For the financial period ended 30 October 2024 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.

The members have not required the company to obtain an audit of its financial statements for the period in question in accordance with section 476.

The directors acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.

These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.

The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.true

Markinch Pharmacy Limited is a private company limited by shares incorporated in Scotland. The registered office is Norwood, 3 Beech Road, Lenzie, GB, G66 4HN.

The entity extended the reporting periof from 31 July to 30 October to be in line with other group and related entities. The 15 month reporting period will therefore not be wholly comparable with the prior year amounts and future 12 month periods.

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 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.

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, however, freehold property amounts have been revalued and subsequently depreciated.

Revenue comprises sales of goods or services provided to customers net of value added tax and other sales taxes, less an appropriate deduction for actual and expected returns and discounts. Revenue is recognised when performance obligations are satisfied and the control of goods or services is transferred to the buyer. Where the performance obligation is satisfied over time, revenue is recognised in accordance with its progress towards complete satisfaction of that performance obligation.

When cash inflows are deferred and represent a financing arrangement, the promised consideration is adjusted for the effects of the time value of money, which is recognised as interest income.

The nature, timing of satisfaction of performance obligations and significant payment terms of the company's major sources of revenue are as follows:

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.

Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 10 years.

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

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.

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:

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:

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.

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.

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.

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.

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

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

Markinch Pharmacy Limited does not employ any staff. All staff are employed by a related entity, Barrie Dear Limited, with wages and other employment costs being recharged to the reporting entity.

In addition to the amount (credited)/charged to the profit and loss account, the following amounts relating to tax have been recognised directly in other comprehensive income:

The implementation of a new computerised NHS system has resulted in delays and discrepancies in the recovery of prescription charge income by the company. The NHS has formally acknowledged the existence of these system-related issues and has confirmed that remedial action is ongoing to rectify the deficiencies and correct the errors identified.

The items being submitted each month do not match with the amounts reimbursed by the NHS. Whilst the volumes submitted are being acknowledged, the values reimbursed do not reconcile with the payments received. The company incurs the cost of purchasing these medicines and supplying them to patients in good faith on the understanding that it will be reimbursed correctly; however, this has not been the case. As the NHS does not provide a precise value for each unpaid item, the company has estimated the shortfall by applying the average ingredient cost to the number of items underpaid. The directors consider this methodology to provide the most reliable estimate of the income ultimately recoverable.

On this basis, the directors have determined that the value of prescription income subject to recovery amounted to £164,793 (2023: £39,178) at the balance sheet date. It remains the directors’ view that all prescriptions were administered in accordance with the required standards, and accordingly that the related income will be recovered in full. Resolution of this matter is anticipated by late 2025 or early 2026, at which point the directors expect settlement of the outstanding amounts by the NHS.

There are ongoing issues with the recovery of monies from the NHS. In the prior year, the company recognised accrued income of £180,000 as an estimate of the income that was due as at 31 July 2023. This should have been treated as a contingent asset therefore a prior period adjustment has been incorporated in these financial statements to remove this £180,000 of accrued income.

In the prior year, there was a tax charge of £24,255 recognised. As a result of the prior period adjustment to remove £180,000 of accrued income (as noted above), no tax charge is due for the year ended 31 July 2023 and this tax charge has been reversed via a prior period adjustment.

The previously recognised £180,000 pertained to the shortfall of scripts paid by the NHS in comparison to the number submitted. The total script shortfall was then multiplied by the average prescription value to arrive at the accrued income for the period concerned. This differs from the methodology used in estimating the contingent asset which has been estimated by applying the average ingredient cost to the number of items underpaid. The directors consider this methodology to provide the most reliable estimate of the income ultimately recoverable.

The following amounts were outstanding at the reporting end date:

The company is a subsidiary of West Coast Healthcare Scotland Limited, which is incorporated in Scotland. The registered office of the parent company is Norwood 3 Beech Road, Lenzie, Glasgow, G66 4HN.

The parent company has taken exemption from preparing consolidated financial statements.

Unity Trust Bank PLC has a floating charge covering all the property or undertaking of the company.

Rx Bridge Limited has a fixed and floating charge covering all the property or undertaking of the company.