KAYS MEDICAL LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
Company Registration No. 01248430 (England and Wales)
KAYS MEDICAL LIMITED
COMPANY INFORMATION
Directors
Mr D H Ludzker
Mrs J Ludzker
Mr B M Ludzker
Secretary
Mrs J Ludzker
Company number
01248430
Registered office
1 Windward Drive
Speke
Liverpool
L24 8QR
Auditor
DSG
Castle Chambers
43 Castle Street
Liverpool
L2 9TL
KAYS MEDICAL LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Statement of cash flows
11
Notes to the financial statements
12 - 25
KAYS MEDICAL LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2023
- 1 -
The directors present the strategic report for the year ended 31 March 2023.
Principal activities
The principal activity of the company continued to be that of the supply of medical equipment and pharmaceutical products, the provision of first aid training, occupational health services and third-party logistics.
Review of the business
With an improvement in sales Kays Medical has delivered another profitable year despite the significant headwinds of inflation. Turnover increased to £12.96 million with an improvement in service revenues driving the majority of this uplift. The growth in services has largely been driven through the award to Kays of a number of larger contract tenders in which the gross margins have been marginally eased, therefore overall gross profit reduced slightly to £3.54m.
During the period, the company continued to invest in growing both its traditional and developing markets, with Occupational Health developing well and overall management capabilities being matured. Despite the pressures from cost inflation and the growth in occupational health and operational management, overheads decreased marginally to £3.61 million (2022: £3.71m). This was driven by a reduction in salaries from an executive board restructure offsetting a number of other inflationary price rises in areas such as energy and computer costs.
Despite the pressures of inflation and the economic downturn the company remains in a relatively stable and robust condition, with a strong cash surplus. The directors remain focused on driving forward plans to expand its warehousing and logistics capacity by completing the construction of a 35,000 square foot warehouse later in the year.
Overall, the directors are confident that the company will continue to be successful and profitable.
Strategy
Kays Medical’s success is dependent upon continuing to deliver to its customers wider choice and better value.
Following significant investment in recent years, together with future growth plans, the company believes it is well placed to exploit opportunities when they arise. The company will continue to strive to improve efficiency in all areas of its operations through cost reduction and more disciplined processes.
The process of risk acceptance and risk management is addressed through a number of procedures and internal controls that are reviewed on an ongoing basis by management.
The keys risks and uncertainties affecting the company are considered to relate to the reliance on the economic success of the broad industries it serves; these sectors being: Occupational Health, Facilities Management, Manufacturing and Offshore.
Financial instruments and risk management
The company manages its exposure to price risk, credit risk and liquidity risk on an ongoing basis and in a variety of ways.
Price risk is managed, wherever possible, by way of customer and supplier contracts, and reducing dependencies on both key customers and suppliers.
With a dedicated credit controller, credit risk is managed by appropriate credit checks on potential customers before sales are made, the daily monitoring of debt and adherence to credit limits, and the use of a credit report agency and debt collection agency.
In respect of liquidity risk, the company actively maintains sufficient cash reserves designed to ensure that it has sufficient available funds for operations and planned expansions.
KAYS MEDICAL LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 2 -
Key performance indicators
The key financial performance indicators during the period were as follows:
Turnover - £12,958,922 (2022: £12,407,132)
Gross profit - £3,636,199 (2022: £3,800,571)
Gross profit % - 28.1% (2022: 30.6%)
Mr B M Ludzker
Director
19 March 2024
KAYS MEDICAL LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2023
- 3 -
The directors present their annual report and financial statements for the year ended 31 March 2023.
Results and dividends
The results for the year are set out on page 8.
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:
Mr D H Ludzker
Mrs J Ludzker
Mr B M Ludzker
Strategic report
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. The company has done so in respect of its principal activities and its financial instruments.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
On behalf of the board
Mr B M Ludzker
Director
19 March 2024
KAYS MEDICAL LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MARCH 2023
- 4 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
KAYS MEDICAL LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF KAYS MEDICAL LIMITED
- 5 -
Opinion
We have audited the financial statements of Kays Medical Limited (the 'company') for the year ended 31 March 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 the financial statements:
give a true and fair view of the state of the company's affairs as at 31 March 2023 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
KAYS MEDICAL LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF KAYS MEDICAL LIMITED
- 6 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Discussions with and enquiries of management and those charged with governance were held with a view to identifying those laws and regulations that could be expected to have a material impact on the financial statements. During the engagement team briefing, the outcomes of these discussions and enquiries were shared with the team, as well as consideration as to where and how fraud may occur in the company.
The following laws and regulations were identified as being of significance to the company:
Those laws and regulations considered to have a direct effect on the financial statements include UK financial reporting standards, Company Law, Tax and Pensions legislation, and distributable profits legislation.
Those laws and regulations for which non-compliance may be fundamental to the operating aspects of the business and therefore may have a material effect on the financial statements include environmental regulations, health and safety legislation, trades description act and employment legislation. Further laws and regulations that the client must adhere to include the Medicines & Healthcare products Regulatory Agency (MHRA).
Audit procedures undertaken in response to the potential risks relating to irregularities (which include fraud and non-compliance with laws and regulations) comprised of: enquiries of management and those charged with governance as to whether the company complies with such laws and regulations; enquiries with the same concerning any actual or potential litigation or claims; inspection of relevant legal correspondence; review of board minutes; testing the appropriateness of journal entries; reviewing post year end payments for evidence of claims pay outs and the performance of analytical review to identify unexpected movements in account balances which may be indicative of fraud.
KAYS MEDICAL LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF KAYS MEDICAL LIMITED
- 7 -
No instances of material non-compliance were identified. However, the likelihood of detecting irregularities, including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the company’s controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. As explained above, there is an unavoidable risk that material misstatements may not be detected, even though the audit has been planned and performed in accordance with ISAs (UK). .
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.
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.
Andrew Moss BA FCA
Senior Statutory Auditor
For and on behalf of DSG
19 March 2024
Chartered Accountants
Statutory Auditor
Castle Chambers
43 Castle Street
Liverpool
L2 9TL
KAYS MEDICAL LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
12,958,922
12,407,132
Cost of sales
(9,322,723)
(8,606,561)
Gross profit
3,636,199
3,800,571
Administrative expenses
(3,613,903)
(3,712,945)
Other operating income
205,000
156,384
Exceptional item
4
1,481,671
Operating profit
5
227,296
1,725,681
Interest receivable and similar income
8
30,081
5,028
Interest payable and similar expenses
9
(98,191)
(51,525)
Profit before taxation
159,186
1,679,184
Tax on profit
10
(7,850)
96,537
Profit for the financial year
151,336
1,775,721
The notes on pages 12 to 25 form part of these financial statements.
KAYS MEDICAL LIMITED
BALANCE SHEET
AS AT
31 MARCH 2023
31 March 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
11
178,012
28,663
Tangible assets
12
10,057,261
6,867,965
10,235,273
6,896,628
Current assets
Stocks
13
1,402,082
1,045,688
Debtors
14
2,265,473
2,282,036
Cash at bank and in hand
1,736,384
3,853,276
5,403,939
7,181,000
Creditors: amounts falling due within one year
15
(2,076,145)
(2,802,508)
Net current assets
3,327,794
4,378,492
Total assets less current liabilities
13,563,067
11,275,120
Creditors: amounts falling due after more than one year
16
(4,662,479)
(2,533,718)
Provisions for liabilities
Deferred tax liability
18
151,311
143,461
(151,311)
(143,461)
Net assets
8,749,277
8,597,941
Capital and reserves
Called up share capital
20
1,000
1,000
Profit and loss reserves
8,748,277
8,596,941
Total equity
8,749,277
8,597,941
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.true
The financial statements were approved by the board of directors and authorised for issue on 19 March 2024 and are signed on its behalf by:
Mr B M Ludzker
Director
Company registration number 01248430 (England and Wales)
KAYS MEDICAL LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2023
- 10 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 April 2021
1,000
6,821,220
6,822,220
Year ended 31 March 2022:
Profit and total comprehensive income
-
1,775,721
1,775,721
Balance at 31 March 2022
1,000
8,596,941
8,597,941
Year ended 31 March 2023:
Profit and total comprehensive income
-
151,336
151,336
Balance at 31 March 2023
1,000
8,748,277
8,749,277
KAYS MEDICAL LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2023
- 11 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash (absorbed by)/generated from operations
25
(582,071)
129,035
Interest paid
(98,191)
(51,525)
Income taxes paid
(213,750)
Net cash outflow from operating activities
(680,262)
(136,240)
Investing activities
Purchase of intangible assets
(175,686)
Purchase of tangible fixed assets
(3,397,239)
(1,076,960)
Proceeds from disposal of tangible fixed assets
1,962
Interest received
30,081
5,028
Net cash used in investing activities
(3,542,844)
(1,069,970)
Financing activities
Repayment of borrowings
(293,786)
(378,124)
Proceeds from new bank loans
2,400,000
-
Net cash generated from/(used in) financing activities
2,106,214
(378,124)
Net decrease in cash and cash equivalents
(2,116,892)
(1,584,334)
Cash and cash equivalents at beginning of year
3,853,276
5,437,610
Cash and cash equivalents at end of year
1,736,384
3,853,276
KAYS MEDICAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
- 12 -
1
Accounting policies
Company information
Kays Medical Limited is a private company limited by shares incorporated in England and Wales. The registered office is 1 Windward Drive, Speke, Liverpool, L24 8QR.
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.
The company has taken advantage of the exemption under Section 405(2) of the Companies Act not to prepare consolidated financial statements. These financial statements present information about Kays Medical Limited as an individual company, the company's subsidiaries have been dormant throughout the reporting period and are not material of the purpose of giving a true and fair view. Accordingly, the financial statements present the results of the parent company only and do not show the results of the group.
1.2
Going concern
The company meets some of it’s capital investment program through a long term loan facility from it’s principal bankerstrue. Based on recent discussions, the bank has indicated its willingness to continue the facilities
The directors have considered the impact of potential operational and financial challenges posed by the current economic situation, including but not restricted to, an assessment of the robustness of their supply chain and broader logistics arrangements. The directors have concluded that any operational and financial pressures caused directly by the current economic situation are unlikely to have a material impact on the company.
The directors have prepared forecasts and budgets which indicate that the company will continue to generate cash over the period considered by them which is at least twelve months from the date of approval of these financial statements, in their assessment of the appropriateness of adopting the going concern basis in preparation of these financial statements. The company has a strong asset base and cash reserves available.
Based on the above, the directors consider it appropriate to prepare these financial statements on a going concern basis.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods 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.
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.
KAYS MEDICAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 13 -
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.
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
25% reducing balance
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:
Leasehold land and buildings
2% straight-line for buildings, nil depreciation for land
Plant and equipment
25% straight-line
Fixtures and fittings
25% straight-line
Motor vehicles
25% straight-line
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.
KAYS MEDICAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 14 -
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.
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.
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.
KAYS MEDICAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 15 -
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 and bank loans 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.
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.
KAYS MEDICAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 16 -
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.
1.12
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.14
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
1.15
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
1.16
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.
KAYS MEDICAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 17 -
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.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Determining and reassessing residual values and useful economic lives of tangible assets
The company depreciates tangible assets over their estimated useful lives. In determining appropriate useful lives of assets, the directors have considered historic performance as well as future expectations for factors such as expected usage of the asset, physical wear and tear, technical and commercial obsolescence and legal limitations of the usage of the asset, such as lease terms. The actual lives of these assets can vary depending on a variety of factors, including technological innovation, product life cycles and maintenance programmes.
Judgement is applied to determine the residual values for tangible assets. When determining the residual values, the directors have assessed the amount that the group would currently obtain for the disposal of the asset, if it were already of the condition expected at the end of its useful economic life. At each reporting date, the directors have also assessed whether there have been any indicators, such as a change in how the asset is used, significant unexpected wear and tear and changes in market prices, which suggest previous estimates may differ from current expectations. Where this is the case, the residual value and/or useful life is amended and accounted for on a prospective basis.
3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Wholesale
8,688,921
9,538,118
Other sales
3,727,226
2,527,229
Training
542,775
341,785
12,958,922
12,407,132
2023
2022
£
£
Turnover analysed by geographical market
UK
11,220,918
10,581,956
Europe
1,388,840
1,472,116
Rest of World
349,164
353,060
12,958,922
12,407,132
KAYS MEDICAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
3
Turnover and other revenue
(Continued)
- 18 -
2023
2022
£
£
Other revenue
Interest income
30,081
5,028
Grants received
5,000
6,384
Management fee receivable
200,000
150,000
4
Exceptional item
2023
2022
£
£
Income
Related party loan release
-
1,481,671
The exceptional item in the prior year of £1,481,671 was in respect of the release of the related party creditor between Kays Medical Ltd and David Ludzker Ltd.
5
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses
30,778
3,451
Government grants
(5,000)
(6,384)
Auditors' remuneration
8,200
11,250
Depreciation of owned tangible fixed assets
207,943
179,724
Amortisation of intangible assets
26,337
9,521
Operating lease charges
2,708
3,041
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Sales
18
16
Marketing
2
1
Warehouse
18
14
Administration
17
12
Occupational health
28
20
Quality and Regulatory Affairs
2
2
Total
85
65
KAYS MEDICAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
6
Employees
(Continued)
- 19 -
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
2,988,539
2,600,641
Social security costs
301,989
293,239
Pension costs
54,907
42,852
3,345,435
2,936,732
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
179,995
300,630
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2022 - 2).
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
n/a
249,310
As total directors' remuneration was less than £200,000 in the current year, no disclosure is provided for that year.
8
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
30,081
5,028
2023
2022
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
30,081
5,028
KAYS MEDICAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 20 -
9
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
98,191
51,525
10
Taxation
2023
2022
£
£
Current tax
Adjustments in respect of prior periods
25,002
Deferred tax
Origination and reversal of timing differences
7,850
(121,539)
Total tax charge/(credit)
7,850
(96,537)
The actual charge/(credit) 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
159,186
1,679,184
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2022: 19.00%)
30,245
319,045
Tax effect of expenses that are not deductible in determining taxable profit
1,989
(278,491)
Unutilised tax losses carried forward
20,381
(105,205)
Adjustments in respect of prior years
25,002
Permanent capital allowances in excess of depreciation
(44,765)
(56,888)
Taxation charge/(credit) for the year
7,850
(96,537)
Factors that may affect future tax charges
In the Budget of 3 March 2021, the Chancellor of the Exchequer announced that the main rate of corporation tax would increase to 25%, with effect from 1 April 2023. This increase in rate was included within Finance Act 2021, which was substantively enacted on 24 May 2021. Accordingly, deferred tax balances as at 31 March 2023 are now calculated at this increased rate.
KAYS MEDICAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 21 -
11
Intangible fixed assets
Software
£
Cost
At 1 April 2022
170,449
Additions
175,686
At 31 March 2023
346,135
Amortisation and impairment
At 1 April 2022
141,786
Amortisation charged for the year
26,337
At 31 March 2023
168,123
Carrying amount
At 31 March 2023
178,012
At 31 March 2022
28,663
12
Tangible fixed assets
Leasehold land and buildings
Assets under construction
Plant and equipment
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 1 April 2022
5,004,129
1,048,684
1,332,628
208,838
51,984
7,646,263
Additions
3,060,052
313,861
5,466
17,860
3,397,239
Transfers
965,944
(1,048,684)
82,740
At 31 March 2023
9,030,125
1,729,229
214,304
69,844
11,043,502
Depreciation and impairment
At 1 April 2022
353,143
329,009
62,785
33,361
778,298
Depreciation charged in the year
88,642
97,621
12,140
9,540
207,943
At 31 March 2023
441,785
426,630
74,925
42,901
986,241
Carrying amount
At 31 March 2023
8,588,340
1,302,599
139,379
26,943
10,057,261
At 31 March 2022
4,650,986
1,048,684
1,003,619
146,053
18,623
6,867,965
KAYS MEDICAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 22 -
13
Stocks
2023
2022
£
£
Finished goods and goods for resale
1,402,082
1,045,688
An impairment loss of £441,330 (2022: £610,846) has been recognised against stock.
14
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
2,042,756
1,617,641
Corporation tax recoverable
20,248
20,248
Other debtors
30,063
456,897
Prepayments and accrued income
172,406
187,250
2,265,473
2,282,036
15
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans
17
138,000
181,000
Other borrowings
17
76,453
131,000
Trade creditors
544,801
1,961,589
Taxation and social security
111,700
86,439
Other creditors
441,278
213,244
Accruals and deferred income
763,913
229,236
2,076,145
2,802,508
16
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Bank loans
17
4,487,479
2,207,202
Other borrowings
17
76,516
Government grants
175,000
180,000
Other creditors
70,000
4,662,479
2,533,718
Government grants relate to a grant from the Regional Growth Fund.
KAYS MEDICAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
16
Creditors: amounts falling due after more than one year
(Continued)
- 23 -
Amounts included above which fall due after five years are as follows:
Payable by instalments
1,489,479
1,283,138
17
Borrowings
2023
2022
£
£
Bank loans
4,625,479
2,388,202
Other loans
76,453
207,516
4,701,932
2,595,718
Payable within one year
214,453
312,000
Payable after one year
4,487,479
2,283,718
Included in bank loans is £2,225,479 (2022: £2,388,202) which is secured by way of a first legal charge over the property and a debenture including a fixed and floating charge over the assets of the company. The loan is with HSBC and is repayable over the period until 2033. The interest on the loan is LIBOR + 1.72%.
Also included in bank loans is £2,400,000 (2022: £nil) which is secured by way of a first legal charge over the property and a debenture including a fixed and floating charge over the assets of the company. The loan is with LCR UDF Limited Partnership and is repayable in 2026.
Other loans comprise a loan of £76,453 (2022: £207,516) from the Regional Growth Fund. The loan bears no interest charge and is repayable over the period until 2024.
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
151,311
143,461
2023
Movements in the year:
£
Liability at 1 April 2022
143,461
Charge to profit or loss
7,850
Liability at 31 March 2023
151,311
KAYS MEDICAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 24 -
19
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
54,907
42,852
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
1,000
1,000
1,000
1,000
21
Financial commitments, guarantees and contingent liabilities
There is a composite company limited multilateral guarantee in place in favour of HSBC dated 2017 given by Kays Medical Limited and David Ludzker Limited. The liability as at 31 March 2023 is £2,225,479 (2022: £2,388,202).
22
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2022
£
£
Within one year
2,066
23
Related party transactions
During the year to 31 March 2023, a management fee of £200,000 (2022: £150,000) has been received from a related party due to common shareholders.
As at 31 December 2023, an amount of £415,100 (2022: £300,000) was due to this same related party. No interest is charged on this outstanding balance.
24
Ultimate controlling party
D Ludzker and J Ludzker have joint control of the company, and hence there is no ultimate controlling party.
KAYS MEDICAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 25 -
25
Cash (absorbed by)/generated from operations
2023
2022
£
£
Profit for the year after tax
151,336
1,775,721
Adjustments for:
Taxation charged/(credited)
7,850
(96,537)
Finance costs
98,191
51,525
Investment income
(30,081)
(5,028)
Amortisation and impairment of intangible assets
26,337
9,521
Depreciation and impairment of tangible fixed assets
207,943
179,724
Movements in working capital:
Increase in stocks
(356,394)
(118,688)
Decrease/(increase) in debtors
16,563
(289,529)
Decrease in creditors
(698,816)
(1,372,674)
Decrease in deferred income
(5,000)
(5,000)
Cash (absorbed by)/generated from operations
(582,071)
129,035
26
Analysis of changes in net funds/(debt)
1 April 2022
Cash flows
31 March 2023
£
£
£
Cash at bank and in hand
3,853,276
(2,116,892)
1,736,384
Borrowings excluding overdrafts
(2,595,718)
(2,106,214)
(4,701,932)
1,257,558
(4,223,106)
(2,965,548)
2023-03-312022-04-01falseCCH SoftwareCCH Accounts Production 2023.300Mr D H LudzkerMr B M LudzkerMr B M LudzkerMrs J Ludzkerfalse012484302022-04-012023-03-3101248430bus:Director12022-04-012023-03-3101248430bus:CompanySecretaryDirector12022-04-012023-03-3101248430bus:Director22022-04-012023-03-3101248430bus:CompanySecretary12022-04-012023-03-3101248430bus:Director32022-04-012023-03-3101248430bus:RegisteredOffice2022-04-012023-03-31012484302023-03-31012484302021-04-012022-03-310124843012022-04-012023-03-310124843012021-04-012022-03-3101248430core:RetainedEarningsAccumulatedLosses2021-04-012022-03-3101248430core:RetainedEarningsAccumulatedLosses2022-04-012023-03-3101248430core:OtherResidualIntangibleAssets2023-03-3101248430core:OtherResidualIntangibleAssets2022-03-3101248430core:ComputerSoftware2023-03-3101248430core:ComputerSoftware2022-03-31012484302022-03-3101248430core:LandBuildingscore:LeasedAssetsHeldAsLessee2023-03-3101248430core:ConstructionInProgressAssetsUnderConstruction2023-03-3101248430core:PlantMachinery2023-03-3101248430core:FurnitureFittings2023-03-3101248430core:MotorVehicles2023-03-3101248430core:LandBuildingscore:LeasedAssetsHeldAsLessee2022-03-3101248430core:ConstructionInProgressAssetsUnderConstruction2022-03-3101248430core:PlantMachinery2022-03-3101248430core:FurnitureFittings2022-03-3101248430core:MotorVehicles2022-03-3101248430core:CurrentFinancialInstrumentscore:WithinOneYear2023-03-3101248430core:CurrentFinancialInstrumentscore:WithinOneYear2022-03-3101248430core:Non-currentFinancialInstrumentscore:AfterOneYear2023-03-3101248430core:Non-currentFinancialInstrumentscore:AfterOneYear2022-03-3101248430core:CurrentFinancialInstruments2023-03-3101248430core:CurrentFinancialInstruments2022-03-3101248430core:Non-currentFinancialInstruments2023-03-3101248430core:Non-currentFinancialInstruments2022-03-3101248430core:ShareCapital2023-03-3101248430core:ShareCapital2022-03-3101248430core:RetainedEarningsAccumulatedLosses2023-03-3101248430core:RetainedEarningsAccumulatedLosses2022-03-3101248430core:ShareCapital2021-03-3101248430core:RetainedEarningsAccumulatedLosses2021-03-31012484302022-03-31012484302021-03-3101248430core:IntangibleAssetsOtherThanGoodwill2022-04-012023-03-3101248430core:ComputerSoftware2022-04-012023-03-3101248430core:LandBuildingscore:LongLeaseholdAssets2022-04-012023-03-3101248430core:PlantMachinery2022-04-012023-03-3101248430core:FurnitureFittings2022-04-012023-03-3101248430core:MotorVehicles2022-04-012023-03-3101248430core:UKTax2022-04-012023-03-3101248430core:UKTax2021-04-012022-03-3101248430core:ComputerSoftware2022-03-3101248430core:ComputerSoftwarecore:InternallyGeneratedIntangibleAssets2022-04-012023-03-3101248430core:LandBuildingscore:LeasedAssetsHeldAsLessee2022-03-3101248430core:ConstructionInProgressAssetsUnderConstruction2022-03-3101248430core:PlantMachinery2022-03-3101248430core:FurnitureFittings2022-03-3101248430core:MotorVehicles2022-03-3101248430core:LandBuildingscore:LeasedAssetsHeldAsLessee2022-04-012023-03-3101248430core:ConstructionInProgressAssetsUnderConstruction2022-04-012023-03-3101248430core:Non-currentFinancialInstruments12023-03-3101248430core:Non-currentFinancialInstruments12022-03-3101248430core:WithinOneYear2023-03-3101248430core:WithinOneYear2022-03-3101248430bus:PrivateLimitedCompanyLtd2022-04-012023-03-3101248430bus:FRS1022022-04-012023-03-3101248430bus:Audited2022-04-012023-03-3101248430bus:FullAccounts2022-04-012023-03-31xbrli:purexbrli:sharesiso4217:GBP