considered the incentives and opportunities that exist in the company, including the extent of management bias, which present a potential for irregularities and fraud to be perpetuated and tailored our risk assessment accordingly. Using our knowledge of the company, together with the discussions held with the directors at the planning stage, we formed a conclusion on the risk of misstatement due to irregularities including fraud and tailored our procedures according to this risk assessment. The key procedures we undertook to detect irregularities including fraud during the course of the audit included: - Identifying and testing journal entries and the overall accounting records, in particular those that were significant and unusual. Performed analytical procedures and obtain explanations for major variances. - Reviewing the financial statement disclosures and determining whether accounting policies have been appropriately applied. - Reviewing and challenging the assumptions and judgements used by management in their significant accounting estimates in respect of depreciation of fixed assets. - Testing key revenue of the company and sales cut-off for evidence of management bias. Reviewing payroll expense accounting records for any indication of fraud. - Obtaining third-party balance confirmations for bank accounts, bank loan and invoice discounting facility. - Documenting and verifying all significant related party balances and transactions. - Assessing the extent of compliance, with the relevant laws and regulations applicable to the company. - Reviewing legal and professional expenses accounting records for any indication of irregularities or fraud. - Reviewing documentation such as service agreements, the company's board minutes, correspondence with solicitors, correspondence with HMRC for indications of irregularities including fraud. - Review matters relating to regulators and made appropriate searches including MHRA to ensure they are valid and in compliance. - Reviewing and challenging the assumptions and judgements made by management in their consideration of the company's ability to continue as Going Concern. Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements even though we have properly planned and performed our audit in accordance with auditing standards. The primary responsibility for the prevention and detection of irregularities and fraud rests with the directors. A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Use of our report
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditors 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.
Kamalkant Liladhar Shah (Senior Statutory Auditor)
For and on behalf of
Anderson Shaw
Chartered Certified Accountants and Statutory Auditors
Scottish Provident House
76 - 80 College Road
Harrow
Middlesex
HA1 1BQ
24 September 2024
Genesis Pharmaceuticals Limited
Statement of comprehensive income
Year ended 31 December 2023
2023 2022
Note £ £
Turnover 4 50,535,632 53,134,583
Cost of sales ( 47,941,832) ( 50,774,783)
_______ _______
Gross profit 2,593,800 2,359,800
Administrative expenses ( 2,268,654) ( 2,106,637)
Other operating income 5 68,800 68,800
_______ _______
Operating profit 6 393,946 321,963
Other interest receivable and similar income 9 - 7
Interest payable and similar expenses 10 ( 15,166) ( 24,119)
_______ _______
Profit before taxation 378,780 297,851
Tax on profit 11 ( 127,065) ( 67,164)
_______ _______
Profit for the financial year and total comprehensive income 251,715 230,687
_______ _______
All the activities of the company are from continuing operations.
Genesis Pharmaceuticals Limited
Statement of financial position
31 December 2023
2023 2022
Note £ £ £ £
Fixed assets
Tangible assets 12 1,488,483 1,546,714
_______ _______
1,488,483 1,546,714
Current assets
Debtors 13 14,766,435 18,440,230
Cash at bank and in hand 381,902 319,853
_______ _______
15,148,337 18,760,083
Creditors: amounts falling due
within one year 15 ( 14,089,252) ( 18,009,243)
_______ _______
Net current assets 1,059,085 750,840
_______ _______
Total assets less current liabilities 2,547,568 2,297,554
Creditors: amounts falling due
after more than one year 16 ( 60,560) ( 81,252)
Provisions for liabilities 18 ( 23,204) ( 4,213)
_______ _______
Net assets 2,463,804 2,212,089
_______ _______
Capital and reserves
Called up share capital 21 4 4
Profit and loss account 22 2,463,800 2,212,085
_______ _______
Shareholders funds 2,463,804 2,212,089
_______ _______
These financial statements were approved by the board of directors and authorised for issue on 24 September 2024 , and are signed on behalf of the board by:
Mr N P Mehta
Director
Company registration number: 03850289
Genesis Pharmaceuticals Limited
Statement of changes in equity
Year ended 31 December 2023
Called up share capital Profit and loss account Total
£ £ £
At 1 January 2022 2 1,981,398 1,981,400
Profit for the year 230,687 230,687
_______ _______ _______
Total comprehensive income for the year - 230,687 230,687
Issue of shares 2 2
_______ _______ _______
Total investments by and distributions to owners 2 - 2
_______ _______ _______
At 31 December 2022 and 1 January 2023 4 2,212,085 2,212,089
Profit for the year 251,715 251,715
_______ _______ _______
Total comprehensive income for the year - 251,715 251,715
_______ _______ _______
At 31 December 2023 4 2,463,800 2,463,804
_______ _______ _______
Genesis Pharmaceuticals Limited
Statement of cash flows
Year ended 31 December 2023
2023 2022
£ £
Cash flows from operating activities
Profit for the financial year 251,715 230,687
Adjustments for:
Depreciation of tangible assets 62,082 69,197
Other interest receivable and similar income - ( 7)
Interest payable and similar expenses 15,166 24,119
Gain/(loss) on disposal of tangible assets 2,010 -
Tax on profit 127,065 67,164
Accrued expenses/(income) 161,281 ( 488,350)
Changes in:
Trade and other debtors 3,415,107 ( 8,794,599)
Trade and other creditors ( 3,443,230) 9,213,249
_______ _______
Cash generated from operations 591,196 321,460
Interest paid ( 15,166) ( 24,119)
Interest received - 7
Tax paid ( 51,527) ( 80,472)
_______ _______
Net cash from operating activities 524,503 216,876
_______ _______
Cash flows from investing activities
Purchase of tangible assets ( 5,861) ( 120,406)
_______ _______
Net cash used in investing activities ( 5,861) ( 120,406)
_______ _______
Cash flows from financing activities
Proceeds from issue of ordinary shares - 2
Repayments of borrowings ( 438,955) ( 81,911)
Net of proceeds (repayments) from hire purchase contracts ( 17,638) 98,891
_______ _______
Net cash (used in)/from financing activities ( 456,593) 16,982
_______ _______
Net increase/(decrease) in cash and cash equivalents 62,049 113,452
Cash and cash equivalents at beginning of year 14 319,853 206,401
_______ _______
Cash and cash equivalents at end of year 14 381,902 319,853
_______ _______
Genesis Pharmaceuticals Limited
Notes to the financial statements
Year ended 31 December 2023
1. General information
The company is a private company limited by shares, registered in England and Wales. The address of the registered office is Scottish Provident House, 3rd Floor, 76 - 80 College Road, Harrow, Middlesex, HA1 1BQ.The company's business address is 84 Pembroke Road, London W86NX. The principal activity of the company is that of wholesale of pharmaceutical products and provision of comprehensive services thereon .
2. Statement of compliance
These financial statements have been prepared in compliance with FRS 102, 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', and the Companies Act 2006.
3. Accounting policies
Basis of preparation
The financial statements have been prepared on the historical cost basis . The financial statements are prepared in sterling, which is the functional currency of the entity.
Going concern
The directors have carefully considered the impact of the macroeconomic uncertainties, the conflicts in Ukraine and Gaza on the company's financial position, liquidity and future performance.The directors, at the time of approving the financial statements, have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. In reaching this conclusion the directors have considered the financial position of the company's cash and liquidity position and financial support from the shareholders of the company.The going concern basis of accounting has therefore continued to be adopted in preparing the financial statements.
Judgements and key sources of estimation uncertainty
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgments are continually reviewed and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.The key area of judgment is in respect of depreciation of fixed assets.Further details of significant estimates and judgements are set out in the relevant accounting polices and notes to the financial statements.
Turnover
Turnover is derived from the provision of services in relation to a service agreement and the fee income is measured at the fair value of the consideration received or receivable for services rendered net of Value Added Tax.Turnover from the sale of goods is measured at the fair value of the consideration received or receivable for goods supplied, net of discounts and Value Added Tax. Turnover is recognised when the significant risks and rewards of ownership have transferred to the buyer (usually on despatch of the goods); the amount of revenue can be measured reliably; it is probable that the associated economic benefits will flow to the entity; and the costs incurred or to be incurred in respect of the transactions can be measured reliably.
Taxation
The taxation expense represents the aggregate amount of current and deferred tax recognised in the reporting period. Tax is recognised in the statement of comprehensive income, except to the extent that it relates to items recognised in other comprehensive income or directly in capital and reserves. In this case, tax is recognised in other comprehensive income or directly in capital and reserves, respectively. Current tax is recognised on taxable profit for the current and past periods. Current tax is measured at the amounts of tax expected to pay or recover using the tax rates and laws that have been enacted or substantively enacted at the reporting date.
Deferred tax is recognised in respect of all timing differences at the reporting date. Unrelieved tax losses and other deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date that are expected to apply to the reversal of the timing difference.
Foreign currencies
Foreign currency transactions are initially recorded in the functional currency, by applying the spot exchange rate as at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the exchange rate ruling at the reporting date, with any gains or losses being taken to profit or loss.
Operating leases
Lease payments are recognised as an expense over the lease term on a straight-line basis. The aggregate benefit of lease incentives is recognised as a reduction to expense over the lease term, on a straight-line basis.
Tangible assets
Tangible assets are initially recorded at cost, and are subsequently stated at cost less any accumulated depreciation and impairment losses.
Depreciation
Depreciation is calculated so as to write off the cost or valuation of an asset, less its residual value, over the useful economic life of that asset as follows:
Freehold property - Land - Nil; Building - Straight line over 40 years
Plant and machinery - Straight line over ten years
Fittings fixtures and equipment - 3 to 5 years straight line
Motor vehicles - 25 % reducing balance
If there is an indication that there has been a significant change in depreciation rate, useful life or residual value of tangible assets, the depreciation is revised prospectively to reflect the new estimates .
Impairment
A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date.When it is not possible to estimate the recoverable amount of an individual asset, an estimate is made of the recoverable amount of the cash-generating unit to which the asset belongs. The cash-generating unit is the smallest identifiable group of assets that includes the asset and generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets .
Hire purchase and finance leases
Assets obtained under hire purchase contracts and finance leases are capitalised as tangible assets and depreciated over the shorter of the lease term and their useful lives. Obligations under such agreements are included in creditors net of the finance charge allocated to future periods. The finance element of the rental payment is charged to the profit and loss account so as to produce constant periodic rates of charge on the net obligations outstanding in each period .
Provisions
Provisions are recognised when the entity has an obligation at the reporting date as a result of a past event; it is probable that the entity will be required to transfer economic benefits in settlement and the amount of the obligation can be estimated reliably. Provisions are recognised as a liability in the statement of financial position and the amount of the provision as an expense. Provisions are initially measured at the best estimate of the amount required to settle the obligation at the reporting date and subsequently reviewed at each reporting date and adjusted to reflect the current best estimate of the amount that would be required to settle the obligation. Any adjustments to the amounts previously recognised are recognised in profit or loss unless the provision was originally recognised as part of the cost of an asset. When a provision is measured at the present value of the amount expected to be required to settle the obligation, the unwinding of the discount is recognised in finance costs in profit or loss in the period it arises.
Financial instruments
A financial asset or a financial liability is recognised only when the company becomes a party to the contractual provisions of the instrument.Basic financial instruments are initially recognised at the transaction price, unless the arrangement constitutes a financing transaction, where it is recognised at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.Debt instruments are subsequently measured at amortised cost.Financial assets that are measured at cost or amortised cost are reviewed for objective evidence of impairment at the end of each reporting date. If there is objective evidence of impairment, an impairment loss is recognised in profit or loss immediately.For all equity instruments regardless of significance, and other financial assets that are individually significant, these are assessed individually for impairment. Other financial assets or either assessed individually or grouped on the basis of similar credit risk characteristics.Any reversals of impairment are recognised in profit or loss immediately, to the extent that the reversal does not result in a carrying amount of the financial asset that exceeds what the carrying amount would have been had the impairment not previously been recognised
Defined contribution pension plans
Contributions to defined contribution plans are recognised as an expense in the period in which the related service is provided. Prepaid contributions are recognised as an asset to the extent that the prepayment will lead to a reduction in future payments or a cash refund.
4. Turnover
Turnover arises from:
2023 2022
£ £
Sale of goods 47,941,832 50,774,783
Service fees receivable 2,593,800 2,359,800
_______ _______
50,535,632 53,134,583
_______ _______
The turnover is attributable to the one principal activity of the company. An analysis of turnover by the geographical markets that substantially differ from each other is given below:
2023 2022
£ £
United Kingdom 47,941,832 50,774,783
Rest of the world 2,593,800 2,359,800
_______ _______
50,535,632 53,134,583
_______ _______
5. Other operating income
2023 2022
£ £
Rental income 28,800 28,800
Management charges receivable 40,000 40,000
_______ _______
68,800 68,800
_______ _______
6. Operating profit
Operating profit is stated after charging/(crediting):
2023 2022
£ £
Depreciation of tangible assets 62,082 69,197
(Gain)/loss on disposal of tangible assets 2,010 -
Operating lease rentals 1,917 1,799
Foreign exchange differences 16 ( 38)
Fees payable for the audit of the financial statements 7,500 7,500
_______ _______
7. Staff costs
The average number of persons employed by the company during the year, including the directors, amounted to:
2023 2022
Administration 8 8
Selling and distribution 3 3
_______ _______
11 11
_______ _______
The aggregate payroll costs incurred during the year were:
2023 2022
£ £
Wages and salaries 1,623,255 1,469,804
Social security costs 222,821 194,426
Other pension costs 37,897 19,648
_______ _______
1,883,973 1,683,878
_______ _______
8. Directors remuneration
The directors aggregate remuneration in respect of qualifying services was:
2023 2022
£ £
Remuneration 747,169 623,725
Company contributions to pension schemes in respect of qualifying services 18,000 -
_______ _______
765,169 623,725
_______ _______
The number of directors who accrued benefits under company pension plans was as follows:
2023 2022
Number Number
Defined contribution plans 1 1
_______ _______
Remuneration of the highest paid directors in respect of qualifying services:
2023 2022
£ £
Aggregate remuneration 735,823 613,637
Company contributions to pension plans in respect of qualifying services 18,000 -
_______ _______
753,823 613,637
_______ _______
9. Other interest receivable and similar income
2023 2022
£ £
Other interest receivable and similar income - 7
_______ _______
10. Interest payable and similar expenses
2023 2022
£ £
Bank loans and overdrafts 8,110 18,559
Other loans made to the company:
Finance leases and hire purchase contracts 6,133 5,560
Other interest payable and similar expenses 923 -
_______ _______
15,166 24,119
_______ _______
11. Tax on profit
Major components of tax expense
2023 2022
£ £
Current tax:
UK current tax expense 108,074 72,438
_______ _______
Deferred tax:
Origination and reversal of timing differences 18,991 ( 5,274)
_______ _______
Tax on profit 127,065 67,164
_______ _______
Reconciliation of tax expense
The tax assessed on the profit for the year is higher than (2022: higher than) the standard rate of corporation tax in the UK of 23.50 % (2022: 19.00%).
2023 2022
£ £
Profit before taxation 378,780 297,851
_______ _______
Profit multiplied by rate of tax 89,013 56,592
Effect of expenses not deductible for tax purposes 5,460 4,774
Effect of capital allowances and depreciation 13,050 11,072
Disposal/Scrap of assets 473 -
Tax rate adjustment 78 -
Deferred tax adjustment 18,991 ( 5,274)
_______ _______
Tax on profit 127,065 67,164
_______ _______
12. Tangible assets
Freehold property Plant and machinery Fixtures, fittings and equipment Motor vehicles Total
£ £ £ £ £
Cost
At 1 January 2023 1,670,840 31,823 182,611 116,160 2,001,434
Additions - - 5,861 - 5,861
Disposals - - ( 5,512) - ( 5,512)
_______ _______ _______ _______ _______
At 31 December 2023 1,670,840 31,823 182,960 116,160 2,001,783
_______ _______ _______ _______ _______
Depreciation
At 1 January 2023 254,248 16,440 161,357 22,675 454,720
Charge for the year 24,271 3,183 11,257 23,371 62,082
Disposals - - ( 3,502) - ( 3,502)
_______ _______ _______ _______ _______
At 31 December 2023 278,519 19,623 169,112 46,046 513,300
_______ _______ _______ _______ _______
Carrying amount
At 31 December 2023 1,392,321 12,200 13,848 70,114 1,488,483
_______ _______ _______ _______ _______
At 31 December 2022 1,416,592 15,383 21,254 93,485 1,546,714
_______ _______ _______ _______ _______
Obligations under finance leases
Included within the carrying value of tangible assets are the following amounts relating to assets held under finance leases or hire purchase agreements:
Motor vehicles
£
At 31 December 2023 70,114
_______
At 31 December 2022 93,485
_______
13. Debtors
2023 2022
£ £
Trade debtors 14,337,946 17,812,770
Prepayments and accrued income 376,596 625,479
Other debtors 51,893 1,981
_______ _______
14,766,435 18,440,230
_______ _______
Included in trade debtors are invoice discounting debtors amounting to £6,577,374 (2022: £11,855,937)
14. Cash and cash equivalents
2023 2022
£ £
Cash at bank and in hand 381,902 319,853
_______ _______
15. Creditors: amounts falling due within one year
2023 2022
£ £
Bank loans and overdrafts - 438,955
Trade creditors 10,809,760 8,274,895
Accruals and deferred income 39,039 136,446
Corporation tax 128,985 72,438
Social security and other taxes 480,877 440,416
Obligations under finance leases 20,693 17,639
Other creditors 2,609,898 8,628,454
_______ _______
14,089,252 18,009,243
_______ _______
Other creditors include a liability amounting to £1,453,626 (2022: £6,873,102) secured against the company's trade debtors in respect of invoice discounting arrangements. The bank loan was secured by a first legal charge on the company's freehold land and building. Interest on the loan was at commercial rate and the loan was repaid in April 2023.
16. Creditors: amounts falling due after more than one year
2023 2022
£ £
Obligations under finance lease 60,560 81,252
_______ _______
17. Obligations under finance leases
Company lessee
The total future minimum lease payments under finance lease agreements are as follows:
2023 2022
£ £
Not later than 1 year 20,693 17,639
Later than 1 year and not later than 5 years 60,559 81,252
_______ _______
81,252 98,891
_______ _______
Obligations under hire purchase agreements are secured on the assets to which they relate .
18. Provisions
Deferred tax (note 19) Total
£ £
At 1 January 2023 4,213 4,213
Charges against provisions 18,991 18,991
_______ _______
At 31 December 2023 23,204 23,204
_______ _______
19. Deferred tax
The deferred tax included in the statement of financial position is as follows:
2023 2022
£ £
Included in provisions (note 18) 23,204 4,213
_______ _______
The deferred tax account consists of the tax effect of timing differences in respect of:
2023 2022
£ £
Accelerated capital allowances 23,204 4,213
_______ _______
Deferred tax has been recognised at the rate of 25% (2022: 25%) based on corporation tax rates and tax law which have been enacted or substantively enacted at Balance Sheet date .
20. Employee benefits
The amount recognised in profit or loss in relation to defined contribution plans was £ 37,897 (2022: £ 19,648 ).
21. Called up share capital
Issued, called up and fully paid
2023 2022
No £ No £
Ordinary shares of £ 1.00 each 4 4 4 4
_______ _______ _______ _______
22. Reserves
Profit and loss account:This reserve records retained earnings and accumulated losses .
23. Analysis of changes in net debt
At 1 January 2023 Cash flows At 31 December 2023
£ £ £
Cash and cash equivalents 319,853 62,049 381,902
Debt due within one year (456,594) 435,901 (20,693)
Debt due after one year (81,252) 20,692 (60,560)
_______ _______ _______
( 217,993) 518,642 300,649
_______ _______ _______
24. Operating leases
The company as lessee
The total future minimum lease payments under non-cancellable operating leases are as follows:
£ £
Not later than 1 year 1,563 1,563
Later than 1 year and not later than 5 years 989 2,552
_______ _______
2,552 4,115
_______ _______
25. Related party transactions
The related parties are either through common ownership or common directorship.Goods returned/sold: £6,366 (2022: £132,528)Services provided: £2,877,600 (2022: £1,870,800)Goods acquired: £48,018,010 (2022: £50,829,103)Recharges to: £5,208,893 (2022: £4,245,652) Management charges receivable £40,000 (2022: £40,000)At the year end the company was owed £5,038,062 (2022: £2,715,295) from related undertakings and the company owed £9,730,460 (2022: £7,991,320 ) to related undertakings .
26. Controlling party
The company is controlled by the director Dr David Solomon who is also the majority shareholder of the compa ny.