Donald G Hayden (Chemists) Limited - Limited company accounts 18.2

REGISTERED NUMBER: 00397744 (England and Wales)

Donald G Hayden (Chemists) Limited

Strategic Report, Report of the Director and

Financial Statements for the Period 1st October 2016 to 31st January 2018

Page

Company Information

1

Strategic Report

2

Report of the Director

3

Report of the Independent Auditors

4

Statement of Comprehensive Income

6

Balance Sheet

7

Statement of Changes in Equity

8

Cash Flow Statement

9

Notes to the Cash Flow Statement

10

Notes to the Financial Statements

11

DIRECTOR:

K S Dhanoa

REGISTERED OFFICE:

Hayden House

Bridge Road

Lowestoft

Suffolk

NR32 3LL

REGISTERED NUMBER:

00397744 (England and Wales)

AUDITORS:

Smailes Goldie

Chartered Accountants

Statutory Auditor

Regent's Court

Princess Street

Hull

East Yorkshire

HU2 8BA

The director presents his strategic report for the period 1st October 2016 to 31st January 2018.

REVIEW OF BUSINESS

The company operates six pharmacies at different locations across East Anglia. This trading period was

challenging for the company as a result of the national pharmacy funding cuts. The overall business has seen

an increase in prescription volumes and the company will focus on volume, combined with efficient buying, to

reduce the impact of the funding cuts going forward.

During the period, the company has continued to manage its cash flow and its stock holding levels across

each of the pharmacies.

PRINCIPAL RISKS AND UNCERTAINTIES

Funding cuts which have impacted upon the entire industry will create additional pressure on the pharmacies

in terms of both income and staffing. This uncertainty will impact upon the company's future performance but

the director considers it to be too early to predict the longer term effect on the industry amid these important

changes.

DEVELOPMENT AND PERFORMANCE

The company is dedicated to improving work flows within the pharmacies to aid efficiencies. The company is

also continuing its focus on drug purchasing along with widening the range of services offered within the

pharmacies it operates.

FINANCIAL KEY PERFORMANCE INDICATORS

The equity holder is also the director of the company and is closely involved in the company's operations.

The director, therefore, believes that analysis of the company's performance for the year using Key

Performance Indicators is not necessary as the development, performance and position of the company is

already understood by the equity holder.

ON BEHALF OF THE BOARD:

K S Dhanoa - Director

17th August 2018

The director presents his report with the financial statements of the company for the period 1st October 2016 to 31st January 2018.

PRINCIPAL ACTIVITY

The principal activity of the company in the period under review was that of an analytical and dispensing

chemists.

DIVIDENDS

Dividends of £5,000 (2016 £Nil) were distributed in the period ended 31st January 2018.

DIRECTOR

K S Dhanoa held office during the whole of the period from 1st October 2016 to the date of this report.

STATEMENT OF DIRECTOR'S RESPONSIBILITIES

The director is responsible for preparing the Strategic Report, the Report of the Director and the financial

statements in accordance with applicable law and regulations.

Company law requires the director to prepare financial statements for each financial year. Under that law the

director has 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 director must not approve the financial statements unless he is 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 director is 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 director is 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 him to ensure that the financial statements comply with the Companies Act 2006. He is

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 director is 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 he 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, Smailes Goldie, will be proposed for re-appointment at the forthcoming Annual General

Meeting.

ON BEHALF OF THE BOARD:

K S Dhanoa - Director

17th August 2018

Opinion

We have audited the financial statements of Donald G Hayden (Chemists) Limited (the 'company') for the

period ended 31st January 2018 which comprise the Statement of Comprehensive Income, Balance Sheet,

Statement of Changes in Equity, Cash Flow Statement and Notes to the Cash Flow Statement, 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 31st January 2018 and of its profit for the period 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

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 director's use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

-

the director has 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 director is responsible for the other information. The other information comprises the information in the

Strategic Report and the Report of the Director, 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 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, 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 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 Director 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 Director 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 Director.

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 director's remuneration specified by law are not made; or

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

Responsibilities of director

As explained more fully in the Statement of Director's Responsibilities set out on page three, the director is

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 director determines 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 director is 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 director either intends to liquidate the company or to cease

operations, or has 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.

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 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.

Ian Lamb FCA CF (Senior Statutory Auditor)

for and on behalf of Smailes Goldie

Chartered Accountants

Statutory Auditor

Regent's Court

Princess Street

Hull

East Yorkshire

HU2 8BA

17th August 2018

TURNOVER

10,541,615

8,236,497

Cost of sales

7,676,155

5,515,138

GROSS PROFIT

2,865,460

2,721,359

Distribution costs

79,710

60,814

Administrative expenses

2,360,450

1,848,526

2,440,160

1,909,340

425,300

812,019

Other operating income

61,218

46,337

OPERATING PROFIT

4

486,518

858,356

Interest receivable and similar income

59,474

54,235

545,992

912,591

Interest payable and similar expenses

5

32,735

40,240

PROFIT BEFORE TAXATION

513,257

872,351

Tax on profit

6

89,274

181,131

PROFIT FOR THE FINANCIAL PERIOD

423,983

691,220

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE PERIOD

423,983

691,220

FIXED ASSETS

Intangible assets

8

1,212,890

1,347,662

Tangible assets

9

742,221

765,598

Investment property

10

705,100

630,000

2,660,211

2,743,260

CURRENT ASSETS

Stocks

11

577,525

562,473

Debtors

12

4,406,517

3,391,773

Cash at bank and in hand

151,743

1,374,713

5,135,785

5,328,959

CREDITORS

Amounts falling due within one year

13

1,773,611

2,135,351

NET CURRENT ASSETS

3,362,174

3,193,608

TOTAL ASSETS LESS CURRENT LIABILITIES

6,022,385

5,936,868

CREDITORS

Amounts falling due after more than one year

14

(431,964

)

(764,121

)

PROVISIONS FOR LIABILITIES

18

(11,079

)

(12,388

)

NET ASSETS

5,579,342

5,160,359

CAPITAL AND RESERVES

Called up share capital

19

8,900

8,900

Revaluation reserve

20

197,528

197,528

Retained earnings

20

5,372,914

4,953,931

SHAREHOLDERS' FUNDS

5,579,342

5,160,359

The financial statements were approved by the director on 17th August 2018 and were signed by:

K S Dhanoa - Director

Called up

share

Retained

Revaluation

Total

capital

earnings

reserve

equity

£

£

£

£

Balance at 1st October 2015

8,900

4,262,711

197,528

4,469,139

Changes in equity

Total comprehensive income

-

691,220

-

691,220

Balance at 30th September 2016

8,900

4,953,931

197,528

5,160,359

Changes in equity

Dividends

-

(5,000

)

-

(5,000

)

Total comprehensive income

-

423,983

-

423,983

Balance at 31st January 2018

8,900

5,372,914

197,528

5,579,342

Cash flows from operating activities

Cash generated from operations

1

(17,170

)

1,445,306

Interest paid

(32,735

)

(40,240

)

Tax paid

(783,665

)

(135,541

)

Net cash from operating activities

(833,570

)

1,269,525

Cash flows from investing activities

Purchase of tangible fixed assets

(4,040

)

(4,285

)

Sale of investment property

-

200,000

Interest received

59,474

54,235

Net cash from investing activities

55,434

249,950

Cash flows from financing activities

Loan repayments in year

(249,834

)

(180,003

)

Amount introduced by directors

137,460

-

Amount withdrawn by directors

(327,460

)

(481,345

)

Equity dividends paid

(5,000

)

-

Net cash from financing activities

(444,834

)

(661,348

)

(Decrease)/increase in cash and cash equivalents

(1,222,970

)

858,127

Cash and cash equivalents at beginning of period

2

1,374,713

516,586

Cash and cash equivalents at end of period

2

151,743

1,374,713

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

Period

1.10.16

to

Year ended

31.1.18

30.9.16

£

£

Profit before taxation

513,257

872,351

Depreciation charges

162,189

127,170

Corporation tax interest

9,502

-

Revaluation of investment properties

(75,100

)

-

Finance costs

32,735

40,240

Finance income

(59,474

)

(54,235

)

583,109

985,526

Increase in stocks

(15,052

)

(131,124

)

(Increase)/decrease in trade and other debtors

(729,906

)

486,482

Increase in trade and other creditors

144,679

104,422

Cash generated from operations

(17,170

)

1,445,306

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in

respect of these Balance Sheet amounts:

Period ended 31st January 2018

31.1.18

1.10.16

£

£

Cash and cash equivalents

151,743

1,374,713

Year ended 30th September 2016

30.9.16

1.10.15

£

£

Cash and cash equivalents

1,374,713

516,586

1.	STATUTORY INFORMATION

Donald G Hayden (Chemists) Limited is a private company, limited by shares , registered in England

and Wales. The company's registered number and registered office address can be found on the

Company Information page.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

The financial statements have been prepared in accordance with applicable accounting standards

including Financial Reporting Standard 102 the Financial Reporting Standard Applicable in the UK and

Republic of Ireland (FRS 102) and the Companies Act 2006. The financial statements have been

prepared on a going concern basis under the historical cost convention, modified to include certain

items at fair value

The significant accounting policies applied in the preparation of these financial statements are set out

below.

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 businesses in 2003, 2012 and

2013, is being amortised evenly over its estimated useful life of between 15 and 20 years. The

amortisation policy reflects the period over which future cash flows are expected to be generated from

these pharmacies.

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 the cost less estimated residual value of each asset over its estimated useful life.

Plant, machinery and equipment

15% on a reducing balance basis

Motor vehicles

15% on a reducing balance basis

On the date of transition, the company elected to measure its freehold property at fair value and use

fair value as the deemed cost. No depreciation has been charged on freehold property as the ongoing

programme of maintenance is such that any depreciation charge would be immaterial.

Investment property

Investment property is shown at most recent valuation. Any aggregate surplus or deficit arising from

changes in fair value is recognised in profit or loss.

Stocks

Stocks are valued at the lower of cost and net realisable value, after making due allowance for

obsolete and slow moving items.

Taxation

Taxation for the period comprises current and deferred tax. Tax is recognised in the Statement of

Comprehensive Income, except to the extent that it relates to items recognised in other comprehensive

income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been

enacted or substantively enacted by the balance sheet date.

Taxation

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at

the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods

different from those in which they are recognised in financial statements. Deferred tax is measured

using tax rates and laws that have been enacted or substantively enacted by the period end and that

are expected to apply to the reversal of the timing difference.

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.

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.

Impairment

Assets not measured at fair value are reviewed for any indication that the asset may be impaired at

each balance sheet date. If such indication exists, the recoverable amount of the asset, or the asset's

cash generating unit, is estimated and compared to the carrying amount. Where the carrying amount

exceeds its recoverable amount, an impairment loss is recognised in profit or loss unless the asset is

carried at a revalued amount where the impairment loss is a revaluation decrease.

Debtors and creditors receivable / payable within one year

Debtors and creditors with no stated interest rate and receivable or payable within one year are

recorded at transaction price. Any losses arising from impairment are recognised in the profit and loss

account in other administrative expenses.

Loans and borrowings

Loans and borrowings are initially recognised at the transaction price including transaction costs.

Subsequently, they are measured at amortised cost using the effective interest rate method, less

impairment. If an arrangement constitutes a finance transaction it is measured at present value.

Leases

Rentals payable and receivable under operating leases are charged to the profit and loss account on a

straight line basis over the period of the lease.

Research and development

Research expenditure is written off to the profit and loss account in the year in which it is incurred.

3.	EMPLOYEES AND DIRECTORS

Period

1.10.16

to

Year ended

31.1.18

30.9.16

£

£

Wages and salaries

1,412,459

1,040,789

Social security costs

90,999

67,779

Other pension costs

9,788

7,126

1,513,246

1,115,694

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

Period

1.10.16

to

Year ended

31.1.18

30.9.16

Shop floor and others

64

65

Administrative

2

2

Pharmacists

6

6

72

73

Period

1.10.16

to

Year ended

31.1.18

30.9.16

£

£

Director's remuneration

17,833

13,376

4.	OPERATING PROFIT

The operating profit is stated after charging:

Period

1.10.16

to

Year ended

31.1.18

30.9.16

£

£

Depreciation - owned assets

27,417

26,090

Goodwill amortisation

134,772

101,080

Auditors' remuneration

9,000

4,000

Operating lease rentals

113,530

96,977

5.

INTEREST PAYABLE AND SIMILAR EXPENSES

Period

1.10.16

to

Year ended

31.1.18

30.9.16

£

£

Bank loan interest

23,233

24,799

Corporation tax interest

9,502

15,441

32,735

40,240

6.

TAXATION

Analysis of the tax charge

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

Period

1.10.16

to

Year ended

31.1.18

30.9.16

£

£

Current tax:

UK corporation tax

90,583

181,720

Deferred tax

(1,309

)

(589

)

Tax on profit

89,274

181,131

Reconciliation of total tax charge included in profit and loss

The tax assessed for the period is lower than the standard rate of corporation tax in the UK. The

difference is explained below:

Period

1.10.16

to

Year ended

31.1.18

30.9.16

£

£

Profit before tax

513,257

872,351

Profit multiplied by the standard rate of corporation tax in the UK of 19% (2016 - 20%)

97,519

174,470

Effects of:

Expenses not deductible for tax purposes

4,888

6,661

Income not taxable for tax purposes

(14,269

)

-

Change in rate

1,136

-

Total tax charge

89,274

181,131