The directors present the strategic report for the year ended 31 December 2023.
Principal Activities
Blue Earth Diagnostics Limited was founded in March 2014 to develop and commercialise molecular imaging agents, addressing areas of high unmet medical need in cancer care. The company’s first approved and commercially available product, Axumin® (18F fluciclovine), a novel molecular imaging agent, images cancer cells using PET (Position Emission Tomography). Furthermore, in May 2023 the Company’s second product, POSLUMA® (flotufolastat F 18), got FDA approval and was commercially launched in June 2023. POSLUMA® (flotufolastat F 18) is indicated for positron emission tomography (PET) of prostate-specific membrane antigen (PSMA) positive lesions in men with prostate cancer with suspected metastasis who are candidates for initial definitive therapy or with suspected recurrence based on elevated serum prostate-specific antigen (PSA) level.
The Company’s key focus areas are product development, licensing and commercialisation. The Blue Earth Diagnostics commercial model is to work with leading manufacturers and distributors of radiolabeled imaging agents. Blue Earth Diagnostics engages with genito-urinary oncologists in cancer clinical trials, provides application training and medical affairs support. Blue Earth Diagnostics is partnered with PETNET Solutions Inc., a wholly owned subsidiary of Siemens Medical Solutions USA, Inc., which operates the largest network of PET radio pharmacies in the US. In Europe, the Company has a few radiopharmaceutical manufacturing and distribution partners.
Company Strategy
Blue Earth Diagnostics launched POSLUMA® (flotufolastat F 18) in the US in 2023 and plans to launch flotufolastat (18F) in Europe and other countries as well through commercial partnerships. POSLUMA is manufactured in 36 manufacturing sites in the US through a single manufacturing and distribution partner. Axumin® (fluciclovine F 18) is still manufactured in the US, Europe and selected other countries with limited utilization for the original indication of recurrent prostate cancer. Additional indications for 18F-fluciclovine are being progressed, the most advanced of which is used in diagnosing and characterising cancer metastases in the brain that has spread from other primary tumours.
The Company has worldwide rights to investigational Fibroblast Activation Protein (FAP)‐targeted imaging agents that are in early-stage development. These imaging agents have been shown to have the potential to improve lesion characterization in various cancer types. The Company will continue portfolio expansion activities for differentiated targeted molecular imaging agents.
In 2023, the Company continued to face competitive headwinds from in-market PSMA (Prostate Specific Membrane Antigen) products, notably Pylarify(R) from Lantheus and Illuccix(R) from Telix. Axumin(R) (fluciclovine F 18) injection sales continued to decline in the US. POSLUMA(R) (flotufolastat F 18) injection, formerly referred to as rhPSMA-7.3, was approved on 26 May 2023. This approval represented a major milestone for PET manufacturing approvals due to the fact that this approval included an unprecedented 31 manufacturing sites, well above the typical 2-3 manufacturing sites included in a New Drug Application (NDA) with the Food and Drug Administration (FDA); the number of manufacturing sites was increased to 36 by end of 2023. Coding and reimbursement for POSLUMA did not take full effect until January 2024 and as a result, the sales of POSLUMA in the US were significantly lower than forecasted in 2023. In late 2023, the Company undertook a full go-to-market strategy analysis and consequently agreed in December to make changes in 2024.
Several named patient supply (NPS) programs were established in Europe during 2023. Under one of these NPS programs, over 70 doses were provided to the Dutch market. In addition, a number of out-license partnership deals were signed to expand the use of flotufolastat (F 18) globally. This includes Global Medical Solutions (GMS) for the Taiwanese market, Sinotau for the Chinese market, and DuChemBio for the South Korean market. All of the partner companies will be responsible for the market authorisation for their respective markets. These partnerships will benefit the Company by earning revenue through a combination of milestone and royalty payments.
During 2023, the Company has continued to heavily invest in R&D, despite the spending slightly decreasing to $19.5m vs. $25.3m in 2022. The decrease in R&D costs in 2023 was due to higher spending in the prior years for the study completion and NDA submission to the FDA for POSLUMA® (flotufolastat F 18).
Approximately 18 individuals in the US (predominantly Medical Affairs support) and 26 in Europe are employed in R&D-focused activities encompassing chemistry development, pre-clinical and clinical research.
The Company received approval for its prostate cancer agent, POSLUMA® (flotufolastat F 18), from the US Food and Drug Administration (FDA). POSLUMA was added to the National Comprehensive Cancer Network® (“NCCN”) Clinical Practice Guidelines in Oncology for Prostate Cancer. The NCCN Guidelines state that POSLUMA PET should be considered in the clinical workup of patients with newly diagnosed or recurrence of their prostate cancer.
During 2023, the Company continued research into the use of 18F-fluciclovine in brain metastases, with a supplemental NDA (sNDA) expected in the near future.
The Company have worldwide rights to investigational Fibroblast Activation Protein (FAP)‐targeted technology for diagnostic PET imaging. These imaging agents are in early-stage development and have been shown to have the potential to improve lesion characterization in various cancer types. A Phase 1 study was initiated, in collaboration with an industry partner, investigating the safety and efficacy of the lead candidate FAP agent.
Key performance indicators
The most relevant indicators for the business for 2023 were:
Turnover decreased by $77.3m (2023 revenue $14.1m vs 2022 revenue $91.4m)
Gross profit decreased by $62.9m (2023 gross loss $8.7m vs 2022 gross profit $54.2m)
The reason for this decrease was due to a delay in coding and reimbursement for POSLUMA which did not take full effect until January 2024 and as a result, the sales of POSLUMA in the US were significantly lower than forecasted in 2023.
Principal Risks and Uncertainties
The Company periodically measures the risks to which it is potentially exposed and designs the organisational, regulatory, operational and strategic measures needed to mitigate these risks to a level considered acceptable according to quantitative and qualitative parameters. The Company monitors performance and cash generation through regular financial reporting, short-term forecasts, budgets and long term strategic plans, together with monthly and quarterly formal business reviews, including Board of Director meetings with the principal shareholder. Additionally, there are periodic finance performance reviews at local and Bracco corporate levels.
Section 172(1) statement
When making decisions, the Directors of the Blue Earth Diagnostics Limited (“BED”) must act in a way they consider, in good faith, is most likely to promote the success of the Company for the benefit of its members, while also considering the broad range of stakeholders who interact with and are impacted by our business. Throughout the year, while discharging their duties, section 172(1) requires a director to have regard, amongst other matters, to the:
• likely consequences of any decisions in the long term;
• interests of the company’s employees;
• need to foster the company’s business relationships with suppliers, customers, and others;
• impact of the company’s operations on the community and environment; and
• desirability of the company maintaining a reputation for high standards of business conduct;
In discharging our s.172(1) duties we have had regard to the factors set out above, as well as other factors considered relevant to the decisions being made. For example, with reference to the likely consequences of any decision in the long term, the company this year made significant R&D investments and developed partnerships to support the PET oncology pipeline long term. Furthermore, from a commercial and marketing prospective, the company is assessing and developing new territories, to deploy the current and future product portfolio. We acknowledge that every decision made will not necessarily result in a positive outcome for all stakeholders.
By considering the Company’s Purpose, Vision and Values, together with its strategic priorities, we aim to ensure that the decisions made are consistent and intended to promote the Company’s long-term success.
Authority for the day-to-day management of the Company is delegated to senior management in setting, approving and overseeing the execution of the business strategy and related policies. We review matters relating to: financial and operational performance; business strategy; key risks; stakeholder-related matters; health and safety; diversity and inclusivity; environmental matters; corporate responsibility; governance; compliance; and legal and regulatory matters over the course of the financial year. This is done through the consideration of reports which are sent in advance of each Board meeting and through presentations to the Board.
Examples of how the Directors have engaged with the Company’s stakeholders with regard to section 172(1) (a) to (f) are detailed below:
Shareholders:
Our ultimate shareholders, through our parent company, are in regular communication with the Board. Performance metrics and updates are provided through established mechanisms. The BED Board meets regularly with Bracco Imaging Spa. The Board has embraced the company’s vision and strategy to maximise shareholder value, through empowering the evolution of care of patients with cancer. The company is committed to improving the lives of patients through innovative imaging solutions that optimize cancer care.
Employees:
The Board strives to maintain and develop a culture where everyone feels valued and included. The Board has engaged with employees via a variety of channels. Regular “Town Hall” meetings have taken place, both virtually and in-person, where the Board has shared its strategic vision, where employees can learn about the patient journey and where Q&A sessions are delivered. Feedback from employees is actively encouraged and is considered a key driver in developing our business activities, processes and workplace environment. Initiatives to encourage wellbeing are well established and continue to evolve and are strongly influenced by the workforce. Together with regular employee communication, Town Hall sessions included specific update presentation on the latest government guidelines and updates and adherence of these, information on health and safety, operational, and general mental and physical wellbeing. Professional and personal development of employees is viewed as fundamental to the continued success of the Company and our revised Development & Performance Management seek to promote this.
Suppliers, customers, and others:
The Board recognises that as a medical diagnostics Company, it is crucial that we deliver a reliable service to our customers and patients. The recent international political crisis around the world did not have any impact on the BED supply chain model. The Company does not have any customers or suppliers in Russia or Ukraine.
Our manufacturing partner in the USA enables a consistent supply of Axumin and POSLUMA products to the market. The Company has regular update meetings with our manufacturing partner to ensure the timely delivery of Axumin and POSLUMA doses to the customer. In addition, the strong and strategic relationship will be leveraged for the new product introductions.
Desirability of the company maintaining a reputation for high standards of business conduct
As a medical diagnostics Company, it is essential that we fully comply with regulations across a variety of territories. The Board regards compliance with the upmost importance and this message is delivered and followed by all facets of the business. Internal Audit and Compliance functions report to the Board on a regular basis and strong Whistleblowing policies have been adopted. Training and monitoring are continually developed and open communication between the Board and stakeholders is encouraged.
Community and environment:
Bracco’ s commitment to sustainability is continuously renewed and improved each year. In 2023, our Group was awarded a gold medal by Eco Vadis, one of the biggest sustainability rating platforms, receiving an overall score of 73/100. Furthermore, the Company has given greater form and substance to its vision and ambition through the Sustainability Plan. The plan has been framed in accordance with the UN’s 2030 Sustainable Development Goals (SDGs) and it contributes to 11 of the 17 goals by putting together different company departments to have a positive impact on people and the environment.
Within the social sphere of sustainability, the Company has obtained some meaningful results. In 2023, 49% of new hires were under the age of 30. Additionally, an increase of 21% of women in executive positions in Bracco S.p.A was registered since 2022, contributing to our ambitious target of reaching 45% by 2030. Finally, during the last year, we were able to reach and support over 11.400 Healthcare Professionals through educational activities and programs. By 2027, we aim to see this number increase up to 68.900.
Our environmental commitment is concretized through circular economy initiatives, the reduction of waste, and a decarbonization process in place. More specifically, we’ve achieved an iodine yield of over 83% and recovered 95% of organic solvents at our state-of-the-art plants. Regarding decarbonisation, our strategy includes actions to improve and maximise energy efficiency and to increase the use of renewable energy, reaching 40% of verified clean energy consumed by the group by 2025. Altogether, the system of actions in place is contributing to our goal of achieving 51% of scope 1 and 2 emissions reduction by 2030.
In terms of Governance, our sustainability commitment is demonstrated through our Human Rights Policy, delivered to 100% of our employees of which 87% executed the training. Additionally, in 2023, through our digital platform “Be Procurement” we qualified 100% of our suppliers, ensuring responsible choices across the value chain.
Finally, in order to assure a future-oriented and international approach to sustainability, Bracco Imaging has confirmed the United Nations Global Compact partnership, with the aim of developing, implementing and disclosing responsible business practices.
Furthermore, Blue Earth Diagnostics (BED) participates every year in the ATOM Festival of Science and Technology that takes place in Abingdon near Oxford, UK. It is a series of events for the local community, with the goal of engaging with young people and families and encouraging everyone to develop a passion for science and its potential to change the world. BED stall aimed to provide an understanding of what we do as a company. We wanted to explain how radioactivity is around us all the time and that it can be utilized in useful ways, such as in diagnostic medical imaging.
In 2023 BED also took part in the IF Oxford Science and Ideas Festival which is packed with inspiring, entertaining and immersive events for people of all ages. We took part with the goal of educating the attendees about radioactivity and how it can be used in medical imaging – in a fun and engaging way.
The Company also support a local school with a donation towards the STEM prizes.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 December 2023.
The results for the year are set out on page 11. The Company’s loss after taxation is $78,661,135 (2022: $12,594,297 loss). A business review is included in the strategic report.
The directors have not declared a dividend (2022: $20,000,000).
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The main risks associated with the Company’s financial assets and liabilities are set out below:
Cash flow risk.
Certain transactions and assets are exposed to foreign currency risk. The company’s functional currently is USD and the majority of the sales and costs occur in USD. In the opinion of the directors, the risk associated with foreign currency movements is acceptable. The company doesn’t enter into financial instruments to hedge against foreign currency risk.
Credit risk
The company is exposed to credit risk on its accounts receivable and its cash balances. The credit risk on accounts receivable is managed through the comprehensive controls including enhanced credit check and monitoring customer credit limits on a continual basis to minimise bad debts and maintain control. The company’s cash balances are led with banks with high credit ratings assigned by international credit rating agencies.
Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting its obligations associated with its financial liabilities.
The Company finances its operations by a combination of retained profits and short-term intercompany credit arrangements to ensure there are sufficient liquid funds.
Management together with Bracco’s corporate treasury monitors rolling forecasts of the company’s liquidity reserve and cash and cash equivalents on the basis of expected cash flows. This is generally carried out at local level, in accordance with practice and limits set by the Bracco corporate group. In addition, the Bracco corporate liquidity management policy involves projecting cash flows in major currencies and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity position.
The Company’s business activities, together with the factors likely to affect its future development, performance and position are set out in the Strategic Report on pages. The financial position of the company, its cash position, liquidity osition can be seen in the balance sheet and accompanying notes to the financial statements.
Budgets and cash flow forecasts have been prepared and subsequently sensitised to take into account the current market situation. The directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.
The Company’s performance is expected to continue throughout the next financial period, recovering market share following US Food and Drug Administration (FDA) approval and commercial launch of POSLUMA® (flotufolastat F 18).
The Company will continue the lifecycle management of flotufolastat (18F). The company plans to launch flotufolastat (18F) in Europe and through commercial partnerships, in other countries (for example, the development and commercialisation of flotufolastat (18F) in China in conjunction with Sinotau Pharmaceutical Group.
The Company will continue research into the use of 18F-fluciclovine in brain metastases, with a supplemental NDA (sNDA) expected in the near future.
The Company have worldwide rights to investigational Fibroblast Activation Protein (FAP)‐targeted imaging agents that are in early-stage development. These imaging agents have been shown to have the potential to improve lesion characterization in various cancer types. The Company will continue the development of the lead candidate FAP agent, completing a Phase 1 study in collaboration with an industry partner.
The Company will continue portfolio expansion activities for differentiated targeted molecular imaging agents.
As the company has not consumed more than 40,000 kWh of energy in this reporting period, it qualifies as a low energy user under these regulations and is not required to report on its emissions, energy consumption or energy efficiency activities.
Basis for 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
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
As explained more fully in the directors' responsibilities statement, 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.
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.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we 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. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
Reviewing minutes of meetings of those charged with governance;
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the company through enquiry and inspection;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. 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.
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.
The profit and loss account has been prepared on the basis that all operations are continuing operations.
Blue Earth Diagnostics Limited is a private company limited by shares incorporated in England and Wales. The registered office is Magdalen Centre, The Oxford Science Park, Oxford, Oxfordshire, UK, OX4 4GA.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest $.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel and transactions between wholly owned members of the group.
The financial statements of the company are consolidated in the financial statements of Bracco s.p.A.. These consolidated financial statements are available at the Business Register of the Chamber of Commerce of Milan, Monza, Brianza, Lodi, Italy.
Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.
Revenue from license fees is recognised based on the milestones achieved per the agreement contract.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Refer to note 20 for detail on the provision for customer rebates program. Refer to note 12 for detail on the intangibles impairment.
The average monthly number of persons (including directors) employed by the company during the year was:
Their aggregate remuneration comprised:
There were 2 (2022: 2) paid directors during the year. The remuneration for the highest paid director was as above.
Bank interest receivable includes $847k (2022: $466k) from a cash pooling program managed by Bracco Imaging s.p.A.
The actual credit for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
Intangible assets have been impaired to reflect the carrying value of the assets.
The balance of intangible assets comprises the purchase of a number of diagnostic technology licenses for development and commercialisation.
Details of the company's subsidiaries at 31 December 2023 are as follows:
Blue Earth Diagnostics Inc. registered address is at 25 Burlington Mall Road, Suite 206, Burlington, MA 01803, United States of America and Blue Earth Ireland Limited is at 6th Floor, 2 Grand Canal Square, Dublin 2, Ireland.
Raw materials recognised as cost of sales in the period amounted to $324,577 (2022: $826,326).
The write down of stocks to net realisable value amounted to $896,594 (2022: $59,393).
Amounts owed to group undertakings comprise of intercompany balances that are unsecured, interest free and repayable on demand.
Long term benefit plan relates to a management incentive programme implemented following the acquisition of the company by Bracco Imaging S.p.A on 31 July 2019.
This nature of the provision is that of the potential costs to customers as part of a rebate program from the sales of Axumin. This is expected to be settled within one year with a best estimate of $6,000,000.
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund. The unpaid contributions outstanding at the year-end were $87,408 (2022: $66,043).
The total expense relating to these plans in the current year was $543,654 (2022: $475,446).
During the year the company paid a dividend of $Nil (2022: $20,000,000).
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
During the period $620,760 (2022: $553,225) was recognised as an expense in the profit and loss account in respect of operating lease expense.