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COMPANY REGISTRATION NUMBER: 08481191
Smartway Pharmaceuticals Limited
Financial Statements
31 March 2024
Smartway Pharmaceuticals Limited
Financial Statements
Year ended 31 March 2024
Contents
Page
Strategic report
1
Directors' report
7
Independent auditor's report to the members
9
Statement of comprehensive income
13
Statement of financial position
14
Statement of changes in equity
15
Notes to the financial statements
16
Smartway Pharmaceuticals Limited
Strategic Report
Year ended 31 March 2024
The directors present their strategic report for the year ended 31st March 2024. Principal activities Smartway Pharmaceuticals Limited (the "Company") is an established supplier of pharmaceutical and medicinal products to the healthcare sector across the globe. The Company operates principally from its premises in South Wimbledon, London. Throughout this financial reporting period, the Company continued to supply medicinal and pharmaceutical products and medical devices to the healthcare and pharmaceutical sector, including to pharmacies, GP surgeries, hospitals, clinics, dental practices, overseas public and private hospitals, healthcare authorities, ministries of health, pharmaceutical wholesalers and non-governmental organisations.
Review of business The board consider the results for this year to be broadly in line with its expectation, having reported and recited in prior years (y/e March 2022) that "growth will be seen for the forthcoming financial year". That remained true for 2023 and the growth has been seen for year ending 31 March 2024. The board monitor the progress of the Company and the implementation of its strategy by reference to key performance indicators which are set and reviewed by the board. These factors are further analysed in this report. The indicators used include revenue, gross profit and operating margin. In addition, soft indicators are built around matters of importance to the Company, such as regulatory compliance, sustainability, credit management and brand awareness. In addition, the Company are excited about its current work on meeting Net Zero. The Company is well advanced in respect of the targets it wishes to set, how it will achieve them and how they will be measured. It is expected that this will make a regular appearance in forthcoming statutory accounts. The factors that have an impact on the business are broadly the same as in prior years, but include: - The pharmaceutical distribution market is extremely competitive. - The cost and risks of compliance and regulation are increasing year on year. - We continue to fund considerable expenditure upfront to fund stock acquisition. - We are continuing to see stock write offs due to the complicated nature of the distribution network. - Credit risk is becoming more prevalent in many of the markets that we serve. - The loss of valuable markets because of the withdrawal from the European Union. Notwithstanding the above factors, there is a continued commitment and delivery of strategic objectives, most of which are long-term investments. These are designed to ameliorate those risks. The success of these long-term investments is already being seen. The board are committed to supporting this process. More and more business has been generated via other companies associated with the Company, including our offices globally. Where appropriate, that income has been appropriately allocated towards those offices.
Future developments Last year, it was reported that "the board have identified several strategic investments that „ includes capitalising on the existing customer base, pursuing entry to new markets and a significant investment in new personnel, as well as an acquisition strategy and strategic partnerships". This strategy has proven to be effective and the board continue to be highly focused on this agenda, particularly in leveraging its data to inform decisions. Whilst they remain at a relatively early stage, these investments will culminate in the Company diversifying into other areas within the pharmaceutical and health space and provide resilience against those challenging periods that have been seen in prior years across the industry. The Company have seen success in generating relationships with new partners or expanding on existing relationships. This has seen the Company continue to deliver mission critical services to the aid, aviation and maritime sectors, through to carrying out specialist access programmes for new medicines The Company will continue to work in partnership with trusted, ethical and reliable partners. It is expected that as the Company drive forward its Net Zero plans that sustainability will be a new factor to to consider in assessing suitability. To generate new relationships, the Company has engaged in market research activity to ascertain the nature and type of products that do and do not do well, the reasons why and across which customer segment and country. This has led to us proactively engaging with customers across different segments across a larger range of products including those that the Company routinely deal in, and products that it does not routinely deal in, to ascertain and/or establish a market for them. This has provided valuable insights, particularly in segments of the market that are not often thought of. At great cost to the Company, discounts have been and are continuing to be offered to customers with the intention of firstly, generating new customer relationships and secondly, to obtain these valuable insights which are shaping and refining our offering, including identifying products that may present new sourcing opportunities. The Company has put considerable expense in brand awareness and marketing throughout the globe. The Company are taking greater steps to ensure it is visible in the market, having historically been passive with marketing efforts. During this year, the Company has attended industry events across the world, it has finessed its website and external media to ensure clarity of its offering and it has made greater use of direct marketing. It has also made greater use of the data that it holds to influence its offering, which has been helpful in identifying opportunities for further imports into the UK. In addition, senior managers are regularly attending meetings and events with key stakeholders, including regulators, government agencies and industry/trade organisations. The sum of all these efforts is greater turnover in the UK. The Company is committed to demonstrating to the market that it is a global, dynamic player with an exceptionally strong procurement network spread across the globe. The Company has invested significant time and resources in pursuing an import strategy, to bring products into the UK, from places such as Europe. It also has imported from other countries with strong regulatory regimes, including Australia, Japan and the United States. This has enabled licensed product competition. Last year, it was reported that "Patient safety, regulatory compliance and quality is something the Company remain a laser focused on". This remains the case. The Company has been increasing its spend in each and every year to ensure that it excels in its effective management of regulatory affairs. It has received excellent feedback for its innovations in this area. The Company is incurring significant costs in research and development spend on its regulatory and automation technology (RegTech) to ensure it can remain at the forefront in this area, with a host of new developments rolled out throughout the financial year. The Company has continued to use its technology in this area to root out risks to patient safety and will continue to collaborate with regulators and enforcement agencies throughout the globe, including proactively, to enhance patient safety. In addition, the Company have been focussed on winding down activity that comes with inherent risk. That has led to the termination of partnerships, the discontinuation of certain products or similar steps, intended to remove that risk. This has allowed the Company to ensure that it only delivers projects that are meaningful. For as long as the Company has existed, it has generally remained free of bank debt, preferring to finance its activities from its balance sheet. This has given a competitive edge to the Company especially in an environment where interest rates are increasing and generally, finance costs are more expensive. However, with the future activities that are proposed the board will continue to review whether there are benefits to taking bank debt, particularly with its increased spend on research and development for its RegTech projects and its commercial activities, such as its focus on the growing import activity.
Key performance indicators (KPls) The management monitors the company's progress in implementing its strategy by reference to a suite of key performance indicators. Progress in the period pertaining to financial KPIs are as follows:- - Revenue for the year increased by 21.02% from £146,196,341 to £176,911,388; - Gross profit for the year increased by 38.47% from £15,003,903 to £20,776,370; - Operating profit for the year by 4.78% from £9,352,612 to £9,822,226. This suggest that the strategy adopted and reported on in earlier years is working.
Principle risk and uncertainties The management of the business and the execution of the Company's strategy are subject to several key risks. Risks are regularly reviewed by the board and appropriate processes are put in place to monitor and mitigate them. Competition Competition is extremely tight. This is made tighter still because the Company often finds that it is competing with those who have lower regulatory and quality standards and thus, lower costs of fulfilling orders. In most cases, the supply and distribution of medicinal products is won and lost on pricing alone. This has been demonstrated in year by the significant discounts offered, which are helping generate new relationships. The Company continue to make efforts to mitigate this by investing in in RegTech, such as automation and other technology, particularly in respect of our regulatory functions. Credit risk Business can be won and lost on the ability of the Company to grant credit whilst meeting up-front payments to its manufacturers and other suppliers based across the globe. The ability to do this has allowed the Company to win business where others have not been able to do so - i.e. because they're not able to pay up front, which is vital in an environment where credit risk continues to subsist. The availability of credit insurance is substantially limited, owing to shocks in the industry - with other competitors having fallen into insolvency. The Company anticipates greater credit risk in the future and is acutely aware of the risks it carries in granting credit or making advance payments, especially outside of the United Kingdom. The Company does have a corresponding increase in its exposure to litigation, which it has regrettable had to commence against various parties, but with great effect. The Company makes payment in a variety of different currencies, which brings with it possible risk. Increased costs and the supply chain disruption The cost of moving and manufacturing goods is continuing to increase, but they are necessary to fulfil our business model. In addition, the greater volume of orders mean that it is necessary to have computer systems that can manage the volume and supported by employees. The Company have deployed more resources, including night shifts, to ensure it is able to meet demand. The Company is also procuring a greater amount of goods from the European Union, to ensure the continued needs of UK patients are met. The increased amount of import activity from the EU, as well as other markets, is often to ensure that the Company can respond to medicines demand in the markets that it serves. However, importing products from the European Union and other countries brings with it greater costs, not just in logistics, but in managing the regulatory issues that go with it.
Credit risk Business can be won and lost on the ability of the Company to grant credit whilst meeting up-front payments to manufacturers and other suppliers. The ability to do this has allowed the Company to win business where others have not been able to do so - i.e. because they're not able to pay up front, which is vital in an environment where credit risk continues to subsist. The availability of credit insurance is substantially limited, owing to significant shocks in the industry - with other competitors having fallen into insolvency. The Company anticipates greater credit risk in the future and is acutely aware of the risks it carries in granting credit or making advance payments, especially outside of the United Kingdom. As a result, the Company do have a corresponding increase in its exposure to litigation, which it has commenced against various parties with great effect. Increased costs and the supply chain disruption The cost of moving and manufacturing goods is increasing. These direct costs and the costs associated with fulfilling our business model have increased significantly. In addition, the greater volume of orders mean that it is necessary to have IT systems that are capable of managing the volume and supported by employees. The Company have deployed more resources, including night shifts, to ensure it is able to meet demand. The Company is also procuring a greater amount of goods from the European Union than in prior years, to ensure the continued needs of UK patients are met. The increased amount of import activity from the EU, as well as other markets, is often to ensure that the Company can respond to medicines shortages in the United Kingdom.
People Without the very best people, it would be challenging to service the current customer base or explore new opportunities. To attract and retain talent, the Company must provide competitive salary, benefits and working environments; this also means adapting our processes to ensure that the move to remote working can be supported. There has been an increase in operating costs to meet this and it is anticipated that these costs will continue to grow, partly to retain talented staff and partly to attract new talent. The Company will continue to ensure that appropriate resources are made available, whilst trying to mitigate the impact of escalating payroll/operating costs through sensible investment in processes, technology and automation.
Regulatory, legal and compliance risk The Company operates in what is probably the most highly regulated space and thus it is rightly subject to strict domestic law throughout the UK. Because of the globally diverse nature of its business, it is necessary to keep up to date with frequently changing requirements. Compliance comes at a cost to the Company. Overall, this is a benefit but it does present other issues, because we are aware that others in the supply chain do not always adhere to the same standards, often giving them a competitive edge over the Company in respect of pricing or transportation arrangements. The Company invest substantial resources into regulatory compliance, including in developing its RegTech projects and will continue to invest in cutting edge RegTech to help protect the supply chain and maintain our high standards. The Company also adopt for its regulatory affairs team, a set of Quality Objectives which are embedded across the business. Those objectives are regularly assessed throughout the year to review whether they are being met.
Geo-political instability For the second year, the Company are formally reporting on geo-political instability. In the past few years alone, there has been unprecedented insecurity across the globe - from pandemics to war and across to natural disasters. Each of these are threats alone, but cumulatively, they can have the impact of causing significant risk to the Company.
The General outlook The outlook continues to be challenging for the Company however, there is increased confidence by the board that the decisions made in earlier years are proving to be effective in driving the key performance indicators. The increased profitability will continue to allow the Company to make key investment decisions, to help fund the growth of the Company and delivery against its strategic objectives. It will also allow the Company the opportunity to make meaningful strides towards achieving its sustainability and Net Zero ambitions, meet its regulatory targets and above all, deliver an important service to its global customer base and their patients. The board are reasonably confident that the Company can mitigate the threats to its business model by continuing to focus on growing in new markets, acquisitions, exploitation of commercial opportunities and investing in internal processes to reduce the costs of its activities.
This report was approved by the board of directors on 20 January 2025 and signed on behalf of the board by:
Mr H Patel
Director
Registered office:
The Old Mill
9 Soar Lane
Leicester
LE3 5DE
Smartway Pharmaceuticals Limited
Directors' Report
Year ended 31 March 2024
The directors present their report and the financial statements of the company for the year ended 31 March 2024 .
Directors
The directors who served the company during the year were as follows:
Mrs K Patel
Mr H Patel
Mr D Patel
Dividends
Particulars of recommended dividends are detailed in note 12 to the financial statements.
Future developments
The Director expects the turnover to be at similar to current levels in the coming year with an increase in the overall profitability of the company.
Greenhouse gas emissions and energy consumption
Information not included
- The company consumed 40,000kWh of energy or less in the UK during the period
Directors' responsibilities statement
The directors are responsible for preparing the strategic report, directors' report and the financial statements in accordance with applicable law and regulations. Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and the profit or loss of the company for that period. In preparing these financial statements, the directors are required to: - select suitable accounting policies and then apply them consistently; - make judgments and accounting estimates that are reasonable and prudent; - state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; - prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. Auditor
Each of the persons who is a director at the date of approval of this report confirms that:
- so far as they are aware, there is no relevant audit information of which the company's auditor is unaware; and - they have taken all steps that they ought to have taken as a director to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information.
This report was approved by the board of directors on 20 January 2025 and signed on behalf of the board by:
Mr H Patel
Director
Registered office:
The Old Mill
9 Soar Lane
Leicester
LE3 5DE
Smartway Pharmaceuticals Limited
Independent Auditor's Report to the Members of Smartway Pharmaceuticals Limited
Year ended 31 March 2024
Opinion
We have audited the financial statements of Smartway Pharmaceuticals Limited (the 'company') for the year ended 31 March 2024 which comprise the statement of comprehensive income, statement of financial position, statement of changes in equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice). In our opinion the financial statements: - give a true and fair view of the state of the company's affairs as at 31 March 2024 and of its profit for the year then ended; - have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; - have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
- the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
- the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report. We have nothing to report in respect of the following matters 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; or - we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: - Enquiry of management with regard to actual and potential fraud and non-compliance with laws and regulations; - Reviewing legal correspondence and correspondence with licencing bodies with regard to potential fraud and non compliance with lawss and regulations; - Understanding and evaluating the company's internal controls; - Testing of journal entries that were deemed unusual; - Assessing financial statement disclosures, and testing to supporting documentation, for compliance with applicable laws and regulations. There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in financial statements. Also, 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 or intentional misrepresentation or through collusion. As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. We also: - Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. - Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control. - Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. - Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the company to cease to continue as a going concern. - Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. 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.
Mark Illingsworth
(Senior Statutory Auditor)
For and on behalf of
Versant Associates LLP
Chartered accountants & statutory auditor
The Old Mill,
9 Soar Lane
Leicester
LE3 5DE
21 January 2025
Smartway Pharmaceuticals Limited
Statement of Comprehensive Income
Year ended 31 March 2024
2024
2023
Note
£
£
Turnover
4
176,911,388
146,196,341
Cost of sales
156,135,018
131,192,438
--------------
--------------
Gross profit
20,776,370
15,003,903
Administrative expenses
11,029,144
5,651,291
Other operating income
5
75,000
-------------
-------------
Operating profit
6
9,822,226
9,352,612
Other interest receivable and similar income
10
58,037
18,925
-------------
-------------
Profit before taxation
9,880,263
9,371,537
Tax on profit
11
1,857,777
1,760,332
------------
------------
Profit for the financial year and total comprehensive income
8,022,486
7,611,205
------------
------------
All the activities of the company are from continuing operations.
Smartway Pharmaceuticals Limited
Statement of Financial Position
31 March 2024
2024
2023
Note
£
£
£
Fixed assets
Intangible assets
13
281,325
414,650
Tangible assets
14
649,176
446,954
---------
---------
930,501
861,604
Current assets
Stocks
15
19,326,614
18,581,283
Debtors
16
40,004,575
41,360,934
Cash at bank and in hand
2,368,275
3,783,544
-------------
-------------
61,699,464
63,725,761
Creditors: amounts falling due within one year
17
50,640,514
47,061,608
-------------
-------------
Net current assets
11,058,950
16,664,153
-------------
-------------
Total assets less current liabilities
11,989,451
17,525,757
Creditors: amounts falling due after more than one year
18
36,778
45,577
-------------
-------------
Net assets
11,952,673
17,480,180
-------------
-------------
Capital and reserves
Called up share capital
22
118
111
Profit and loss account
23
11,952,555
17,480,069
-------------
-------------
Shareholders funds
11,952,673
17,480,180
-------------
-------------
These financial statements were approved by the board of directors and authorised for issue on 20 January 2025 , and are signed on behalf of the board by:
Mr H Patel
Director
Company registration number: 08481191
Smartway Pharmaceuticals Limited
Statement of Changes in Equity
Year ended 31 March 2024
Called up share capital
Profit and loss account
Total
£
£
£
At 1 April 2022
111
39,898,864
39,898,975
Profit for the year
7,611,205
7,611,205
----
-------------
-------------
Total comprehensive income for the year
7,611,205
7,611,205
Dividends paid and payable
12
( 30,030,000)
( 30,030,000)
----
-------------
-------------
Total investments by and distributions to owners
( 30,030,000)
( 30,030,000)
At 31 March 2023
111
17,480,069
17,480,180
Profit for the year
8,022,486
8,022,486
----
-------------
-------------
Total comprehensive income for the year
8,022,486
8,022,486
Issue of shares
7
7
Dividends paid and payable
12
( 13,550,000)
( 13,550,000)
----
-------------
-------------
Total investments by and distributions to owners
7
( 13,550,000)
( 13,549,993)
----
-------------
-------------
At 31 March 2024
118
11,952,555
11,952,673
----
-------------
-------------
Smartway Pharmaceuticals Limited
Notes to the Financial Statements
Year ended 31 March 2024
1. General information
The company is a private company limited by shares, registered in England and Wales. The address of the registered office is The Old Mill, 9 Soar Lane, Leicester, LE3 5DE.
2. Statement of compliance
These financial statements have been prepared in compliance with FRS 102, 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland'.
3. Accounting policies
Basis of preparation
The financial statements have been prepared on the historical cost basis, as modified by the revaluation of certain financial assets and liabilities and investment properties measured at fair value through profit or loss.
The financial statements are prepared in sterling, which is the functional currency of the entity.
Disclosure exemptions
The entity satisfies the criteria of being a qualifying entity as defined in FRS 102. Its financial statements are consolidated into the financial statements of Smartway PW Holdings Limited which can be obtained from the Companies House. As such, advantage has been taken of the following disclosure exemptions available under paragraph 1.12 of FRS 102: No cash flow statement has been presented for the company. Disclosures in respect of financial instruments have not been presented. No disclosure has been given for the aggregate remuneration of key management personnel.
Related party transactions
The group has taken advantage of the exemption contained within FRS 102 and has therefore not disclosed transactions or balances with entities which form part of the group.
Judgements and key sources of estimation uncertainty
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Significant judgements The judgements (apart from those involving estimations) that management has made in the process of applying the entity's accounting policies and that have the most significant effect on the amounts recognised in the financial statements are as follows: The directors have made a significant bad debt write off during the year, and although there is a possibility of recovering some or all of this, it is considered very unlikely. Key sources of estimation uncertainty Accounting estimates and assumptions are made concerning the future and, by their nature, will rarely equal the related actual outcome. The key assumptions and other sources of estimation uncertainty that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are as follows: There are no significant accounting estimates made that have a material effect on the financial statements.
Revenue recognition
Turnover is measured at the consideration received or receivable and represents amounts receivable for goods supplied, stated net of discounts and of Value Added Tax. Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have transferred to the buyer, usually on despatch of the goods, the amount of revenue can be measured reliably, it is probable that the associated economic benefits will flow to the entity, and the costs incurred or to be incurred in respect of the transactions can be measured reliably.
Income tax
The taxation expense represents the aggregate amount of current and deferred tax recognised in the reporting period. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, tax is recognised in other comprehensive income or directly in equity, respectively. Current tax is recognised on taxable profit for the current and past periods. Current tax is measured at the amounts of tax expected to pay or recover using the tax rates and laws that have been enacted or substantively enacted at the reporting date.
Foreign currencies
Foreign currency transactions are initially recorded in the functional currency, by applying the spot exchange rate as at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the exchange rate ruling at the reporting date, with any gains or losses being taken to the profit and loss account.
Intangible assets
Intangible assets are initially recorded at cost, and are subsequently stated at cost less any accumulated amortisation and impairment losses. Any intangible assets carried at revalued amounts, are recorded at the fair value at the date of revaluation, as determined by reference to an active market, less any subsequent accumulated amortisation and subsequent accumulated impairment losses.
Amortisation
Amortisation is calculated so as to write off the cost of an asset, less its estimated residual value, over the useful life of that asset as follows:
Software development
-
20% straight line
If there is an indication that there has been a significant change in amortisation rate, useful life or residual value of an intangible asset, the amortisation is revised prospectively to reflect the new estimates.
Tangible assets
Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and impairment losses. Any tangible assets carried at revalued amounts are recorded at the fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses.
Depreciation
Depreciation is calculated so as to write off the cost or valuation of an asset, less its residual value, over the useful economic life of that asset as follows:
Leasehold property
-
10% reducing balance
Plant and machinery
-
20% reducing balance
Fixtures and fittings
-
15% reducing balance
Motor vehicles
-
20% straight line
Equipment
-
25% reducing balance
Stocks
Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell. Cost includes all costs of purchase, costs of conversion and other costs incurred in bringing the stock to its present location and condition.
Defined contribution plans
Contributions to defined contribution plans are recognised as an expense in the period in which the related service is provided. Prepaid contributions are recognised as an asset to the extent that the prepayment will lead to a reduction in future payments or a cash refund.
4. Turnover
Turnover arises from:
2024
2023
£
£
Sale of goods
176,911,388
146,196,341
--------------
--------------
The turnover and profit before tax are attributable to the one principal activity of the company.
An analysis of turnover is given below:
2024 2023
£ £
Domestic Sales 154,768,053 133,049,441
OverseasSales 22,143,335 13,146,890
5. Other operating income
2024
2023
£
£
Management charges receivable
75,000
--------
----
6. Operating profit
Operating profit or loss is stated after charging/crediting:
2024
2023
£
£
Amortisation of intangible assets
133,325
133,325
Depreciation of tangible assets
135,131
84,711
Impairment of trade debtors
4,726,975
631,610
Foreign exchange differences
116,984
( 147,404)
------------
---------
7. Auditor's remuneration
2024
2023
£
£
Fees payable for the audit of the financial statements
39,000
32,500
--------
--------
Fees payable to the company's auditor and its associates for other services:
Taxation compliance services
1,000
1,000
--------
--------
8. Staff costs
The average number of persons employed by the company during the year, including the directors, amounted to:
2024
2023
No.
No.
Administrative staff
102
96
Management staff
1
1
----
----
103
97
----
----
The aggregate payroll costs incurred during the year, relating to the above, were:
2024
2023
£
£
Wages and salaries
3,612,150
3,066,701
Social security costs
371,592
318,716
Other pension costs
240,556
41,409
------------
------------
4,224,298
3,426,826
------------
------------
9. Directors' remuneration
The directors' aggregate remuneration in respect of qualifying services was:
2024
2023
£
£
Company contributions to defined contribution pension plans
140,000
---------
----
10. Other interest receivable and similar income
2024
2023
£
£
Other interest receivable and similar income
58,037
18,925
--------
--------
11. Tax on profit
Major components of tax expense
2024
2023
£
£
Current tax:
UK current tax expense
1,911,390
1,760,332
Adjustments in respect of prior periods
( 53,613)
------------
------------
Total current tax
1,857,777
1,760,332
------------
------------
------------
------------
Tax on profit
1,857,777
1,760,332
------------
------------
Reconciliation of tax expense
The tax assessed on the profit on ordinary activities for the year is lower than (2023: lower than) the standard rate of corporation tax in the UK of 25 % (2023: 19 %).
2024
2023
£
£
Profit on ordinary activities before taxation
9,880,263
9,371,537
------------
------------
Profit on ordinary activities by rate of tax
2,470,066
1,780,592
Adjustment to tax charge in respect of prior periods
( 53,613)
Effect of expenses not deductible for tax purposes
2,479
2,724
Effect of capital allowances and depreciation
( 9,548)
( 22,676)
Utilisation of tax losses
( 551,607)
( 308)
------------
------------
Tax on profit
1,857,777
1,760,332
------------
------------
12. Dividends
2024
2023
£
£
Dividends paid during the year (excluding those for which a liability existed at the end of the prior year )
13,530,000
30,030,000
-------------
-------------
13. Intangible assets
Software development
£
Cost
At 1 April 2023 and 31 March 2024
666,625
---------
Amortisation
At 1 April 2023
251,975
Charge for the year
133,325
---------
At 31 March 2024
385,300
---------
Carrying amount
At 31 March 2024
281,325
---------
At 31 March 2023
414,650
---------
14. Tangible assets
Land and buildings
Plant and machinery
Fixtures and fittings
Motor vehicles
Equipment
Total
£
£
£
£
£
£
Cost
At 1 Apr 2023
352,915
58,096
75,083
211,911
152,522
850,527
Additions
89,117
18,799
2,967
213,852
12,618
337,353
---------
--------
--------
---------
---------
------------
At 31 Mar 2024
442,032
76,895
78,050
425,763
165,140
1,187,880
---------
--------
--------
---------
---------
------------
Depreciation
At 1 Apr 2023
133,019
47,762
42,209
69,669
110,914
403,573
Charge for the year
30,901
5,826
5,376
81,808
11,220
135,131
---------
--------
--------
---------
---------
------------
At 31 Mar 2024
163,920
53,588
47,585
151,477
122,134
538,704
---------
--------
--------
---------
---------
------------
Carrying amount
At 31 Mar 2024
278,112
23,307
30,465
274,286
43,006
649,176
---------
--------
--------
---------
---------
------------
At 31 Mar 2023
219,896
10,334
32,874
142,242
41,608
446,954
---------
--------
--------
---------
---------
------------
Land and buildings relates to short leasehold
15. Stocks
2024
2023
£
£
Finished goods and goods for resale
19,326,614
18,581,283
-------------
-------------
16. Debtors
2024
2023
£
£
Trade debtors
36,283,594
38,481,649
Prepayments and accrued income
311,332
152,040
Corporation tax repayable
1,364,560
461,254
Other debtors
2,045,089
2,265,991
-------------
-------------
40,004,575
41,360,934
-------------
-------------
17. Creditors: amounts falling due within one year
2024
2023
£
£
Trade creditors
5,366,480
5,387,664
Amounts owed to group undertakings
45,085,525
37,638,786
Accruals and deferred income
131,300
3,518,736
Social security and other taxes
452,653
Obligations under finance leases and hire purchase contracts
9,599
9,599
Other creditors
47,610
54,170
-------------
-------------
50,640,514
47,061,608
-------------
-------------
18. Creditors: amounts falling due after more than one year
2024
2023
£
£
Obligations under finance leases and hire purchase contracts
36,778
45,577
--------
--------
19. Finance leases and hire purchase contracts
The total future minimum lease payments under finance leases and hire purchase contracts are as follows:
2024
2023
£
£
Not later than 1 year
9,599
9,599
Later than 1 year and not later than 5 years
36,778
45,577
--------
--------
46,377
55,176
--------
--------
20. Employee benefits
Defined contribution plans
The amount recognised in profit or loss as an expense in relation to defined contribution plans was £ 240,556 (2023: £ 41,409 ).
21. Financial risk management objectives and policies
The company holds or issues financial instruments in order to achieve three main objectives, being: (a) to finance its operations; (b) to manage its exposure to interest and currency risks arising from its operations and from its sources of finance; and (c) for trading purposes. In addition, various financial instruments (e.g. trade debtors, trade creditors, accruals and prepayments) arise directly from the company's operations. Transactions in financial instruments result in the company assuming or transferring to another party one or more of the financial risks described below. The company believes that its current regime of managing its liabilities minimises its exposure to interest rate risk. The company monitors credit risk closely and considers that its current policies of credit checks meets its objectives of managing exposure to credit risk. The company has no significant concentrations of credit risk. Amounts shown in the balance sheet best represent the maximum credit risk exposure in the event other parties fail to perform their obligations under financial instruments. The company manages liquidity risk closely and considers that its current cash flow management meets its objectives of managing exposure to liquidity risk. The company closely monitors its exposure to currency risk and considers that its current methods of trade do not expose it to significant currency risk.
Hedge accounting
The company does not undertake any hedging activities.
22. Called up share capital
Issued, called up and fully paid
2024
2023
No.
£
No.
£
Ordinary A shares of £ 0.01 (2023 - £ 1) each
10,000
100
100
100
Ordinary B shares of £ 0.01 (2023 - £ 1) each
1,100
11
11
11
Ordinary C shares of £ 0.01 each
710
7
--------
----
----
----
11,810
118
111
111
--------
----
----
----
23. Reserves
Profit and loss account - This reserve records retained earnings.
24. Directors' advances, credits and guarantees
During the year the directors entered into the following advances and credits with the company:
2024
Balance brought forward
Advances/ (credits) to the directors
Amounts repaid
Balance outstanding
£
£
£
£
Mr D Patel
516,359
246,011
( 350,000)
412,370
---------
---------
---------
---------
2023
Balance brought forward
Advances/ (credits) to the directors
Amounts repaid
Balance outstanding
£
£
£
£
Mr D Patel
516,359
516,359
---------
----
----
---------
25. Controlling party
Throughout the period the company's immediate and ultimate parent company is Smartway PW Holdings Limited which was incorporated in the United Kingdom.