Company Registration No. SC228623 (Scotland)
RIGHT MEDICINE PHARMACY LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2021
RIGHT MEDICINE PHARMACY LIMITED
COMPANY INFORMATION
Directors
Mr N Wicks
Mr M Embrey
Mr J Burton
Mr M Embrey
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 profit and loss account
7
Group balance sheet
8 - 9
Company balance sheet
10
Group statement of changes in equity
11
Company statement of changes in equity
12
Group statement of cash flows
13
Notes to the financial statements
14 - 35
RIGHT MEDICINE PHARMACY LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 28 FEBRUARY 2021
- 1 -
The directors present the strategic report for the year ended 28 February 2021.
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 Norvik Topco Limited, Norvik Holdings Limited and Norvik Pharmacies Limited.
Mr N Wicks
Director
26 November 2021
RIGHT MEDICINE PHARMACY LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 28 FEBRUARY 2021
- 2 -
The directors present their annual report and financial statements for the year ended 28 February 2021.
Results and dividends
The results for the year are set out on page 7.
Ordinary dividends were paid amounting to £195,392. The directors do not recommend payment of a further dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr N Wicks
Mr M Embrey
Mr J Burton
Mr M Embrey
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
;
-
prepare the
on the going concern basis unless it is inappropriate to presume that the
group and
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 2021
- 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
26 November 2021
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 2021 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
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 2021 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
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
group's and
parent
company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
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
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
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
.
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
.
Extent to which the audit was considered capable of detecting irregularities, including fraud
We considered the opportunities and incentives that may exist within the group for fraud and identified the greatest potential for fraud in the following areas; existence and timing of recognition of income, posting of unusual journals along with complex transactions and non-compliance with laws and regulations. We discussed these areas in detail with management and designed audit procedures to test the timing and existence of revenue, carried out analytical review and reviewed the internal controls in place and asked questions of management with regard laws and regulations.
We discussed with management the laws and regulations as being significant to the company and the group and whether there had been any breaches or litigation. The group and company are not considered to be in a particularly regulated industry which has reduced the level of risk.
RIGHT MEDICINE PHARMACY LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF RIGHT MEDICINE PHARMACY LIMITED
- 6 -
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our sector experience through discussions with management (as required by the auditing standards).
We reviewed the laws and regulations in areas that directly affect the financial statements including applicable company law and considered the extent of compliance with those laws and regulations as part of our procedures of the related financial statement items,
With the exception of the known or possible non-compliance with relevant and significant laws and regulations, and as required by the auditing standards, our work in respect of these was limited to enquiry of the officers and management of the company.
We communicated identified laws and regulations and potential fraud risks throughout our team and remained alert to any indications of non-compliance or fraud throughout the audit. However, the primary responsibility for the prevention and detection of fraud rests with the directors.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Sharon Collins (Senior Statutory Auditor)
For and on behalf of Thomson Cooper, Statutory Auditor
Dunfermline
26 November 2021
RIGHT MEDICINE PHARMACY LIMITED
GROUP PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 28 FEBRUARY 2021
- 7 -
2021
2020
Notes
£
£
Turnover
2
22,953,892
19,625,257
Cost of sales
(13,184,936)
(12,145,517)
Gross profit
9,768,956
7,479,740
Administrative expenses
(7,100,316)
(7,175,189)
Other operating income
543,166
381,323
Operating profit
3
3,211,806
685,874
Share of results of associates
48,564
-
Interest receivable and similar income
7
12,158
5,000
Interest payable and similar expenses
8
(380,664)
(394,826)
Amounts written off investments
9
(68,272)
-
Profit before taxation
2,823,592
296,048
Tax on profit
10
(879,199)
(239,548)
Profit for the financial year
26
1,944,393
56,500
Profit for the financial year is attributable to:
- Owners of the parent company
1,669,822
88,754
- Non-controlling interests
274,571
(32,254)
1,944,393
56,500
Total comprehensive income for the year is attributable to:
- Owners of the parent company
1,669,822
88,754
- Non-controlling interests
274,571
(32,254)
1,944,393
56,500
The profit and loss account has been prepared on the basis that all operations are continuing operations.
RIGHT MEDICINE PHARMACY LIMITED
GROUP BALANCE SHEET
AS AT
28 FEBRUARY 2021
28 February 2021
- 8 -
2021
2020
Notes
£
£
£
£
Fixed assets
Goodwill
12
11,547,296
9,662,294
Other intangible assets
12
3,355
-
Total intangible assets
11,550,651
9,662,294
Tangible assets
13
3,745,634
3,382,648
Investment properties
14
1,895,000
150,000
17,191,285
13,194,942
Current assets
Stocks
17
1,318,651
1,160,934
Debtors
18
2,430,468
2,645,308
Cash at bank and in hand
3,321,695
1,996,011
7,070,814
5,802,253
Creditors: amounts falling due within one year
19
(5,867,730)
(5,267,586)
Net current assets
1,203,084
534,667
Total assets less current liabilities
18,394,369
13,729,609
Creditors: amounts falling due after more than one year
20
(14,094,146)
(11,205,476)
Provisions for liabilities
Provisions
22
-
48,564
Deferred tax liability
23
134,715
59,062
(134,715)
(107,626)
Net assets
4,165,508
2,416,507
Capital and reserves
Called up share capital
25
95
95
Capital redemption reserve
26
5
5
Profit and loss reserves
26
3,341,539
1,867,109
Equity attributable to owners of the parent company
3,341,639
1,867,209
Non-controlling interests
823,869
549,298
4,165,508
2,416,507
RIGHT MEDICINE PHARMACY LIMITED
GROUP BALANCE SHEET (CONTINUED)
AS AT
28 FEBRUARY 2021
28 February 2021
- 9 -
The financial statements were approved by the board of directors and authorised for issue on 26 November 2021 and are signed on its behalf by:
26 November 2021
Mr N Wicks
Director
RIGHT MEDICINE PHARMACY LIMITED
COMPANY BALANCE SHEET
AS AT 28 FEBRUARY 2021
28 February 2021
- 10 -
2021
2020
Notes
£
£
£
£
Fixed assets
Goodwill
12
4,763,982
3,476,951
Tangible assets
13
2,063,932
1,646,323
Investments
15
4,193,198
1,899,064
11,021,112
7,022,338
Current assets
Stocks
17
832,472
634,844
Debtors
18
1,584,543
1,944,508
Cash at bank and in hand
1,988,342
1,146,959
4,405,357
3,726,311
Creditors: amounts falling due within one year
19
(4,240,151)
(3,209,073)
Net current assets
165,206
517,238
Total assets less current liabilities
11,186,318
7,539,576
Creditors: amounts falling due after more than one year
20
(7,510,113)
(5,223,879)
Provisions for liabilities
Deferred tax liability
23
114,371
47,300
(114,371)
(47,300)
Net assets
3,561,834
2,268,397
Capital and reserves
Called up share capital
25
95
95
Capital redemption reserve
26
5
5
Profit and loss reserves
26
3,561,734
2,268,297
Total equity
3,561,834
2,268,397
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 £1,488,829 (2020 - £303,091 profit).
The financial statements were approved by the board of directors and authorised for issue on 26 November 2021 and are signed on its behalf by:
26 November 2021
Mr N Wicks
Director
Company Registration No. SC228623
RIGHT MEDICINE PHARMACY LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 28 FEBRUARY 2021
- 11 -
Share capital
Capital redemption reserve
Profit and loss reserves
Total controlling interest
Non-controlling interest
Total
Notes
£
£
£
£
£
£
Balance at 1 March 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
11
-
-
(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
Year ended 28 February 2021:
Profit and total comprehensive income for the year
-
-
1,669,822
1,669,822
274,571
1,944,393
Dividends
11
-
-
(195,392)
(195,392)
-
(195,392)
Balance at 28 February 2021
95
5
3,341,539
3,341,639
823,869
4,165,508
RIGHT MEDICINE PHARMACY LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 28 FEBRUARY 2021
- 12 -
Share capital
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 March 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
11
-
-
(197,000)
(197,000)
Balance at 28 February 2020
95
5
2,268,297
2,268,397
Year ended 28 February 2021:
Profit and total comprehensive income for the year
-
-
1,488,829
1,488,829
Dividends
11
-
-
(195,392)
(195,392)
Balance at 28 February 2021
95
5
3,561,734
3,561,834
RIGHT MEDICINE PHARMACY LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 28 FEBRUARY 2021
- 13 -
2021
2020
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
30
4,908,550
2,836,601
Interest paid
(380,664)
(394,826)
Income taxes paid
(464,004)
(307,476)
Net cash inflow from operating activities
4,063,882
2,134,299
Investing activities
Purchase of intangible assets
(3,471,074)
(2,022,791)
Purchase of tangible fixed assets
(776,762)
(1,471,461)
Proceeds on disposal of tangible fixed assets
175,500
10,569
Purchase of investment property
(1,813,272)
-
Receipts from associates
48,564
-
Receipts arising from loans made
7,767
(1,481)
Interest received
12,158
5,000
Net cash used in investing activities
(5,817,119)
(3,480,164)
Financing activities
Repayment of bank loans
3,274,313
2,024,089
Dividends paid to equity shareholders
(195,392)
(197,000)
Net cash generated from financing activities
3,078,921
1,827,089
Net increase in cash and cash equivalents
1,325,684
481,224
Cash and cash equivalents at beginning of year
1,996,011
1,514,787
Cash and cash equivalents at end of year
3,321,695
1,996,011
RIGHT MEDICINE PHARMACY LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2021
- 14 -
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
Unit 79-81, Bandeath Industrial Estate, Throsk, Stirling, FK7 7NP.
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, to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:
-
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
-
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues
:
The
disclosure
requirements of paragraphs 11.42, 11.44, 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b), 11.48(c), 12.26, 12.27, 12.29(a), 12.29(b), and 12.29A;
-
Section 26 ‘Share based Payment’
:
Share based payment arrangements required under FRS 102 paragraphs 26.18(b), 26.19 to 26.21 and 26.23;
-
Section 33 ‘Related Party Disclosures’
:
Compensation for key management personnel
.
1.2
Business combinations
In the parent company
financial statements, t
he 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.
RIGHT MEDICINE PHARMACY LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2021
1
Accounting policies
(Continued)
- 15 -
1.3
Basis of consolidation
The consolidated group financial statements consist of the financial statements of the parent company
Right Medicine Pharmacy Limited
together with
all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates
.
All
financial statements
are made up to 28 February 2021
.
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 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. 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.
Investments in joint ventures and associates are carried in the group balance sheet at cost plus post-acquisition changes in the group’s share of the net assets of the entity, less any impairment in value. The carrying values of investments in joint ventures and associates include acquired goodwill.
If the group’s share of losses in a joint venture or associate equals or exceeds its investment in the joint venture or associate, the group does not recognise further losses unless it has incurred obligations to do so or has made payments on behalf of the joint venture or associate.
Unrealised gains arising from transactions with joint ventures and associates are eliminated to the extent of the group’s interest in the entity.
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.
1.4
Going concern
At the time of approving the financial statements, the directors expect that the
group
has adequate resources to continue in operational existence for a period of not less than twelve months. The directors have reviewed their cashflow requirements and are satisfied that both short term liquidity and longer term financial viability is appropriate and as such the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.5
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.
RIGHT MEDICINE PHARMACY LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2021
1
Accounting policies
(Continued)
- 16 -
1.6
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.
1.7
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date
where
it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the
fair
value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Software
33% Straight Line
1.8
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
.
1.9
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.
RIGHT MEDICINE PHARMACY LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2021
1
Accounting policies
(Continued)
- 17 -
1.10
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.
Entities in which the
group
has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities
.
1.11
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.
RIGHT MEDICINE PHARMACY LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2021
1
Accounting policies
(Continued)
- 18 -
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.
1.12
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
the lower of cost and replacement cost
, adjusted where applicable for any loss of service potential.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.13
Cash and cash equivalents
Cash and cash equivalents
are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.14
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.
RIGHT MEDICINE PHARMACY LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2021
1
Accounting policies
(Continued)
- 19 -
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.
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.
1.15
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.
1.16
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
RIGHT MEDICINE PHARMACY LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2021
1
Accounting policies
(Continued)
- 20 -
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.
1.17
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.
1.18
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.
1.19
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.20
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.
RIGHT MEDICINE PHARMACY LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2021
1
Accounting policies
(Continued)
- 21 -
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.
1.21
Government grants
Government grants are recognised at the fair value of the asset receive
d
or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met
. Where a
grant does not specify performance conditions
it
is recognised in income when the proceeds are received or receivable
. A grant received before the recognition criteria are satisfied is recognised as a liability.
2
Turnover and other revenue
2021
2020
£
£
Turnover analysed by class of business
Sale of goods
22,953,892
19,625,257
2021
2020
£
£
Other significant revenue
Interest income
12,158
5,000
Grants received
292,613
-
Rental income arising from investment properties
-
35,829
3
Operating profit
2021
2020
£
£
Operating profit for the year is stated after charging/(crediting):
Government grants
(292,613)
-
Depreciation of owned tangible fixed assets
258,875
205,601
Profit on disposal of tangible fixed assets
(20,599)
(2,600)
Amortisation of intangible assets
1,501,447
1,229,042
Operating lease charges
216,310
235,687
4
Auditor's remuneration
2021
2020
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
9,195
9,795
Audit of the financial statements of the company's subsidiaries
6,250
13,442
15,445
23,237
RIGHT MEDICINE PHARMACY LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2021
- 22 -
5
Employees
The average monthly number of persons (including directors) employed by the group and company during the year was:
Group
Company
2021
2020
2021
2020
Number
Number
Number
Number
Administrative Staff
228
226
137
120
Directors
3
3
3
3
Total
231
229
140
123
Their aggregate remuneration comprised:
Group
Company
2021
2020
2021
2020
£
£
£
£
Wages and salaries
4,106,415
3,795,043
2,426,318
2,149,203
Social security costs
292,626
255,227
182,994
148,409
Pension costs
186,625
170,525
158,733
145,733
4,585,666
4,220,795
2,768,045
2,443,345
6
Directors' remuneration
2021
2020
£
£
Remuneration for qualifying services
26,196
25,272
Company pension contributions to defined contribution schemes
110,000
110,000
136,196
135,272
7
Interest receivable and similar income
2021
2020
£
£
Interest income
Interest on bank deposits
7,448
-
Other interest income
4,710
5,000
Total income
12,158
5,000
RIGHT MEDICINE PHARMACY LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2021
- 23 -
8
Interest payable and similar expenses
2021
2020
£
£
Interest on bank overdrafts and loans
361,478
394,028
Other interest on financial liabilities
19,186
798
Total finance costs
380,664
394,826
9
Amounts written off investments
2021
2020
£
£
Changes in the fair value of investment properties
(68,272)
-
Amounts above represent the fair value adjustments in investment properties.
10
Taxation
2021
2020
£
£
Current tax
UK corporation tax on profits for the current period
803,834
245,137
Adjustments in respect of prior periods
30,667
(19,532)
Total current tax
834,501
225,605
Deferred tax
Origination and reversal of timing differences
44,698
13,943
Total tax charge
879,199
239,548
RIGHT MEDICINE PHARMACY LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2021
10
Taxation
(Continued)
- 24 -
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:
2021
2020
£
£
Profit before taxation
2,823,592
296,048
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2020: 19.00%)
536,482
56,249
Tax effect of expenses that are not deductible in determining taxable profit
270,894
218,573
Tax effect of income not taxable in determining taxable profit
3,745
-
Permanent capital allowances in excess of depreciation
(7,287)
(29,685)
Under/(over) provided in prior years
30,667
(19,532)
Deferred tax adjustments in respect of prior years
44,698
13,943
Taxation charge
879,199
239,548
11
Dividends
2021
2020
Recognised as distributions to equity holders:
£
£
Final paid
195,392
197,000
12
Intangible fixed assets
Group
Goodwill
Software
Total
£
£
£
Cost
At 29 February 2020
14,973,856
-
14,973,856
Additions
3,467,624
3,450
3,471,074
Disposals
(293,749)
-
(293,749)
At 28 February 2021
18,147,731
3,450
18,151,181
Amortisation and impairment
At 29 February 2020
5,311,562
-
5,311,562
Amortisation charged for the year
1,501,352
95
1,501,447
Disposals
(212,479)
-
(212,479)
At 28 February 2021
6,600,435
95
6,600,530
RIGHT MEDICINE PHARMACY LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2021
12
Intangible fixed assets
(Continued)
- 25 -
Carrying amount
At 28 February 2021
11,547,296
3,355
11,550,651
At 28 February 2020
9,662,294
-
9,662,294
Company
Goodwill
£
Cost
At 29 February 2020
6,554,112
Additions
1,899,043
At 28 February 2021
8,453,155
Amortisation and impairment
At 29 February 2020
3,077,161
Amortisation charged for the year
612,012
At 28 February 2021
3,689,173
Carrying amount
At 28 February 2021
4,763,982
At 28 February 2020
3,476,951
RIGHT MEDICINE PHARMACY LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2021
- 26 -
13
Tangible fixed assets
Group
Heritable Property
Leasehold land and buildings
Plant and machinery
Fixtures and fittings
Office equipment
Motor vehicles
Total
£
£
£
£
£
£
£
Cost
At 29 February 2020
3,137,639
29,571
(180)
598,699
421,304
121,794
4,308,827
Additions
-
-
-
97,974
74,389
155,029
327,392
Business combinations
50,000
-
-
385,470
2,500
11,400
449,370
Disposals
(155,809)
-
-
-
-
(35,622)
(191,431)
At 28 February 2021
3,031,830
29,571
(180)
1,082,143
498,193
252,601
4,894,158
Depreciation and impairment
At 29 February 2020
171,873
23,446
7,788
386,103
292,947
44,022
926,179
Depreciation charged in the year
60,906
750
-
75,934
85,252
36,033
258,875
Eliminated in respect of disposals
(15,196)
-
-
-
-
(21,334)
(36,530)
At 28 February 2021
217,583
24,196
7,788
462,037
378,199
58,721
1,148,524
Carrying amount
At 28 February 2021
2,814,247
5,375
(7,968)
620,106
119,994
193,880
3,745,634
At 28 February 2020
2,965,766
6,125
(7,968)
212,596
128,357
77,772
3,382,648
RIGHT MEDICINE PHARMACY LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2021
- 27 -
Company
Heritable Property
Leasehold land and buildings
Fixtures and fittings
Office equipment
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 29 February 2020
1,426,493
29,571
457,861
311,521
70,499
2,295,945
Additions
19,225
57,346
142,734
219,305
Business combinations
50,000
385,470
2,500
11,400
449,370
Disposals
(85,809)
(26,606)
(112,415)
At 28 February 2021
1,390,684
29,571
862,556
371,367
198,027
2,852,205
Depreciation and impairment
At 29 February 2020
74,943
23,446
307,554
215,962
27,717
649,622
Depreciation charged in the year
27,266
750
47,584
61,485
19,891
156,976
Eliminated in respect of disposals
(6,007)
(12,318)
(18,325)
At 28 February 2021
96,202
24,196
355,138
277,447
35,290
788,273
Carrying amount
At 28 February 2021
1,294,482
5,375
507,418
93,920
162,737
2,063,932
At 28 February 2020
1,351,550
6,125
150,307
95,559
42,782
1,646,323
14
Investment property
Group
Company
2021
2021
£
£
Fair value
At 29 February 2020
150,000
-
Additions through external acquisition
1,813,272
-
Net gains or losses through fair value adjustments
(68,272)
-
At 28 February 2021
1,895,000
-
The fair value of the investment property brought forward 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 company. 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.
During the year, the company bought a number of investment properties. Valuations were undertaken by DM Hall and Pinders Chartered Surveyors on these properties between March and November 2020. The directors do not consider there to have been any material change in the value between the date of the valuations and the balance sheet date.
The differences between the cost and the fair value of the investment properties purchased during the year is shown above as a fair value adjustment.
RIGHT MEDICINE PHARMACY LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2021
14
Investment property
(Continued)
- 28 -
If investment properties were stated on an historical cost basis rather than a fair value basis, the amounts would have been included as follows:
Group
Company
2021
2020
2021
2020
£
£
£
£
Cost
1,963,272
150,000
-
-
Accumulated depreciation
-
-
-
-
Carrying amount
1,963,272
150,000
-
-
15
Fixed asset investments
Group
Company
2021
2020
2021
2020
Notes
£
£
£
£
Investments in subsidiaries
16
-
-
4,193,177
1,899,043
Investments in associates
-
-
21
21
-
-
4,193,198
1,899,064
Movements in fixed asset investments
Company
Shares in subsidiaries and associates
£
Cost or valuation
At 29 February 2020
1,899,064
Additions
4,193,178
Disposals
(1,899,044)
At 28 February 2021
4,193,198
Carrying amount
At 28 February 2021
4,193,198
At 28 February 2020
1,899,064
The disposal of investments relates to the purchase of 100% subsidiaries which were hived up into the company on acquisition with the residual value of the investment reclassified as a goodwill addition.
16
Subsidiaries
Details of the company's subsidiaries at 28 February 2021 are as follows:
RIGHT MEDICINE PHARMACY LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2021
16
Subsidiaries
(Continued)
- 29 -
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
Norvik Topco Limited
United Kingdom
Ordinary shares
100.00
-
Norvik Holdings Limited
United Kindom
Ordinary shares
0
100.00
Norvik Pharmacies Limited
United Kingdom
Ordinary shares
0
100.00
On 7 January 2021 Right Medicine Pharmacy Limited acquired the share capital of Norvik Topco Limited. Norvik Topco Limited owned 100% of the share capital of Norvik Holdings Limited and Norvik Pharmacies Limited.
On the same day the assets and liabilities of Norvik Topco Limited, Norvik Holdings Limited and Norvik Pharmacies Limited. were hived up into Right Medicine Pharmacy Limited.
17
Stocks
Group
Company
2021
2020
2021
2020
£
£
£
£
Finished goods and goods for resale
1,318,651
1,160,934
832,472
634,844
Stock with a carrying value of £1,318,651 (2020 - £1,160,934) is pledged as security for the group's bank loans.
18
Debtors
Group
Company
2021
2020
2021
2020
Amounts falling due within one year:
£
£
£
£
Trade debtors
1,504,882
1,943,385
952,013
1,162,560
Corporation tax recoverable
54,341
22,750
54,341
22,750
Amounts owed by group undertakings
-
-
-
228,446
Amounts owed by undertakings in which the company has a participating interest
-
248
-
248
Other debtors
637,371
412,946
446,964
321,064
Prepayments and accrued income
233,874
265,979
131,225
209,440
2,430,468
2,645,308
1,584,543
1,944,508
RIGHT MEDICINE PHARMACY LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2021
- 30 -
19
Creditors: amounts falling due within one year
Group
Company
2021
2020
2021
2020
Notes
£
£
£
£
Bank loans
21
1,450,277
1,064,634
893,550
608,705
Trade creditors
2,885,972
2,854,038
1,757,321
1,687,062
Amounts owed to group undertakings
-
-
543,033
Amounts owed to undertakings in which the group has a participating interest
2,059
-
2,059
Corporation tax payable
526,076
154,943
354,419
34,022
Other taxation and social security
79,090
60,380
51,939
37,811
Other creditors
475,175
272,051
355,265
101,086
Accruals and deferred income
449,081
861,540
282,565
740,387
5,867,730
5,267,586
4,240,151
3,209,073
20
Creditors: amounts falling due after more than one year
Group
Company
2021
2020
2021
2020
Notes
£
£
£
£
Bank loans and overdrafts
21
13,954,146
11,065,476
7,510,113
5,223,879
Other creditors
140,000
140,000
14,094,146
11,205,476
7,510,113
5,223,879
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
6,031,188
5,909,257
2,013,481
552,666
21
Loans and overdrafts
Group
Company
2021
2020
2021
2020
£
£
£
£
Bank loans
15,404,423
12,130,110
8,403,663
5,832,584
Payable within one year
1,450,277
1,064,634
893,550
608,705
Payable after one year
13,954,146
11,065,476
7,510,113
5,223,879
RIGHT MEDICINE PHARMACY LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2021
21
Loans and overdrafts
(Continued)
- 31 -
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.
22
Provisions for liabilities
Group
Company
2021
2020
2021
2020
Notes
£
£
£
£
Interest in net liabilities of associates
-
48,564
-
-
Deferred tax liabilities
23
134,715
59,062
114,371
47,300
134,715
107,626
114,371
47,300
Movements on provisions apart from deferred tax liabilities:
Interest in net liabilities of associates
Group
£
At 29 February 2020
48,564
Reversal of provision
(48,564)
At 28 February 2021
-
The reversal in provision relates to the group's share of losses in an associated company which was dissolved during the year.
RIGHT MEDICINE PHARMACY LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2021
- 32 -
23
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
Liabilities
Liabilities
2021
2020
Group
£
£
Accelerated capital allowances
134,715
59,062
Liabilities
Liabilities
2021
2020
Company
£
£
Accelerated capital allowances
114,371
47,300
Group
Company
2021
2021
Movements in the year:
£
£
Liability at 29 February 2020
59,062
47,300
Charge to profit or loss
75,653
67,071
Liability at 28 February 2021
134,715
114,371
24
Retirement benefit schemes
2021
2020
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
186,625
170,525
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.
25
Share capital
2021
2020
2021
2020
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
95
95
95
95
RIGHT MEDICINE PHARMACY LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2021
- 33 -
26
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.
27
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
2021
2020
2021
2020
£
£
£
£
Within one year
139,908
83,744
128,508
72,344
Between two and five years
462,248
267,574
416,648
221,974
In over five years
761,525
275,194
753,975
256,244
1,363,681
626,512
1,299,131
550,562
Lessor
At the reporting end date the group had contracted with tenants for the following minimum lease payments:
Group
Company
2021
2020
2021
2020
£
£
£
£
Within one year
137,375
7,200
-
-
Between two and five years
541,573
10,200
-
-
In over five years
273,140
-
-
-
952,088
17,400
-
-
RIGHT MEDICINE PHARMACY LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2021
- 34 -
28
Related party transactions
Group
At 28 February 2021 the group owed £160,033 (2020: £160,033) to Cross Healthcare Limited a company which owns a minority interest in Web Pharmacy Limited.
Company
During the year the company sold goods £693,252 (2020: £723,736) and made purchases of £112,119 (2020: £112,861) from Web Pharmacy Limited. The company charged a management fee of £235,592 (2020: £Nil) to Web Pharmacy Limited. At 28 February 2021 the company was owed £170,852 (2020: £271,583).
29
Directors' transactions
Dividends totalling £195,392 (2020 - £197,000) were paid in the year in respect of shares held by the company's directors.
30
Cash generated from group operations
2021
2020
£
£
Profit for the year after tax
1,944,393
56,500
Adjustments for:
Share of results of associates and joint ventures
(48,564)
-
Taxation charged
879,199
239,548
Finance costs
380,664
394,826
Investment income
(12,158)
(5,000)
Gain on disposal of tangible fixed assets
(20,599)
(2,600)
Amortisation and impairment of intangible assets
1,501,447
1,229,042
Depreciation and impairment of tangible fixed assets
258,875
205,601
Other gains and losses
68,272
-
Decrease in provisions
(48,564)
-
Movements in working capital:
Increase in stocks
(157,717)
(55,807)
Decrease/(increase) in debtors
238,664
(599,060)
(Decrease)/increase in creditors
(75,362)
1,373,551
Cash generated from operations
4,908,550
2,836,601
RIGHT MEDICINE PHARMACY LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2021
- 35 -
31
Analysis of changes in net debt - group
2021
£
Opening net funds/(debt)
Cash and cash equivalents
1,996,011
Loans
(12,130,110)
(10,134,099)
Changes in net debt arising from:
Cash flows of the entity
(1,948,629)
Closing net funds/(debt) as analysed below
(12,082,728)
Closing net funds/(debt)
Cash and cash equivalents
3,321,695
Loans
(15,404,423)
(12,082,728)
2021-02-28
2020-02-29
false
CCH Software
CCH Accounts Production 2021.300
No description of principal activity
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