The directors present the strategic report for the year ended 30 June 2024.
Our mission at Forsite, and Abingdon (the "Group"), is to improve life by making rapid tests accessible to all. We achieve this by supporting our customers, as an integrated lateral flow Contract Research Organisation (“CRO”) and Contract Development and Manufacturing Organisation (“CDMO”), in developing and manufacturing lateral flow tests across a range of sectors including human health, such as infectious disease testing, animal health, plant pathogen, food and environmental testing.
The rapid diagnostic market is forecast to be worth over $280 billion by 2033 growing at a cumulative annual growth rate (CAGR) of 20.8% between 2023 and 2033. The lateral flow segment is estimated to be the largest segment of the rapid testing market, accounting for 36% of the market in 2023 (Source: Precedence Research: 2024 Rapid Diagnostics Market report. This growth is being driven in part by reduced barriers to adoption for lateral flow technology (“LFT”) due to the widespread adoption of LFT during the COVID-19 pandemic. According to Statista, there were 1.15 billion and 0.5 billion COVID-19 lateral flow tests performed in the US and the UK respectively by December 2022. The vast majority of people have performed a lateral flow test and understand the technology. The second growth driver is innovation. We believe the COVID-19 pandemic has driven a second wave of innovation in the lateral flow market and this is driving greater possible use of the technology as the usability and performance of lateral flow technology improves. Further growth drivers include the expansion in infectious disease testing, growing use within chronic disease management, rising consumer interest and growth in home testing kits, integration of digital technologies and regulatory and reimbursement developments.
We remain committed to becoming a leading lateral flow CRO and CDMO. The CRO and CDMO business model, well-established in the pharmaceutical industry, has direct application to the medical diagnostics market, and our CRO/CDMO team have the capability to take a project from “idea to commercial success” with our contract services covering R&D, scale-up, technical transfer and manufacturing as well as added-value services such as reagent development, regulatory consultancy and clinical trial support, packaging design and kitting.
As a CRO/CDMO focused on lateral flow technology with a well-established track record of bringing products from “idea to market” we believe we are well-placed to support a broad range of customers across the clinical (point of care & self-test), pharmaceutical, animal health, food, plant pathogen and environmental testing markets. We believe our full-service contract service proposition strongly resonates with customers, and we look forward to continuing to support our customers in bringing their innovative tests to market.
We would like to thank all our employees for their hard work, dedication and commitment during the past year as we continued to grow our revenues. We are confident that our contract services customer base and our current growing pipeline means we are well positioned to grow our business and deliver shareholder value going forward. We would like to thank shareholders for their support.
The Company believes it has no current requirement for additional funding. We believe we have sufficient cash resources within the Group to fund progress beyond 12 months from the signing date of the accounts, with our priority continuing to be moving the Company to a positive cashflow position. The Group’s cash resources were strengthened by the completion of a fundraising in August 2025 which raised net proceeds of £5.1m.
We are pleased to report continued revenue growth in the year ended 30 June 2024 and an improving cashflow and EBITDA performance, particularly in the second half of the financial year.
In the year, revenue rose to £5.85m (2023: £3.9m). We were pleased to report EBITDA of £0.9m which excluded a gain on settlement of £0.4m on the write-back of machinery, (2023: EBITDA loss £(0.4)m).
The principal risks and uncertainties of the group are considered to be:
Funding risk
Regulatory approval
Revenue growth
Key employees
Supply chain
Information technology and IT integration
Cyber IT security
Group structure
Product recall
Economic and political factors
These risks and the group's response to them are outlined in Abingdon Health plc's Strategic report in more details.
On behalf of the board
The directors present their annual report and financial statements for the year ended 30 June 2024.
The results for the year are set out on page 9.
No ordinary dividends were paid (2023 - £nil). The directors do not recommend payment of a final dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Going concern
The Directors have prepared cash flow forecasts under a number of scenarios, including plausible downside scenarios, for the foreseeable future, being a period of at least 12 months from the expected date of approval of the financial statements and continue to evaluate financial forecasts. The models are underpinned by a high percentage of forecast revenues up to December 2025 being based on committed milestone-based contracts. The Group continues to focus on partnering with other Companies to develop products for manufacture and transition these in a timely manner and securing sales of existing and new products through its websites and distribution channels. At 30 June 2024 the group cash bank balance was £1.4m. Cash burn on a monthly basis continues to reduce. Post-year end, in August 2024 the business completed a fundraise which raised gross proceeds of £5.6m (net proceeds of £5.1m).
Existing facilities provided by the company’s parent, Abingdon Health plc, will provide sufficient funds to continue at their current level for a minimum of 12 months from the date of the approval of these financial statements. There is a binding letter of support in place to evidence this.
In accordance with the company's articles, a resolution proposing that BDO LLP be reappointed as auditor of the company will be put at a General Meeting.
Basis for opinion
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report.
Other information
The Directors are responsible for the other information. The other information comprises the information included in the Annual report and financial statements, other than the financial statements and our auditor’s report thereon. 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.
Other Companies Act 2006 reporting
In our opinion, based on the work undertaken in the course of the audit:
the information given in the Strategic report and the Directors’ report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the Strategic report and the Directors’ report have been prepared in accordance with applicable legal requirements.
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 Directors’ remuneration specified by law are not made; and
we have not received all the information and explanations we require for our audit.
Non-compliance with laws and regulations
Based on our understanding of the Company and the industry in which it operates; discussion with management and those charged with governance; and obtaining an understanding of the Company’s policies and procedures regarding compliance with laws and regulations; we identified that the principal risks of non-compliance with laws and regulations related to the reporting framework, FRS 101, UK tax legislation and the UK Companies Act 2006 and we have considered the extent to which non-compliance might have a direct impact and material effect on the Company’s Financial Statements on its continued operation.
Auditor's responsibility for the audit of the financial statements (continued)
Non-compliance with laws and regulations (continued)
Our procedures in respect of the above included:
Discussions with management including those charged with governance, inquiring specifically as to whether there were any known or suspected instances of non-compliance with laws and regulations;
Review of minutes of meetings of those charged with governance for any instances of non-compliance with laws and regulations;
Review of financial statement disclosures and agreeing to supporting documentation;
Involvement of tax specialists in the audit; and
Review of legal expenditure accounts to understand the nature of expenditure incurred.
Fraud
We assessed the susceptibility of the financial statements to material misstatement, including fraud. Our risk assessment procedures included:
Enquiry with management and those charged with governance regarding any known or suspected instances of fraud;
Obtaining an understanding of the Company’s policies and procedures relating to:
o Detecting and responding to the risks of fraud; and
o Internal controls established to mitigate risks related to fraud.
Review of minutes of meeting of those charged with governance for any known or suspected instances of fraud;
Discussion amongst the engagement team as to how and where fraud might occur in the financial statements; and
Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud; and
Considering remuneration incentive schemes and performance targets and the related financial statement areas impacted by these.
Based on our risk assessment, we considered the areas most susceptible to fraud to be management override of controls through journal postings.
Our procedures in respect of the above included:
Testing a sample of journal entries throughout the year, which met a defined risk criteria, by agreeing to supporting documentation;
Testing a random sample of journal entries from the residual population to ensure our risk criteria had been defined correctly; and
Challenging assumptions made by management in their significant accounting estimates and judgements.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members who were all deemed to have appropriate competence and capabilities and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
Our audit procedures were designed to respond to risks of material misstatement in the financial statements, 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. There are inherent limitations in the audit procedures performed 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 are to become aware of it.
A further description of our responsibilities is available on the Financial Reporting Council’s website at:
https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Use of our report
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
The statement of comprehensive income has been prepared on the basis that all operations are continuing operations.
The notes on pages 12 to 29 form part of these financial statements.
The notes on pages 12 to 29 form part of these financial statements.
The notes on pages 12 to 29 form part of these financial statements.
Forsite Diagnostics Limited is a private company limited by shares incorporated in England and Wales. The registered office is York Biotech Campus, Sand Hutton, York, YO41 1LZ. The company's principal activity is developing and manufacturing lateral flow devices for the diagnostics sector.
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 £1.
This company is a qualifying entity for the purposes of FRS 101, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
the requirements of IFRS 7 Financial Instruments: Disclosure, on the grounds that equivalent disclosures for financial instruments are presented in the group accounts of Abingdon Health Plc;
the requirements of IAS 7 Statement of Cash Flows to present a statement of cash flows;
the requirements of IAS 24 Related Party Disclosures to disclose related party transactions and balances between two or more members of a group;
the requirements of paragraphs 62, B64(d), B64(e), B64(g), B64(h), B64(j) to B64(m), B64(n)(ii), B64(o)(ii), B64(q)(ii), B66 and 367 of IFRS 3 ' Business Combinations ', for which equivalent disclosures are included in the group accounts of Abingdon Health Plc;
the requirement in paragraph 38 of IAS 1 ' Presentation of Financial Statements ' to present comparative information in respect of:
(i) paragraph 79 (a)(iv) of IAS 1;
(ii) paragraph 73 (e) of IAS 16 ' Property , Plant and Equipment '; and
(iii) paragraph 118 (e) of IAS 38 ' Intangible Assets '.
the requirements of paragraphs 10 (d) , 10(f) , 39 (c) and 134-136 of IAS 1 ' Presentation of Financial Statements; and
the requirements of ' paragraphs 134(d)-134 (f) and 135 (c)-35(e) of IAS 36 ' Impairment of Assets
Where required, equivalent disclosures are given in the group accounts of Abingdon Health Plc. The group accounts of Abingdon Health Plc are available to the public and can be obtained as set out in note 27.
Product sales and contract manufacturing
Goods are supplied under contracts where the key performance criteria for the company are the manufacturing and delivery of the products. The fair value of the revenue, being the price per unit net of volume discounts and sales taxes, are recognised as revenue at the point of transfer of control to the customer, which is typically on dispatch from the company’s premises. Product sales include a range of rights to return, which are accrued as appropriate where expected to be utilised by the customer.
Contract development
Contract Development services typically represent a rate for a period of work with demonstrable milestones. Where milestones are met, these will typically trigger an additional stage of work, or alternatively will become a stop point for the contract. This milestone is the risk of the end customer. The company therefore breaks down these milestone payments and recognises revenue over time based on a proportion of completion basis, using its judgement as to the stage of completion of the contract through to the point of completion of that milestone.
Although Contract Development services typically cover a period of several weeks or months, the pricing of this is typically set on a day rate as opposed to any milestone or percentage of completion approach. As such, the performance obligations are considered to be availability of staff to fulfil each day’s work, as opposed to the overall contract qualifying as a long-term contract.
Revenues are therefore recognised at a point in time on the day that each unit of contract development is provided, or the day that a member of staff have been utilised, at the day rate agreed on that particular contract. Where contracts include significant uncertainties as to the technical feasibility of outcome, the revenue recognition is deferred until such time as the company has reasonable certainty as to the likely success of the development work. As the contracts typically involve the transfer of knowledge, and as any intellectual property created is owned by the customer, the Directors do not consider that there is any deferred element to the provision of staff.
Contract development (continued)
A contract liability does, however, arise where services are invoiced in advance of performance, or where a customer makes payment in advance of an invoice being raised and work being performed. The amount is released to the profit or loss in subsequent periods in reference to utilisation of staff at the prevailing day rate. A contract receivable arises where services are performed, and a sales invoice is not raised before the reporting period end.
Regulatory
Regulatory services provides customers with support in meeting compliance requirements in international IVD and medical device markets. The Group therefore recognises revenue over time as the service is provided.
Intangible assets are initially measured at cost. Where intangible assets are acquired as part of a business combination, cost is determined by reference to a fair value estimation technique as disclosed further in note 2. After initial recognition, intangible assets are recognised at cost less any accumulated amortisation and any accumulated impairment losses.
The depreciable amount of an intangible asset with a finite useful life is allocated on a systematic basis over its useful life. Amortisation begins when the asset is available for use, i.e. when it is in the location and condition necessary for it to be capable of operating in the manner intended by management. Amortisation is charged to administrative expenses in the Consolidated Statement of Comprehensive Income.
The amortisation period and the amortisation method for intangible assets with a finite useful life is reviewed each financial period-end. If the expected useful life of the asset is different from previous estimates, the amortisation period is changed accordingly. Useful lives are typically amortised on the following basis:
Intellectual property 10 - 25% straight line
Research expenditure is written off against profits in the year in which it is incurred. Development costs incurred on specific projects are capitalised when all the following conditions are satisfied:
completion of the intangible asset is technically feasible so that it will be available for use or sale;
the Group intends to complete the intangible asset and use or sell it;
the Group has the ability to use or sell the intangible asset;
the intangible asset will generate probable future economic benefits. Among other things, this requires that there is a market for the output from the intangible asset or for the intangible asset itself, or, if it is to be used internally, the asset will be used in generating such benefits;
there are adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and
the expenditure attributable to the intangible asset during its development can be measured reliably.
Development costs not meeting the criteria for capitalisation detailed above are expensed as incurred.
The cost of an internally generated intangible asset comprises all directly attributable costs necessary to create, produce and prepare the asset to be capable of operating in the manner intended by management. Directly attributable costs include employee (other than directors) costs incurred on development and directly attributable overheads. The costs of internally generated software developments are recognised as intangible assets.
Capitalised development costs are amortised over a period which is usually no more than five years. Amortisation commences once an asset is available for use, in line with IAS38.
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:
The residual value and the useful life of an asset are reviewed at least at each financial period-end and if expectations differ from previous estimates, the changes are accounted for prospectively.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the income statement.
Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment annually, and whenever there is an indication that the asset may be impaired.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity.
The company recognises financial debt when the company becomes a party to the contractual provisions of the instruments. Financial liabilities are classified as either 'financial liabilities at fair value through profit or loss' or 'other financial liabilities'.
Other financial liabilities, including borrowings, trade payables and other short-term monetary liabilities, are initially measured at fair value net of transaction costs directly attributable to the issuance of the financial liability. They are subsequently measured at amortised cost using the effective interest method.
For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding.
Financial liabilities are derecognised when, and only when, the company’s obligations are discharged, cancelled, or they expire.
Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
Share capital represents the nominal value of shares that have been issued. Share premium represents the excess consideration received over share capital upon the sale of shares, less any incidental costs of issue.
Retained losses include all current and prior period retained losses.
The capital contribution reserve relates to the company's share of the fair value expense imposed on the company in respect of options granted over the equity shares of the company's parent Abingdon Health Plc.
The tax expense represents the sum of the tax currently payable and deferred tax.
Under IFRS 16, leases are accounted for on the right of use model. At inception, the Company assesses whether a contract contains a lease. This assessment involved the exercise of judgement about whether the Company obtains substantially all the economic benefits from the use of that asset, and whether the Company has the right to direct the use of the asset.
The company identifies a lease as follows:
At inception of a contact the company assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset the Group assesses whether:
the contract involves the sole use of a specific identified asset – this may be specified explicitly or implicitly and should be physically distinct or represent substantially all of the capacity of a physically distinct asset. If the supplier has a substantive substitution right, then the asset is not identified;
the Group has the right to obtain substantially all of the economic benefits from use of the asset throughout the period of use; and
the Group has the right to direct the use of the asset.
As a lessee the company recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability. The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are unpaid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the company's incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise fixed payments, variable lease payments that depend on an index or a rate, amounts expected to be payable under a residual value guarantee, and the cost of any options that the company is reasonably certain to exercise, such as the exercise price under a purchase option, lease payments in an optional renewal period, or penalties for early termination of a lease.
The lessee uses its incremental borrowing rate as the discount rate. Lease payments included in the measurement of the lease liability comprise fixed payments. The company does not make other types of payment referred to in IFRS 16 for its leases.
Generally, the lease liability represents the present value of contractual future lease payments including optional renewal periods where the company is reasonably certain to exercise the extension option. The Group does not typically enter into purchase options or variable lease payments.
The lease liability is measured at amortised cost using the effective interest method. The company presents right-of-use assets that do not meet the definition of investment property in ‘Property, plant and equipment’ and discloses the corresponding “Lease liability” in the statement of financial position. The company has elected not to recognise right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less and leases of low-value assets which it defines as having a purchase cost of £5,000. The company recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term.
Research and development expenditure credits
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, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are outlined below.
The accounts are prepared on the going concern basis, despite significant level of retained losses. Further explanation of this judgement is provided in note 1.2.
In line with IFRS 15 management are required to determine appropriate revenue recognition points for all revenue streams. Where multiple contracts are entered into with a single counterparty any instalment payments are not considered to be a key indicator of the satisfaction of a performance obligation, although linked contracts with a counterparty are considered in conjunction when identifying the appropriate point for revenue recognition. Disclosure of the key assumptions and judgements on this is provided in note 1.3.
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:
The company converts raw materials to finished goods. Stock values include any costs such as labour and overheads attributable to generating finished goods, as management believe this is the most suitable costing method to take into account the matching concept of accounting.
In addition, the company provides against the cost of inventories where the value of the inventory is considered to be irrecoverable, either through demand or through expiration. Details of the current inventory provision is provided in note 15.
The average monthly number of persons (including directors) employed by the company during the year was:
Their aggregate remuneration comprised:
The directors of the company are remunerated through the parent company, Abingdon Health Plc.
In the current and prior years the company's audit fee has been borne by its parent, Abingdon Health Plc.
The credit for the year can be reconciled to the profit/(loss) per the income statement as follows:
The UK corporation tax rate rose from 19% to 25% on 1 April 2023. The tax rate shown in the prior year of 20.5% is a composite figure and reflects that two different rates were applied during the year.
Deferred tax balances at the reporting date continue to be measured at 25% (2023 - 25%).
A gain on settlement of £360,534 was recognised in the current year relating to machinery that was fully impaired being replaced by the supplier. During the year, credit notes were received from the supplier on machinery that had already been fully impaired.
Included within plant & machinery are assets under construction with value £nil (2023 - £29,262). The assets are not depreciated until brought into use.
Inventories comprise of products, which are not generally subject to rapid obsolescence on account of technological, deterioration in condition or market trends. Consequently, management considers that there is little risk of significant adjustments to the company’s inventory assets within the next financial year.
The company has recognised a total provision of £391,466 (2023 - £835,977) against its inventories. An expense has been recognised in the year relating to new impairments of £61,514 (2023 - £158,027).
Expected credit losses for the following 12 months have been estimated in accordance with IFRS 9 'Financial Instruments'. The current year expected credit losses have been adjusted to reflect credit risks outstanding at the current reporting period date. The expected credit loss provision as at 30 June 2024 is £14,406 (2023: £21,665). This has been determined by reference to past default experience and known issues. Write offs are made when the irrecoverable amount becomes certain. The Directors consider that the carrying amount of trade and other receivables approximates to their fair value.
Contract assets have been calculated in accordance with IFRS 15 'Revenue from Contracts with Customers'.
Amounts owed by parent undertakings of £127,700 have been presented as a net liability against amounts owed to parent undertakings in note 18 due to similar terms, following an assessment of the recoverability of amounts receiveable. Amounts owed by fellow group undertakings of £44,379 have been provided for in full in the current year following an assessment of their recoverability given they are due from loss making entities within the Group. See note 5.
The interest rate on the loan with Abingdon Health Plc, the company's ultimate parent, is 8% per annum.
At present, the Directors have no formal terms over the timing of the loan, and as such the loan has been presented as due within one year.
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon during the current and prior reporting period.
The company has estimated tax losses of £13,400,000 (2023 - £14,100,000) which have not been recognised as a deferred tax asset due to uncertainty over the timing and extent of the company's ability to utilise these against future taxable profits. If a deferred tax asset was recognised in full in respect of this, the company's net liabilities would increase by approximately £3,525,000 (2023 - £3,610,000).
Deferred revenue is calculated in accordance with IFRS 15 'Revenue from Contracts with Customers'. The amount of deferred revenues relating to the prior year has been fully released in the current financial year.
The company has recognised the following expense in the year in respect of share-based payments:
The fair value expense relates to options granted to employees of the company but are for issue of shares in Abingdon Health Plc, the company's immediate and ultimate parent; accordingly the company has taken advantage of the disclosure exemptions under FRS 101 not to present this information.
The determination of the fair values of the EMI options and SAYE scheme options have been made by reference to the Black-Scholes model. The expense recognised in the prior year associated with these options is adjusted to reflect the anticipated staff attrition rates over the life of each scheme.
The capital contribution reserve relates to the company's share of the fair value expense imposed on the company in respect of options granted over the equity shares of the company's parent Abingdon Health Plc. Amounts transferred from the reserve into retained profits represent the forfeit of share options that will not vest.
Share capital represents the nominal value of shares that have been issued.
Share premium represents the excess consideration received over share capital upon the sale of shares, less any incidental costs of issue.
Retained losses include all current and prior period retained losses.
Capital contribution reserve relates to the fair value of options recognised as an expense, which are settled on the Company's behalf by its parent, Abingdon Health plc.
The company has taken advantage of the disclosure exemptions conferred by FRS 101 to not disclose related party transactions and balances where relevant group companies are all wholly owned by the group headed by Abingdon Health Plc. Details of the outstanding balances at the year end are given in notes 16 and 18.