Company registration number 02347386 (England and Wales)
CEM ANALYTICAL SERVICES LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
CEM ANALYTICAL SERVICES LIMITED
COMPANY INFORMATION
Directors
Mr N W Rawle
Mr G Apps
Mr R G Eustace
Mr P S J Jutsum
Mr G E Langridge
Ms M E Ridley
Mr E L V J Jaffre
(Appointed 16 May 2023)
Secretary
Mr R L H Long
Company number
02347386
Registered office
Imperial House
Oaklands Business Centre
Oaklands Park
Wokingham
Berkshire
RG41 2FD
Auditor
Kirk Rice LLP
The Courtyard
High Street
Ascot
Berkshire
SL5 7HP
CEM ANALYTICAL SERVICES LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Independent auditor's report
4 - 6
Statement of comprehensive income
7
Balance sheet
8
Statement of changes in equity
9
Statement of cash flows
10
Notes to the financial statements
11 - 24
CEM ANALYTICAL SERVICES LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 JANUARY 2024
- 1 -
The directors present the strategic report for the year ended 31 January 2024.
Review of the business
CEMAS is composed of three analytical groups; agrochemical residues; agrochemical and biocide products; and pharmaceutical related, in descending order of size. The latter two groups grew their revenues year-on-year, and are currently well placed to grow their revenues. Agrochemical residues revenue declined against the previous year, and is likely to be flat at best during the current year due to weakness in European agrochemical demand causing sponsors to reduce their research and development spending. Overall these factors combined to cause the company to make a loss for the financial year.
Principal risks and uncertainties
The principal risk is that the level of analytical studies placed by sponsors will decline. CEMAS has competed for analytical studies against much larger analytical groups for many years, however a prolonged period of weakness in the European agrochemical market would likely translate to a decline in the number of outsourced residue studies, where CEMAS has a significant market share.
Development and performance
CEMAS made several strides during the year to develop and make more resilient its business. On the development side an important digitalisation project was completed which enables compliant (to good laboratory practice) end-to-end study digital working. On the resilience side a handful of staff were made redundant, reflecting; the decline in agrochemical residue analysis; and efficiencies from the digitalisation project.
Key performance indicators
Not relevant to CEMAS outside the financial statements.
Mr R G Eustace
Director
22 October 2024
CEM ANALYTICAL SERVICES LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 JANUARY 2024
- 2 -
The directors present their annual report and financial statements for the year ended 31 January 2024.
Principal activities
The principal activity of the company continued to be that of the provision of analytical services for the pharmaceutical, agrochemical and biocides industries.
Results and dividends
The results for the year are set out on page 7.
Ordinary dividends were paid amounting to £172,000. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr N W Rawle
Mr G Apps
Mr R G Eustace
Mr P S J Jutsum
Mr G E Langridge
Ms M E Ridley
Mr E L V J Jaffre
(Appointed 16 May 2023)
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.
CEM ANALYTICAL SERVICES LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 3 -
On behalf of the board
Mr R G Eustace
Director
22 October 2024
CEM ANALYTICAL SERVICES LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CEM ANALYTICAL SERVICES LIMITED
- 4 -
Opinion
We have audited the financial statements of CEM Analytical Services Limited (the 'company') for the year ended 31 January 2024 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 the financial statements:
give a true and fair view of the state of the company's affairs as at 31 January 2024 and of its loss 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.
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.
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:
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.
CEM ANALYTICAL SERVICES LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CEM ANALYTICAL SERVICES LIMITED
- 5 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of 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.
Our audit approach was developed by obtaining an understanding of the company’s activities, the key functions undertaken on behalf of the Board by management and by service organisations, and the overall control environment. Based on this understanding we assessed those aspects of the company’s transactions and balances which were most likely to give rise to a material misstatement and were most susceptible to irregularities including fraud or error. Specifically, we identified what we considered to be key audit risks and planned our audit approach accordingly.
We gained an understanding of the legal and regulatory framework applicable to the company and the industry in which it operates, and considered the risk of acts by the company which were contrary to applicable laws and regulations, including fraud. These included but were not limited to compliance with the Companies Act 2006, FRS 102, and regulations which affect the company’s services, namely Good Laboratory Practice, Good Clinical Practice and Good Manufacturing Processes.
We designed audit procedures to respond to the risk, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion.
CEM ANALYTICAL SERVICES LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CEM ANALYTICAL SERVICES LIMITED
- 6 -
We focused on laws and regulations that could give rise to a material misstatement in the company financial statements. Our tests included, but were not limited to:
- Agreement of the financial statements disclosures to underlying supporting documentation;
- Enquiries of management;
- Considering the effectiveness of control environment in monitoring compliance with laws and regulations.
- Reviewing audit certificates for compliance with the required industry practices.
There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. As in all of our audits we also addressed the risk of management override of internal controls, including testing journals and evaluating whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud.
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.
Other matters which we are required to address
The members did not require the company to obtain an audit of its financial statements for the prior year ended 31 January 2023, in accordance with section 476 of the Companies Act 2006 relating to small companies.
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.
Graham Jennings
Senior Statutory Auditor
For and on behalf of Kirk Rice LLP
22 October 2024
Statutory Auditor
The Courtyard
High Street
Ascot
Berkshire
SL5 7HP
CEM ANALYTICAL SERVICES LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 JANUARY 2024
- 7 -
2024
2023
as restated
Notes
£
£
Turnover
3
4,871,287
5,046,060
Cost of sales
(2,788,469)
(2,763,590)
Gross profit
2,082,818
2,282,470
Administrative expenses
(2,425,698)
(2,056,309)
Other operating income
68,309
126,754
Operating (loss)/profit
4
(274,571)
352,915
Interest receivable and similar income
8
3,886
442
Amounts written off investments
9
-
(50)
(Loss)/profit before taxation
(270,685)
353,307
Tax on (loss)/profit
10
14,647
(30,284)
(Loss)/profit for the financial year
(256,038)
323,023
The profit and loss account has been prepared on the basis that all operations are continuing operations.
CEM ANALYTICAL SERVICES LIMITED
BALANCE SHEET
AS AT 31 JANUARY 2024
31 January 2024
- 8 -
2024
2023
as restated
Notes
£
£
£
£
Fixed assets
Tangible assets
12
2,037,612
2,145,160
Current assets
Stocks
14
299,495
124,889
Debtors
15
1,776,413
954,397
Investments
16
750,000
Cash at bank and in hand
1,074,307
2,083,426
3,900,215
3,162,712
Creditors: amounts falling due within one year
17
(2,091,153)
(1,040,698)
Net current assets
1,809,062
2,122,014
Total assets less current liabilities
3,846,674
4,267,174
Provisions for liabilities
Deferred tax liability
18
21,311
13,773
(21,311)
(13,773)
Net assets
3,825,363
4,253,401
Capital and reserves
Called up share capital
20
1,150
1,150
Profit and loss reserves
3,824,213
4,252,251
Total equity
3,825,363
4,253,401
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 22 October 2024 and are signed on its behalf by:
Mr R G Eustace
Director
Company registration number 02347386 (England and Wales)
CEM ANALYTICAL SERVICES LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JANUARY 2024
- 9 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
As restated for the period ended 31 January 2023:
Balance at 1 February 2022
1,150
3,931,228
3,932,378
Prior year adjustment
-
40,000
40,000
As restated
1,150
3,971,228
3,972,378
Year ended 31 January 2023:
Profit and total comprehensive income
-
323,023
323,023
Dividends
11
-
(42,000)
(42,000)
Balance at 31 January 2023
1,150
4,252,251
4,253,401
Year ended 31 January 2024:
Loss and total comprehensive income
-
(256,038)
(256,038)
Dividends
11
-
(172,000)
(172,000)
Balance at 31 January 2024
1,150
3,824,213
3,825,363
CEM ANALYTICAL SERVICES LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 JANUARY 2024
- 10 -
2024
2023
as restated
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
22
25,307
329,223
Income taxes refunded/(paid)
5,450
(44,622)
Net cash inflow from operating activities
30,757
284,601
Investing activities
Purchase of tangible fixed assets
(121,762)
(232,756)
Purchase of short term investments
(750,000)
Interest received
3,886
442
Net cash used in investing activities
(867,876)
(232,314)
Financing activities
Dividends paid
(172,000)
(42,000)
Net cash used in financing activities
(172,000)
(42,000)
Net (decrease)/increase in cash and cash equivalents
(1,009,119)
10,287
Cash and cash equivalents at beginning of year
2,083,426
2,073,139
Cash and cash equivalents at end of year
1,074,307
2,083,426
CEM ANALYTICAL SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
- 11 -
1
Accounting policies
Company information
CEM Analytical Services Limited is a private company limited by shares incorporated in England and Wales. The registered office is Imperial House, Oaklands Business Centre, Oaklands Park, Wokingham, Berkshire, RG41 2FD.
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.
In the prior year, the company took advantage of the exemption under section 399 of the Companies Act 2006 not to prepare consolidated accounts, on the basis that the group of which this was the parent qualified as a small group. The financial statements present information about the company as an individual entity and not about the group it was a part of.
1.2
Going concern
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
Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates and value added tax.
For projects lasting over one month, where the full value has been invoiced at the commencement of the project, turnover is recognised as the project progresses.
For projects which are in between billing milestones, turnover is accrued on the stage of completion basis.
1.4
Research and development expenditure
Research and development expenditure is written off against profits in the year in which it is incurred.
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 land and buildings
1% straight line
Plant and equipment
over 6 years
Fixtures and fittings
over 6 years
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.
CEM ANALYTICAL SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
1
Accounting policies
(Continued)
- 12 -
1.6
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.
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.
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.
CEM ANALYTICAL SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
1
Accounting policies
(Continued)
- 13 -
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, bank loans, loans from fellow group companies and preference shares that are classified as debt, 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.
CEM ANALYTICAL SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
1
Accounting policies
(Continued)
- 14 -
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.
Deferred tax
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
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
1.15
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.
CEM ANALYTICAL SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 15 -
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.
3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by class of business
Agrochemical residues
2,750,934
3,298,062
Agrochemical and biocide products
1,266,358
1,071,739
Pharmaceutical related
825,028
669,935
Miscellaneous income
28,967
6,324
4,871,287
5,046,060
2024
2023
£
£
Turnover analysed by geographical market
United Kingdom
4,342,418
4,508,518
European Union
430,508
437,568
Rest of the World
98,361
99,974
4,871,287
5,046,060
2024
2023
£
£
Other revenue
Interest income
3,886
442
4
Operating (loss)/profit
2024
2023
Operating (loss)/profit for the year is stated after charging/(crediting):
£
£
Exchange gains
(923)
(7,201)
Research and development costs
126,006
116,591
Depreciation of owned tangible fixed assets
229,310
207,884
CEM ANALYTICAL SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 16 -
5
Auditor's remuneration
2024
2023
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
11,350
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Agrochemical residues
33
35
Agrochemical and biocide
15
14
Pharmaceutical
14
12
Administration
21
20
Total
83
81
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
2,758,159
2,584,827
Social security costs
278,192
282,561
Pension costs
146,555
136,225
3,182,907
3,003,613
7
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
335,536
370,971
Company pension contributions to defined contribution schemes
21,355
22,216
356,891
393,187
Remuneration disclosed above include the following amounts paid to the highest paid director:
2024
2023
£
£
Remuneration for qualifying services
73,143
74,390
Company pension contributions to defined contribution schemes
6,850
7,663
CEM ANALYTICAL SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 17 -
8
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
3,886
Other interest income
442
Total income
3,886
442
2024
2023
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
3,886
9
Amounts written off investments
2024
2023
£
£
Other gains and losses
-
(50)
10
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
(15,324)
(5,416)
Adjustments in respect of prior periods
(6,861)
Total current tax
(22,185)
(5,416)
Deferred tax
Origination and reversal of timing differences
7,538
35,700
Total tax (credit)/charge
(14,647)
30,284
CEM ANALYTICAL SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
10
Taxation
(Continued)
- 18 -
The actual (credit)/charge for the year can be reconciled to the expected (credit)/charge for the year based on the profit or loss and the standard rate of tax as follows:
2024
2023
£
£
(Loss)/profit before taxation
(270,685)
353,307
Expected tax (credit)/charge based on the standard rate of corporation tax in the UK of 24.00% (2023: 19.00%)
(64,964)
67,128
Tax effect of expenses that are not deductible in determining taxable profit
229
269
Unutilised tax losses carried forward
22,414
Adjustments in respect of prior years
(6,861)
Depreciation on assets not qualifying for tax allowances
2,760
3,135
Research and development tax credit
(11,393)
(2,536)
Deferred tax adjustments in respect of prior years
9,121
Losses carried back
34,975
(27,688)
Effect of different rates of deferred tax
(928)
(10,024)
Taxation (credit)/charge for the year
(14,647)
30,284
11
Dividends
2024
2023
£
£
Interim paid
172,000
42,000
CEM ANALYTICAL SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 19 -
12
Tangible fixed assets
Freehold land and buildings
Plant and equipment
Fixtures and fittings
Total
£
£
£
£
Cost
At 1 February 2023
1,650,000
3,341,960
1,014,091
6,006,051
Additions
121,762
121,762
At 31 January 2024
1,650,000
3,463,722
1,014,091
6,127,813
Depreciation and impairment
At 1 February 2023
103,500
2,776,380
981,011
3,860,891
Depreciation charged in the year
11,500
200,019
17,791
229,310
At 31 January 2024
115,000
2,976,399
998,802
4,090,201
Carrying amount
At 31 January 2024
1,535,000
487,323
15,289
2,037,612
At 31 January 2023
1,546,500
565,580
33,080
2,145,160
13
Financial instruments
2024
2023
£
£
Carrying amount of financial assets
Instruments measured at fair value through profit or loss
750,000
-
14
Stocks
2024
2023
£
£
Stocks of consumables
299,495
124,889
15
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
1,524,129
754,014
Corporation tax recoverable
22,151
5,416
Other debtors
230
2,344
Prepayments and accrued income
190,902
152,976
1,737,412
914,750
CEM ANALYTICAL SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
15
Debtors
(Continued)
- 20 -
2024
2023
Amounts falling due after more than one year:
£
£
Other debtors
39,001
39,647
Total debtors
1,776,413
954,397
16
Current asset investments
2024
2023
£
£
Fixed term bank deposit
750,000
17
Creditors: amounts falling due within one year
2024
2023
£
£
Trade creditors
216,909
194,735
Taxation and social security
412,556
294,968
Other creditors
39,931
41,125
Accruals and deferred income
1,421,757
509,870
2,091,153
1,040,698
18
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2024
2023
Balances:
£
£
Accelerated capital allowances
24,179
16,795
Unpaid pension contributions
(2,868)
(3,022)
21,311
13,773
CEM ANALYTICAL SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
18
Deferred taxation
(Continued)
- 21 -
2024
Movements in the year:
£
Liability at 1 February 2023
13,773
Charge to profit or loss
7,538
Liability at 31 January 2024
21,311
The deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances and unpaid pension contributions that are expected to mature within the same period.
Deferred tax is not recognised in respect of tax losses of £93,238 as it is not probable that they will be recovered against the reversal of deferred tax liabilities or future taxable profits.
19
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
140,889
131,021
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
20
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary A of £1 each
1,000
1,000
1,000
1,000
Ordinary B Non-Voting of £1 each
50
50
50
50
C Non-Voting of £1 each
100
100
100
100
1,150
1,150
1,150
1,150
21
Directors' transactions
Dividends totalling £50,000 (2023 - £0) were paid in the year in respect of shares held by the company's directors.
CEM ANALYTICAL SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 22 -
22
Cash generated from operations
2024
2023
£
£
(Loss)/profit for the year after tax
(256,038)
323,023
Adjustments for:
Taxation (credited)/charged
(14,647)
30,284
Investment income
(3,886)
(442)
Depreciation and impairment of tangible fixed assets
229,310
207,884
Other gains and losses
-
50
Movements in working capital:
(Increase)/decrease in stocks
(174,606)
5,368
Increase in debtors
(805,281)
(128,220)
Increase/(decrease) in creditors
1,050,455
(72,240)
Cash generated from operations
25,307
365,707
23
Analysis of changes in net funds
1 February 2023
Cash flows
31 January 2024
£
£
£
Cash at bank and in hand
2,083,426
(1,009,119)
1,074,307
24
Prior period adjustment
Changes to the balance sheet
As previously reported
Adjustment
As restated at 31 Jan 2023
£
£
£
Fixed assets
Tangible assets
2,063,676
81,484
2,145,160
Current assets
Debtors due within one year
859,936
94,461
954,397
Net assets
4,077,456
175,945
4,253,401
Capital and reserves
Profit and loss reserves
4,076,306
175,945
4,252,251
CEM ANALYTICAL SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
24
Prior period adjustment
(Continued)
- 23 -
Changes to the profit and loss account
As previously reported
Adjustment
As restated
Period ended 31 January 2023
£
£
£
Turnover
4,951,599
94,461
5,046,060
Administrative expenses
(2,097,793)
41,484
(2,056,309)
Profit for the financial period
187,078
135,945
323,023
Reconciliation of changes in equity
1 February
31 January
2022
2023
£
£
Adjustments to prior year
Reversal of depreciation charged on the land element of land and buildings
40,000
45,000
Corrections to tangible fixed assets brought forward cost and depreciation
-
36,484
Recognition of accrued income as at 31 January 2023 in respect of services performed but not invoiced
-
94,461
Total adjustments
40,000
175,945
Equity as previously reported
3,932,378
4,077,456
Equity as adjusted
3,972,378
4,253,401
Analysis of the effect upon equity
Profit and loss reserves
40,000
175,945
Reconciliation of changes in profit for the previous financial period
2023
£
Adjustments to prior year
Reversal of depreciation charged on the land element of land and buildings
5,000
Corrections to tangible fixed assets brought forward cost and depreciation
36,484
Recognition of accrued income as at 31 January 2023 in respect of services performed but not invoiced
94,461
Total adjustments
135,945
Profit as previously reported
187,078
Profit as adjusted
323,023
CEM ANALYTICAL SERVICES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
24
Prior period adjustment
(Continued)
- 24 -
Notes to reconciliation
Reversal of depreciation charged on the land element of land and buildings
The company has historically charged depreciation on its freehold land and buildings on a 1% straight line basis. Depreciation has historically been charged on the full value of the freehold land and buildings. The directors have realised that depreciation has been charged on the land element of the freehold land and buildings, and the directors have estimated the value of the land element of the freehold land and buildings. A prior year adjustment has been made to reverse the depreciation which has historically been charged on the land element of the freehold land and buildings.
Corrections to tangible fixed assets brought forward cost and depreciation
The directors have realised that there were material differences between the company's fixed assets register, and the brought forward cost and accumulated depreciation of fixed assets in the financial statements. Therefore, a prior year adjustment has been made to agree the brought forward cost and accumulated depreciation of fixed assets in the financial statements to the company's fixed assets register.
Recognition of accrued income as at 31 January 2023 in respect of services performed but not invoiced
The directors have performed an exercise to review the stage of completion of projects which were in between billing milestones as at 31 January 2024 and 31 January 2023. As a result of this exercise, accrued income of £94,042 has been recognised as at 31 January 2024, and a prior year adjustment has been made to recognise accrued income of £94,461 as at 31 January 2023.
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