Company Registration No. SC228623 (Scotland)
RIGHT MEDICINE PHARMACY LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2020
RIGHT MEDICINE PHARMACY LIMITED
COMPANY INFORMATION
Directors
Mr N Wicks
Mr M Embrey
Mr J Burton
Secretary
Mrs E Embrey
Company number
SC228623
Registered office
Unit 79-81
Bandeath Industrial Estate
Throsk
Stirling
FK7 7NP
Auditor
Thomson Cooper
3 Castle Court
Carnegie Campus
Dunfermline
Fife
KY11 8PB
Bankers
Bank of Scotland Plc
Teviot House
41 South Gyle Crescent
Edinburgh
EH12 9DR
Solicitors
Aberdein Considine
23 Port Street
Stirling
FK6 2EJ
RIGHT MEDICINE PHARMACY LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Independent auditor's report
4 - 6
Group statement of profit or loss
7
Group balance sheet
8
Company balance sheet
9
Group statement of changes in equity
10
Company statement of changes in equity
11
Group statement of cash flows
12
Notes to the financial statements
13 - 32
RIGHT MEDICINE PHARMACY LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 28 FEBRUARY 2020
- 1 -
The directors present the strategic report for the year ended 28 February 2020.
Fair review of the business
The principal activity of the group during the year was to provide the service of dispensing chemists and to retail medical and orthopaedic goods.
This year has proved to be another strong year of trading as shown in the financial results reported.
This year has shown improved margins which are attributed to maintaining the core business and the effective execution of buying strategy.
Since year end the group have continued to grow with the acquisition of a further pharmacy.
Principal risks and uncertainties
The directors are ultimately responsible for the system of internal control, which covers all aspects of the business, and for reviewing its effectiveness. However, any such system is designed to manage, rather than eliminate, the risk of failure to achieve the group's objectives. Therefore any system is only able to provide reasonable, and not absolute assurance against material misstatement or loss. The directors regularly review the risks to which the group is exposed, as well as the operation and effectiveness of the system of internal controls. This is an ongoing process, involving the identification, evaluation and management of the significant risks faced by the group.
Risks are assessed on a regular basis across all areas but, in particular, health and safety, information flow, asset protection and regulatory requirements.
Key performance indicators
The key financial indicators used by the directors are detailed below:
The directors also make use of a number of monthly non-financial metrics based around the NHS service provision to provide insight and assist decision making within the group.
Other events during the year
During the year Right Medicine Pharmacy Limited acquired Tinkler Limited and Tinkler Edinburgh Limited.
Mr N Wicks
Director
4 December 2020
RIGHT MEDICINE PHARMACY LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 28 FEBRUARY 2020
- 2 -
The directors present their annual report and financial statements for the year ended 28 February 2020.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr N Wicks
Mr M Embrey
Mr J Burton
Mr M Embrey
Results and dividends
The results for the year are set out on page 7.
Ordinary dividends were paid amounting to £197,000. The directors do not recommend payment of a further dividend.
Auditor
Thomson Cooper were appointed as auditor to the group and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
Statement of directors' responsibilities
The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and company, and of the profit or loss of the group 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;
-
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
-
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the
company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Strategic report
The
true
group
has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the
group
'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. It has done so in respect of
the principal activities, business review and principal risks and uncertainties of the group.
RIGHT MEDICINE PHARMACY LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2020
- 3 -
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 auditor
of the
company 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 auditor
of the
company
is
aware of that information.
On behalf of the board
Mr N Wicks
Director
4 December 2020
RIGHT MEDICINE PHARMACY LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF RIGHT MEDICINE PHARMACY LIMITED
- 4 -
Opinion
We have audited the
financial statements of Right Medicine Pharmacy Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 28 February 2020 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and 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 United Kingdom Accounting Standards, including FRS 102
The Financial Reporting Standard applicable in the UK and Republic of Ireland
(United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
-
give a true and fair view of the state of the group's and the parent company's affairs as at 28 February 2020 and of the group's 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
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
-
the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
-
the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the
group's or the parent
company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue
.
The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report 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 materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
RIGHT MEDICINE PHARMACY LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF RIGHT MEDICINE PHARMACY LIMITED
- 5 -
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' r
eport for the financial year for which the financial statements are prepared is consistent with the financial statements
; and
-
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the
group and the parent
company and its environment obtained in the course of the audit, we have not identifie
d
material misstatements in the strategic report and the directors'
r
eport
.
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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
-
the parent company financial statements are not in agreement with the accounting records and returns; or
-
certain disclosures of directors' remuneration specified by law are not made; or
-
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors'
r
esponsibilities
s
tatement, 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
group's and the parent
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
group or the parent
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.
A further description of our responsibilities for the audit of the financial statements is located on the
Financial Reporting Council’s website at: http://www.frc.org.uk/auditorsresponsibilities
.
This description forms part of our auditor’s report.
RIGHT MEDICINE PHARMACY LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF RIGHT MEDICINE PHARMACY LIMITED
- 6 -
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.
Sharon Collins (Senior Statutory Auditor)
for and on behalf of Thomson Cooper
Dunfermline
11 December 2020
RIGHT MEDICINE PHARMACY LIMITED
GROUP STATEMENT OF PROFIT OR LOSS
FOR THE YEAR ENDED 28 FEBRUARY 2020
- 7 -
2020
2019
Notes
£
£
Turnover
3
19,625,257
16,438,815
Cost of sales
(12,145,517)
(9,894,439)
Gross profit
7,479,740
6,544,376
Administrative expenses
(6,964,981)
(5,363,388)
Other operating income
171,115
51,603
Operating profit
4
685,874
1,232,591
Share of results of associates and joint ventures
-
2,725
Interest receivable and similar income
8
5,000
4,731
Interest payable and similar expenses
9
(394,826)
(265,760)
Amounts written off investments
10
-
(1)
Profit before taxation
296,048
974,286
Tax on profit
11
(239,548)
(318,284)
Profit for the financial year
28
56,500
656,002
Profit for the financial year is attributable to:
- Owners of the parent company
88,754
603,304
- Non-controlling interests
(32,254)
52,698
56,500
656,002
Total comprehensive income for the year is attributable to:
- Owners of the parent company
88,754
603,304
- Non-controlling interests
(32,254)
52,698
56,500
656,002
RIGHT MEDICINE PHARMACY LIMITED
GROUP BALANCE SHEET
AS AT
28 FEBRUARY 2020
28 February 2020
- 8 -
2020
2019
Notes
£
£
£
£
Fixed assets
Goodwill
13
9,662,294
8,868,545
Tangible assets
14
3,382,648
2,137,649
Investment properties
15
150,000
150,000
13,194,942
11,156,194
Current assets
Stocks
19
1,160,934
1,105,127
Debtors
20
2,645,308
2,022,017
Cash at bank and in hand
1,996,011
1,514,787
5,802,253
4,641,931
Creditors: amounts falling due within one year
21
(5,267,586)
(3,778,370)
Net current assets
534,667
863,561
Total assets less current liabilities
13,729,609
12,019,755
Creditors: amounts falling due after more than one year
22
(11,205,476)
(9,356,173)
Provisions for liabilities
24
(107,626)
(93,683)
Net assets
2,416,507
2,569,899
Capital and reserves
Called up share capital
27
95
95
Capital redemption reserve
28
5
5
Profit and loss reserves
28
1,867,109
1,988,247
Equity attributable to owners of the parent company
1,867,209
1,988,347
Non-controlling interests
549,298
581,552
2,416,507
2,569,899
The financial statements were approved by the board of directors and authorised for issue on 4 December 2020 and are signed on its behalf by:
04 December 2020
Mr N Wicks
Director
RIGHT MEDICINE PHARMACY LIMITED
COMPANY BALANCE SHEET
AS AT 28 FEBRUARY 2020
28 February 2020
- 9 -
2020
2019
Notes
£
£
£
£
Fixed assets
Goodwill
13
3,476,951
3,757,385
Tangible assets
14
1,646,323
478,673
Investments
16
1,899,064
21
7,022,338
4,236,079
Current assets
Stocks
19
634,844
573,131
Debtors
20
1,944,508
1,397,889
Cash at bank and in hand
1,146,959
1,067,149
3,726,311
3,038,169
Creditors: amounts falling due within one year
21
(3,209,073)
(1,853,407)
Net current assets
517,238
1,184,762
Total assets less current liabilities
7,539,576
5,420,841
Creditors: amounts falling due after more than one year
22
(5,223,879)
(3,225,570)
Provisions for liabilities
25
(47,300)
(32,965)
Net assets
2,268,397
2,162,306
Capital and reserves
Called up share capital
27
95
95
Capital redemption reserve
28
5
5
Profit and loss reserves
28
2,268,297
2,162,206
Total equity
2,268,397
2,162,306
As permitted by s408 Companies Act 2006, the
c
ompany has not presented its own profit and loss account and related notes. The
c
ompany’s profit for the year was £303,091 (2019 - £527,333 profit).
The financial statements were approved by the board of directors and authorised for issue on 4 December 2020 and are signed on its behalf by:
04 December 2020
Mr N Wicks
Director
Company Registration No. SC228623
RIGHT MEDICINE PHARMACY LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 28 FEBRUARY 2020
- 10 -
Share capital
Capital redemption reserve
Profit and loss reserves
Total controlling interest
Non-controlling interest
Total
Notes
£
£
£
£
£
£
Balance at 1 March 2018
95
5
1,572,943
1,573,043
528,854
2,101,897
Year ended 28 February 2019:
Profit and total comprehensive income for the year
-
-
603,304
603,304
52,698
656,002
Dividends
12
-
-
(188,000)
(188,000)
-
(188,000)
Balance at 28 February 2019
95
5
1,988,247
1,988,347
581,552
2,569,899
Year ended 28 February 2020:
Profit and total comprehensive income for the year
-
-
88,754
88,754
(32,254)
56,500
Dividends
12
-
-
(197,000)
(197,000)
-
(197,000)
Transfers
-
-
(12,892)
(12,892)
-
(12,892)
Balance at 28 February 2020
95
5
1,867,109
1,867,209
549,298
2,416,507
RIGHT MEDICINE PHARMACY LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 28 FEBRUARY 2020
- 11 -
Share capital
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 March 2018
95
5
1,822,872
1,822,972
Year ended 28 February 2019:
Profit and total comprehensive income for the year
-
-
527,334
527,334
Dividends
12
-
-
(188,000)
(188,000)
Balance at 28 February 2019
95
5
2,162,206
2,162,306
Year ended 28 February 2020:
Profit and total comprehensive income for the year
-
-
303,091
303,091
Dividends
12
-
-
(197,000)
(197,000)
Balance at 28 February 2020
95
5
2,268,297
2,268,397
RIGHT MEDICINE PHARMACY LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 28 FEBRUARY 2020
- 12 -
2020
2019
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
33
2,836,601
1,761,425
Interest paid
(394,826)
(265,760)
Income taxes paid
(307,476)
(197,966)
Net cash inflow from operating activities
2,134,299
1,297,699
Investing activities
Purchase of intangible assets
(2,022,791)
(3,121,214)
Purchase of tangible fixed assets
(1,471,461)
(693,965)
Proceeds on disposal of tangible fixed assets
10,569
5,456
Purchase of investment property
-
(150,000)
Proceeds on disposal of associates
-
7,419
Receipts arising from loans made
(1,481)
(8,635)
Interest received
5,000
4,731
Net cash used in investing activities
(3,480,164)
(3,956,208)
Financing activities
Repayment of bank loans
2,024,089
2,995,827
Dividends paid to equity shareholders
(197,000)
(188,000)
Net cash generated from financing activities
1,827,089
2,807,827
Net increase in cash and cash equivalents
481,224
149,318
Cash and cash equivalents at beginning of year
1,514,787
1,365,469
Cash and cash equivalents at end of year
1,996,011
1,514,787
RIGHT MEDICINE PHARMACY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2020
- 13 -
1
Accounting policies
Company information
Right Medicine Pharmacy Limited
(“the company”)
is a
private
limited company domiciled and incorporated in Scotland.
The registered office is
.
The group consists of Right Medicine Pharmacy Limited and its subsidiary, Web Pharmacy Limited.
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 a
mounts
in these financial statements are
rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
1.2
Basis of consolidation
In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date.
Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date.
I
nvestments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.
Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.
The consolidated financial statements incorporate those of Right Medicine Pharmacy Limited and all of its subsidiaries (ie entities that the
g
roup controls through its power to govern the financial and operating policies so as to obtain economic benefits). Subsidiaries acquired during the year are consolidated using the purchase method. Their results are incorporated from the date that control passes.
All financial statements are made up to 28 February 2020
.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the
g
roup.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Entities other than subsidiary undertakings or joint ventures, in which the group has a participating interest and over whose operating and financial policies the group exercises a significant influence, are treated as associates. In the group financial statements, associates are accounted for
using the equity method.
RIGHT MEDICINE PHARMACY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2020
1
Accounting policies
(Continued)
- 14 -
Entities in which the group holds an interest and which are jointly controlled by the group and one or more other venturers under a
contractual arrangement are treated as joint ventures.
In the group financial statements, joint ventures are accounted for using the equity method.
Minority interests in the net assets of consolidated subsidiaries are identified separately from the Group’s equity. Minority interests consist of the amount of those interests at the date of the original business combination and the minority’s share of changes in equity since the date of the combination.
The proportions of profit or loss and changes in equity allocated to the owners of the parent and to the minority interests are determined on the basis of existing ownership interests and do not reflect the possible exercise or conversion of options or convertible instruments.
1.3
Going concern
At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.4
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
1.5
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of acquisition of
a
business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated
amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 10 years. Goodwill arising on group reorganisations is amortised over a 20 year period.
For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.
RIGHT MEDICINE PHARMACY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2020
1
Accounting policies
(Continued)
- 15 -
1.6
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:
Heritable Property
2% straight line
Leasehold land and buildings
10% straight line
Plant and machinery
33% straight line
Fixtures and fittings
20%/25% straight line
Office equipment
30%/33% straight line
Motor vehicles
33% 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 recognised in the profit and loss account.
1.7
Investment properties
Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure
. Subsequently it is measured
at fair value a
t
the reporting end date.
Changes in fair value are recognised in profit or loss.
1.8
Fixed asset investments
Equity in
vest
ments are measured at fair value through profit or loss
,
except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably
,
which are recognised at cost less impairment until a reliable measure of fair value becomes available.
I
n the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the
group. Control is
the power to govern the financial and operating policies of
the
entity so as to obtain benefits from its activities.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The
group
considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Investments in associates are initially recognised at the transaction price (including transaction costs) and are subsequently adjusted to reflect the
g
roup’s share of the profit or loss, other comprehensive income and equity of the associate using the equity method.
Any difference between the cost of acquisition and the share of the fair value of the net identifiable assets of the associate on acquisition is recognised as goodwill. Any unamortised balance of goodwill is included in the carrying value of the investment in associates.
Losses in excess of the carrying amount of an investment in an associate are recorded as a provision only when the company has incurred legal or constructive obligations or has made payments on behalf of the associate.
In the
parent c
ompany financial statements, investments in associates are accounted for at cost less impairment.
RIGHT MEDICINE PHARMACY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2020
1
Accounting policies
(Continued)
- 16 -
Entities in which the
group
has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities
.
1.9
Impairment of fixed assets
At each reporting
period
end date, the
group
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.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
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.
1.10
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks held for distribution at no or nominal consideration are measured at
the
lower of replacement cost and cost, adjusted where applicable for any loss of service potential.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.11
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.
RIGHT MEDICINE PHARMACY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2020
1
Accounting policies
(Continued)
- 17 -
1.12
Financial instruments
The group 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 group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and 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
m
ethod 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.
Impairment of financial assets
Financial assets, other than those
held
at
fair value through profit and loss
, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected.
If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group 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 group after deducting all of its liabilities.
RIGHT MEDICINE PHARMACY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2020
1
Accounting policies
(Continued)
- 18 -
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future
paymen
ts 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
group's contractual obligations expire or are discharged or cancelled.
1.13
Equity instruments
Equity instruments issued by the group 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 group.
1.14
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
group’s
liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset
if, and only if, there is
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.
RIGHT MEDICINE PHARMACY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2020
1
Accounting policies
(Continued)
- 19 -
1.15
Provisions
Provisions are recognised when the
group
has a legal or constructive present obligation as a result of a past event, it is probable that the
group
will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation.
Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision i
s
measured at present value
,
the unwinding of the discount is recognised as a finance cost in profit or loss in the period
in which
it arises.
1.16
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.
1.17
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.18
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 lease
d
asset are consumed.
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
2
Judgements and key sources of estimation uncertainty
In the application of the group’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.
3
Turnover and other revenue
2020
2019
£
£
Turnover analysed by class of business
Sale of goods
19,625,257
16,438,815
RIGHT MEDICINE PHARMACY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2020
3
Turnover and other revenue
(Continued)
- 20 -
2020
2019
£
£
Other significant revenue
Interest income
5,000
4,731
Rental income arising from investment properties
35,829
21,300
Management charges receivable
-
21,493
4
Operating profit
2020
2019
£
£
Operating profit for the year is stated after charging/(crediting):
Depreciation of owned tangible fixed assets
205,601
118,890
Profit on disposal of tangible fixed assets
(2,600)
(38,221)
Amortisation of intangible assets
1,229,042
834,735
Operating lease charges
235,687
226,491
5
Auditor's remuneration
2020
2019
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
9,795
7,000
Audit of the financial statements of the company's subsidiaries
13,442
9,318
23,237
16,318
6
Employees
The average monthly number of persons (including directors) employed by the group and company during the year was:
Group
Company
2020
2019
2020
2019
Number
Number
Number
Number
Administrative Staff
226
177
120
97
Directors
3
3
3
3
Total
229
180
123
100
RIGHT MEDICINE PHARMACY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2020
6
Employees
(Continued)
- 21 -
Their aggregate remuneration comprised:
Group
Company
2020
2019
2020
2019
£
£
£
£
Wages and salaries
3,795,043
3,084,557
2,149,203
1,594,249
Social security costs
255,227
215,686
148,409
115,889
Pension costs
170,525
154,129
145,733
129,444
4,220,795
3,454,372
2,443,345
1,839,582
7
Directors' remuneration
2020
2019
£
£
Remuneration for qualifying services
25,272
25,206
Company pension contributions to defined contribution schemes
110,000
110,000
135,272
135,206
8
Interest receivable and similar income
2020
2019
£
£
Interest income
Other interest income
5,000
4,731
9
Interest payable and similar expenses
2020
2019
£
£
Interest on bank overdrafts and loans
394,028
265,760
Other interest on financial liabilities
798
-
Total finance costs
394,826
265,760
10
Amounts written off investments
2020
2019
£
£
Amounts written back to/(written off) investments held at fair value
-
(1)
Amounts written off investments represent the disposal of the group's investment in Carcrow Limited.
RIGHT MEDICINE PHARMACY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2020
- 22 -
11
Taxation
2020
2019
£
£
Current tax
UK corporation tax on profits for the current period
245,137
306,272
Adjustments in respect of prior periods
(19,532)
-
Total current tax
225,605
306,272
Deferred tax
Origination and reversal of timing differences
13,943
12,012
Total tax charge
239,548
318,284
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2020
2019
£
£
Profit before taxation
296,048
974,286
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2019: 19.00%)
56,249
185,114
Tax effect of expenses that are not deductible in determining taxable profit
218,573
134,903
Unutilised tax losses carried forward
-
892
Permanent capital allowances in excess of depreciation
(29,685)
(14,804)
Other permanent differences
-
167
Under/(over) provided in prior years
(19,532)
-
Deferred tax adjustments in respect of prior years
13,943
(3,878)
Deferred tax
-
15,890
Taxation charge
239,548
318,284
12
Dividends
2020
2019
£
£
Final paid
197,000
188,000
RIGHT MEDICINE PHARMACY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2020
- 23 -
13
Intangible fixed assets
Group
Goodwill
£
Cost
At 1 March 2019
12,951,065
Additions
2,022,791
At 28 February 2020
14,973,856
Amortisation and impairment
At 1 March 2019
4,082,520
Amortisation charged for the year
1,229,042
At 28 February 2020
5,311,562
Carrying amount
At 28 February 2020
9,662,294
At 28 February 2019
8,868,545
Company
Goodwill
£
Cost
At 1 March 2019
6,417,472
Additions
136,640
At 28 February 2020
6,554,112
Amortisation and impairment
At 1 March 2019
2,660,087
Amortisation charged for the year
417,074
At 28 February 2020
3,077,161
Carrying amount
At 28 February 2020
3,476,951
At 28 February 2019
3,757,385
RIGHT MEDICINE PHARMACY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2020
- 24 -
14
Tangible fixed assets
Group
Heritable Property
Leasehold land and buildings
Plant and machinery
Fixtures and fittings
Office equipment
Motor vehicles
Total
£
£
£
£
£
£
£
Cost
At 1 March 2019
1,871,520
29,571
7,789
507,745
350,788
96,814
2,864,227
Additions
1,266,119
-
-
90,954
70,516
30,980
1,458,569
Disposals
-
-
(7,969)
-
-
(6,000)
(13,969)
At 28 February 2020
3,137,639
29,571
(180)
598,699
421,304
121,794
4,308,827
Depreciation and impairment
At 1 March 2019
115,122
22,696
7,788
335,432
216,499
29,041
726,578
Depreciation charged in the year
56,751
750
-
50,671
76,448
20,981
205,601
Eliminated in respect of disposals
-
-
-
-
-
(6,000)
(6,000)
At 28 February 2020
171,873
23,446
7,788
386,103
292,947
44,022
926,179
Carrying amount
At 28 February 2020
2,965,766
6,125
(7,968)
212,596
128,357
77,772
3,382,648
At 28 February 2019
1,756,398
6,875
1
172,313
134,289
67,773
2,137,649
RIGHT MEDICINE PHARMACY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2020
- 25 -
Company
Heritable Property
Leasehold land and buildings
Fixtures and fittings
Office equipment
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 1 March 2019
277,283
29,571
377,867
253,308
70,499
1,008,528
Additions
1,149,210
-
79,994
58,213
-
1,287,417
At 28 February 2020
1,426,493
29,571
457,861
311,521
70,499
2,295,945
Depreciation and impairment
At 1 March 2019
50,856
22,696
277,649
161,398
17,256
529,855
Depreciation charged in the year
24,087
750
29,905
54,564
10,461
119,767
At 28 February 2020
74,943
23,446
307,554
215,962
27,717
649,622
Carrying amount
At 28 February 2020
1,351,550
6,125
150,307
95,559
42,782
1,646,323
At 28 February 2019
226,427
6,875
100,218
91,910
53,243
478,673
15
Investment property
Group
Company
2020
2020
£
£
Fair value
At 1 March 2019 and 28 February 2020
150,000
-
The fair value of the investment property has been arrived at on the basis of a valuation carried out at 3 March 2015 by Allied Scotland, Chartered Surveyors, who are not connected with the group. The valuation was made on an open market value basis by reference to market evidence of transaction prices for similar properties. The directors do not consider there to have been any material change in the value of the property since this date.
16
Fixed asset investments
Group
Company
2020
2019
2020
2019
Notes
£
£
£
£
Investments in subsidiaries
17
-
-
1,899,043
-
Investments in associates
18
-
-
21
21
-
-
1,899,064
21
RIGHT MEDICINE PHARMACY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2020
16
Fixed asset investments
(Continued)
- 26 -
Movements in fixed asset investments
Company
Shares in group undertakings and participating interests
£
Cost or valuation
At 1 March 2019
21
Additions
1,899,043
At 28 February 2020
1,899,064
Carrying amount
At 28 February 2020
1,899,064
At 28 February 2019
21
17
Subsidiaries
Details of the company's subsidiaries at 28 February 2020 are as follows:
Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Indirect
Web Pharmacy Limited
United Kingdom
Ordinary shares
58.33
-
Tinkler Edinburgh Limited
United Kingdom
Ordinary shares
100.00
-
Tinkler Limited
United Kingdom
Ordinary Shares
0
100.00
Sceaux Limited
United Kingdom
Ordinary shares
0
100.00
On 2 May 2019 Right Medicine Pharmacy Limited acquired the share capital of Tinkler Edinburgh Limited. Tinkler Edinburgh Limited owned 100% of the share capital of Tinkler Limited and Sceaux Limited.
On 9 May 2019 the assets and liabilities of Tinkler Edinburgh Limited ,Tinkler Limited and Sceaux Limited were hived up into Right Medicine Pharmacy Limited.
18
Associates
Details of associates at 28 February 2020 are as follows:
Name of undertaking
Registered office
Class of
% Held
shares held
Direct
HKPC Limited
United Kingdom
Ordinary shares
50
RIGHT MEDICINE PHARMACY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2020
- 27 -
19
Stocks
Group
Company
2020
2019
2020
2019
£
£
£
£
Finished goods and goods for resale
1,160,934
1,105,127
634,844
573,131
Stock with a carrying value of £1,160,934 (2019 - £1,105,127) is pledged as security for the group's bank loans.
20
Debtors
Group
Company
2020
2019
2020
2019
Amounts falling due within one year:
£
£
£
£
Trade debtors
1,943,385
1,466,984
1,162,560
883,740
Corporation tax recoverable
22,750
-
22,750
-
Amounts owed by group undertakings
-
-
228,446
104,138
Amounts owed by undertakings in which the company has a participating interest
248
18,396
248
18,396
Other debtors
412,946
401,850
321,064
297,488
Prepayments and accrued income
265,979
134,787
209,440
94,127
2,645,308
2,022,017
1,944,508
1,397,889
21
Creditors: amounts falling due within one year
Group
Company
2020
2019
2020
2019
Notes
£
£
£
£
Bank loans
23
1,064,634
889,848
608,705
458,344
Trade creditors
2,854,038
2,236,015
1,687,062
1,180,177
Corporation tax payable
154,943
214,064
34,022
78,915
Other taxation and social security
60,380
54,580
37,811
31,030
Other creditors
272,051
187,338
101,086
23,432
Accruals and deferred income
861,540
196,525
740,387
81,509
5,267,586
3,778,370
3,209,073
1,853,407
The Bank of Scotland Plc holds legal charges over all property and undertakings of the group. The Bank of Scotland Plc also holds various standard securities and floating charges over the heritable property owned by the group.
RIGHT MEDICINE PHARMACY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2020
- 28 -
22
Creditors: amounts falling due after more than one year
Group
Company
2020
2019
2020
2019
Notes
£
£
£
£
Bank loans and overdrafts
23
11,065,476
9,216,173
5,223,879
3,225,570
Other creditors
140,000
140,000
-
-
11,205,476
9,356,173
5,223,879
3,225,570
The Bank of Scotland Plc holds legal charges over all property and undertakings of the group. The Bank of Scotland Plc also holds various standard securities, floating charges and negative pledges over the heritable property owned by the group.
Amounts included above which fall due after five years are as follows:
Payable by instalments
5,909,257
5,786,546
2,026,656
552,666
23
Loans and overdrafts
Group
Company
2020
2019
2020
2019
£
£
£
£
Bank loans
12,130,110
10,106,021
5,832,584
3,683,914
Payable within one year
1,064,634
889,848
608,705
458,344
Payable after one year
11,065,476
9,216,173
5,223,879
3,225,570
The following securities are held in respect of the company bank loans: The Bank of Scotland Plc hold legal charges dated 7th May 2013 and 27th May 2013 over all of the heritable property owned by the company.
The following securities have been granted by Web Pharmacy Limited: The Bank of Scotland Plc hold a legal charge dated 10th October 2014 over all property and undertakings of the company. The Bank of Scotland Plc also holds various standard securities over the heritable property owned by the company.
The company has several fixed interest and variable interest term loans which attract fixed interest at rates of between 3.64%-3.80% and variable interest rates of 2.0%-2.1% over base rate.
The subsidiary has term loans on which interest is charged at 2-4% over base rate payable monthly in arrears.
RIGHT MEDICINE PHARMACY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2020
- 29 -
24
Provisions for liabilities
Group
Company
2020
2019
2020
2019
Notes
£
£
£
£
Interest in net liabilities of associates
48,564
48,564
-
-
Deferred tax liabilities
25
59,062
45,119
47,300
32,965
107,626
93,683
47,300
32,965
Movements on provisions apart from deferred tax liabilities:
Interest in net liabilities of associates
Group
£
At 1 March 2019 and 28 February 2020
48,564
25
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
Liabilities
Liabilities
2020
2019
Group
£
£
Accelerated capital allowances
59,062
45,119
Liabilities
Liabilities
2020
2019
Company
£
£
Accelerated capital allowances
47,300
32,965
Group
Company
2020
2020
Movements in the year:
£
£
Liability at 1 March 2019
45,119
32,965
Charge to profit or loss
13,943
14,335
Liability at 28 February 2020
59,062
47,300
RIGHT MEDICINE PHARMACY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2020
- 30 -
26
Retirement benefit schemes
2020
2019
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
170,525
154,129
A
defined contribution pension scheme
is operated
for all qualifying employees.
The assets of the scheme are held separately from those of the group in an independently administered fund.
27
Share capital
Group and company
2020
2019
Ordinary share capital
£
£
Issued and fully paid
95 Ordinary shares of £1 each
95
95
28
Reserves
Equity reserve
Share capital account - This reserve records the nominal value of shares that have been issued.
Profit and loss account - This reserve records retained earnings and accumulated losses. This reserve also includes a revaluation reserve of £70,691 which is non-distributable.
Capital redemption reserve
Capital redemption reserve - This reserve records the nominal value of shares repurchased by the company.
29
Operating lease commitments
Lessee
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
Group
Company
2020
2019
2020
2019
£
£
£
£
Within one year
83,744
85,327
72,344
73,927
Between two and five years
267,574
281,136
221,974
235,536
In over five years
275,194
316,983
256,244
286,633
626,512
683,446
550,562
596,096
RIGHT MEDICINE PHARMACY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2020
29
Operating lease commitments
(Continued)
- 31 -
Lessor
At the reporting end date the group had contracted with tenants for the following minimum lease payments:
Group
Company
2020
2019
2020
2019
£
£
£
£
Within one year
7,200
7,200
-
-
Between two and five years
10,200
17,400
-
-
17,400
24,600
-
-
30
Capital commitments
Amounts contracted for but not provided in the financial statements:
Group
Company
2020
2019
2020
2019
£
£
£
£
Acquisition of tangible fixed assets
-
96,000
-
96,000
31
Related party transactions
Group
At 28 February 2020 the group owed £160,033 (2019: £300,043 ) to Cross Healthcare Limited a company which owns a minority interest in Web Pharmacy Limited.
Company
During the year the company sold goods £723,736 (2019: £634,848) and made purchases of £112,861 (2019: £81,346) from Web Pharmacy Limited. At 28 February 2020 the company was owed £271,583 (2019: £246,953).
32
Directors' transactions
Dividends totalling £197,000 (2019 - £188,000) were paid in the year in respect of shares held by the company's directors.
RIGHT MEDICINE PHARMACY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2020
- 32 -
33
Cash generated from group operations
2020
2019
£
£
Profit for the year after tax
56,500
656,002
Adjustments for:
Share of results of associates and joint ventures
-
(2,725)
Taxation charged
239,548
318,284
Finance costs
394,826
265,760
Investment income
(5,000)
(4,731)
Gain on disposal of tangible fixed assets
(2,600)
(38,221)
Amortisation and impairment of intangible assets
1,229,042
834,735
Depreciation and impairment of tangible fixed assets
205,601
118,890
Amounts written off investments
-
1
Decrease in provisions
-
(7,422)
Movements in working capital:
Increase in stocks
(55,807)
(68,939)
Increase in debtors
(599,060)
(436,188)
Increase in creditors
1,373,551
125,979
Cash generated from operations
2,836,601
1,761,425
34
Analysis of changes in net debt - group
1 March 2019
Cash flows
28 February 2020
£
£
£
Cash at bank and in hand
1,514,787
481,224
1,996,011
Borrowings excluding overdrafts
(10,106,021)
(2,024,089)
(12,130,110)
(8,591,234)
(1,542,865)
(10,134,099)
2020-02-28
2019-03-01
false
CCH Software
CCH Accounts Production 2020.310
No description of principal activity
Mr N Wicks
Mr M Embrey
Mr J Burton
Mr Jonathan Burton
Mr Michael Embrey
Mrs E Embrey
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