Company registration number 2337313 (England and Wales)
BIOPHARMA PROCESS SYSTEMS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
BIOPHARMA PROCESS SYSTEMS LIMITED
COMPANY INFORMATION
Directors
A E Cowen
R J Lowe
M R Richards
K Ward
P Conway
R Castangia
Secretary
M R Richards
Company number
2337313
Registered office
Biopharma House
Winnall Valley Road
Winnall
Winchester
Hampshire
United Kingdom
SO23 0LD
Auditor
Azets Audit Services
2nd Floor
Regis House
45 King William Street
London
EC4R 9AN
Business address
Biopharma House
Winnall Valley Road
Winnall
Winchester
Hampshire
United Kingdom
SO23 0LD
BIOPHARMA PROCESS SYSTEMS LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Independent auditor's report
4 - 6
Profit and loss account
7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Statement of cash flows
11
Notes to the financial statements
12 - 26
BIOPHARMA PROCESS SYSTEMS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The directors present the strategic report for the year ended 31 December 2023.
Review of the business
During the year the company has seen a small increase in its turnover to £14,155,445 (2022: £13,971,302), This is despite a more defensive attitude within the life sciences industry as participants weigh up future investment options post pandemic and in an environment of sharply higher funding costs and reduced economic growth. That attitude and a different product mix to the previous year has resulted in a more competitive pricing regime that has lead to a gross profit of £3,167,284 (2022: £4,719,127). Whilst the Directors do not relish this more austere environment, the Board remains pleased that the Company has remained profitable and cash flow positive.
Principal risks and uncertainties
The company's financial instruments at the balance sheet date comprised of bank loans, HP loans and cash and liquid resources. In addition, the company has other financial instruments such as trade debtors and trade creditors that arise directly from its operations. The main purpose of these financial instruments is to provide working capital for the company’s activities.
The main risks from the company’s financial instruments are interest rate risk, liquidity risk and foreign currency risk. In common with businesses of a similar size, these risks are managed by the board, who set the policies and circumstances for the use of financial instruments and with are monitored and reviewed on an ongoing basis.
Interest rate risk
The company's loan comprise both fixed and floating rate liabilities. Any exposure to interest rate fluctuations is managed in order that the company's operations are financed through retained profits.
Liquidity and cash flow risk
Liquidity risk is managed through forecasting the future cash flow requirements of the business and maintaining sufficient cash, overdraft and loan facilities are in place.
Exchange rate risk
A significant number of transactions are in foreign currency so any movement on the exchange rate can have an effect on the company. To reduce the risk, the group that this company is part of has a presence in the US and Europe, as well as using foreign forward contracts on significant purchases.
..............................
A E Cowen
Director
Date: .............................................
BIOPHARMA PROCESS SYSTEMS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
The directors present their annual report and financial statements for the year ended 31 December 2023.
Principal activities
The principal activity of the company continued to be that of suppliers of specialist equipment to the process industries.
Results and dividends
The results for the year are set out on page 7.
Ordinary dividends were paid amounting to £817,726. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
A E Cowen
R J Lowe
M R Richards
K Ward
P Conway
R Castangia
Auditor
The auditors, Azets Audit Services, will be proposed for re-appointment at the forthcoming Annual General Meeting.
Statement of directors' responsibilities
The directors are responsible 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 then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
BIOPHARMA PROCESS SYSTEMS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
On behalf of the board
A E Cowen
Director
2 August 2024
BIOPHARMA PROCESS SYSTEMS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF BIOPHARMA PROCESS SYSTEMS LIMITED
- 4 -
Opinion
We have audited the financial statements of Biopharma Process Systems Limited (the 'company') for the year ended 31 December 2023 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 December 2023 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.
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
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.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. 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. 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 course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of 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.
BIOPHARMA PROCESS SYSTEMS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF BIOPHARMA PROCESS SYSTEMS LIMITED
- 5 -
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 directors' report.
We have nothing to report in respect of the following matters in relation to which 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 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 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.
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.
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.
BIOPHARMA PROCESS SYSTEMS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF BIOPHARMA PROCESS SYSTEMS LIMITED
- 6 -
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.
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.
Julian Golding
Senior Statutory Auditor
For and on behalf of Azets Audit Services
Chartered Accountants
Statutory Auditor
2nd Floor
Regis House
45 King William Street
London
EC4R 9AN
BIOPHARMA PROCESS SYSTEMS LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 7 -
2023
2022
Notes
£
£
Turnover
3
14,155,445
13,971,302
Cost of sales
(10,988,161)
(9,252,175)
Gross profit
3,167,284
4,719,127
Administrative expenses
(2,133,410)
(2,124,483)
Other operating income
374,837
95,298
Operating profit
4
1,408,711
2,689,942
Interest receivable and similar income
7
28,939
3,190
Interest payable and similar expenses
8
(35,216)
(41,425)
Profit before taxation
1,402,434
2,651,707
Tax on profit
9
(295,527)
(352,526)
Profit for the financial year
1,106,907
2,299,181
The profit and loss account has been prepared on the basis that all operations are continuing operations.
BIOPHARMA PROCESS SYSTEMS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
2023
2022
£
£
Profit for the year
1,106,907
2,299,181
Other comprehensive income
-
-
Total comprehensive income for the year
1,106,907
2,299,181
BIOPHARMA PROCESS SYSTEMS LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Goodwill
11
40,021
48,301
Tangible assets
12
2,808,893
1,815,743
Investments
13
57,384
57,384
2,906,298
1,921,428
Current assets
Stocks
14
1,058,033
1,220,878
Debtors
15
3,021,519
4,215,517
Cash at bank and in hand
5,120,662
5,750,543
9,200,214
11,186,938
Creditors: amounts falling due within one year
16
(2,290,253)
(3,556,776)
Net current assets
6,909,961
7,630,162
Total assets less current liabilities
9,816,259
9,551,590
Creditors: amounts falling due after more than one year
17
(312,575)
(415,321)
Provisions for liabilities
Deferred tax liability
20
254,937
176,703
(254,937)
(176,703)
Net assets
9,248,747
8,959,566
Capital and reserves
Called up share capital
22
10,426
10,426
Share premium account
14,484
14,484
Profit and loss reserves
9,223,837
8,934,656
Total equity
9,248,747
8,959,566
The financial statements were approved by the board of directors and authorised for issue on 29 July 2024 and are signed on its behalf by:
A E Cowen
Director
Company Registration No. 2337313
BIOPHARMA PROCESS SYSTEMS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
Share capital
Share premium account
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 January 2022
10,426
14,484
8,383,927
8,408,837
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
-
2,299,181
2,299,181
Dividends
10
-
-
(1,748,452)
(1,748,452)
Balance at 31 December 2022
10,426
14,484
8,934,656
8,959,566
Year ended 31 December 2023:
Profit and total comprehensive income for the year
-
-
1,106,907
1,106,907
Dividends
10
-
-
(817,726)
(817,726)
Balance at 31 December 2023
10,426
14,484
9,223,837
9,248,747
BIOPHARMA PROCESS SYSTEMS LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
25
1,744,889
2,712,225
Interest paid
(35,216)
(41,425)
Income taxes paid
(175,000)
(781,319)
Net cash inflow from operating activities
1,534,673
1,889,481
Investing activities
Purchase of tangible fixed assets
(1,236,056)
(331,199)
Proceeds on disposal of tangible fixed assets
9,750
Interest received
28,939
3,190
Net cash used in investing activities
(1,197,367)
(328,009)
Financing activities
Proceeds of new bank loans
203,000
Repayment of bank loans
(39,815)
(40,416)
Payment of finance leases obligations
(109,646)
(56,460)
Dividends paid
(817,726)
(1,748,452)
Net cash used in financing activities
(967,187)
(1,642,328)
Net decrease in cash and cash equivalents
(629,881)
(80,856)
Cash and cash equivalents at beginning of year
5,750,543
5,831,399
Cash and cash equivalents at end of year
5,120,662
5,750,543
BIOPHARMA PROCESS SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
1
Accounting policies
Company information
Biopharma Process Systems Limited is a private company limited by shares incorporated in England and Wales. The registered office is Biopharma House, Winnall Valley Road, Winnall, Winchester, Hampshire, United Kingdom, SO23 0LD.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
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 £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The company has taken advantage of the exemption under section 399 of the Companies Act 2006 not to prepare consolidated accounts, on the basis that the group of which this is the parent qualifies as a small group. The financial statements present information about the company as an individual entity and not about its group.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
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.
1.4
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is ten years.
BIOPHARMA PROCESS SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
1.5
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Leasehold land and buildings
Over the lease term
Fixtures and fittings
Over 10 years
Motor vehicles
Over 4 years
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.
1.6
Fixed asset investments
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
1.7
Impairment of fixed assets
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.8
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Work in progress is valued at the lower of cost and net realisable value.
1.9
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
BIOPHARMA PROCESS SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
1.10
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Other financial assets
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.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
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.
Basic financial 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.
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.
BIOPHARMA PROCESS SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
Other financial liabilities
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.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.11
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.12
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
BIOPHARMA PROCESS SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.14
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
1.15
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
BIOPHARMA PROCESS SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
2
Judgements and key sources of estimation uncertainty
The preparation of financial statements requires management to make judgements, estimates and assumptions about the carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and underlying 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 a continuing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
The key judgements and sources of estimation uncertainty that have a significant effect on the amounts recognised in the financial statements are described below.
(i) Impairment of debtors
The Company makes an estimate of the recoverable value of its debtors, including inter-company and other debtors. When assessing impairment of debtors, management considers factors including any history of non-payment by the counter-party or any other factors which indicate that they may not be able to settle their obligation to the company in full.
(ii) Impairment of stock
The Company makes an estimate of the stock obsolescence. When assessing the impairment of stock, management considers factors including future selling price of stock and expected demand and best before dates of goods for resale.
(iii) Useful economic lives of tangible assets
The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful economic lives and residual values of the assets. The useful economic lives and residual values are re-assessed annually. They are amended when necessary to reflect current estimates, based on technological advancement future investments, economic utilisation and the physical condition of the assets.
3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Pharmaceutical capital goods sales
4,788,818
4,870,829
Airflow capital goods sales
4,163,359
2,504,077
Pharmaceutical equipment service and parts
2,012,564
1,604,638
Technology products and services
3,190,704
4,991,758
14,155,445
13,971,302
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
11,234,329
9,951,229
Europe
1,912,255
2,709,936
United States
617,747
841,635
Asia
126,322
394,538
Rest of the world
264,792
73,964
14,155,445
13,971,302
BIOPHARMA PROCESS SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
3
Turnover and other revenue
(Continued)
- 18 -
2023
2022
£
£
Other revenue
Interest income
28,939
3,190
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses/(gains)
6,584
(23,600)
Fees payable to the company's auditor for the audit of the company's financial statements
16,200
16,200
Depreciation of owned tangible fixed assets
242,906
233,932
Profit on disposal of tangible fixed assets
(9,750)
-
Amortisation of intangible assets
8,280
8,280
Operating lease charges
37,834
61,152
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Directors
2
2
Operations
46
48
Temps
12
19
Total
60
69
2023
2022
£
£
Wages and salaries
2,757,826
2,798,384
Social security costs
275,135
270,862
Pension costs
137,683
103,496
3,170,644
3,172,742
BIOPHARMA PROCESS SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
174,070
220,500
Company pension contributions to defined contribution schemes
16,182
14,411
190,252
234,911
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
23,906
Interest receivable from group companies
5,033
3,190
Total income
28,939
3,190
2023
2022
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
28,939
3,190
8
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on invoice finance arrangements
27,920
29,134
Other finance costs:
Interest on finance leases and hire purchase contracts
7,296
12,291
35,216
41,425
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
177,220
475,400
Adjustments in respect of prior periods
40,073
(155,883)
Total current tax
217,293
319,517
Deferred tax
Origination and reversal of timing differences
78,234
33,009
Total tax charge
295,527
352,526
BIOPHARMA PROCESS SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
9
Taxation
(Continued)
- 20 -
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Profit before taxation
1,402,434
2,651,707
Expected tax charge based on the standard rate of corporation tax in the UK of 23.50% (2022: 19.00%)
329,572
503,824
Tax effect of expenses that are not deductible in determining taxable profit
448
41,743
Tax effect of income not taxable in determining taxable profit
(2,291)
Change in unrecognised deferred tax assets
78,234
33,009
Group relief
(62,754)
(67,062)
Permanent capital allowances in excess of depreciation
(121,259)
(70,639)
Depreciation on assets not qualifying for tax allowances
57,083
44,447
Amortisation on assets not qualifying for tax allowances
1,946
1,573
Research and development tax credit
(25,525)
20,585
Under/(over) provided in prior years
40,073
(154,954)
Taxation charge for the year
295,527
352,526
10
Dividends
2023
2022
£
£
Interim paid
817,726
1,748,452
11
Intangible fixed assets
Goodwill
£
Cost
At 1 January 2023 and 31 December 2023
82,801
Amortisation and impairment
At 1 January 2023
34,500
Amortisation charged for the year
8,280
At 31 December 2023
42,780
Carrying amount
At 31 December 2023
40,021
At 31 December 2022
48,301
BIOPHARMA PROCESS SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
12
Tangible fixed assets
Leasehold land and buildings
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
Cost
At 1 January 2023
1,055,038
1,479,779
241,918
2,776,735
Additions
737,737
498,319
1,236,056
Disposals
(18,497)
(18,497)
At 31 December 2023
1,792,775
1,978,098
223,421
3,994,294
Depreciation and impairment
At 1 January 2023
111,387
715,757
133,848
960,992
Depreciation charged in the year
21,329
180,997
40,580
242,906
Eliminated in respect of disposals
(18,497)
(18,497)
At 31 December 2023
132,716
896,754
155,931
1,185,401
Carrying amount
At 31 December 2023
1,660,059
1,081,344
67,490
2,808,893
At 31 December 2022
943,651
764,022
108,070
1,815,743
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2023
2022
£
£
Fixtures and fittings
208,580
235,822
Motor vehicles
61,426
101,642
270,006
337,464
13
Fixed asset investments
2023
2022
£
£
Investments in subsidiaries
57,384
57,384
BIOPHARMA PROCESS SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
14
Stocks
2023
2022
£
£
Work in progress
253,827
294,016
Finished goods and goods for resale
804,206
926,862
1,058,033
1,220,878
15
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
2,166,675
3,221,144
Corporation tax recoverable
380,459
136,918
Amounts owed by group undertakings
168,822
232,573
Other debtors
12,829
14,630
Prepayments and accrued income
241,400
549,366
2,970,185
4,154,631
2023
2022
Amounts falling due after more than one year:
£
£
Amounts owed by group undertakings
51,334
60,886
Total debtors
3,021,519
4,215,517
16
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans
18
46,237
45,791
Obligations under finance leases
19
62,485
109,646
Trade creditors
1,290,425
2,178,967
Amounts owed to group undertakings
12,065
54,538
Taxation and social security
229,219
298,504
Other creditors
9,163
Accruals and deferred income
649,822
860,167
2,290,253
3,556,776
BIOPHARMA PROCESS SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
17
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Bank loans and overdrafts
18
300,604
340,865
Obligations under finance leases
19
11,971
74,456
312,575
415,321
Amounts included above which fall due after five years are as follows:
Payable by instalments
85,106
168,912
18
Loans and overdrafts
2023
2022
£
£
Bank loans
346,841
386,656
Payable within one year
46,237
45,791
Payable after one year
300,604
340,865
The long-term loans are secured by fixed charges over the assets of the company.
The company has a debenture loan with Lloyds Commercial Finance of £64,078 (2022: £73,593). The loan is repayable over 12 years. The interest rate on the loan is LIBOR plus 2.95% per annum.
The company has a mortgage with Lloyds Bank of £282,763 (2022: £313,063). The loan is repayable over 10 years. The interest rate on the loan is LIBOR plus 2.95% per annum.
19
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
65,023
109,646
In two to five years
12,498
83,739
77,521
193,385
Less: future finance charges
(3,065)
(9,283)
74,456
184,102
BIOPHARMA PROCESS SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
20
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
254,937
176,703
2023
Movements in the year:
£
Liability at 1 January 2023
176,703
Charge to profit or loss
78,234
Liability at 31 December 2023
254,937
21
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
137,683
103,496
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.
22
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary A shares of £1 each
10,000
10,000
10,000
10,000
Ordinary B shares of £1 each
426
426
426
426
10,426
10,426
10,426
10,426
BIOPHARMA PROCESS SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 25 -
23
Operating lease commitments
Lessee
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:
2023
2022
£
£
Within one year
36,302
44,410
Between two and five years
136,200
138,452
In over five years
1,293,900
1,327,950
1,466,402
1,510,812
24
Ultimate controlling party
The parent company of Biopharma Process Systems Limited is PE487 Limited and its registered office is Biopharma House, Winnall Valley Road, Winchester, Hampshire, SO23 0LD.
PE487 Limited prepare consolidated accounts for the group, which are available at companies house.
25
Cash generated from operations
2023
2022
£
£
Profit for the year after tax
1,106,907
2,299,181
Adjustments for:
Taxation charged
295,527
352,526
Finance costs
35,216
41,425
Investment income
(28,939)
(3,190)
Gain on disposal of tangible fixed assets
(9,750)
-
Amortisation and impairment of intangible assets
8,280
8,280
Depreciation and impairment of tangible fixed assets
242,906
233,932
Movements in working capital:
Decrease/(increase) in stocks
162,845
(630,725)
Decrease/(increase) in debtors
1,151,705
(254,628)
(Decrease)/increase in creditors
(1,219,808)
665,424
Cash generated from operations
1,744,889
2,712,225
BIOPHARMA PROCESS SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 26 -
26
Analysis of changes in net funds
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
5,750,543
(629,881)
5,120,662
Borrowings excluding overdrafts
(386,656)
39,815
(346,841)
Obligations under finance leases
(184,102)
109,646
(74,456)
5,179,785
(480,420)
4,699,365
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