Schulke & Mayr UK Limited - Limited company accounts 23.2

REGISTERED NUMBER: 02987168 (England and Wales)

SCHULKE & MAYR UK LIMITED

STRATEGIC REPORT,

REPORT OF THE DIRECTORS AND

AUDITED FINANCIAL STATEMENTS

FOR THE YEAR ENDED

31 DECEMBER 2022

Page

Company Information

1

Strategic Report

2

Report of the Directors

3

Report of the Independent Auditors

5

Income Statement

9

Other Comprehensive Income

11

Statement of Financial Position

12

Statement of Changes in Equity

13

Statement of Cash Flows

14

Notes to the Statement of Cash Flows

15

Notes to the Financial Statements

16

DIRECTORS:

H Nehlsen

R T Blackwood

REGISTERED OFFICE:

Cygnet House

1 Jenkin Road

Meadowhall

Sheffield

South Yorkshire

S9 1AT

REGISTERED NUMBER:

02987168 (England and Wales)

AUDITORS:

Xeinadin Audit Limited

Sidings House

Sidings Court

Lakeside

Doncaster

South Yorkshire

DN4 5NU

The directors present their strategic report for the year ended 31 December 2022.

The results for the year and financial position of the company are shown in the annexed financial statements

The company reported a pre-tax profit of £916,637, mainly attributed to the change in market conditions post Covid-19 restrictions lifting.

PERFORMANCE SUMMARY

The healthcare industry opened up following the UK Government's removal of all Covid-19 pandemic restrictions in January 2022 with elective surgeries recommencing close to pre-pandemic levels. This heavily contrasts with the prior year's performance. Significantly, the switch in focus to pure healthcare infection prevention and reduction products following the sale of the Personal care business in 2021 has allowed for a greater concentration on this market segment.

PRINCIPAL RISKS

The management of the business and the execution of the Company's strategy are subject to a number of risks. The key business risks affecting the company are considered to relate to competition, the effect of legislation, and other regulations, government policy and localised NHS procurement. The business seeks to mitigate exposure to all forms of risk where applicable. This is done by forming close relationships with customers, identifying their needs and providing cost effectiveness and high quality products.

FINANCIAL KEY PERFORMANCE INDICATORS

The management of the business monitors the activities and performance of the Company on a regular basis. Sales and key margins are monitored on an ongoing basis against budget and prior year. The management uses both financial and non-financial indicators to assess performance and the indicators below used to the year ending 31 December 2022 will continue to apply to the year ending 31 December 2023:

Key Area

Activity

KPI Indicator

Comments

Sales Activity

Monitoring sales against budget and prior years by customer and by product

Net sales turnover

Turnover increased by 11% on continuing activity vs 2021

Gross Margin

Analysis of Gross Profit against budget and prior years

Gross Profit as % of Net Sales

Gross margin on continuing activity improved to 30% in 2022 from 26% in 2021

Working Capital Management

Collection of Debtors

Debtor Days

Closing 2022 debtor days for continuing activity were 48 compared to 42 at end of 2021. No doubtful debts were provisioned for.

ON BEHALF OF THE BOARD:

R T Blackwood - Director

24 April 2023

The directors present their report with the financial statements of the company for the year ended 31 December 2022.

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of a chemical and pharmaceutical company supplying services and products that help to protect people and materials against infections and contamination.

DIVIDENDS

The total distribution of dividends for the year ended 31 December 2022 will be £ 1,000,000 .

DIRECTORS

The directors who have held office during the period from 1 January 2022 to the date of this report are as follows:

S Naylor - resigned 7 May 2022

H Nehlsen - appointed 28 January 2022

R T Blackwood - appointed 4 April 2022

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

-	select suitable accounting policies and then apply them consistently;

-	make judgements and accounting estimates that are reasonable and prudent;

-	prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

AUDITORS

The auditors, Xeinadin Audit Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

R T Blackwood - Director

24 April 2023

Opinion

We have audited the financial statements of Schulke & Mayr UK Limited (the 'company') for the year ended 31 December 2022 which comprise the Income Statement, Other Comprehensive Income, Statement of Financial Position, Statement of Changes in Equity, Statement of Cash Flows and Notes to the Statement of Cash Flows, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 31 December 2022 and of its profit for the year then ended;

-	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

-	have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months 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.

Other information

The directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is 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 this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

-	the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Report of the Directors.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

-	adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

-	the financial statements are not in agreement with the accounting records and returns; or

-	certain disclosures of directors' remuneration specified by law are not made; or

-	we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page three, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditors' responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Based on our understanding of the company, we identified that the principal risks of non-compliance with laws and regulations related to the preparation of statutory accounts and corporation tax legislation and we considered the extent to which non-compliance might have a material effect on the financial statements. As part of this assessment we considered both quantitative and qualitative factors. We also considered those laws and regulations that have a direct impact on the preparation on the financial statements, such as the Companies Act 2006 and FRS 102.

We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements which included the risk of management override of controls. We determined that the principal risks were related to posting inappropriate journal entries, omitting, advancing or delaying recognition of events and transactions that have occurred during or after the reporting period, and potential management bias in the determination of accounting estimates or judgements to manipulate results.

Audit procedures performed by the engagement team include:

- Enquiring of and obtaining written representation from management in relation to known or suspected instances of non-compliance with laws and regulations and fraud;

- Evaluation of management's controls designed to prevent and detect irregularities;

- Identifying and, where relevant, testing journal entries posted by senior management or with unusual combinations;

- Assessing and evaluating the business rationale of significant transactions outside the normal course of business;

- Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;

- Incorporating elements of unpredictability into the nature, timing and/or extent of audit procedures performed.

- Review of board meeting minutes and meetings of those charged with governance.

There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentation, or through collusion.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Andrew Cribb BFP FCA (Senior Statutory Auditor)

for and on behalf of Xeinadin Audit Limited

Sidings House

Sidings Court

Lakeside

Doncaster

South Yorkshire

DN4 5NU

25 April 2023

TURNOVER

3

7,353,283

-

7,353,283

Cost of sales

(5,155,918

)

-

(5,155,918

)

GROSS PROFIT

2,197,365

-

2,197,365

Administrative expenses

(1,557,808

)

-

(1,557,808

)

639,557

-

639,557

Other operating income

42,471

-

42,471

OPERATING PROFIT

5

682,028

-

682,028

Cost of fundamental

reorganisation

6

(329,613

)

-

(329,613

)

352,415

-

352,415

Interest receivable and similar income

7

564,222

-

564,222

Gain/loss on revaluation of assets

-

-

-

PROFIT BEFORE TAXATION

916,637

-

916,637

Tax on profit

8

(152,330

)

-

(152,330

)

PROFIT FOR THE FINANCIAL YEAR

764,307

-

764,307

TURNOVER

3

6,524,784

3,054,018

9,578,802

Cost of sales

(4,846,349

)

(1,544,718

)

(6,391,067

)

GROSS PROFIT

1,678,435

1,509,300

3,187,735

Administrative expenses

(1,718,725

)

(159,175

)

(1,877,900

)

(40,290

)

1,350,125

1,309,835

Other operating income

32,677

-

32,677

OPERATING (LOSS)/PROFIT

5

(7,613

)

1,350,125

1,342,512

Profit/loss on sale of

business segment

6

-

8,348,819

8,348,819

Cost of fundamental

reorganisation

6

-

(232,194

)

(232,194

)

(7,613

)

9,466,750

9,459,137

Interest receivable and similar income

7

196,744

-

196,744

Gain/loss on revaluation of assets

-

-

-

PROFIT BEFORE TAXATION

189,131

9,466,750

9,655,881

Tax on profit

8

9,081

(1,762,592

)

(1,753,511

)

PROFIT FOR THE FINANCIAL YEAR

198,212

7,704,158

7,902,370

PROFIT FOR THE YEAR

764,307

7,902,370

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

764,307

7,902,370

FIXED ASSETS

Intangible assets

10

-

-

Tangible assets

11

4,253

8,034

4,253

8,034

CURRENT ASSETS

Stocks

12

766,607

1,097,972

Debtors

13

11,853,527

11,339,661

Cash at bank and in hand

563,857

1,453,153

13,183,991

13,890,786

CREDITORS

Amounts falling due within one year

14

1,291,755

1,766,638

NET CURRENT ASSETS

11,892,236

12,124,148

TOTAL ASSETS LESS CURRENT LIABILITIES

11,896,489

12,132,182

PROVISIONS FOR LIABILITIES

16

3,453

3,453

NET ASSETS

11,893,036

12,128,729

CAPITAL AND RESERVES

Called up share capital

17

100,000

100,000

Retained earnings

18

11,793,036

12,028,729

SHAREHOLDERS' FUNDS

11,893,036

12,128,729

The financial statements were approved by the Board of Directors and authorised for issue on 24 April 2023 and were signed on its behalf by:

R T Blackwood - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 January 2021

100,000

4,126,359

4,226,359

Changes in equity

Total comprehensive income

-

7,902,370

7,902,370

Balance at 31 December 2021

100,000

12,028,729

12,128,729

Changes in equity

Dividends

-

(1,000,000

)

(1,000,000

)

Total comprehensive income

-

764,307

764,307

Balance at 31 December 2022

100,000

11,793,036

11,893,036

Cash flows from operating activities

Cash generated from operations

1

543,236

1,049,266

Tax paid

(996,754

)

(730,000

)

Net cash from operating activities

(453,518

)

319,266

Cash flows from investing activities

Purchase of tangible fixed assets

-

(11,422

)

Sale of tangible fixed assets

-

6,491

Interest received

564,222

196,744

Net cash from investing activities

564,222

191,813

Cash flows from financing activities

Equity dividends paid

(1,000,000

)

-

Net cash from financing activities

(1,000,000

)

-

(Decrease)/increase in cash and cash equivalents

(889,296

)

511,079

Cash and cash equivalents at beginning of year

2

1,453,153

942,074

Cash and cash equivalents at end of year

2

563,857

1,453,153

1.	RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

2022

2021

£

£

Profit before taxation

916,637

9,655,881

Depreciation charges

3,781

10,993

Finance income

(564,222

)

(196,744

)

356,196

9,470,130

Decrease in stocks

331,365

451,237

Increase in trade and other debtors

(513,866

)

(8,253,653

)

Increase/(decrease) in trade and other creditors

369,541

(618,448

)

Cash generated from operations

543,236

1,049,266

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Statement of Cash Flows in respect of cash and cash equivalents are in respect of these Statement of Financial Position amounts:

Year ended 31 December 2022

31.12.22

1.1.22

£

£

Cash and cash equivalents

563,857

1,453,153

Year ended 31 December 2021

31.12.21

1.1.21

£

£

Cash and cash equivalents

1,453,153

942,074

3.	ANALYSIS OF CHANGES IN NET FUNDS

At 1.1.22

Cash flow

At 31.12.22

£

£

£

Net cash

Cash at bank and in hand

1,453,153

(889,296

)

563,857

1,453,153

(889,296

)

563,857

Total

1,453,153

(889,296

)

563,857

1.	STATUTORY INFORMATION

Schulke & Mayr UK Limited is a limited liability company incorporated in England and Wales. The Registered Office is Cygnet House, 1 Jenkin Road, Meadowhall, Sheffield, South Yorkshire, S9 1AT. The company is limited by shares.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Turnover

Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

Goodwill

Goodwill, being the amount paid in connection with the acquisition of a business, has been fully amortised having exceeded its estimated useful life of five years.

Intangible assets

Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Improvements to short leasehold property

-

25% on cost

IT and Fixings

-

25% on cost and Straight line over 3 years

Stocks

Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.

Foreign currencies

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.

Hire purchase and leasing commitments

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease.

Pension costs and other post-retirement benefits

The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate.

Deferred taxation

The charge for taxation takes into account taxation deferred as a result of timing differences between the treatment of certain items for taxation and accounting purposes. In general, deferred taxation is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date. However, deferred tax assets are recognised only to the extent that the directors consider that it is more likely than not that there will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted. Deferred taxation is measured on a non-discounted basis at the tax rates that are expected to apply in the periods in which the timing differences reverse, based on tax rates and law enacted or substantively enacted at the balance sheet date.

3.

TURNOVER

The turnover and profit before taxation are attributable to the one principal activity of the company.

An analysis of turnover by geographical market is given below:

2022

2021

£

£

United Kingdom

7,079,090

9,508,235

Europe

150,518

70,567

Asia

115,095

-

Africa

8,580

-

7,353,283

9,578,802

4.	EMPLOYEES AND DIRECTORS

2022

2021

£

£

Wages and salaries

763,252

930,822

Social security costs

96,019

118,625

Other pension costs

93,561

94,815

952,832

1,144,262

The average number of employees during the year was as follows:

2022

2021

Selling and administration

16

24

2022

2021

£

£

Directors' remuneration

156,162

112,906

Directors' pension contributions to money purchase schemes

8,558

11,232

The number of directors to whom retirement benefits were accruing was as follows:

Money purchase schemes

1

1

5.	OPERATING PROFIT

The operating profit is stated after charging:

2022

2021

£

£

Other operating leases

47,131

73,879

Depreciation - owned assets

3,781

10,994

Auditors' remuneration

10,962

10,500

Auditors' remuneration for non audit work

2,375

20,486

6.	EXCEPTIONAL ITEMS

2022

2021

£

£

Profit/loss on sale of

business segment

-

8,348,819

Cost of fundamental

reorganisation

(329,613

)

(232,194

)

(329,613

)

8,116,625

The exceptional items relates to fundamental reorganisation including £167,961 settlement costs paid to the Director and £161,652 stock write off relating to surplus stock purchased in response to the Covid-19 Global Pandemic.

7.

INTEREST RECEIVABLE AND SIMILAR INCOME

2022

2021

£

£

Deposit account interest

-

(149

)

Group undertakings loan

interest

564,222

196,893

564,222

196,744

8.

TAXATION

Analysis of the tax charge

The tax charge on the profit for the year was as follows:

2022

2021

£

£

Current tax:

UK corporation tax

152,330

1,753,511

Tax on profit

152,330

1,753,511