Neurotechnics Limited - Period Ending 2017-12-31

Registration number: 02491098

Neurotechnics Limited

Annual Report and Financial Statements

for the Year Ended 31 December 2017

TB Millar & Co
Chartered Accountant & Registered Auditor
6 Doagh Road
Ballyclare
Co Antrim
BT39 9BG

Neurotechnics Limited

Contents

Company Information	1
Directors' Report	2 to 3
Statement of Directors' Responsibilities	4
Independent Auditor's Report	5 to 7
Profit and Loss Account	8
Balance Sheet	9
Statement of Changes in Equity	10
Statement of Cash Flows	11
Notes to the Financial Statements	12 to 23

Neurotechnics Limited

Company Information

Directors

Dara Murphy Declan Devine John Gannon

Company secretary

Dara Murphy

Registered office

Cephalon House 8 Manor Park Wildmere Industrial Estate Banbury Oxfordshire OX16 3TB England

Solicitors

Flynn O'Driscoll Business Lawyers No1 Grant's Row Lower Mount Street Dublin 2 Ireland

Bankers

Ulster Bank Limited Donegal Square East 11-16 Donegal Square East Belfast Co Antrim BT1 5UB Northern Ireland

Auditors

TB Millar & Co Chartered Accountant & Registered Auditor 6 Doagh Road Ballyclare Co Antrim BT39 9BG Northern Ireland

Page 1

Neurotechnics Limited

Directors' Report for the Year Ended 31 December 2017

The directors present their report and the financial statements for the year ended 31 December 2017.

Directors of the company

The directors who held office during the year were as follows:

Dara Murphy - Company secretary and director

Declan Devine

John Gannon

Julie Forster resigned as company secretary on 21 March 2018 and was replaced by Dara Murphy.

Principle activities

The principle activity of the company is the sales, marketing, distribution and after sales support of medical equipment and medical consumables to the Hospital sector. In addition, the company is a supplier of consumer healthcare products to the Pharmacy and Health Store sectors.

Development and performance

The directors are pleased with trading in the year under review. The company achieved a turnover of £3,462,331 for the year compared to £3,068,023 for the year ended 31 December 2016. An operating profit of £241,312 was achieved for the year under review compared to a profit of £36,687 for the year ended 31 December 2016. The company continues to expand into new market segments within the Hospital and Pharmacy markets. The company expects that business development initiatives will continue in 2018.

Assets and liabilities and financial position

At the end of the financial year the company has gross assets of £2,624,139 (2016: £2,241,846) and total net assets of £650,542 (2016: £545,334). The directors are satisfied with the level of retained reserves at year end.

Principle risks and uncertainties

The principal risks and uncertainties affecting the company are:
- changes in health related government expenditure;
- competition in the market place;
- changes in dynamics & structures within the healthcare sector;
- adverse movements in foreign exchange rates;
- disruption caused to IT and/or facilities that could disrupt the company’s supply chain;
- loss of key personnel;
- changes in distribution arrangements with suppliers.

Neurotechnics Limited is a 100% subsidiary of Pharmed Holdings Limited, the ultimate parent undertaking for the Pharmed Group and as such the company has available to it the financial resources of the Group.

Likely future developments

The directors have no plans to change the activities and operations of the company in the foreseeable future.

Events after the end of the reporting period

In February 2018 the company acquired a 55% share in Powermed Plus Limited, a company which provides contract sales and marketing services to the retail pharmacy sector.

Research and development

The company did engage in research and development activities during the financial year.

Page 2

Neurotechnics Limited

Directors' Report for the Year Ended 31 December 2017

Directors and secretary and their interests

The directors and secretary, at the year end, had no interests in shares in, or debentures of, the company.

The directors and secretary at the financial year end and their interests in the shares of the holding company, Pharmed Holdings Limited were as follows:

	At 31/12/17	At 01/01/17
Directors:	Number	Number
Declan Devine	168	168
Dara Murphy	60	60
John Gannon	60	60
Company secretary:
Dara Murphy	60	60

Accounting records

The measures taken by the directors to secure compliance with the requirements of the Companies Act 2006 with regard to the keeping of accounting records are the implementation of necessary policies and procedures for recording transactions, the employment of competent accounting personnel with appropriate expertise and the provision of adequate resources to the financial function. The accounting records of the company are located at Cephalon House, 8 Manor Park, Wildmere Industrial Estate, Banbury, Oxfordshire, England.

Disclosure of information to the auditors

Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditors are aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditors are unaware.

Reappointment of auditors

The auditors TB Millar & Co are deemed to be reappointed under section 487(2) of the Companies Act 2006.

Approved by the Board on 9 May 2018 and signed on its behalf by:

.........................................
Dara Murphy
Company secretary and director

.........................................
John Gannon
Director

Page 3

Neurotechnics Limited

Statement of Directors' Responsibilities

The directors acknowledge their responsibilities 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 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 apply them consistently;

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

•	state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

•	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.

Page 4

Neurotechnics Limited

Independent Auditor's Report to the Members of Neurotechnics Limited

Opinion

We have audited the financial statements of Neurotechnics Limited (the 'company') for the year ended 31 December 2017, which comprise the Profit and Loss Account, Balance Sheet, Statement of Changes in Equity, Statement of Cash Flows, and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

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.

In our opinion the financial statements:

•	give a true and fair view of the state of the company's affairs as at 31 December 2017 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 Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:

•	the directors’ use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
•	the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

Other information

The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

Page 5

Neurotechnics Limited

Independent Auditor's Report to the Members of Neurotechnics Limited

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinion on other matter 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 Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

•	the Directors' Report has been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

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

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 4], 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 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.

As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

Page 6

Neurotechnics Limited

Independent Auditor's Report to the Members of Neurotechnics Limited

•

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

•	Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control.

•	Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.

•

Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the company to cease to continue as a going concern.

•	Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

•

Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the company to express an opinion on the financial statements. We are responsible for the direction, supervision and performance of the company audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

......................................
Barry Millar (Senior Statutory Auditor)
For and on behalf of TB Millar & Co, Statutory Auditor

6 Doagh Road
Ballyclare
Co Antrim
BT39 9BG

9 May 2018

Page 7

Neurotechnics Limited

Profit and Loss Account for the Year Ended 31 December 2017

	Note	2017  £	2016  £
Turnover	3	3,462,331	3,068,023
Changes in stocks of finished goods and work in progress		(28,890)	(127,217)
Raw materials and consumables		(2,047,043)	(1,581,281)
Staff costs		(550,980)	(682,439)
Other operating charges		(594,106)	(640,399)
Operating profit before depreciation and amortisation	4	241,312	36,687
Depreciation on fixed assets		(85,822)	(47,222)
Amortisation of intangible fixed assets		(3,301)	(3,303)
Operating profit on ordinary activities before interest		152,189	(13,838)
Interest payable and similar charges	5	(23,682)	(15,688)
Profit/(loss) before taxation		128,507	(29,526)
Taxation	8	3,771	(11,003)
Profit/(loss) for the year		132,278	(40,529)

The above results were derived from continuing operations.

The notes on pages 12 to 23 form an integral part of these financial statements.

Page 8

Neurotechnics Limited

(Registration number: 02491098)
Balance Sheet as at 31 December 2017

	Note	2017 £	2016 £
Fixed assets
Intangible assets	9	32,238	35,539
Tangible assets	10	324,544	355,032
		356,782	390,571
Current assets
Stocks	11	982,473	1,011,363
Debtors	12	1,070,238	835,851
Cash at bank and in hand		214,646	4,061
		2,267,357	1,851,275
Creditors: Amounts falling due within one year	14	(1,880,523)	(1,610,511)
Net current assets		386,834	240,764
Total assets less current liabilities		743,616	631,335
Creditors: Amounts falling due after more than one year	14	(64,160)	(53,316)
Provisions for liabilities		(28,914)	(32,685)
Net assets		650,542	545,334
Capital and reserves
Called up share capital	15	368,750	368,750
Other reserves		(48,594)	(21,524)
Profit and loss account		330,386	198,108
Total equity		650,542	545,334

Approved and authorised by the Board on 9 May 2018 and signed on its behalf by:
 

.........................................

Dara Murphy
Company secretary and director

.........................................

John Gannon
Director

The notes on pages 12 to 23 form an integral part of these financial statements.

Page 9

Neurotechnics Limited

Statement of Changes in Equity for the Year Ended 31 December 2017

	Share capital £	Other reserves £	Profit and loss account £	Total £
At 1 January 2017	368,750	(21,524)	198,108	545,334
Profit for the year	-	-	132,278	132,278
Transfers	-	(27,070)	-	(27,070)
At 31 December 2017	368,750	(48,594)	330,386	650,542

	Share capital £	Other reserves £	Profit and loss account £	Total £
At 1 January 2016	368,750	(31,080)	238,637	576,307
Loss for the year	-	-	(40,529)	(40,529)
Transfers	-	9,556	-	9,556
At 31 December 2016	368,750	(21,524)	198,108	545,334

Other reserves and transfers relate to non-current amounts owed by other group company's being restated under FRS 102 at present value and then amortised over the duration of the loan.

The notes on pages 12 to 23 form an integral part of these financial statements.

Page 10

Neurotechnics Limited

Statement of Cash Flows for the Year Ended 31 December 2017

	Note	2017 £	2016 £
Cash flows from operating activities
Profit/(loss) for the year		132,278	(40,529)
Adjustments to cash flows from non-cash items
Depreciation and amortisation	4	89,123	50,525
Profit on disposal of tangible assets		-	(8,651)
Income tax expense	8	(3,771)	11,003
		217,630	12,348
Working capital adjustments
Decrease in stocks	11	28,890	127,217
Increase in trade debtors	12	(169,797)	(86,310)
Increase in trade creditors	14	53,066	21,394
Net cash flow from operating activities		129,789	74,649
Cash flows from investing activities
Acquisitions of tangible assets		(66,300)	(248,537)
Proceeds from sale of tangible assets		10,966	13,061
Net cash flows from investing activities		(55,334)	(235,476)
Cash flows from financing activities
Net movement on invoice discounting facility		77,661	111,410
Repayments/proceeds of finance lease liabilities/new leases		16,530	(917)
Loans to related parties		56,877	118,186
Net cash flows from financing activities		151,068	228,679
Net increase in cash and cash equivalents		225,523	67,852
Cash and cash equivalents at 1 January		(10,877)	(78,729)
Cash and cash equivalents at 31 December		214,646	(10,877)

The notes on pages 12 to 23 form an integral part of these financial statements.

Page 11

Neurotechnics Limited

Notes to the Financial Statements for the Year Ended 31 December 2017

1	General information

The company is a private company limited by share capital, incorporated in England.

The address of its registered office is:
Cephalon House
8 Manor Park
Wildmere Industrial Estate
Banbury
Oxfordshire
OX16 3TB
United Kingdom

These financial statements were authorised for issue by the Board on 9 May 2018.

2	Accounting policies

Summary of significant accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Statement of compliance

These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'.

Basis of preparation

These financial statements have been prepared using the historical cost convention except that as disclosed in the accounting policies certain items are shown at fair value.

Revenue recognition

Turnover comprises the fair value of the consideration received or receivable for the sale of goods and provision of services in the ordinary course of the company’s activities. Turnover is shown net of sales/value added tax, returns, rebates and discounts.

Turnover on sale of goods is recognised when the company has transferred the significant risks and rewards of ownership in the goods, which usually takes place when the goods have been dispatched to the buyer.

Revenue generated in advance in respect of maintenance contracts is credited to deferred income and recognised as revenue in the period to which it relates on a straight line basis.
 

Page 12

Neurotechnics Limited

Notes to the Financial Statements for the Year Ended 31 December 2017

Tax

Current tax
Current tax is recognised for the amount of corporation tax payable in respect of the taxable profit for the current or past reporting periods using the tax rates and laws that have been enacted or substantively enacted by the reporting date.
Where a surcharge rate of tax applies to certain undistributed profits, the tax (deferred and current) charge is calculated at the tax rate applicable to undistributed profits until the company recognises a liability to pay a dividend.

Deferred tax
Deferred tax is recognised in respect of all timing differences, except that unrelieved tax losses and other deferred tax assets are recognised only to the extent that the directors consider that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Timing differences are differences between taxable profits and total comprehensive income that arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in the financial statements.
Deferred tax is measured on an undiscounted basis at the tax rates that are expected to apply in the periods in which timing differences reverse, based on the tax rates and laws enacted or substantively enacted at the balance sheet date.
 

Foreign currencies

Neurotechnics Limited is a member of the Pharmed group of companies. The company is entitled to make use of certain group banking facilities which include forward exchange currency contacts entered by the ultimate parent undertaking, Pharmed Holdings Limited.

Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the financial year end date. Non monetary items that are measured at historical cost are translated at the foreign exchange rate ruling at the rate of exchange at the date of valuation. All foreign exchange differences are taken to the profit and loss account.
 

Tangible assets

Tangible assets are stated in the balance sheet at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

Depreciation

Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:

Asset class	Depreciation method and rate
Plant and demonstration equipment	15-25% Straight line
Leasehold buildings	10% Straight line
Motor vehicles	25% Straight line
Office equipment	15-20% Straight line

Page 13

Neurotechnics Limited

Notes to the Financial Statements for the Year Ended 31 December 2017

Intangible assets

Separately acquired trademarks and licences are shown at historic cost.

Trademarks, licences and customer-related intangible assets have a finite useful life and are carried at cost less accumulated amortisation and any accumulated impairment losses.

Amortisation

Amortisation is provided on intangible assets so as to write off the cost, less any estimated residual value, over their useful life as follows:

Asset class	Amortisation method and rate
Licence	Straight line basis over their estimated life of twenty years

Cash and cash equivalents

Cash and cash equivalents comprise of cash on hand.

Trade debtors

Trade debtors are amounts due from customers for merchandise sold or services performed in the ordinary course of business.

Trade debtors are recognised initially at the transaction price. A provision for the impairment of trade debtors is established when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of the agreement.

Stocks

Stocks are stated at the lower of historical cost and estimated selling costs to complete and sell. Stocks are recognised as an expense in the period in which the related revenue is recognised. Cost includes the purchase price, including taxes and duties and transport and other costs directly attributable to bringing the inventory to its present location and condition.

At the end of each reporting period Stocks are assessed for impairment. If an item of inventory is impaired, the inventory concerned is reduced to its selling price less costs to complete and sell and the related impairment cost is recognised in the profit and loss account. Where a reversal of the impairment occurs, the impairment charge is reversed and recognised in the profit and loss account.

Trade creditors

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the company does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.

Trade creditors are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method.

Page 14

Neurotechnics Limited

Notes to the Financial Statements for the Year Ended 31 December 2017

Impairment

Where the objective evidence that recoverable amounts of an asset is less than its carrying value the carrying amount of the asset is reduced to its recoverable amount resulting in an impairment loss. Impairment losses are recognised immediately in the profit and loss account, with the exception of losses previously revalued tangible assets, which are recognised in other comprehensive income to the extent of any previously recognised revaluation increase accumulated in equity, in respect of that asset.

Where the circumstances causing an impairment of an asset no longer apply, then the impairment is reversed through the profit and loss account, except for impairments on previously revalued tangible assets, which are treated as revaluation increases to the extent that the revaluation was recognised in equity.

The recoverable amount of tangible fixed assets, goodwill and other intangible assets is the higher of the fair value less cost to sell of the asset and its value in use. The value in use of these assets is the present value of the cash flows expected to be derived from those. This is determined by the directors to be a single cash generating unit.
 

Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee.

Assets held under finance leases are recognised at the lower of their fair value at inception of the lease and the present value of the minimum lease payments. These assets are depreciated on a straight-line basis over the shorter of the useful life of the asset and the lease term. The corresponding liability to the lessor is included in the Balance Sheet as a finance lease obligation.

Lease payments are apportioned between finance costs in the Profit and Loss Account and reduction of the lease obligation so as to achieve a constant periodic rate of interest on the remaining balance of the liability.

Operating lease payments are recognised as an expense in the profit and loss account over the lease term on a straight line basis.
 

Provisions

Provisions are recognised when the entity has an obligation at the reporting date as a result of a past event; it is probable that the entity will be required to transfer economic benefits in settlement and the amount of the obligation can be estimated reliably. Provisions are recognised as a liability in the Balance Sheet and the amount of the provision as an expense.

Provisions are initially measured at the best estimate of the amount required to settle the obligation at the reporting date and subsequently reviewed at each reporting date and adjusted to reflect the current best estimate of the amount that would be required to settle the obligation. Any adjustments to the amounts previously recognised are recognised in profit or loss unless the provision was originally recognised as part of the cost as an asset. When a provision is measured at the present value of the amount expected to be required to settle the obligation, the unwinding of the discount is recognised in finance costs in profit or loss in the period it arises.

Page 15

Neurotechnics Limited

Notes to the Financial Statements for the Year Ended 31 December 2017

Financial Instruments

Sections 11 and 12 of FRS102 in full have been adopted in respect of financial instruments.

Financial assets
Basic financial assets, including trade and other receivables, cash and bank balances, are initially recognised at transaction price. If the arrangement constitutes a financing transaction, the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Such assets are subsequently carried at amortised cost using the effective interest method.
At the end of each reporting period financial assets are assessed for objective evidence of impairment as described in the accounting policy for impairment.

Cash and cash equivalents consists of cash on hand and demand deposits. Cash equivalents consist of short term highly liquid investments that are readily convertible to known amounts of cash that are subject to an insignificant risk of change in value.

Financial liabilities
Basic financial liabilities, including trade and other payables, bank loans and loans from fellow group companies, are initially recognised at transaction price. If the arrangement constitutes a financing transaction, the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Debt instruments are subsequently carried at amortised cost using the effective interest method.

The computation of amortised cost includes any issue costs, transaction costs and fees, and any discount or premium on settlement, and the effect of this is to amortise these amounts over the expected borrowing period. Loans with no stated interest rate and repayable within one year or on demand are not amortised. Loans and borrowings are classified as current assets or liabilities unless the borrower has an unconditional right to defer settlement of the liability for at least twelve months after the financial year end date.
 

Employee benefits and defined contribution plans

Employee benefits
The company provides a range of benefits to employees, including annual bonus arrangements and paid holiday arrangements. These short term benefits are recognised as an expenses in the period in which the service is received or where the company has a legal or constructive obligation as a result of past events and a reliable estimate can be made.

Defined contribution plans
The company operates a defined contribution pension scheme. Retirement benefit contributions in respect of the scheme for employees are charged to the profit and loss account as they become payable in accordance with the rules of the scheme. The assets are held separately from those of the company in an independently administered fund. Differences between the amounts charged in the profit and loss account and payments made to the retirement benefit scheme are treated as assets or liabilities.
 

3

Revenue

The analysis of the company's revenue for the year from continuing operations is as follows:

	2017 £	2016 £
Sales and servicing of medical equipment & healthcare consumables	3,462,331	3,068,023

Page 16

Neurotechnics Limited

Notes to the Financial Statements for the Year Ended 31 December 2017

4	Operating profit

Arrived at after charging/(crediting)

	2017 £	2016 £
Depreciation on fixed assets	85,822	47,222
Amortisation of intangible fixed assets	3,301	3,303
Operating lease expense - plant and machinery	58,656	84,293
Profit on disposal of property, plant and equipment	-	(8,651)

5	Interest payable and similar expenses

	2017 £	2016 £
Interest on bank overdrafts and borrowings	4,303	3,936
Interest on obligations under finance leases and hire purchase contracts	6,649	4,650
Other finance costs	12,730	7,102
	23,682	15,688

6	Staff costs

The aggregate payroll costs (including directors' remuneration) were as follows:

	2017 £	2016 £
Wages and salaries	476,914	596,908
Social security costs	50,049	61,575
Pension costs, defined contribution scheme	24,017	23,956
	550,980	682,439

The average number of persons employed by the company (including directors) during the year, analysed by category was as follows:

	2017 No.	2016 No.
Administrative	7	8
Warehouse and sales	6	10
Servicing	1	1
	14	19

7	Auditors' remuneration

	2017 £	2016 £
Audit of the financial statements	4,500	4,500

Page 17

Neurotechnics Limited

Notes to the Financial Statements for the Year Ended 31 December 2017

 

8

Taxation

Tax charged/(credited) in the income statement

	2017 £	2016 £
Deferred taxation
Arising from origination and reversal of timing differences	(3,771)	11,003

Deferred tax

Deferred tax assets and liabilities

2017	Liability £
Reversal of timing differences between tax allowances and depreciation	28,914

2016	Liability £
Reversal of timing differences between tax allowances and depreciation	32,685

9	Intangible assets

	Licence  £	Total £
Cost or valuation
At 1 January 2017	66,086	66,086
At 31 December 2017	66,086	66,086
Amortisation
At 1 January 2017	30,547	30,547
Amortisation charge	3,301	3,301
At 31 December 2017	33,848	33,848
Carrying amount
At 31 December 2017	32,238	32,238
At 31 December 2016	35,539	35,539

Page 18

Neurotechnics Limited

Notes to the Financial Statements for the Year Ended 31 December 2017

10	Tangible assets

	Leasehold buildings £	Office equipment £	Motor vehicles  £	Plant and demonstration equipment £	Total £
Cost or valuation
At 1 January 2017	18,294	52,196	32,168	462,198	564,856
Additions	-	5,278	-	61,022	66,300
Disposals	-	-	-	(41,124)	(41,124)
At 31 December 2017	18,294	57,474	32,168	482,096	590,032
Depreciation
At 1 January 2017	18,294	41,106	32,168	118,256	209,824
Charge for the year	-	4,362	-	81,460	85,822
Eliminated on disposal	-	-	-	(30,158)	(30,158)
At 31 December 2017	18,294	45,468	32,168	169,558	265,488
Carrying amount
At 31 December 2017	-	12,006	-	312,538	324,544
At 31 December 2016	-	11,090	-	343,942	355,032

During the year £25,825 of stock was transferred at cost to tangible assets as this equipment was placed in hospitals to generate future income, this amount has been included in additions.

Tangible fixed assets with a carrying value of £324,544 (31 December 2016 £355,032) are pledged as security for the company's bank borrowings and lease arrangements arising from a fixed charge over the property, plant and equipment granted to the company's bankers.

Assets held under finance leases and hire purchase contracts

The net carrying amount of tangible assets includes the following amounts in respect of assets held under finance leases and hire purchase contracts:

	2017 £	2016 £
Demonstration equipment	119,830	91,358

Page 19

Neurotechnics Limited

Notes to the Financial Statements for the Year Ended 31 December 2017

11

Stocks

	2017 £	2016 £
Equipment and consumables	982,473	1,011,363

Stocks are stated after provisions for impairment of £241,477 (2016 £242,806). The amount of stock recognised as an expense is £2,075,933 (2016 £1,708,498). The total carrying amount of the stocks are pledged as a security for the company's bank.

In the opinion of the directors there are no material difference between the carrying amount of stock and the replacement cost.

12

Debtors

	Note	2017 £	2016 £
Trade debtors		656,118	474,690
Amounts owed by related parties	17	362,069	297,479
Other debtors		866	534
Prepayments		51,185	63,148
		1,070,238	835,851
Less non-current portion		(224,294)	(198,957)
		845,944	636,894

Details of non-current trade and other debtors

£224,924 (2016 -£198,957) of Amounts owed by other group undertakings is classified as non current.

The total trade debtors of the company are pledged as security for the invoice discounting facility by way of a floating charge granted to the company`s bank. The balances of these invoice discounting facilities at 31 December 2017 are £428,016 (2016 £350,355). These amounts are included in the bank loans and borrowings facility figures in creditors amounts falling within one year.

Amounts owed by group companies are unsecured, interest free and repayable on demand.
 

Page 20

Neurotechnics Limited

Notes to the Financial Statements for the Year Ended 31 December 2017

13	Cash and cash equivalents

	2017 £	2016 £
Cash on hand	552	724
Cash at bank	214,094	3,337
	214,646	4,061
Bank overdrafts	-	(14,938)
Cash and cash equivalents in statement of cash flows	214,646	(10,877)

14

Creditors

	Note	2017 £	2016 £
Due within one year
Loans and borrowings	16	462,797	394,388
Trade creditors		655,358	672,796
Amounts due to related parties	17	571,961	423,424
Social security and other taxes		88,585	76,842
Accruals		101,822	43,061
		1,880,523	1,610,511
Due after one year
Loans and borrowings	16	64,160	53,316

The repayment of trade creditors vary between thirty and ninety days. No interest is payable on trade creditors.

Interest is payable on the overdraft at the banks base rate plus 4.55% per annum. Interest is payable on the invoice discounting facilities at a cost of funds plus a margin of 2.8%. The bank overdraft is repayable on demand. These facilities are noted in Note 16.

Social security are subject to the terms of the relevant legislation.

The terms of the accruals are based on the underlying contracts.

Other amounts included within creditors not covered by specific note disclosures are unsecured, interest free and repayable on demand.

Trade creditors include amounts owing to suppliers who purport to include reservation of title clauses in their conditions of sale. It is not practical to quantify either this amount or the amount included in year end stocks.
 

Page 21

Neurotechnics Limited

Notes to the Financial Statements for the Year Ended 31 December 2017

15	Share capital

Allotted, called up and fully paid shares

	2017		2016
	No.	£	No.	£
Ordinary share of £1 each	155,000	155,000	155,000	155,000
Preference shares of £1 each	213,750	213,750	213,750	213,750
	368,750	368,750	368,750	368,750

16	Loans and borrowings

	2017 £	2016 £
Current loans and borrowings
Bank overdrafts	-	14,938
Finance lease liabilities	34,781	29,095
Other borrowings	428,016	350,355
	462,797	394,388

	2017 £	2016 £
Non-current loans and borrowings
Finance lease liabilities	64,160	53,316

The company`s bank borrowings and facilities for group companies are secured by a composite cross company guarantee and indemnity from Pharmed Holdings Limited and its Subsidiaries; a composite all monies debenture incorporating first ranking fixed and floating charges over all the property, assets and undertakings of Pharmed Holdings Limited and its Subsidiaries to include from each charger, without limitation, a charge over its shares in any Subsidiary; personal guarantees and indemnity from Declan Devine, John Gannon and Dara Murphy, Directors, up to €1,750,000; and an assignment of the benefit of “keyman” life policies over the lives of the Directors.

The invoice discounting facilities are secured by an assignment over the book debts of Neurotechnics Limited (Note 12).
 

17	Related party transactions

In February 2016 a motor vehicle was sold from the company to JD Consulting Management Services Ltd for £12,731. Mr Declan Devine is a director in JD Consulting Management Services Ltd. The amount of £12,731 was owing at 31 December 2017 and included in trade debtors.

Page 22

Neurotechnics Limited

Notes to the Financial Statements for the Year Ended 31 December 2017

18	Parent and ultimate parent undertaking

The company's immediate parent is Pharmed Holdings Limited, incorporated in Ireland.

The transactions with other companies in the Pharmed Holdings group are not disclosed as the company has taken advantage of the exemption available to wholly owned members of a group under FRS 102 "Related Party Disclosures";.

 
 

Page 23