| Medicalchain.com Limited |
| Notes to the Accounts |
| for the year ended 30 June 2018 |
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| 1 |
Accounting policies |
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Basis of preparation |
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The accounts have been prepared under the historical cost convention and in accordance with FRS 102, The Financial Reporting Standard applicable in the UK and Republic of Ireland (as applied to small entities by section 1A of the standard). |
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Turnover |
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Turnover is measured at the fair value of the consideration received or receivable, net of discounts and value added taxes. Turnover, if any includes revenue earned from the sale of goods and from the rendering of services. Turnover, if any from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have transferred to the buyer. Turnover, if any from the rendering of services is recognised by reference to the stage of completion of the contract. The stage of completion of a contract is measured by comparing the costs incurred for work performed to date to the total estimated contract costs. |
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Intangible fixed assets |
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Intangible assets include purchased computer software, capitalised website costs and software licences. The identifiable and directly associated external and internal costs of acquiring and developing software are capitalised and recognised as an intangible asset where the software is controlled by the Company, and where it is probable that future economic benefits will flow from its use over more than one year. Costs associated with maintaining software are recognised as an expense as incurred.
Computer software and other intangible assets are stated at cost less amortisation and impairment losses, if any.
Capitalised software costs and other intangible assets are amortised on a straight-line basis. The amortisation rates used for each class of intangible assets are:
Computer software - 33.3%
Website - 25%
Licences - 10% |
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Tangible fixed assets |
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Tangible fixed assets are measured at cost less accumulative depreciation and any accumulative impairment losses. Depreciation is provided on all tangible fixed assets, other than freehold land, at rates calculated to write off the cost, less estimated residual value, of each asset evenly over its expected useful life, as follows: |
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Office equipment |
20% straight line method. |
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Computer Equipment |
33.33% straight line method. |
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Leasehold improvements |
20% straight line method. |
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Investments |
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Investments in subsidiaries, associates and joint ventures are measured at cost less any accumulated impairment losses. Listed investments are measured at fair value. Unlisted investments are measured at fair value unless the value cannot be measured reliably, in which case they are measured at cost less any accumulated impairment losses. Changes in fair value are included in the profit and loss account. |
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Going Concern |
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The directors believe that the Company is experiencing sufficient development and that it is well placed to manage its business risks successfully. Accordingly, they have reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future and thus have opted to apply the going concern basis of accounting in preparing the financial statements. |
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Debtors |
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Short term debtors are measured at transaction price (which is usually the invoice price), less any impairment losses for bad and doubtful debts. Loans and other financial assets are initially recognised at transaction price including any transaction costs and subsequently measured at amortised cost determined using the effective interest method, less any impairment losses for bad and doubtful debts. |
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Creditors |
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Short term creditors are measured at transaction price (which is usually the invoice price). Loans and other financial liabilities are initially recognised at transaction price net of any transaction costs and subsequently measured at amortised cost determined using the effective interest method. |
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Taxation |
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A current tax liability is recognised for the tax payable on the taxable profit of the current and past periods. A current tax asset is recognised in respect of a tax loss that can be carried back to recover tax paid in a previous period. Deferred tax is recognised in respect of all timing differences between the recognition of income and expenses in the financial statements and their inclusion in tax assessments. Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference, except for revalued land and investment property where the tax rate that applies to the sale of the asset is used. Current and deferred tax assets and liabilities are not discounted. |
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Provisions |
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Provisions (ie liabilities of uncertain timing or amount) are recognised when there is an obligation at the reporting date as a result of a past event, it is probable that economic benefit will be transferred to settle the obligation and the amount of the obligation can be estimated reliably. |
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Foreign currency translation |
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Transactions in foreign currencies are initially recognised at the rate of exchange ruling at the date of the transaction. At the end of each reporting period foreign currency monetary items are translated at the closing rate of exchange. Non-monetary items that are measured at historical cost are translated at the rate ruling at the date of the transaction. All differences are charged to profit or loss. |
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Leased assets |
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A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. All other leases are classified as operating leases. The rights of use and obligations under finance leases are initially recognised as assets and liabilities at amounts equal to the fair value of the leased assets or, if lower, the present value of the minimum lease payments. Minimum lease payments are apportioned between the finance charge and the reduction in the outstanding liability using the effective interest rate method. The finance charge is allocated to each period during the lease so as to produce a constant periodic rate of interest on the remaining balance of the liability. Leased assets are depreciated in accordance with the company's policy for tangible fixed assets. If there is no reasonable certainty that ownership will be obtained at the end of the lease term, the asset is depreciated over the lower of the lease term and its useful life. Operating lease payments are recognised as an expense on a straight line basis over the lease term. |
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Impairment of non-financial asset |
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At the end of each reporting period, the Company assesses whether there is any indication that an asset may be impaired. The assessment will include the consideration of external and internal sources of information. If such an indication exists, an impairment test is carried out on the asset by comparing the recoverable amount of the asset, being the higher of the asset's fair value less costs to sell and value in use to the asset's carrying value. Value in use is calculated by discounting the estimated future cash flows of the asset at a pre-tax discount rate reflected the specific risks in the asset. Any excess of the asset's carrying value over its recoverable amount is expensed to the Income statement.
Impairment testing is performed annually for intangible assets and indefinite lives. Assets that have an allocated impairment loss are reviewed for reversal indicators at the end of each reporting period. After recognition of an impairment loss, the amortisation charge for the asset is adjusted in future periods to allocate the asset's revised carrying amount on a systematic basis over its remaining useful life.
Impairment losses are recognised as an expense immediately. |
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Pensions |
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Contributions to defined contribution plans are expensed in the period to which they relate. |
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| 2 |
Employees |
2018 |
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2017 |
| Number |
Number |
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Average number of persons employed by the company |
8 |
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- |
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| 3 |
Intangible fixed assets |
£ |
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WIP & Website: |
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Cost |
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Additions |
106,252 |
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At 30 June 2018 |
106,252 |
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Amortisation |
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Provided during the year |
5,797 |
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At 30 June 2018 |
5,797 |
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Net book value |
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At 30 June 2018 |
100,455 |
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Employee expenses totalling £47,058 related to software development was capitalised as work in progress during the period. The £106,252 made up of £47,058 in WIP of development cost and £59,194 in website costs. |
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| 4 |
Tangible fixed assets |
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Plant and machinery etc |
| £ |
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Cost |
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Additions |
9,084 |
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At 30 June 2018 |
9,084 |
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Depreciation |
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Charge for the year |
1,883 |
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At 30 June 2018 |
1,883 |
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Net book value |
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At 30 June 2018 |
7,201 |
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| 5 |
Investments |
| Investments in |
| subsidiary |
Other |
| undertakings |
investments |
Total |
| £ |
£ |
£ |
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Cost |
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Additions |
386,500 |
|
1,080,000 |
|
1,466,500 |
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Impairment |
(386,500) |
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- |
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(386,500) |
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At 30 June 2018 |
- |
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1,080,000 |
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1,080,000 |
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Historical cost |
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At 30 June 2018 |
386,500 |
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1,080,000 |
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Impairment of £386,500 will not be allowable for Tax purposes even when the investment is dispose off and therefore no deferred tax asset has been recognised. |
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| 6 |
Debtors |
2018 |
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2017 |
| £ |
£ |
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Trade debtors |
1,439 |
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- |
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| 7 |
Creditors: amounts falling due within one year |
2018 |
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2017 |
| £ |
£ |
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Holiday Leave provision (see note 8) |
11,216 |
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- |
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Trade creditors |
9,828 |
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- |
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Due to related parties |
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4,890,281 |
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- |
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Taxation and social security costs |
69,066 |
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- |
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Other creditors |
23,594 |
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- |
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5,003,985 |
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- |
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| 8 |
Annual Leave provision |
2018 |
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2017 |
| £ |
£ |
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At 1 July 2017 |
- |
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- |
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Utilised during the year |
(11,308) |
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- |
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Additional provisions |
22,524 |
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- |
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At 30 June 2018 |
11,216 |
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- |
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| 8 |
Related party transactions |
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FRS 102 (paragraph 33.1A) exempts the reporting of transactions between group companies provided that any subsidiary which is party to the transaction is wholly owned by such a member. The Company has taken advantage of this exemption.
On 2 February 2018 all trade and assets of Medicalchain Records Limited, a wholly owned subsidiary, were hived up into the Company resulting in a reduction in net assets of £384,500 and an intercompany debtor of the same amount. The debtor was subsequently legally waived by the Company.
During the year, the company has provided £1976 to another company controlled by the related parties. This loan has been written off using the general rule where the debtor and creditor in a loan relationship are connected in any part of an accounting period and the whole or part of a loan is written off, then this is effectively a ‘tax nothing’
On 6 March 2018 the Company purchased 108,000 £10 Class A Ordinary shares in Goodshaw Capital Management Limited, a business controlled by one of the directors of the Company.
During the year, the company owed £4,890,281 to the related parties on which interest is accrued at 1.75% and the loan is repayable on demand. |
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| 9 |
Controlling party |
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Mr Mohammed Tayeb is the ultimate controlling party of the company by virtue of his shareholdings in the company. |
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| 10 |
Other information |
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Medicalchain.com Limited is a private company limited by shares and incorporated in England. Its registered office is: |
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Elizabeth House 6th Floor |
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39 York Road |
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London |
|
SE1 7NQ |
