Company registration number SC424013 (Scotland)
BARRIE DEAR LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2023
BARRIE DEAR LIMITED
COMPANY INFORMATION
Directors
Mr B Dear
Mrs L Dear
Mr M Nickkho-Amiry
Secretary
Mr M Nickkho-Amiry
Company number
SC424013
Registered office
Norwood
3 Beech Road
Lenzie
G66 4HN
Auditor
Thomson Cooper
3 Castle Court
Carnegie Campus
Dunfermline
Fife
KY11 8PB
Business address
Norwood
3 Beech Road
Lenzie
G66 4HN
Bankers
Santander (Bootle)
Bridle Road
Bootle
Merseryside
L30 4GB
BARRIE DEAR LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Statement of cash flows
11
Notes to the financial statements
12 - 26
BARRIE DEAR LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 JULY 2023
- 1 -
The directors present the strategic report and financial statements for the year ended 31 July 2023.
Fair review of the business
The company’s principal activity continued to be running retail pharmacy and travel clinics trading as Dears Pharmacy and Dears Health & Beauty.
The results are set out in the Profit and Loss account on page 8.
Trading conditions have been challenging primarily due to the increased demand on pharmacies to deliver an increased range of services and growing prescription volumes with scaling resources up to meet the increased volume.
Business Review and Future Developments
The business has continued to invest in ways to assist with scaling up and has throughout the course of this year set up a spoke and hub dispensing centre for our Pick 2 Prescription work and invested in a further robot to assist with our PillPouch solution. These investments allow the company to maximise all available growth streams and support our teams to deliver the highest level of service at all times through centralised dispensing.
The business continues to meet these needs through increased investment in staffing and resources to support training and development. Throughout the year we further invested in automation and technology including more automated collection points and fleet including our transition to greener deliveries with our new electric mopeds as part of the strive to have full green delivery service by 2025.
This investment will allow the company to drive improvements and efficiencies for the future with the investment made in the financial year.
The company expects trading levels to continue over next year and will continue with our rolling program of refits and relocations leading to improvements and efficiency savings. Improvement in stock management processes have been made to negate changes due to the pandemic and supply due to ongoing supply challenges overall in the market.
Increased revenues from opportunities presented from the NHS Pharmacy Contract and developing our range of private services continue to be adapted and evolved. Our rolling program for staff training and development will facilitate this to ensure continued levels of excellent customer service.
The directors are always looking for opportunities to expand the business. Since the year end a newly incorporated fellow group company has entered into an agreement to purchase a number of retail units from another group to further expand its portfolio of pharmacies within the areas where it currently operates. The company has paid a non-refundable deposit of £2.2m on its behalf.
Key performance indicators
The company uses a range of Key Performance Indicators to measure performance which incorporates financial and non-financial metrics. All of these are monitored closely and reviewed throughout the year.
Annualised earnings before interest, tax depreciation and amortisation (EBITDA) has increased to £3,217,951 for the year (2022 - £3,034,043).
BARRIE DEAR LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
- 2 -
Financial risk management objectives and policies
The company finances its operations through a mixture of retained profits and where necessary to fund expansion or capital expenditure through bank borrowings. The main objectives are to:
Retain sufficient liquid funds to enable to meet day to day obligations
Minimise company exposure to fluctuations in interest rates when seeking borrowing
Match the repayment schedule of any borrowings with expected future cash flows expected to arise from trading activities
The company does not use any hedge fund accounting. The exposure to price risk, credit risk, liquidity risk and cash flow is minimized where possible.
Mr M Nickkho-Amiry
Director
2 October 2024
BARRIE DEAR LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 JULY 2023
- 3 -
The directors present their annual report and financial statements for the year ended 31 July 2023.
Principal activities
The principal activity of the company was that of a dispensing chemist in specialised stores.
Results and dividends
The results for the year are set out on page 8.
Ordinary dividends were paid amounting to £118,226. 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:
Mr B Dear
Mrs L Dear
Mr M Nickkho-Amiry
Auditor
Thomson Cooper 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:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the 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.
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.
BARRIE DEAR LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
- 4 -
On behalf of the board
Mr M Nickkho-Amiry
Director
2 October 2024
BARRIE DEAR LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF BARRIE DEAR LIMITED
- 5 -
We have audited the financial statements of Barrie Dear Limited (the 'company') for the year ended 31 July 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion, except for the effects of the matter described in the Basis for Qualified Opinion paragraph, the financial statements:
give a true and fair view of the state of the company's affairs as at 31 July 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 qualified opinion
During our course of the audit, we have been unable to verify and support the stock valuation and NHS sale accrual.
We have been unable to satisfy ourselves by alternative means regarding the valuation of stock and the completeness of income for the current year in respect of the above limitation. Consequently, we are unable to determine if any adjustment is required to the carrying value of stock or satisfy ourselves over the completeness of NHS sale accrual.
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 qualified opinion.
Material uncertainty relating to going concern
We draw attention to note 1.2 in the financial statements. As stated in this note, these events or conditions indicate that a material uncertainty exists that may cast significant doubt on the company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.
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.
As described in the Basis for qualified opinion section of our report, our audit opinion is qualified in respect to the stock and NHS sales accrual balance.
BARRIE DEAR LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF BARRIE DEAR LIMITED (CONTINUED)
- 6 -
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In respect solely of the limitation on our work relating to stock and accrued NHS Sales, described above:
we have not obtained all the information and explanations that we considered necessary for the purpose of our audit; and
we were unable to determine whether adequate accounting records had been maintained.
Except for the matter described in the Basis for qualified section of our report, in the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of 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.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Extent to which the audit was capable of detecting irregularities, including fraud
We considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following areas: existence and timing of recognition of income, posting of unusual journals along with complex transactions and manipulating the company’s key performance indicators to meet targets. We discussed these risks with management, designed audit procedures to test the timing and existence of revenue, tested a sample of journals to confirm they were appropriate and reviewed areas of judgement for indicators of management bias to address these risks.
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our sector experience through discussion with the officers and other management (as required by the auditing standards).
BARRIE DEAR LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF BARRIE DEAR LIMITED (CONTINUED)
- 7 -
We reviewed the laws and regulations in areas that directly affect the financial statements including financial and taxation legislation and considered the extent of compliance with those laws and regulations as part of our procedures on the related financial statement items.
With the exception of any known or possible non-compliance with relevant and significant laws and regulations, and as required by the auditing standards, our work in respect of these was limited to enquiry of the officers and management of the company.
We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit.
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. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.
These inherent limitations are particularly significant in the case of misstatement resulting from fraud as this may involve sophisticated schemes designed to avoid detection, including deliberate failure to record transactions, collusion or the provision of intentional misrepresentations.
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.
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.
Alan Mitchell (Senior Statutory Auditor)
For and on behalf of Thomson Cooper, Statutory Auditors
Dunfermline
2 October 2024
BARRIE DEAR LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 JULY 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
21,474,798
17,671,534
Cost of sales
(11,884,083)
(9,819,446)
Gross profit
9,590,715
7,852,088
Administrative expenses
(7,438,417)
(5,795,434)
Other operating income
200
9,923
Operating profit
4
2,152,498
2,066,577
Interest receivable and similar income
7
1,472
Interest payable and similar expenses
8
(1,241,046)
(1,073,512)
Profit before taxation
912,924
993,065
Tax on profit
9
(188,269)
(718)
Profit for the financial year
724,655
992,347
The profit and loss account has been prepared on the basis that all operations are continuing operations.
BARRIE DEAR LIMITED
BALANCE SHEET
AS AT 31 JULY 2023
31 July 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Goodwill
11
10,525,674
11,316,232
Tangible assets
12
1,648,120
1,533,406
12,173,794
12,849,638
Current assets
Stocks
13
2,406,833
2,092,656
Debtors
14
7,345,970
2,005,783
Cash at bank and in hand
593,718
1,138,549
10,346,521
5,236,988
Creditors: amounts falling due within one year
15
(6,785,575)
(2,475,721)
Net current assets
3,560,946
2,761,267
Total assets less current liabilities
15,734,740
15,610,905
Creditors: amounts falling due after more than one year
16
(11,278,329)
(11,748,313)
Provisions for liabilities
Deferred tax liability
19
192,434
205,044
(192,434)
(205,044)
Net assets
4,263,977
3,657,548
Capital and reserves
Called up share capital
21
2
2
Profit and loss reserves
4,263,975
3,657,546
Total equity
4,263,977
3,657,548
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 2 October 2024 and are signed on its behalf by:
Mr B Dear
Mr M Nickkho-Amiry
Director
Director
Company registration number SC424013 (Scotland)
BARRIE DEAR LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JULY 2023
- 10 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 August 2021
2
2,839,069
2,839,071
Year ended 31 July 2022:
Profit and total comprehensive income
-
992,347
992,347
Dividends
10
-
(173,870)
(173,870)
Balance at 31 July 2022
2
3,657,546
3,657,548
Year ended 31 July 2023:
Profit and total comprehensive income
-
724,655
724,655
Dividends
10
-
(118,226)
(118,226)
Balance at 31 July 2023
2
4,263,975
4,263,977
BARRIE DEAR LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 JULY 2023
- 11 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash (absorbed by)/generated from operations
25
(571,821)
2,573,298
Interest paid
(1,241,046)
(1,073,512)
Income taxes refunded
225,094
Net cash (outflow)/inflow from operating activities
(1,587,773)
1,499,786
Investing activities
Proceeds from disposal of intangibles
25,000
Purchase of tangible fixed assets
(389,609)
(804,245)
Proceeds from disposal of tangible fixed assets
11,308
Interest received
1,472
Net cash used in investing activities
(388,137)
(767,937)
Financing activities
Repayment of borrowings
(623,469)
(120,613)
Repaymnt of directors loan
(183,357)
-
New bank loans
2,167,987
New finance leases obligations
188,144
(36,223)
Dividends paid
(118,226)
(173,870)
Net cash generated from/(used in) financing activities
1,431,079
(330,706)
Net (decrease)/increase in cash and cash equivalents
(544,831)
401,143
Cash and cash equivalents at beginning of year
1,138,549
737,406
Cash and cash equivalents at end of year
593,718
1,138,549
BARRIE DEAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2023
- 12 -
1
Accounting policies
Company information
Barrie Dear Limited is a private company limited by shares incorporated in Scotland. The registered office is Norwood, 3 Beech Road, Lenzie, G66 4HN.
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.
1.2
Going concern
The company reports a pre-tax profit in the year of £912,924 (2022 - £993,065), and has net current assets of £3.6m (2022 - £2.8m). Excluding the shareholders' loans, the company has net assets of £12.5m.true
As described in note 21, during the year a fellow subsidiary company has committed to acquire a number of retail pharmacy units for which a non-refundable deposit of £2.2m has been paid. The directors are currently in negotiations with funders to agree support for this transaction.
The current and future cash position of the company has been reviewed by the directors. This included a comprehensive review of the financial projections and cash-flow requirements covering a period of more than twelve months from the date of approval of the financial statements. The projections, which have been prepared based upon the outcome of funding support for the above transaction, make key assumptions around:
• ongoing liquidity risks associated with growth in business turnover and delays relating to receipts from the NHS
• control of payroll costs
• non-repayment of shareholder loan accounts of £8,248,122 for a period of at least twelve months from the date of approval of the financial statements
• the continued support of the company's creditors
• successful financing of new retail acquisitions noted above.
The directors have considered the implications for cash flow if the appropriate funding is not secured and the resultant loss of the deposit of £2.2m.
The directors acknowledge that the company's liquidity position is reliant on the above key assumptions and without this a material uncertainty would exist which may cast doubt over the company's ability to continue as a going concern.
After due consideration of the above, including the potential impact of key assumptions not materialising, the directors are satisfied that the company has adequate resources to continue in operational existence for a period of not less than twelve months from the date of approval of the financial statements. Accordingly, the directors consider it appropriate to prepare the financial statements on the going concern basis.
1.3
Turnover
Turnover represents amounts receivable for pharmaceutical and other goods and services, net of VAT.
BARRIE DEAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
1
Accounting policies
(Continued)
- 13 -
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.
1.4
Intangible fixed assets - goodwill
Acquired goodwill is written off in equal annual instalments over its estimated useful economic life of twenty years.
1.5
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.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Freehold property
10% straight line
Leasehold improvements
10% straight line
Plant and machinery
15% reducing balance
Fixtures, fittings & equipment
15% reducing balance
Motor vehicles
25% reducing balance
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.6
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
1.7
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.8
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.
BARRIE DEAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
1
Accounting policies
(Continued)
- 14 -
1.9
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 balance sheet 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. Financial assets classified as receivable within one year are not amortised.
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.
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.
BARRIE DEAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
1
Accounting policies
(Continued)
- 15 -
Basic financial liabilities
Basic financial liabilities, including creditors or bank loans, 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. Financial liabilities classified as payable within one year are not amortised.
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.
1.10
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.
1.11
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 profit and loss account 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.
BARRIE DEAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
1
Accounting policies
(Continued)
- 16 -
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 profit and loss account, 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.
1.12
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.14
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
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.
1.15
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
BARRIE DEAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
1
Accounting policies
(Continued)
- 17 -
1.16
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
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.
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.
Goodwill
The company established a reliable estimate of the useful economic life of goodwill arising on conversion of the partnership to a limited company. This estimate is based on a number of factors such as the expected use of the acquired business. This is regularly reviewed to ensure it is still deemed appropriate.
Stock
The Company have established an estimate of the stock valuation based on the lower of cost and net realisable value and taking account of the stock obsolescence.
NHS Sales
The Company has estimated the NHS sales accrual at year end, The estimate is based on the NHS receipts received and is deemed to be appropriate.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2023
2022
£
£
Turnover analysed by class of business
General Sales
1,924,423
2,524,270
NHS Sales
19,550,375
15,147,264
21,474,798
17,671,534
BARRIE DEAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
3
Turnover and other revenue
(Continued)
- 18 -
2023
2022
£
£
Other revenue
Interest income
1,472
-
Grants received
-
9,723
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Government grants
-
(9,723)
Fees payable to the company's auditor for the audit of the company's financial statements
31,725
8,500
Depreciation of owned tangible fixed assets
202,609
158,054
Depreciation of tangible fixed assets held under finance leases
72,286
18,854
Profit on disposal of tangible fixed assets
-
(5,965)
Amortisation of intangible assets
790,558
790,558
Operating lease charges
24,450
9,016
5
Employees
The average monthly number of persons employed by the company during the year was:
2023
2022
Number
Number
Pharmaceutical and support staff
217
177
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
4,302,268
3,363,682
Social security costs
305,555
225,183
Pension costs
72,169
53,426
4,679,992
3,642,291
The key management personnel are the directors.
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
39,573
BARRIE DEAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
- 19 -
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
1,472
2023
2022
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
1,472
8
Interest payable and similar expenses
2023
2022
£
£
Other finance costs:
Interest on finance leases and hire purchase contracts
15,071
4,501
Other interest
1,225,975
1,069,011
1,241,046
1,073,512
Other interest represents interest payable on group and directors' loans.
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
362,461
287,032
Adjustments in respect of prior periods
(161,582)
(407,064)
Total current tax
200,879
(120,032)
Deferred tax
Origination and reversal of timing differences
(12,610)
70,660
Changes in tax rates
50,090
Total deferred tax
(12,610)
120,750
Total tax charge
188,269
718
BARRIE DEAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
9
Taxation
(Continued)
- 20 -
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
912,924
993,065
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2022: 19.00%)
228,231
188,682
Tax effect of expenses that are not deductible in determining taxable profit
45,500
11,929
Adjustments in respect of prior years
(161,582)
(407,064)
Effect of change in corporation tax rate
(68,928)
Group relief
(3,339)
Permanent capital allowances in excess of depreciation
(39,982)
(60,446)
Amortisation on assets not qualifying for tax allowances
197,640
150,206
Deferred tax
(12,610)
120,750
Taxation charge for the year
188,269
718
The adjustment in respect of prior years relates to research and development tax credit claims.
10
Dividends
2023
2022
£
£
Final paid
118,226
173,870
11
Intangible fixed assets
Goodwill
£
Cost
At 1 August 2022 and 31 July 2023
15,692,335
Amortisation and impairment
At 1 August 2022
4,376,103
Amortisation charged for the year
790,558
At 31 July 2023
5,166,661
Carrying amount
At 31 July 2023
10,525,674
At 31 July 2022
11,316,232
BARRIE DEAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
- 21 -
12
Tangible fixed assets
Freehold property
Leasehold improvements
Plant and machinery
Fixtures, fittings & equipment
Computer equipment
Motor vehicles
Total
£
£
£
£
£
£
£
Cost
At 1 August 2022
517,096
563,845
361,965
514,604
49,191
151,948
2,158,649
Additions
4,600
207,540
3,784
18,031
155,654
389,609
At 31 July 2023
517,096
568,445
569,505
518,388
67,222
307,602
2,548,258
Depreciation and impairment
At 1 August 2022
72,507
105,092
98,028
283,677
65,939
625,243
Depreciation charged in the year
51,710
56,845
70,721
35,207
60,412
274,895
At 31 July 2023
124,217
161,937
168,749
318,884
126,351
900,138
Carrying amount
At 31 July 2023
392,879
406,508
400,756
199,504
67,222
181,251
1,648,120
At 31 July 2022
444,589
458,753
263,937
230,927
49,191
86,009
1,533,406
BARRIE DEAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
12
Tangible fixed assets
(Continued)
- 22 -
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2023
2022
£
£
Fixtures, fittings & equipment
217,292
106,838
Motor vehicles
101,819
319,111
106,838
All assets of the company are subject to a floating charge held by the holding company's bank. The company is not allowed to pledge these assets as security for any other borrowings.
13
Stocks
2023
2022
£
£
Finished goods and goods for resale
2,406,833
2,092,656
14
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
3,718,157
1,476,091
Corporation tax recoverable
164,918
235,165
Other debtors
3,408,355
235,584
Prepayments and accrued income
54,540
58,943
7,345,970
2,005,783
Included in other debtors is a non-refundable deposit paid of £2.2m in respect of the acquisition of a number of retail pharmacy units by a fellow subsidiary company.
15
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans
17
2,167,987
Obligations under finance leases
18
75,384
40,725
Trade creditors
3,435,007
2,020,620
Corporation tax
642,758
287,032
Other taxation and social security
329,097
73,341
Other creditors
14,418
15,771
Accruals and deferred income
120,924
38,232
6,785,575
2,475,721
BARRIE DEAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
- 23 -
16
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Obligations under finance leases
18
166,996
13,511
Other borrowings
17
11,111,333
11,734,802
11,278,329
11,748,313
17
Loans and overdrafts
2023
2022
£
£
Bank loans
2,167,987
Loans from group undertakings
8,248,122
9,032,198
Other loans
2,863,211
2,702,604
13,279,320
11,734,802
Payable within one year
2,167,987
Payable after one year
11,111,333
11,734,802
Further details in respect of other loans are provided in note 23.
18
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
75,384
40,725
In two to five years
166,996
13,511
242,380
54,236
Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 5 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
BARRIE DEAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
- 24 -
19
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
192,434
205,044
2023
Movements in the year:
£
Liability at 1 August 2022
205,044
Credit to profit or loss
(12,610)
Liability at 31 July 2023
192,434
The deferred tax liability set out above is expected to reverse within 36 months and relates to accelerated capital allowances that are expected to mature within the same period.
20
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
72,169
53,426
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.
21
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
2
2
2
2
22
Capital commitments
Amounts contracted for but not provided in the financial statements:
2023
2022
£
£
Acquisition of tangible fixed assets
-
151,300
BARRIE DEAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
- 25 -
23
Related party transactions
Trade debtors includes £nil (2022 - £22,994) in respect of the sums due from entities in which a director holds an interest.
Included in other debtor is £684,152 (2022 - £36,098) due from companies in which a director holds an interest. Also included in other debtors is a directors loan in the name of the director Mahyar Nickkho-Amiry in the amount of £183,357 (2022 - £(9,971).
The company paid rent of £53,000 (2022 - £53,000) to an entity in which a director holds an interest.
Included in creditors due within one year is £nil (2022 - £5,800) due to a company in which a director holds an interest.
Included within creditors due after one year are directors' loans in the name of the director Barrie Dear in the amount of £1,431,606 (2022 - £1,351,302) and the director Lesley Dear in the amount of £1,431,605 (2022 - £1,351,302).
In accordance with section 33.1A of FRS 102, the company is not required to make disclosure of transactions between members of the group.
24
Ultimate controlling party
The ultimate controlling party is Scotpharm (MNA) Ltd, a company registered in Scotland (SC567980). Scotpharm (MNA) Ltd is controlled by Mr M Nickkho-Amiry by virtue of his own and his family's shareholding in the company. The registered office of Scotpharm (MNA) Ltd is Norwood, 3 Beech Road, Lenzie, G66 4HN.
25
Cash (absorbed by)/generated from operations
2023
2022
£
£
Profit for the year after tax
724,655
992,347
Adjustments for:
Taxation charged
188,269
718
Finance costs
1,241,046
1,073,512
Investment income
(1,472)
Gain on disposal of tangible fixed assets
-
(5,965)
Amortisation and impairment of intangible assets
790,558
790,558
Depreciation and impairment of tangible fixed assets
274,895
176,908
Movements in working capital:
Increase in stocks
(314,177)
(871,370)
Increase in debtors
(5,227,077)
(9,337)
Increase in creditors
1,751,482
425,927
Cash (absorbed by)/generated from operations
(571,821)
2,573,298
BARRIE DEAR LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
- 26 -
26
Analysis of changes in net debt
1 August 2022
Cash flows
31 July 2023
£
£
£
Cash at bank and in hand
1,138,549
(544,831)
593,718
Borrowings excluding overdrafts
(11,734,802)
(1,544,518)
(13,279,320)
Obligations under finance leases
(54,236)
(188,144)
(242,380)
(10,650,489)
(2,277,493)
(12,927,982)
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