REGISTERED NUMBER: |
STRATEGIC REPORT, REPORT OF THE DIRECTORS AND |
FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 MARCH 2023 |
FOR |
ORITAIN UK LIMITED |
REGISTERED NUMBER: |
STRATEGIC REPORT, REPORT OF THE DIRECTORS AND |
FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 MARCH 2023 |
FOR |
ORITAIN UK LIMITED |
ORITAIN UK LIMITED (REGISTERED NUMBER: 09783112) |
CONTENTS OF THE FINANCIAL STATEMENTS |
for the Year Ended 31 March 2023 |
Page |
Company Information | 1 |
Strategic Report | 2 |
Report of the Directors | 3 |
Report of the Independent Auditors | 5 |
Statement of Profit or Loss | 9 |
Statement of Profit or Loss and Other Comprehensive Income |
10 |
Statement of Financial Position | 11 |
Statement of Changes in Equity | 12 |
Statement of Cash Flows | 13 |
Notes to the Statement of Cash Flows | 14 |
Notes to the Financial Statements | 15 |
ORITAIN UK LIMITED |
COMPANY INFORMATION |
for the Year Ended 31 March 2023 |
DIRECTORS: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
AUDITORS: |
Statutory Auditors |
Herschel House |
58 Herschel Street |
Slough |
Berkshire |
SL1 1PG |
ORITAIN UK LIMITED (REGISTERED NUMBER: 09783112) |
STRATEGIC REPORT |
for the Year Ended 31 March 2023 |
The directors present their strategic report for the year ended 31 March 2023. |
REVIEW OF BUSINESS |
For the year ending 31 March 2023, turnover was £6,441,403 (2022: £4,092,683) and the loss for the year was £1,334,391 (2022: £15,493). |
Further revenue growth is expected for years ending 31 March 2024 and 31 March 2025. The Oritain Group is continuing to diversify into new product verticals to support its Global scaling. |
The directors believe that the company remains in a strong position in its sectors of the market. |
PRINCIPAL RISKS AND UNCERTAINTIES |
The company is subject to risks common in the industry in which it operates. The company is addressing risk by continuing to innovate and explore new markets, to cement it's position as a leader in the field of product origin verification. As part of this, the company is investing in its sales and software development teams, who provide services to the wider group. |
KEY PERFORMANCE INDICATORS |
The directors evaluate performance based on several key performance indicators, including turnover, EBITDA, rolling annualised contract value and customer acquisition. Performance is monitored monthly at group board level and KPIs are regularly reviewed and discussed. |
The directors are satisfied with the company's performance in terms of revenue growth and are actively investing to support the drive to scale, at the same time continuing to monitor and control operating costs. |
In addition to financial key performance indicators, the directors also maintain certain non-financial key performance indicators, including employee retention, employee satisfaction and stakeholder engagement. |
ON BEHALF OF THE BOARD: |
ORITAIN UK LIMITED (REGISTERED NUMBER: 09783112) |
REPORT OF THE DIRECTORS |
for the Year Ended 31 March 2023 |
The directors present their report with the financial statements of the company for the year ended 31 March 2023. |
PRINCIPAL ACTIVITY |
The principal activity of the company in the year under review was that of product origin verification. |
DIVIDENDS |
No dividends will be distributed for the year ended 31 March 2023. |
FUTURE DEVELOPMENTS |
The Group expects a continued increase in its isotope database in order to expand the markets in which verifications can be performed. The Group continues to invest in its product capabilities to expand its offering throughout the Global marketplace. |
DIRECTORS |
The directors shown below have held office during the whole of the period from 1 April 2022 to the date of this report. |
Other changes in directors holding office are as follows: |
DIRECTORS' RESPONSIBILITIES STATEMENT |
The directors are responsible for preparing the Strategic Report, the Report of the Directors 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 UK-adopted international accounting standards. 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. |
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information. |
ORITAIN UK LIMITED (REGISTERED NUMBER: 09783112) |
REPORT OF THE DIRECTORS |
for the Year Ended 31 March 2023 |
AUDITORS |
The auditors, Oury Clark Chartered Accountants, were appointed in accordance with Section 485 of the Companies Act 2006. A resolution that they be re-appointed will be put in a general meeting. |
ON BEHALF OF THE BOARD: |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
ORITAIN UK LIMITED |
Opinion |
We have audited the financial statements of Oritain UK Limited (the 'company') for the year ended 31 March 2023 which comprise the Statement of Profit or Loss, the Statement of Profit or Loss and Other Comprehensive Income, the Statement of Financial Position, the Statement of Changes in Equity, the Statement of Cash Flows and Notes to the Statement of Cash Flows, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the UK. |
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 loss for the year then ended; |
- | have been properly prepared in accordance with IFRSs as adopted by the UK; and |
- | have been prepared in accordance with the requirements of the Companies Act 2006. |
Basis for opinion |
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' 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 and one day from the date the audit report attached to these financial statements is signed. |
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. |
Other information |
The directors are responsible for the other information. The other information comprises the information in the Report of the Directors, but does not include the financial statements and our Report of the Independent Auditors thereon. |
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. |
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be misstated. If we identify such inconsistencies or apparent 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 misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. |
The financial statements for the previous accounting period were not audited. |
Opinions on other matters prescribed by the Companies Act 2006 |
In our opinion, based on the work undertaken in the course of the audit: |
- | the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
- | the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
ORITAIN UK LIMITED |
Matters on which we are required to report by exception |
In light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified any matters in the Strategic Report or the Report of the Directors that are inconsistent with our overall view of the financial statements. |
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: |
- | adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or |
- | the financial statements are not in agreement with the accounting records and returns; or |
- | certain disclosures of directors' remuneration specified by law are not made; or |
- | we have not received all the information and explanations we require for our audit; or |
- | the directors were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemption from the requirement to prepare a Strategic Report or in preparing the Report of the Directors. |
Responsibilities of directors |
As explained more fully in the Directors' Responsibilities Statement set out on page three, 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 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. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
ORITAIN UK LIMITED |
Auditors' 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 a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. |
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: |
Identifying and assessing potential irregularities, including fraud |
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, our procedures included the following: |
- | Considering the nature of the industry, sector, control environment and current business activities, including possible performance targets and subsequent remuneration; |
- | Enquiring of management concerning policies and procedures relating to: |
1. | Complying with laws and regulations and whether there were any instances of non compliance; |
2. | Mitigating, detecting and responding to fraud risk and whether there has been any actual or possible instances of fraud. |
- | Discussing within the engagement team and internal specialists where necessary, regarding how and where fraud may occur in the financial statements along with the possible indicators of fraud. We identified the following areas as most likely to be susceptible to fraud: |
1. | Management override; |
2. | Revenue recognition. |
- | Discussing within the engagement team and internal specialists where necessary, the legal and regulatory framework in which the company operates and in particular those which would have an impact on the financial statements. The key laws and regulations considered were the Companies Act 2006 and UK tax legislation. |
Audit response to the risks identified |
As noted above, we identified management override and revenue recognition as the matters that would most likely be susceptible to fraud. Our procedures to respond to these risks included the following: |
- | Review of journals posted in the year to ensure there was no evidence of management override; |
- | Testing a sample of revenue contracts and invoices to ensure they were recognised in the correct period and in line with IFRS15. |
Further, we also identified compliance with the Companies Act 2006 and UK tax legislation as being key areas where there may be possible non-compliance. Our procedures to respond to these risks included the following: |
- | Review the financial statement disclosures with completion of a disclosure checklist and testing disclosures to supporting documentation to assess compliance with the Companies Act 2006; |
- | Review the corporation tax return to ensure it complies with UK tax legislation and completion of our detailed corporation tax checklist; |
- | A safeguard review of the financial statements by a qualified accountant independent of the audit team; and |
- | A safeguard review of the corporation tax computation by a Chartered Tax Adviser, also independent of the audit team. |
The above matters and identified laws and regulations and potential fraud risks were communicated to all engagement team members and internal specialists where necessary, in order to enable the team to have the ability to identify such risks. The whole team remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit. |
There are inherent limitations in the audit procedures described above and the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment. |
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors. |
Other matters which we are required to address |
The comparative figures in these financial statements were unaudited. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
ORITAIN UK LIMITED |
Use of our report |
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors 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. |
for and on behalf of |
Statutory Auditors |
Herschel House |
58 Herschel Street |
Slough |
Berkshire |
SL1 1PG |
ORITAIN UK LIMITED (REGISTERED NUMBER: 09783112) |
STATEMENT OF PROFIT OR LOSS |
for the Year Ended 31 March 2023 |
31.3.23 | 31.3.22 |
Unaudited/ |
Restated |
Notes | £ | £ |
CONTINUING OPERATIONS |
Revenue | 4 |
Cost of sales | ( |
) | ( |
) |
GROSS PROFIT |
Administrative expenses | ( |
) | ( |
) |
OPERATING (LOSS)/PROFIT | ( |
) |
Finance costs | 6 | (515,265 | ) | (174,777 | ) |
LOSS BEFORE INCOME TAX | 7 | ( |
) | ( |
) |
Income tax | 8 |
LOSS FOR THE YEAR | ( |
) | ( |
) |
ORITAIN UK LIMITED (REGISTERED NUMBER: 09783112) |
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME |
for the Year Ended 31 March 2023 |
31.3.23 | 31.3.22 |
Unaudited/ |
Restated |
£ | £ |
LOSS FOR THE YEAR | ( |
) | ( |
) |
OTHER COMPREHENSIVE INCOME |
Item that may be reclassified subsequently to profit or loss: |
Employee share scheme expense | 131,645 | - |
Income tax relating to item that may be reclassified subsequently to profit or loss |
- |
- |
OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
( |
) |
( |
) |
ORITAIN UK LIMITED (REGISTERED NUMBER: 09783112) |
STATEMENT OF FINANCIAL POSITION |
31 March 2023 |
31.3.23 | 31.3.22 |
Unaudited/ |
Restated |
Notes | £ | £ |
ASSETS |
NON-CURRENT ASSETS |
Owned |
Intangible assets | 10 |
Property, plant and equipment | 11 |
Right-of-use |
Property, plant and equipment | 11, 18 |
CURRENT ASSETS |
Trade and other receivables | 12 |
Contract assets | 4 |
Cash and cash equivalents | 13 |
TOTAL ASSETS |
EQUITY |
SHAREHOLDERS' EQUITY |
Called up share capital | 14 |
Capital contribution reserve | 15 |
Retained earnings | 15 | ( |
) | ( |
) |
TOTAL EQUITY | (4,786,534 | ) | (3,583,788 | ) |
LIABILITIES |
NON-CURRENT LIABILITIES |
Financial liabilities - borrowings |
Interest bearing loans and borrowings | 17 |
CURRENT LIABILITIES |
Trade and other payables | 16 |
Contract liabilities | 4 |
Financial liabilities - borrowings |
Interest bearing loans and borrowings | 17 |
TOTAL LIABILITIES |
TOTAL EQUITY AND LIABILITIES |
The financial statements were approved by the Board of Directors and authorised for issue on |
ORITAIN UK LIMITED (REGISTERED NUMBER: 09783112) |
STATEMENT OF CHANGES IN EQUITY |
for the Year Ended 31 March 2023 |
Called up | Capital |
share | Retained | contribution | Total |
capital | earnings | reserve | equity |
£ | £ | £ | £ |
Balance at 1 April 2021 | ( |
) | ( |
) |
Changes in equity |
Total comprehensive income | - | ( |
) | ( |
) |
Balance at 31 March 2022 | 100 | (3,583,888 | ) | - | (3,583,788 | ) |
Changes in equity |
Total comprehensive income | - | ( |
) | ( |
) |
Balance at 31 March 2023 | 100 | (4,918,279 | ) | 131,645 | (4,786,534 | ) |
ORITAIN UK LIMITED (REGISTERED NUMBER: 09783112) |
STATEMENT OF CASH FLOWS |
for the Year Ended 31 March 2023 |
31.3.23 | 31.3.22 |
Unaudited/ |
Restated |
£ | £ |
Cash flows from operating activities |
Cash generated from operations | 1 | ( |
) |
Interest paid | ( |
) | ( |
) |
Net cash from operating activities | ( |
) |
Cash flows from investing activities |
Purchase of tangible fixed assets | ( |
) | ( |
) |
Net cash from investing activities | ( |
) | ( |
) |
Cash flows from financing activities |
Loan repayments in year | ( |
) | ( |
) |
Payment of lease liabilities | ( |
) |
Amount introduced by directors | - | 29,692 |
Amount withdrawn by directors | (70,000 | ) | (5,850 | ) |
Movement in group balances | 1,456,504 | (292,024 | ) |
Net cash from financing activities | ( |
) |
Increase in cash and cash equivalents |
Cash and cash equivalents at beginning of year |
2 |
78,938 |
Cash and cash equivalents at end of year | 2 |
ORITAIN UK LIMITED (REGISTERED NUMBER: 09783112) |
NOTES TO THE STATEMENT OF CASH FLOWS |
for the Year Ended 31 March 2023 |
1. | RECONCILIATION OF LOSS BEFORE INCOME TAX TO CASH GENERATED FROM OPERATIONS |
31.3.23 | 31.3.22 |
Unaudited/ |
Restated |
£ | £ |
Loss before income tax | ( |
) | ( |
) |
Depreciation charges |
Share based payment charges | 131,644 | - |
Finance costs | 515,265 | 174,777 |
(449,371 | ) | 163,290 |
Increase in trade and other receivables | ( |
) | ( |
) |
Decrease/(increase) in contract assets | 54,454 | (21,399 | ) |
Increase in trade and other payables |
Increase in contract liabilities | 407,217 | 510,299 |
Cash generated from operations | ( |
) |
2. | CASH AND CASH EQUIVALENTS |
The amounts disclosed on the Statement of Cash Flows in respect of cash and cash equivalents are in respect of these Statement of Financial Position amounts: |
Year ended 31 March 2023 |
31.3.23 | 1.4.22 |
£ | £ |
Cash and cash equivalents | 269,746 | 233,071 |
Year ended 31 March 2022 |
31.3.22 | 1.4.21 |
Unaudited/ |
Restated |
£ | £ |
Cash and cash equivalents | 233,071 | 78,938 |
ORITAIN UK LIMITED (REGISTERED NUMBER: 09783112) |
NOTES TO THE FINANCIAL STATEMENTS |
for the Year Ended 31 March 2023 |
1. | STATUTORY INFORMATION |
Oritain UK Limited is a |
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £1. |
2. | ACCOUNTING POLICIES |
Basis of preparation |
These financial statements have transitioned from FRS101 in the previous year to IFRS at the start of the period. No adjustments arose on transition. |
The financial statements contain information about Oritain UK Limited as an individual entity and the principle accounting policies adopted have been set out below. |
Going Concern |
The company has obtained a letter of support from the parent Company. The directors of the parent Company have provided a commitment to provide any financial support which may be necessary in order for the Company to meet liabilities, as they fall due, for a period in excess of 12 months and 1 day from the signing of the audit report. As a result of this commitment the directors have continued to adopt the going concern basis in preparing these financial statements. |
ORITAIN UK LIMITED (REGISTERED NUMBER: 09783112) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 March 2023 |
2. | ACCOUNTING POLICIES - continued |
Revenue recognition |
Revenue is recognised at the fair value of the consideration received or receivable for product origin verification provided in the normal course of business, 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 future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income. |
Revenue from contracts for the provision of product verification services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by reference to the amount of product verification audits completed, over the total amount of audits to be carried out under the contract. |
Revenue derived from contracts are reported if the following performance obligations are achieved: |
1) the parties to the contract have approved the contract (in writing, orally or in accordance with other customary business practices) and are committed to perform their respective obligations; |
2) the entity can identify each party's rights regarding the goods or services to be transferred; |
3) the entity can identify the payment terms for the goods or services to be transferred; |
4) the contract has commercial substance (ie the risk, timing or amount of the entity's future cash flows is expected to change as a result of the contract); and |
5) it is probable that the entity will collect the consideration to which it will be entitled in exchange for the verification services that will be transferred to the customer. In evaluating whether collectability of an amount of consideration is probable, the entity shall consider only the customer's ability and intention to pay that amount of consideration when it is due. The amount of consideration to which the entity will be entitled may be less than the price stated in the contract if the consideration is variable because the entity may offer the customer a price concession. |
Amounts receivable/received from group companies in respect of the group transfer pricing adjustment is recognised within revenue. |
Revenue amounting to £6,441,403 (2022: £4,092,683) consists of sales made to external customers for product origin verification and certification work amounting to £2,529,824 (2022: £1,507,486) and amounts recharged to group companies of £3,911,579 (2022: £2,585,197). |
Geographical analysis of the revenue derived from contracts with parties external to the group is as follows: |
2023 | 2022 |
£ | £ |
Americas | 134,383 | 395,288 |
Asia Pacific | 332,216 | 4,673 |
Europe | 2,063,225 | 1,107,525 |
2,529,824 | 1,507,486 |
ORITAIN UK LIMITED (REGISTERED NUMBER: 09783112) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 March 2023 |
2. | ACCOUNTING POLICIES - continued |
Cash and cash equivalents |
Cash represents cash in hand and deposits held on demand with financial institutions. Cash equivalents are short-term, highly-liquid investments with original maturities of three months or less (as at their date of acquisition). Cash equivalents are readily convertible to known amounts of cash and subject to an insignificant risk of change in that cash value. |
In the presentation of the Statement of Cash Flows, cash and cash equivalents also include bank overdrafts. Any such overdrafts are shown within borrowings under ‘current liabilities’ on the Statement of Financial Position. |
Statement of Cash Flows |
The cash flow statement is presented using the indirect method. |
Property, plant and equipment |
Plant and machinery | - |
Tangible fixed assets are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses. |
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 the statement of profit or loss. |
ORITAIN UK LIMITED (REGISTERED NUMBER: 09783112) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 March 2023 |
2. | ACCOUNTING POLICIES - continued |
Financial instruments |
Financial instruments are recognised in the company's statement of financial position 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 legal 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, 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 the market rate of interest. Financial assets classified as receivable within one year are not amortised. |
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 event that occured 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 assets 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 occuring 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 cashflows from the asset expire, are settled, 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 which 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 and amounts owed to fellow group companies, are initially recognised at transaction price unless the arrangement constitute 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 are 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 rate method. |
Derecognition of financial liabilities |
Financial liabilities are derecognised when the company's contractual obligations expire, are discharged or cancelled. |
ORITAIN UK LIMITED (REGISTERED NUMBER: 09783112) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 March 2023 |
2. | ACCOUNTING POLICIES - continued |
Taxation |
Current taxes are based on the results shown in the financial statements and are calculated according to local tax rules, using tax rates enacted or substantially enacted by the statement of financial position date. |
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the statement of financial position date. |
Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference. |
Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. |
Foreign currencies |
Transactions denominated in foreign currencies are recorded at the rates of exchange ruling at the dates of the transactions, or at an average rate for the period if the rates do not fluctuate significantly. Monetary assets and liabilities are translated at year end exchange rates or, where appropriate, at rates of exchange fixed under the terms of the relevant transaction. The resulting exchange rate differences are charged to the profit and loss account. |
Leases |
Leases are recognised as finance leases. The lease liability is initially recognised at the present value of the lease payments which have not yet been made and subsequently measured under the amortised cost method. The initial cost of the right-of-use asset comprises the amount of the initial measurement of the lease liability, lease payments made prior to the lease commencement date, initial direct costs and the estimated costs of removing or dismantling the underlying asset per the conditions of the contract. |
Where ownership of the right-of-use asset transfers to the lessee at the end of the lease term, the right-of-use asset is depreciated over the asset’s remaining useful life. If ownership of the right-of-use asset does not transfer to the lessee at the end of the lease term, depreciation is charged over the shorter of the useful life of the right-of-use asset and the lease term. |
Employee benefit costs |
The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to the income statement in the period to which they relate. |
Share-based payment transactions |
Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in exchange for the rendering of services. |
The cost of equity-settled transactions is measured at fair value on grant date. Fair value is independently determined using the Binomial share based payment pricing model that takes into account the share price at grant date, the hurdle price, the expiration term, the impact of dilution, expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the entire term, together with non-vesting conditions that do not determine whether the Company receives the services that entitle the employees to receive payment. No account is taken of any other vesting conditions. |
The cost of equity-settled transactions is recognised as an expense with a corresponding increase in equity over the vesting period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the best estimate of the number of awards that are likely to vest and the expired portion of the vesting period. The amount recognised in profit or loss for the period is the cumulative amount calculated at each reporting date less amounts already recognised in previous periods. |
ORITAIN UK LIMITED (REGISTERED NUMBER: 09783112) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 March 2023 |
3. | CRITICAL ACCOUNTING 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 revision and future periods where the revision affects both current and future periods. |
Key sources of estimation uncertainty are estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities. These are as follows: |
Share based payments |
An employee share incentive scheme is in operation within the current and previous year and are measured based on the fair value of the shares at grant date. Estimates are required based on similar quoted companies and complex modelling techniques in order to determine the fair value at grant date. |
Revenue from contracts with customers |
Revenue from contracts for the provision of product verification services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The executive management estimates how the revenues should be allocated to each performance obligation, and different principles for the revenue recognition can be applied for different performance obligations. The stage of completion is calculated by reference to the amount of product verification audits completed, over the total amount of audits to be carried out under the contract. |
Depreciation and amortisation |
Management uses judgement to estimate the useful lives and residual value of depreciating tangible and intangible assets. |
Deferred tax |
Management uses judgements concluding whether any possible deferred tax asset should be recognised. |
4. | REVENUE |
Revenue from contracts with customers |
Contract balances |
31.3.23 | 31.3.22 |
Unaudited/ |
Restated |
£ | £ |
Contract assets |
Current |
Contract assets | 48,423 | 102,877 |
Contract liabilities |
Current |
Contract liabilities | 917,529 | 510,312 |
ORITAIN UK LIMITED (REGISTERED NUMBER: 09783112) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 March 2023 |
5. | EMPLOYEES AND DIRECTORS |
31.3.23 | 31.3.22 |
Unaudited/ |
Restated |
£ | £ |
Wages and salaries |
Social security costs |
Other pension costs |
The average number of employees during the year was as follows: |
31.3.23 | 31.3.22 |
Unaudited/ |
Restated |
Administration and sales |
31.3.23 | 31.3.22 |
Unaudited/ |
Restated |
£ | £ |
Directors' remuneration |
The number of directors to whom retirement benefits were accruing was as follows: |
Money purchase schemes |
Information regarding the highest paid director is as follows: |
31.3.23 | 31.3.22 |
Unaudited/ |
Restated |
£ | £ |
Emoluments etc |
6. | NET FINANCE COSTS |
31.3.23 | 31.3.22 |
Unaudited/ |
Restated |
£ | £ |
Finance costs: |
Loan interest |
ORITAIN UK LIMITED (REGISTERED NUMBER: 09783112) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 March 2023 |
7. | LOSS BEFORE INCOME TAX |
The loss before income tax is stated after charging/(crediting): |
31.3.23 | 31.3.22 |
Unaudited/ |
Restated |
£ | £ |
Depreciation - owned assets |
Depreciation - assets on finance leases |
Computer software amortisation |
Foreign exchange differences | ( |
) |
8. | INCOME TAX |
Analysis of tax expense |
No liability to UK corporation tax arose for the year ended 31 March 2023 nor for the year ended 31 March 2022. |
Factors affecting the tax expense |
The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below: |
31.3.23 | 31.3.22 |
Unaudited/ |
Restated |
£ | £ |
Loss before income tax | ( |
) | ( |
) |
Loss multiplied by the standard rate of corporation tax in the UK of (2022 - |
( |
) |
( |
) |
Effects of: |
Expenditure disallowed for tax purposes | 30,454 | 1,175 |
Capital allowances in excess of depreciation | (12,558 | ) | (867 | ) |
Prior year adjustment | (3,176 | ) | 3,176 |
Losses created in the year for carry forward | 238,814 | (540 | ) |
Tax expense |
9. | PRIOR YEAR ADJUSTMENT |
Prior year adjustments have been made in respect of the following. |
IFRS16 leases - an adjustment has been made in order to recognise the right of use asset and corresponding lease liability. This has resulted in an increase in the prior year fixed assets and creditors of £554,913. There has been no impact on the prior year profit as a result of this adjustment. |
Contract asset and contract liability - adjustments have been made in order to recognise credit notes relating to the prior year not accrued of £26,825 and to accrue for revenue in respect of a single contract of £54,168. This has resulted in the prior year contract asset balance increasing by £54,168, contract liability increasing by £26,825 and there being a net increase in profit of £27,343. |
Accrued expenses - an adjustment has been made in order to increase accruals in respect of holiday pay and bonuses. This has resulted in an increase in the prior year accruals of £44,058 and an equivalent reduction in profit. |
The overall effect of the above prior year adjustments has been to decrease the prior year profit by £16,715, and to increase the brought forwards retained losses figure by the same amount. |
ORITAIN UK LIMITED (REGISTERED NUMBER: 09783112) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 March 2023 |
10. | INTANGIBLE ASSETS |
Computer |
software |
£ |
COST |
At 1 April 2022 |
and 31 March 2023 |
AMORTISATION |
At 1 April 2022 |
Amortisation for year |
At 31 March 2023 |
NET BOOK VALUE |
At 31 March 2023 |
At 31 March 2022 |
The amortisation charge is recognised within Administrative expenses within the income statement. |
11. | PROPERTY, PLANT AND EQUIPMENT |
Freehold | Plant and |
property | machinery | Totals |
£ | £ | £ |
COST |
At 1 April 2022 |
Additions |
At 31 March 2023 |
DEPRECIATION |
At 1 April 2022 |
Charge for year |
At 31 March 2023 |
NET BOOK VALUE |
At 31 March 2023 |
At 31 March 2022 |
12. | TRADE AND OTHER RECEIVABLES |
31.3.23 | 31.3.22 |
Unaudited/ |
Restated |
£ | £ |
Current: |
Trade debtors |
Amounts owed by group undertakings |
Other debtors | 132,290 | 51,929 |
Directors' loan accounts |
Prepayments and accrued income | 53,974 | 84,158 |
ORITAIN UK LIMITED (REGISTERED NUMBER: 09783112) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 March 2023 |
13. | CASH AND CASH EQUIVALENTS |
31.3.23 | 31.3.22 |
Unaudited/ |
Restated |
£ | £ |
Cash in hand |
Bank accounts |
14. | CALLED UP SHARE CAPITAL |
Allotted and issued: |
Number: | Class: | Nominal | 31.3.23 | 31.3.22 |
value: | £ | £ |
Ordinary | £1 | 100 | 100 |
Each Ordinary share entitles the holder to full rights in the company with respect to voting, dividends and distributions. |
15. | RESERVES |
Capital |
Retained | contribution |
earnings | reserve | Totals |
£ | £ | £ |
At 1 April 2022 | ( |
) | ( |
) |
Deficit for the year | ( |
) | ( |
) |
Share based payments | - | 131,645 | 131,645 |
At 31 March 2023 | (4,918,279 | ) | 131,645 | (4,786,634 | ) |
16. | TRADE AND OTHER PAYABLES |
31.3.23 | 31.3.22 |
Unaudited/ |
Restated |
£ | £ |
Current: |
Trade creditors |
Amounts owed to group undertakings |
Other creditors |
Accruals and deferred income |
VAT | 53,703 | 31,374 |
ORITAIN UK LIMITED (REGISTERED NUMBER: 09783112) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 March 2023 |
17. | FINANCIAL LIABILITIES - BORROWINGS |
31.3.23 | 31.3.22 |
Unaudited/ |
Restated |
£ | £ |
Current: |
Bank loans |
Leases (see note 18) | 68,568 | 218,002 |
Non-current: |
Bank loans - 1-2 years |
Leases (see note 18) | 288,000 | 336,911 |
Terms and debt repayment schedule |
1 year or |
less | 1-2 years | 2-5 years | Totals |
£ | £ | £ | £ |
Bank loans |
Leases | 68,568 | 288,000 | - | 356,568 |
The interest rate which applies to the loan agreement is 2.5% (fixed) per annum. |
The loan is paid back in monthly repayments with the last repayment date being in June 2026. |
18. | LEASING |
Right-of-use assets |
Property, plant and equipment |
31.3.23 | 31.3.22 |
Unaudited/ |
Restated |
£ | £ |
COST |
At 1 April 2022 | 554,913 | - |
Additions | - | 554,913 |
554,913 | 554,913 |
DEPRECIATION |
Charge for year | 218,002 | - |
NET BOOK VALUE |
ORITAIN UK LIMITED (REGISTERED NUMBER: 09783112) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 March 2023 |
18. | LEASING - continued |
Lease liabilities |
Minimum lease payments fall due as follows: |
31.3.23 | 31.3.22 |
Unaudited/ |
Restated |
£ | £ |
Gross obligations repayable: |
Within one year | 68,568 | 218,002 |
Between one and five years | 288,000 | 336,911 |
356,568 | 554,913 |
Finance charges repayable: |
Net obligations repayable: |
Within one year | 68,568 | 218,002 |
Between one and five years | 288,000 | 336,911 |
356,568 | 554,913 |
ORITAIN UK LIMITED (REGISTERED NUMBER: 09783112) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 March 2023 |
19. | FINANCIAL INSTRUMENTS |
Risk management |
The Company is exposed to market risk, credit risk and liquidity risk in the normal course of business. These risks are limited by the Company's financial management policies and practices described below. There has been no change to the Company's exposure to financial risk or the manner in which these risks are managed and measured. |
Market risk - currency risk |
The Company undertakes certain transactions denominated in foreign currency and is exposed to foreign currency risk through foreign exchange rate fluctuations. Foreign exchange risk arises from future commercial transactions and recognised financial assets and financial liabilities denominated in a currency that is not the entity's functional currency. The risk is measured using sensitivity analysis and cash flow forecasting. As the foreign exchange risk is not considered significant to the entity individually, exposure and sensitivity analysis is not conducted. |
Credit risk |
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company has a strict code of credit and setting appropriate credit limits. The maximum exposure to credit risk at the reporting date to recognised financial assets is the gross carrying amount, as disclosed in the balance sheet and notes to the financial statements. The Company does not hold any collateral. |
Generally, trade receivables are written off when there is no reasonable expectation of recovery. Indicators of this include the failure of a debtor to engage in a repayment plan, no active enforcement activity and a failure to make contractual payments. Standard payment terms regularly exceed 30 days and so the Company does not consider this to be an indicator that balances older than this are more likely to default. |
Except for cash and cash equivalents, the Company has no other concentration of credit risk exposure as at 31 March 2023 and 2022. No expected credit loss is recorded for cash and cash equivalents as the Group and Company only deal with creditworthy financial institutions. |
Liquidity risk |
The Company manages liquidity risk by maintaining adequate cash reserves by monitoring actual and forecast cashflows and matching the maturity profiles of financial assets and liabilities. |
The following tables detail the Company's remaining contractual maturity for its financial instrument liabilities. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the financial liabilities are required to be paid. The tables include both interest and principal cash flows disclosed as remaining contractual maturities and therefore these totals may differ from their carrying amount in the statement of financial position. |
1 year or less |
Between 1 and 2 years |
Between 2 and 5 years |
Over 5 years |
Remaining contractual liabilities |
31 March 2023 | £ | £ | £ | £ | £ |
Non-derivatives |
Non-interest bearing |
Trade creditors | 63,265 | - | - | - | 63,265 |
Amounts owed to group undertakings |
9,769,059 |
- |
- |
- |
9,769,059 |
Social security and other taxes |
53,703 |
- |
- |
- |
53,703 |
Other creditors | 31,318 | - | - | - | 31,318 |
Accruals and deferred income |
568,251 |
- |
- |
- |
568,251 |
Total non-derivatives | 10,485,596 | - | - | - | 10,485,596 |
ORITAIN UK LIMITED (REGISTERED NUMBER: 09783112) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 March 2023 |
FINANCIAL INSTRUMENTS - continued |
1 year or less |
Between 1 and 2 years |
Between 2 and 5 years |
Over 5 years |
Remaining contractual liabilities |
31 March 2022 | £ | £ | £ | £ | £ |
Non-derivatives |
Non-interest bearing |
Trade creditors | 175,228 | - | - | - | 175,228 |
Amounts owed to group undertakings |
5,287,349 |
5,287,349 |
Social security and other taxes |
31,374 |
- |
- |
- |
31,374 |
Other creditors | 5,332 | - | - | - | 5,332 |
Accruals and deferred income |
373,201 |
- |
- |
- |
373,201 |
Total non-derivatives | 5,872,484 | - | - | - | 5,872,484 |
20. | OTHER FINANCIAL COMMITMENTS |
The Company operates a defined contribution pension scheme. Contributions of £24,829 (2022: £14,354) were made during the year. As at the balance sheet date, there was an amount payable of £7,182 (2022: £4,593). |
21. | DIRECTORS' ADVANCES, CREDITS AND GUARANTEES |
The following advances and credits to a director subsisted during the years ended 31 March 2023 and 31 March 2022: |
31.3.23 | 31.3.22 |
Unaudited/ |
Restated |
£ | £ |
Balance outstanding at start of year |
Amounts advanced |
Amounts repaid | ( |
) |
Amounts written off | - | - |
Amounts waived | - | - |
Balance outstanding at end of year |
The balance outstanding as at 31 March 2023 was repaid by the director within 9 months of the year end. |
ORITAIN UK LIMITED (REGISTERED NUMBER: 09783112) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 March 2023 |
22. | RELATED PARTY DISCLOSURES |
Oritain Global Limited and its subsidiary companies, Isotrace NZ Limited, Tredegar Holdings Inc, Oritain USA Inc, Oritain Government Services Inc, Oritain Australia PTY Limited, Oritain GmbH, Oritain Austria GmbH and Agroisolab GmbH are related parties of Oritain UK Limited as a result of Oritain Global Limited's ownership in the Company. |
During the year, the Company recognised revenue from recharges made to group companies and costs recharged by group companies as follows: |
Sales | Cost of sales |
31.3.23 | 31.3.22 | 31.3.23 | 31.3.22 |
£ | £ | £ | £ |
Isotrace NZ Limited | 1,831 | 1,373 | - | - |
Oritain Australia Pty Ltd | 413,542 | 412,281 | 68,393 | 85,698 |
Oritain Global Ltd | 391,976 | 1,070,846 | 1,120,869 | 882,091 |
Oritain GmbH (Switzerland) | 8,492 | - | 116,151 | 128,934 |
Oritain USA | 3,095,738 | 1,100,697 | 413,232 | 160,328 |
Oritain Government Services Inc | - | - | 86,472 | 12,942 |
Tredegar Holdings Inc | - | - | 2,432 | - |
3,911,579 | 2,585,197 | 1,807,549 | 1,269,993 |
The Company also had intercompany balances with the Group as follows: |
31.3.23 | 31.3.22 |
£ | £ |
Isotrace NZ Limited | 36,769 | 34,938 |
Oritain Australia PTY Ltd | 555,019 | 222,326 |
Oritain Global Limited | (9,305,179 | ) | (4,977,577 | ) |
Oritain GmbH | (365,944 | ) | (296,830 | ) |
Oritain USA Inc | 4,217,877 | 1,527,195 |
Oritain Government Services Inc | (101,504 | ) | (12,942 | ) |
Tredegar Holdings Inc | (2,432 | ) | - |
Under the transfer pricing agreement, direct costs which are recharged across the group are subject to a 10% markup and admin expenses recharged are subject to a 5% markup. |
23. | ULTIMATE CONTROLLING PARTY |
As at the year end, the immediate parent company was Oritain Global Limited, a company incorporated in New Zealand and registered at Heimsath Alexander, Shed 22, 147 Quay Street, Auckland Central, Auckland, 1010, New Zealand.. This is the smallest and largest group of which the company is consolidated. Copies of the consolidated financial statements are not publicly available. |
The directors do not consider there to be an ultimate controlling party. |
ORITAIN UK LIMITED (REGISTERED NUMBER: 09783112) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
for the Year Ended 31 March 2023 |
24. | SHARE-BASED PAYMENT TRANSACTIONS |
The Company has issued shares to employees under the Group's Employee Share Scheme. The equity issued is that of the parent company, Oritain Global Limited. The scheme entitles employees to buy shares at an initial offer price as specified in the agreement. The shares are subject to reverse vesting over a period of between one and four years. The charge in the year is calculated based on the fair value of the shares as at the date of issue, with this charge being recognised over the vesting period. |
There is no expiration date in relation to these shares. |
In determining the fair value of the issued shares, volatility was based on a range of US listed entities. Further, dividend yield was expected to be 0%. |
The following summarises the shares issued under the scheme to employees of the Company: |
Item | Number | Weighted average hurdle price (NZ$ | ) |
In issue from earlier periods | 209,500 | 15.18 |
Granted during the year | 52,500 | 48.00 |
Forfeited/cancelled during the period | (19,625 | ) | 37.65 |
Expired during the period | - | - |
In issue by the end of the year | 242,375 | 20.47 |
The share based payment charge recognised in the year is £131,645 (2022: £nil). This charge is recognised as an increase in reserves. |
Further details over how the fair value of the goods or services received are measured are given in note 2 to the financial statements. |
25. | SECURED DEBT |
Creditor facilities, including company credit cards, are secured by way of a deposit of £70,000 in favour of Metro Bank PLC. |