Company Registration No. 04416704 (England and Wales)
12/14 PHARMACY LTD
FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31 DECEMBER 2023
20 Commerce Road
Lynch Wood
Peterborough
Cambridgeshire
England
PE2 6LR
12/14 PHARMACY LTD
CONTENTS
Page
Company information
1
Strategic report
2
Directors' report
3 - 4
Independent auditor's report
5 - 9
Statement of comprehensive income
10
Balance sheet
11 - 12
Statement of changes in equity
13
Statement of cash flows
14
Notes to the financial statements
15 - 30
12/14 PHARMACY LTD
COMPANY INFORMATION
- 1 -
Directors
Mrs Z Damani
Dr M J Jessa
Dr S Walji
Secretary
Mrs Z Damani
Company number
04416704
Registered office
20 Commerce Road
Lynch Wood
Peterborough
Cambridgeshire
England
PE2 6LR
Auditor
TC Group
20 Commerce Road
Lynch Wood
Peterborough
Cambridgeshire
England
PE2 6LR
12/14 PHARMACY LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -

The directors present the strategic report for the year ended 31 December 2023.

Fair review of the business

This year has seen some growth in the business activities of 12-14 Pharmacy Ltd. The effects of the Covid epidemic have been mild this year. It has been a settled year with few disruptions.

Principal risks and uncertainties

The risks we faced this year were price increases due to Brexit, covid related recruitment issues. We expect the average price of pharmacist recruitment to remain high and the drug price rises to become more volatile, affecting a larger range of products. An election is due also which may see a change in government that would have far reaching effects on the healthcare sector. These cannot be predicted as new policies are often a complete surprise.

Price risk, credit risk, liquidity risk and cash flow risk

The business’ principal financial instruments comprise of bank balances, bank overdrafts, trade debtors, trade creditors and loans to the business. The main purpose of these instruments is to finance the business’ operations.

 

In respect of bank balances, the liquidity risk is managed by maintaining a balance between the continuity of funding and flexibility through the use of borrowings at fixed rate of interest.

 

Trade debtors are managed in respect of credit and cash flow risk by policies concerning the credit offered to customers and the regular monitoring of amounts outstanding for both time and credit limited.

Trade creditors’ liquidity risk is managed by ensuring sufficient funds ae available to meet amounts due.

 

Finance leases comprise of hire purchases to facilitate the purchase of fixed assets. The business manages liquidity risk by ensuring that there are sufficient funds to meet the repayments for the finance leases

Key performance indicators

The company's key financial and other performance indicators during the period were as follows:

Unit
2023
2022
Turnover
£
12,896,572
11,471,330
Gross Profit
£
1,733,180
1,710,600

On behalf of the board

Dr S Walji
Director
6 June 2025
12/14 PHARMACY LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -

The directors present their annual report and financial statements for the year ended 31 December 2023.

Principal activities

The principal activity of the company continued to be that of Dispensing Chemist and Wholesale of pharmaceutical products.

Results and dividends

The results for the year are set out on page 10.

No ordinary dividends were paid. 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:

Mrs Z Damani
Dr M J Jessa
Dr S Walji
Financial instruments

Details of financial instruments are provided in the strategic report.

Research and development

We have nothing to note with respect to research and development activities.

Auditor

TC Group were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.

12/14 PHARMACY LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
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:

 

 

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.

On behalf of the board
Dr S Walji
Director
6 June 2025
12/14 PHARMACY LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF 12/14 PHARMACY LTD
- 5 -

Qualified Opinion

We have audited the financial statements of 12/14 Pharmacy Ltd (the 'company') for the year ended 31 December 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion, except for the effects of the matter described in the Basis for Qualified Opinion paragraph, the financial statements:

Basis for qualified opinion

The evidence available to us was limited because we were not appointed as auditor of the company until September 2024 and in consequence it was not possible for us to observe the counting of physical inventories at the end of 31 December 2022 and 31 December 2023. We were unable to satisfy ourselves by alternative means concerning inventory quantities held at 31 December 2022 and 31 December 2023, which are included in the comparative balance sheet at £249,717 and in the current year balance sheet at £373,899, by using other audit procedures.

 

Consequently we were unable to determine whether any adjustment to these amounts was necessary or whether there was any consequential effect on the cost of sales for the year ended 31 December 2023.

 

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion.

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.

12/14 PHARMACY LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF 12/14 PHARMACY LTD
- 6 -

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 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:

Matters on which we are required to report by exception

In respect solely of the limitation on our work relating to stock, described above:

 

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:

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.

12/14 PHARMACY LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF 12/14 PHARMACY LTD
- 7 -
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. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

 

Extent to which the audit was considered capable of detecting irregularities, including fraud

The objectives of our audit, in respect to fraud, are: to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses; and to respond appropriately to fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and its management.

 

12/14 PHARMACY LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF 12/14 PHARMACY LTD
- 8 -

Our approach was as follows:

 

 

Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations. Where the risk was considered to be higher, we performed audit procedures to address each identified fraud risk. These procedures included: testing manual journals; reviewing the financial statement disclosures and testing to supporting documentation; performing analytical procedures; and enquiring of management, and were designed to provide reasonable assurance that the financial statements were free from fraud or error.

 

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.

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.

12/14 PHARMACY LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF 12/14 PHARMACY LTD
- 9 -

This report is made solely to the company's member 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 member those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.

John Grant (Senior Statutory Auditor)
For and on behalf of TC Group
Statutory Auditor
Office: Peterborough
6 June 2025
12/14 PHARMACY LTD
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
2023
2022
Notes
£
£
Turnover
3
12,896,572
11,471,330
Cost of sales
(11,163,392)
(9,760,730)
Gross profit
1,733,180
1,710,600
Administrative expenses
(1,083,738)
(1,126,651)
Operating profit
4
649,442
583,949
Interest receivable and similar income
7
52
17
Interest payable and similar expenses
8
(276,828)
(238,708)
Profit before taxation
372,666
345,258
Tax on profit
9
(142,280)
(86,507)
Profit for the financial year
230,386
258,751

The profit and loss account has been prepared on the basis that all operations are continuing operations.

12/14 PHARMACY LTD
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 11 -
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
10
285,913
321,651
Tangible assets
11
101,301
174,912
387,214
496,563
Current assets
Stocks
12
373,899
249,717
Debtors
13
7,792,477
7,161,796
Cash at bank and in hand
20,562
11,350
8,186,938
7,422,863
Creditors: amounts falling due within one year
14
(4,675,042)
(3,781,274)
Net current assets
3,511,896
3,641,589
Total assets less current liabilities
3,899,110
4,138,152
Creditors: amounts falling due after more than one year
15
(1,444,363)
(1,939,116)
Provisions for liabilities
Deferred tax liability
18
25,325
-
0
(25,325)
-
Net assets
2,429,422
2,199,036
Capital and reserves
Called up share capital
20
100
100
Capital redemption reserve
-
0
(225,000)
Profit and loss reserves
21
2,429,322
2,423,936
Total equity
2,429,422
2,199,036
12/14 PHARMACY LTD
BALANCE SHEET (CONTINUED)
AS AT
31 DECEMBER 2023
31 December 2023
- 12 -

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 6 June 2025 and are signed on its behalf by:
Dr S Walji
Director
Company registration number 04416704 (England and Wales)
12/14 PHARMACY LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 13 -
Share capital
Capital redemption reserve
Profit and loss reserves
Total
£
£
£
£
Balance at 1 January 2022
100
(225,000)
2,165,185
1,940,285
Year ended 31 December 2022:
Profit and total comprehensive income
-
-
258,751
258,751
Balance at 31 December 2022
100
(225,000)
2,423,936
2,199,036
Year ended 31 December 2023:
Profit and total comprehensive income
-
-
230,386
230,386
Transfers
-
-
(225,000)
(225,000)
Other movements
-
225,000
-
225,000
Balance at 31 December 2023
100
-
0
2,429,322
2,429,422
12/14 PHARMACY LTD
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 14 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
25
940,945
(2,404,710)
Interest paid
(276,828)
(238,708)
Income taxes paid
(82,967)
(68,054)
Net cash inflow/(outflow) from operating activities
581,150
(2,711,472)
Investing activities
Proceeds from disposal of tangible fixed assets
52,908
-
0
Interest received
52
17
Net cash generated from investing activities
52,960
17
Financing activities
Proceeds from borrowings
-
0
1,426,566
Repayment of borrowings
(523,711)
(316,156)
Proceeds from finance leases obligations
328,604
473,303
Payment of finance leases obligations
(274,075)
(86,283)
Net cash (used in)/generated from financing activities
(469,182)
1,497,430
Net increase/(decrease) in cash and cash equivalents
164,928
(1,214,025)
Cash and cash equivalents at beginning of year
(876,483)
337,542
Cash and cash equivalents at end of year
(711,555)
(876,483)
Relating to:
Cash at bank and in hand
20,562
11,350
Bank overdrafts included in creditors payable within one year
(732,117)
(887,833)
12/14 PHARMACY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 15 -
1
Accounting policies
Company information

12/14 Pharmacy Ltd is a private company limited by shares incorporated in England and Wales. The registered office is 20 Commerce Road, Lynch Wood, Peterborough, Cambridgeshire, England, PE2 6LR.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

1.2
Going concern

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 recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

 

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

1.4
Intangible fixed assets other than goodwill

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

 

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

12/14 PHARMACY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -

Amortisation 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:

Software
10 years straight line
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:

Plant and equipment
10% straight line
Fixtures and fittings
15% reducing balance
Motor vehicles
20% reducing balance

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

1.6
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

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.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. 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.

12/14 PHARMACY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 17 -
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.

12/14 PHARMACY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 18 -
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.

12/14 PHARMACY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 19 -
Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.10
Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

1.11
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

12/14 PHARMACY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 20 -
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.

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

 

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

1.14
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

2
Judgements and key sources of estimation uncertainty

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

12/14 PHARMACY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Dispensing chemist and wholesale of pharmaceutical products.
12,896,572
11,471,330
2023
2022
£
£
Other revenue
Interest income
52
17

The whole turnover is attributable to one geographical market, being the UK.

4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
13,000
-
0
Depreciation of owned tangible fixed assets
27,758
38,563
Profit on disposal of tangible fixed assets
(7,055)
-
Amortisation of intangible assets
35,738
35,738
Operating lease charges
27,148
56,709
5
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2023
2022
Number
Number
20
24
12/14 PHARMACY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
5
Employees
(Continued)
- 22 -

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
539,503
517,892
Social security costs
44,995
42,894
Pension costs
4,660
9,265
589,158
570,051
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
86,000
33,000
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
52
17
8
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
197,691
198,795
Other interest on financial liabilities
4,330
-
0
202,021
198,795
Other finance costs:
Interest on finance leases and hire purchase contracts
64,595
39,154
Other interest
10,212
759
276,828
238,708
12/14 PHARMACY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
116,955
86,507
Deferred tax
Origination and reversal of timing differences
25,325
-
0
Total tax charge
142,280
86,507

The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

2023
2022
£
£
Profit before taxation
372,666
345,258
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2022: 19.00%)
93,167
65,599
Tax effect of expenses that are not deductible in determining taxable profit
1,308
6,790
Effect of change in corporation tax rate
(9,082)
-
0
Permanent capital allowances in excess of depreciation
56,887
14,118
Taxation charge for the year
142,280
86,507
12/14 PHARMACY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
10
Intangible fixed assets
Software
£
Cost
At 1 January 2023 and 31 December 2023
357,389
Amortisation and impairment
At 1 January 2023
35,738
Amortisation charged for the year
35,738
At 31 December 2023
71,476
Carrying amount
At 31 December 2023
285,913
At 31 December 2022
321,651
11
Tangible fixed assets
Plant and equipment
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
Cost
At 1 January 2023
142,208
95,210
87,430
324,848
Disposals
(52,908)
-
0
-
0
(52,908)
At 31 December 2023
89,300
95,210
87,430
271,940
Depreciation and impairment
At 1 January 2023
51,707
56,289
41,940
149,936
Depreciation charged in the year
8,930
9,729
9,099
27,758
Eliminated in respect of disposals
(7,055)
-
0
-
0
(7,055)
At 31 December 2023
53,582
66,018
51,039
170,639
Carrying amount
At 31 December 2023
35,718
29,192
36,391
101,301
At 31 December 2022
90,501
38,921
45,490
174,912

Assets held as security with a carrying amount of £101,301 (2022 - £174,912) have been pledged as security for bank loans and overdrafts.

12/14 PHARMACY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 25 -
12
Stocks
2023
2022
£
£
Finished goods and goods for resale
373,899
249,717

The carrying amount of stock pledged as security for liabilities amounted to £373,899 (2022 - £249,717).

13
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
832,033
582,659
Other debtors
6,824,664
6,394,537
Prepayments and accrued income
135,780
184,600
7,792,477
7,161,796
14
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans and overdrafts
16
732,117
887,833
Obligations under finance leases
17
273,917
202,719
Other borrowings
16
686,975
732,601
Trade creditors
2,207,368
1,312,992
Amounts owed to undertakings in which the company has a participating interest
433,256
146,166
Corporation tax
268,530
234,542
Other taxation and social security
592
-
0
Other creditors
49,700
252,738
Accruals and deferred income
22,587
11,683
4,675,042
3,781,274
12/14 PHARMACY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 26 -
15
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Other loans
16
1,123,492
1,601,576
Obligations under finance leases
17
320,871
337,540
1,444,363
1,939,116
16
Loans and overdrafts
2023
2022
£
£
Bank loans
1,123,492
1,601,576
Bank overdrafts
732,117
887,833
Other loans
686,975
732,601
2,542,584
3,222,010
Payable within one year
1,419,092
1,620,434
Payable after one year
1,123,492
1,601,576

Security is held over both current and non-current loans and borrowings. The bank borrowings and overdrafts are secured by a debenture and a legal charge over assets of the company. The finance lease obligations are secured against the assets to which they relate. The value of the security in each case is equal to the total outstanding as shown above.

No bank loans or other loans are due over 5 years.

 

The other loans is made up of various loans with different terms and interest rates. The interest rates charged during the year ranged from 8.7% to 17%.

 

 

17
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
273,917
202,719
In two to five years
320,871
337,540
594,788
540,259
12/14 PHARMACY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
17
Finance lease obligations
(Continued)
- 27 -

The assets which the hire purchases are secured against are capitalised within another group company, Al Zahra Medical Ltd. The hire purchases are therefore secured against the assets held in Al Zahra Medical Ltd.

18
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
25,325
-
2023
Movements in the year:
£
Liability at 1 January 2023
-
Charge to profit or loss
25,325
Liability at 31 December 2023
25,325

The rate of deferred taxation provisions on accelerated capital allowances has been recognised at 25% (2023 - 25%) in line with government legislation on corporation tax.

 

The reversal of deferred taxation timing differences is not expected to be significant in the forth coming year.

19
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
4,660
9,265

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
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
100
100
100
100
12/14 PHARMACY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
20
Share capital
(Continued)
- 28 -
21
Reserves

Share capital

Represents the nominal value of shares that have been issued.

 

Profit and loss account

Includes all current and prior period retained profits and losses.

22
Related party transactions

During the year sales were made to Joint Venture (of the group) companies of £13,116 (2022 - £nil). Purchases of £1,629,060 (2022 - £41,871) were incurred. Loans made to Joint Venture (of the group) £825,893, at the year end the amount owed from these companies were £5,905,780 (2022 - £6,237,334).

 

At the year end the amount owed from the parent Sakina Health Care Limited was £723 (2022 - £723).

 

During the year sales were made to companies of which the directors have a participating interest of £1,785,881 (2022 - £238,723). Purchases of £23,739 (2022 - £nil) were incurred. Loans from these companies in the year were £767,158 received. The amount owed from the companies were £731,077 (2022 - £22,103). Amounts owed to these companies were £463,956 (2022 - £164,066).

 

23
Ultimate controlling party

The immediate parent and ultimate parent is Sakina Health Care Limited.

 

The registered office of Sakina Health Care Limited is 20 Commerce Road, Lynch Wood, Peterborough, England, PE2 6LR.

 

There is no single controlling party in Sakina Health Care Limited.

 

 

12/14 PHARMACY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 29 -
24
Prior Period Adjustments

There has been five prior period adjustments in relation to the year ended 31 December 2022.

 

The first adjustment was to debit Interest £209,437 and credit other loans £209,437. This adjustment reduced profits available for distribution by £209,437. This adjustment has been made to correct the other loans balances due to Interest not having been recognised.

 

The second adjustment was to debit Turnover £259,578 and credit Accrued Income £259,578. This adjustment reduced profits available for distribution by £259,578. This adjustment has been made to remove accrued income recognised in error.

 

The third adjustment was to debit Interest £39,154, credit Hire purchase liability (under 1 year) £202,179, credit Hire purchase liability (over 1 year) £337,540 and debit Amounts owed to group undertakings £501,104. This adjustment reduce profits available for distribution by £39,154. This adjustment has been made to recognise HP liabilities in the name of the company that were recognised in another group company in error.

 

The fourth adjustment was to debit other loans (over 1 year) £730,647 and credit other loans (under 1 year) £730,647. This adjustment has had no effect on the profits available for distribution. This adjustment has been made to recognise the correct ageing on the other loans.

 

The fifth adjustment was to debit corporation tax creditor £96,552 and credit corporation tax charge £96,552. This adjustment has increased the profits available for distribution by £96,552. This adjustment has been made to recognise the tax effect on the prior period adjustments made.

 

In total these prior period adjustments reduced the profits available for distribution by £411,617.

 

12/14 PHARMACY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 30 -
25
Cash generated from/(absorbed by) operations
2023
2022
£
£
Profit for the year after tax
230,386
258,751
Adjustments for:
Taxation charged
142,280
86,507
Finance costs
276,828
238,708
Investment income
(52)
(17)
Gain on disposal of tangible fixed assets
(7,055)
-
Amortisation and impairment of intangible assets
35,738
35,738
Depreciation and impairment of tangible fixed assets
27,758
38,563
Movements in working capital:
Increase in stocks
(124,182)
(70,239)
Increase in debtors
(630,680)
(3,377,046)
Increase in creditors
989,924
384,325
Cash generated from/(absorbed by) operations
940,945
(2,404,710)
26
Analysis of changes in net debt
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
11,350
9,212
20,562
Bank overdrafts
(887,833)
155,716
(732,117)
(876,483)
164,928
(711,555)
Borrowings excluding overdrafts
(2,334,177)
523,710
(1,810,467)
Obligations under finance leases
(540,259)
(54,529)
(594,788)
(3,750,919)
634,109
(3,116,810)
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