Registration number:
Emmes Biopharma UK Limited
for the Year Ended 31 December 2023
Emmes Biopharma UK Limited
Contents
Company Information |
|
Strategic Report |
|
Directors' Report |
|
Statement of Directors' Responsibilities |
|
Independent Auditor's Report |
|
Consolidated Profit and Loss Account |
|
Consolidated Statement of Comprehensive Income |
|
Consolidated Balance Sheet |
|
Balance Sheet |
|
Consolidated Statement of Changes in Equity |
|
Statement of Changes in Equity |
|
Consolidated Statement of Cash Flows |
|
Statement of Cash Flows |
|
Notes to the Financial Statements |
Emmes Biopharma UK Limited
Company Information
Directors |
John Matthew Bond Sastry Venkata Chilukuri Peter Ronco |
Registered office |
|
Bankers |
|
Auditors |
|
Emmes Biopharma UK Limited
Strategic Report for the Year Ended 31 December 2023
The directors present their strategic report for the year ended 31 December 2023.
Principal activity
The principal activity of the group is clinical research
Fair review of the business
Emmes UK's primary role is to support full-service clinical research activities globally. By employing individuals with the appropriate experience and expertise, Emmes UK ensures the effective design and implementation of all services associated with clinical trials. As one of the core countries for conducting clinical trials, the UK presence has been critical since Emmes' acquisition in 2021. This acquisition has facilitated the integration of Emmes UK with the global company, resulting in streamlined and centralized processes and policies.
Emmes is expanding into various therapeutic areas, including vaccines, infectious diseases, ophthalmology, and neurosciences. This expansion underscores the company's commitment to addressing unmet medical needs and advancing public health.
The financial position for 2023 remains optimistic, even after the successful conclusion of profitable COVID-19 phase 3 studies in 2022. However, profits have declined due to reductions in the pipeline and geographical staff restructuring. This restructuring has allowed Emmes to attract high-caliber talent in the UK and US, and the recent hiring of two UK-based Business Development staff members will proactively address business needs both locally and globally.
The group's key financial and other performance indicators during the year were as follows:
Financial KPIs |
Unit |
2023 |
2022 |
Turnover |
£m |
15 |
18 |
Profit after tax |
£m |
1 |
6 |
Working capital |
£m |
12 |
11 |
Reserves |
£m |
12 |
11 |
Studies and Opportunities
• Secured Studies: Emmes UK has secured a second study in a rare indication, a new vaccine study with a new sponsor, and two additional studies with the same sponsor. This diverse portfolio of studies is promising for the organization.
• Global Pipeline: The robust global pipeline of study opportunities indicates potential growth and continued success.
Office Closure: With only a handful of employees attending the office, the decision was made to close the Milton Keynes offices. Overall, Emmes UK is effectively navigating the complexities of the clinical research landscape.
Emmes UK has made significant strides in integrating with the global company and expanding its therapeutic areas. While facing challenges, the company's strategic hires and strong pipeline position it well for future growth. Emmes UK is committed to navigating the clinical research landscape effectively and contributing to the overall success of Emmes globally.
Emmes Biopharma UK Limited
Strategic Report for the Year Ended 31 December 2023
Principal risks and uncertainties
Challenges and Solutions
• Staff Competition and Turnover: Like other Emmes affiliates, Emmes UK faces challenges related to competition for qualified staff and staff turnover, common in the clinical research industry.
• Geographical Staff Changes: The geographical staff change demonstrates adaptability, although it increases costs. Leveraging UK and other affiliate staff and sites will help sustain these costs.
o Early Termination of Studies: Studies can end earlier than planned due to unforeseen circumstances, impacting resource allocation and revenues. To mitigate this, contracts should include notice and penalty clauses for early termination, providing a clear framework for managing such situations and reducing potential financial losses.
o Operational Risks: Continuous monitoring and assessment of operational risks are crucial. Emmes UK has implemented a global 13-week cash flow forecast to ensure prompt action on any collection-related issues. Project Forecasting from backlog has been implemented and measured against actuals.
o Credit Covenant Compliance: Emmes UK operates well below its credit covenant ceilings with lenders and has significantly improved its 12-month rolling forecast capabilities to ensure compliance with financial ratios into the future.
Approved and authorised by the
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Emmes Biopharma UK Limited
Directors' Report for the Year Ended 31 December 2023
The directors present their report and the for the year ended 31 December 2023.
Directors of the group
The directors who held office during the year were as follows:
Future developments
2024 is expected to be a challenging year, with several large studies concluding. However, other studies will continue, and Emmes is looking to expand its European presence. Hiring efforts will continue in the UK to service both local and global business needs. In addition to building the Business Development team, Emmes will also add therapeutic area experts to improve the win rate. Emmes UK remains a key part of the global strategy and will be supported by its parent company.
Disclosure of information to the auditor
Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditor is unaware.
Approved and authorised by the
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Emmes Biopharma UK Limited
Statement of Directors' Responsibilities
The directors acknowledge their responsibilities for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and the company and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:
• |
select suitable accounting policies and apply them consistently; |
• |
make judgements and accounting estimates that are reasonable and prudent; |
• |
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and |
• |
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. |
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group's and the company's transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Emmes Biopharma UK Limited
Independent Auditor's Report to the Members of Emmes Biopharma UK Limited
Opinion
We have audited the financial statements of Emmes Biopharma UK Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2023, which comprise the Consolidated Profit and Loss Account, Consolidated Statement of Comprehensive Income, Consolidated Balance Sheet, Balance Sheet, Consolidated Statement of Changes in Equity, Statement of Changes in Equity, Consolidated Statement of Cash Flows, Statement of Cash Flows, and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
• | give a true and fair view of the state of the group's and the parent company's affairs as at 31 December 2023 and of the group's profit for the year then ended; |
• | have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and |
• | have been prepared in accordance with the requirements of the Companies Act 2006. |
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditor responsibilities for the audit of the financial statements section of our report. We are independent of the group 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 director's 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 group's ability to continue as a going concern for a period of at least twelve months from when the original financial statements were authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Emmes Biopharma UK Limited
Independent Auditor's Report to the Members of Emmes Biopharma UK Limited
Opinion on other matter prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
• |
the information given in the Strategic Report and Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
• |
the Strategic Report and Directors' Report have been prepared in accordance with applicable legal requirements. |
Matters on which we are required to report by exception
In the light of our knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report and the Directors' Report.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
• | adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or |
• | the parent company financial statements are not in agreement with the accounting records and returns; or |
• | certain disclosures of directors' remuneration specified by law are not made; or |
• | we have not received all the information and explanations we require for our audit. |
Responsibilities of directors
As explained more fully in the Statement of Directors' Responsibilities [set out on page 5], 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 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.
Emmes Biopharma UK Limited
Independent Auditor's Report to the Members of Emmes Biopharma UK Limited
Irregularities including fraud
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
We identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and then design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion.
In identifying and addressing risk of material misstatement in respect of irregularities, including fraud and non compliance with laws and regulations, our audit procedures performed included, but were not limited to the following: review of the financial statements and disclosures to underlying supporting documentation, obtained an understanding of laws and regulations that affect the company both directly in the financial statements and its operations, undertaking a walk through test of key controls that are in operation, review and enquiries into journal entries processed during the period under review, enquiries of management and key personnel, performance of analytical review and reviewing the findings of testing, documents obtained and engaging in discussions to ensure consistency is evident in the findings documented.
We assessed the risk of material misstatement in respect of irregularities, including fraud and non compliance with laws and regulations by focusing on areas where management has significant judgement, such as revenue recognition based on the percentage of completion method. This involves estimating costs to date, total budgeted costs, and other factors that influence project accounting.
Our audit procedures to address specific risks related to project accounting and revenue recognition included, but were not limited to the following:
Evaluating the internal controls to prevent and detect fraud related to project accounting and revenue recognition.
Testing the completeness and accuracy of cost estimates and other critical inputs to the percentage of completion calculation.
Reveiewing management's assumptions and estimates for bias or inconsistency, particularly in the context of revenue recognition and cost estimation.
Performing detailed analytical procedures to identify unusual trends or significant variations in project-related costs and revenue.
Testing a sample of project contracts to verify the terms and conditions, focusing on revenue recognition and any associated variable consideration.
Where we noted weaknesses in internal controls or potential risks of fraud, we communicated these finding to management and those charged with governance for corrective action.
Our audit did not identify any instances of fraud or irregularities that materially affect the financial statements. However, due to the inherent estimation risks in project accounting, there is a risk that future results may differ from management's current estimates. We recommend that management continues to strengthen internal controls and monitor estimation processes to mitigate this inherent risk within project accounting.
There are inherent limitations in the audit procedures described above as irregularities in relation to fraud are by nature difficult to detect as it would likely have occurred through deliberate concealment and could involve collusion and deliberate misrepresentations. We are not responsible for preventing fraud or non-compliance with laws and regulations and cannot be expected to detect all fraud and non compliance with laws and regulations.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Emmes Biopharma UK Limited
Independent Auditor's Report to the Members of Emmes Biopharma UK Limited
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.
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For and on behalf of
Unit 1 The Cam Centre
Wilbury Way
Herts
SG4 0TW
Emmes Biopharma UK Limited
Consolidated Profit and Loss Account for the Year Ended 31 December 2023
Note |
2023 |
2022 |
|
Turnover |
|
|
|
Cost of sales |
( |
( |
|
Gross profit |
|
|
|
Administrative expenses |
( |
( |
|
Other operating income |
|
|
|
Operating profit |
|
|
|
Other interest receivable and similar income |
|
|
|
Interest payable and similar expenses |
( |
- |
|
299,192 |
7 |
||
Profit before tax |
|
|
|
Tax on profit |
( |
( |
|
Profit for the financial year |
|
|
|
Profit/(loss) attributable to: |
|||
Owners of the company |
|
|
Emmes Biopharma UK Limited
Consolidated Statement of Comprehensive Income for the Year Ended 31 December 2023
2023 |
2022 |
|
Profit for the year |
|
|
Foreign currency translation losses on consolidation |
( |
( |
Total comprehensive income for the year |
|
|
Total comprehensive income attributable to: |
||
Owners of the company |
|
|
Emmes Biopharma UK Limited
(Registration number: 04498663)
Consolidated Balance Sheet as at 31 December 2023
Note |
2023 |
2022 |
|
Fixed assets |
|||
Intangible assets |
|
|
|
Tangible assets |
|
|
|
|
|
||
Current assets |
|||
Debtors |
|
|
|
Cash at bank and in hand |
|
|
|
|
|
||
Creditors: Amounts falling due within one year |
( |
( |
|
Net current assets |
|
|
|
Total assets less current liabilities |
|
|
|
Provisions for liabilities |
( |
( |
|
Net assets |
|
|
|
Capital and reserves |
|||
Called up share capital |
1,954 |
1,954 |
|
Share premium reserve |
97,805 |
97,805 |
|
Retained earnings |
12,244,491 |
10,935,278 |
|
Equity attributable to owners of the company |
12,344,250 |
11,035,037 |
|
Shareholders' funds |
12,344,250 |
11,035,037 |
Approved and authorised by the
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Emmes Biopharma UK Limited
(Registration number: 04498663)
Balance Sheet as at 31 December 2023
Note |
2023 |
2022 |
|
Fixed assets |
|||
Intangible assets |
|
|
|
Tangible assets |
|
|
|
Investments |
|
|
|
|
|
||
Current assets |
|||
Debtors |
|
|
|
Cash at bank and in hand |
|
|
|
|
|
||
Creditors: Amounts falling due within one year |
( |
( |
|
Net current assets |
|
|
|
Total assets less current liabilities |
|
|
|
Provisions for liabilities |
( |
( |
|
Net assets |
|
|
|
Capital and reserves |
|||
Called up share capital |
1,954 |
1,954 |
|
Share premium reserve |
97,805 |
97,805 |
|
Retained earnings |
11,424,720 |
9,980,114 |
|
Shareholders' funds |
11,524,479 |
10,079,873 |
As permitted by Section 408 of the Companies Act 2006 the company has not presented its own profit and loss account and related notes. The company made a profit after tax for the financial year of £1,444,606 (2022 - profit of £5,438,961).
Emmes Biopharma UK Limited
(Registration number: 04498663)
Balance Sheet as at 31 December 2023
Approved and authorised by the
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Emmes Biopharma UK Limited
Consolidated Statement of Changes in Equity for the Year Ended 31 December 2023
Equity attributable to the parent company
Share capital |
Share premium |
Retained earnings |
Total |
Total equity |
|
At 1 January 2023 |
|
|
|
|
|
Profit for the year |
- |
- |
|
|
|
Other comprehensive income |
- |
- |
( |
( |
( |
Total comprehensive income |
- |
- |
|
|
|
At 31 December 2023 |
|
|
|
|
|
Emmes Biopharma UK Limited
Statement of Changes in Equity for the Year Ended 31 December 2023
Share capital |
Share premium |
Retained earnings |
Total |
|
At 1 January 2023 |
|
|
|
|
Profit for the year |
- |
- |
|
|
At 31 December 2023 |
|
|
|
|
Share capital |
Share premium |
Retained earnings |
Total |
|
At 1 January 2022 |
|
|
|
|
Profit for the year |
- |
- |
|
|
At 31 December 2022 |
1,954 |
97,805 |
9,980,114 |
10,079,873 |
Emmes Biopharma UK Limited
Consolidated Statement of Cash Flows for the Year Ended 31 December 2023
Note |
2023 |
2022 |
|
Cash flows from operating activities |
|||
Profit for the year |
|
|
|
Adjustments to cash flows from non-cash items |
|||
Depreciation and amortisation |
|
|
|
Financial instrument net gains (losses) through profit and loss |
- |
|
|
Loss/(profit) on disposal of tangible assets |
|
( |
|
Finance income |
( |
( |
|
Finance costs |
|
- |
|
Income tax expense |
|
|
|
|
|
||
Working capital adjustments |
|||
Increase in trade debtors |
( |
( |
|
Increase in trade creditors |
|
|
|
(Decrease)/increase in deferred income, including government grants |
( |
|
|
Cash generated from operations |
( |
|
|
Income taxes paid |
( |
( |
|
Net cash flow from operating activities |
( |
( |
|
Cash flows from investing activities |
|||
Interest received |
|
|
|
Acquisitions of tangible assets |
( |
( |
|
Proceeds from sale of tangible assets |
- |
|
|
Acquisition of intangible assets |
- |
( |
|
Net cash flows from investing activities |
|
( |
|
Cash flows from financing activities |
|||
Interest paid |
( |
- |
|
Net decrease in cash and cash equivalents |
( |
( |
|
Cash and cash equivalents at 1 January |
|
|
|
Effect of exchange rate fluctuations on cash held |
( |
( |
|
Cash and cash equivalents at 31 December |
2,630,780 |
4,056,292 |
Emmes Biopharma UK Limited
Statement of Cash Flows for the Year Ended 31 December 2023
Note |
2023 |
2022 |
|
Cash flows from operating activities |
|||
Profit for the year |
|
|
|
Adjustments to cash flows from non-cash items |
|||
Depreciation and amortisation |
|
|
|
Loss/(profit) on disposal of tangible assets |
|
( |
|
Finance income |
( |
- |
|
Finance costs |
|
- |
|
Income tax expense |
|
|
|
|
|
||
Working capital adjustments |
|||
Increase in trade debtors |
( |
( |
|
Increase in trade creditors |
|
|
|
(Decrease)/increase in deferred income, including government grants |
( |
|
|
Cash generated from operations |
( |
|
|
Income taxes paid |
( |
( |
|
Net cash flow from operating activities |
( |
( |
|
Cash flows from investing activities |
|||
Interest received |
|
- |
|
Proceeds from sale of subsidiaries |
- |
|
|
Acquisitions of tangible assets |
( |
( |
|
Proceeds from sale of tangible assets |
- |
|
|
Acquisition of intangible assets |
- |
( |
|
Revaluation of investment in subsidiaries |
|
( |
|
Net cash flows from investing activities |
|
( |
|
Cash flows from financing activities |
|||
Interest paid |
( |
- |
|
Net decrease in cash and cash equivalents |
( |
( |
|
Cash and cash equivalents at 1 January |
|
|
|
Cash and cash equivalents at 31 December |
1,588,173 |
3,009,671 |
Emmes Biopharma UK Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
General information |
The company is a private company limited by share capital, incorporated in England and Wales.
The address of its registered office is:
These financial statements were authorised for issue by the
Accounting policies |
Summary of significant accounting policies and key accounting estimates
The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.
Statement of compliance
These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland and the Companies Act 2006'.
Basis of preparation
These financial statements have been prepared using the historical cost convention.
The financial statements are prepared in sterling, which is the functional currency of the entity. Amounts are rounded to the nearest £1.
Basis of consolidation
The consolidated financial statements consolidate the financial statements of the company and its subsidiary undertakings drawn up to 31 December 2023.
A subsidiary is an entity controlled by the company. Control is achieved where the company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.
The results of subsidiaries acquired or disposed of during the year are included in the Profit and Loss Account from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the group.
Foreign subsidiaries are converted to sterling £ prior to consolidation at the relevant rates. As a result there is a foreign exchange on consolidation that arises which is recognised within other comprehensive income. Share capital is converted at the historical rate of exchange. Profit and loss items are converted at the average rate and balance sheet items are converted at the closing rate.
Inter-company transactions, balances and unrealised gains on transactions between the company and its subsidiaries, which are related parties, are eliminated in full.
Emmes Biopharma UK Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
Intra-group losses are also eliminated but may indicate an impairment that requires recognition in the consolidated financial statements.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group as well as company year end alignment. There are no non controlling interests within this group.
Going concern
The financial statements have been prepared on a going concern basis.
Judgements
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 reviewed 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. |
Project accounting |
Estimating total budgeted costs |
The accuracy of estimated total costs directly affects the stage of completion and revenue recognition. Key components include labour, overheads and estimation of contract costs. The costs are accrued at month end where costs have been incurred but not yet billed, these are accrued for as necessary and raised within creditors. |
Where costs are paid in advance and these comprise prepaid expenses they are recorded wtihin debtors. Judgement is required to ensure that estimates are reasonable, reflecting expected efficiencies or risks. |
Percentage of completion |
The percentage of completion is calculated using the ratio of costs incurred to date over total budgeted costs. This ratio can be influenced by changes in project scope, re-estimation of costs, or delays. Judgement is needed to ensure the ratio accurately reflects project progress and expected outcome of the overall project. |
Recognition of revenue |
Applying the percentage of completion to the total contract revenue determines the amount of revenue to be recognised in the current accounting period. Judgement is required to ensure consistency and to adjust for changes in estimates or project scope accordingly. |
Emmes Biopharma UK Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
Revenue recognition
Turnover comprises the fair value of the consideration received or receivable for the sale of goods and provision of services in the ordinary course of the company’s activities. Turnover is shown net of value added tax, returns, rebates and discounts.
Revenue from project-based contracts is recognised over time using the percentage of completion method when the following criteria are met:
-The contract identifies clear deliverables, terms of payment, and rights and obligations of the parties involved.
- The project's costs and revenues can be estimated reliably.
- The entity expects to receive the consideration for performance as agreed upon in the contract.
- The entity's performance provides services that benefit the customer as the project progresses.
The percentage of completion is calculated as the ratio of costs incurred to date against total budgeted costs. This ratio determines the stage of completion and is applied to the total contract revenue to recognise revenue in the current accounting period.
Revenue recognised for the current accounting period is derived by applying the percentage of completion to the total contract revenue, then subtracting any revenue already recognised.
Costs directly related to the project are expensed as incurred. If these costs are expected to be utilised for future performance, they are carried on the balance sheet and recognised when the corresponding obligations are fulfilled.
If it is expected that total costs will exceed total revenue, the entire anticipated loss is recognised immediately. Additionally, if there are revisions to the total budgeted costs or the contract scope, the revenue is recalculated based on the updated estimates.
The estimate is applied by management and detailed within significant judgements above, being a significant judgement applied within these financial statements.
Research and development
Expenditure on research and development is written off in the year in which it is incurred.
Research and Development credits under the RDEC scheme are calculated in accordance with the prevailing tax statutes and are recognised within the financial statements as other operating income accrued within the relevant year.
Emmes Biopharma UK Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
Foreign currency transactions and balances
Monetary assets and liabilities denominated in foreign currencies are retranslated into the respective functional currency of the entity at the rates prevailing on the reporting period date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rate on the date when the fair value is re-measured.
The group consolidation uses historical rates for certain items and as such there is a foreign exchange on consolidation that arises. The amount arising is recognised through other comprehensive income in the relevant period.
Non-monetary items measured in terms of historical cost in a foreign currency are not retranslated.
Tax
The tax expense for the period comprises current tax. Tax is recognised in profit or loss, except that a change attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the group operates and generates taxable income.
Deferred tax is recognised in respect of all timing differences between taxable profits and profits reported in the consolidated financial statements.
Unrelieved tax losses and other deferred tax assets are recognised when it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.
Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference.
Tangible assets
Tangible assets are stated in the balance sheet at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.
The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.
Depreciation
Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:
Asset class |
Depreciation method and rate |
Plant and machinery |
33% straight line |
Furniture and fittings |
20% straight line |
Short leasehold improvements |
20% straight line |
Emmes Biopharma UK Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
Amortisation
Amortisation is provided on intangible assets so as to write off the cost, less any estimated residual value, over their useful life as follows:
Asset class |
Amortisation method and rate |
Computer software and licenses |
7 years straight line |
Investments
Investments in equity shares which are not publicly traded and where fair value cannot be measured reliably are measured at cost less impairment. Amounts are held in their denominated currency's original cost and translated at year end Oanda rates annually to GBP.
Interest income on debt securities, where applicable, is recognised in income using the effective interest method. Dividends on equity securities are recognised in income when receivable.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible.
Amounts held in foreign currency are translated during each month at the opening rate using HMRC approved rates. At the year end the company applies Oanda rates for closing balances to align with the group.
Trade debtors
Trade debtors are amounts due from customers for merchandise sold or services performed in the ordinary course of business.
Trade debtors are recognised initially at the transaction price. They are subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for the impairment of trade debtors is established when there is objective evidence that the group will not be able to collect all amounts due according to the original terms of the receivables.
Amounts invoiced in foreign currency are translated during each month at the opening rate using HMRC approved rates. At the year end the company applies Oanda rates for closing balances to align with the group.
Trade creditors
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the group does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.
Trade creditors are recognised at the transaction price and subsequently measured at amortised cost using the effective interest method.
Amounts invoiced in foreign currency are translated during each month at the opening rate using HMRC approved rates. At the year end the company applies Oanda rates for closing balances to align with the group.
Emmes Biopharma UK Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
Leases
Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.
Share capital
Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.
Defined contribution pension obligation
A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the group has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.
Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.
Financial instruments
Classification
Turnover |
The analysis of the group's Turnover for the year from continuing operations is as follows:
2023 |
2022 |
|
Rendering of services |
|
|
The analysis of the group's Turnover for the year by class of business is as follows:
2023 |
2022 |
|
Fixed fee revenue |
|
|
Pass through costs |
|
|
|
|
The analysis of the group's Turnover for the year by market is as follows:
Emmes Biopharma UK Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
2023 |
2022 |
|
UK |
|
|
Europe |
|
|
Rest of world |
|
|
|
|
Other operating income |
The analysis of the group's other operating income for the year is as follows:
2023 |
2022 |
|
RDEC Tax credit |
|
|
Other gains and losses |
The analysis of the group's other gains and losses for the year is as follows:
2023 |
2022 |
|
(Loss)/gain on disposal of Tangible assets |
( |
|
Operating profit |
Arrived at after charging/(crediting)
2023 |
2022 |
|
Depreciation expense |
|
|
Amortisation expense |
|
|
Foreign exchange losses/(gains) |
|
( |
Operating lease expense - property |
|
|
Operating lease expense - plant and machinery |
|
|
Loss/(profit) on disposal of property, plant and equipment |
|
( |
Other interest receivable and similar income |
2023 |
2022 |
|
Interest income on financial assets |
|
- |
Interest income on bank deposits |
|
|
|
|
Emmes Biopharma UK Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
Interest payable and similar expenses |
2023 |
2022 |
|
Interest on bank overdrafts and borrowings |
|
- |
Interest expense on other finance liabilities |
|
- |
|
- |
Emmes Biopharma UK Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
Staff costs |
The aggregate payroll costs (including directors' remuneration) were as follows:
2023 |
2022 |
|
Wages and salaries |
|
|
Social security costs |
|
|
Other short-term employee benefits |
|
|
Pension costs, defined contribution scheme |
|
|
Other employee expense |
|
|
|
|
The average number of persons employed by the group (including directors) during the year, analysed by category was as follows:
2023 |
2022 |
|
Administration and support |
|
|
Research and development |
|
|
Sales, marketing and distribution |
|
|
Other departments |
|
|
|
|
Directors' remuneration |
The directors' remuneration for the year was as follows:
2023 |
2022 |
|
Remuneration |
- |
|
Auditors' remuneration |
2023 |
2022 |
|
Audit of these financial statements |
18,700 |
17,237 |
Emmes Biopharma UK Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
Taxation |
Tax charged/(credited) in the consolidated profit and loss account
2023 |
2022 |
|
Current taxation |
||
UK corporation tax |
|
|
Deferred taxation |
||
Arising from origination and reversal of timing differences |
- |
|
Tax expense in the income statement |
|
|
The tax on profit before tax for the year is the same as the standard rate of corporation tax in the UK (2022 - the same as the standard rate of corporation tax in the UK) of
The differences are reconciled below:
2023 |
2022 |
|
Profit before tax |
|
|
Corporation tax at standard rate |
|
|
Tax decrease from effect of capital allowances and depreciation |
( |
( |
Tax increase from other short-term timing differences |
|
|
Effect of foreign tax rates |
|
( |
Deferred tax expense from temporary difference |
- |
|
Total tax charge |
|
|
Deferred tax
Group
Deferred tax assets and liabilities
2023 |
Asset |
Liability |
Accelerated capital allowances |
- |
|
- |
|
2022 |
Asset |
Liability |
Accelerated capital allowances |
- |
|
- |
|
Emmes Biopharma UK Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
Company
Deferred tax assets and liabilities
The company deferred taxation is the same as the group's deferred taxation.
Intangible assets |
Group
Computer software and licenses |
Total |
|
Cost or valuation |
||
At 1 January 2023 |
|
|
At 31 December 2023 |
|
|
Amortisation |
||
At 1 January 2023 |
|
|
Amortisation charge |
|
|
At 31 December 2023 |
|
|
Carrying amount |
||
At 31 December 2023 |
|
|
At 31 December 2022 |
|
|
Company
The company's intangible fixed assets are the same as the group.
Emmes Biopharma UK Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
Tangible assets |
Group
Short leasehold buildings |
Furniture, fittings and equipment |
Other tangible assets |
Total |
|
Cost or valuation |
||||
At 1 January 2023 |
|
|
|
|
Additions |
- |
- |
|
|
Disposals |
( |
( |
( |
( |
At 31 December 2023 |
- |
|
|
|
Depreciation |
||||
At 1 January 2023 |
|
|
|
|
Charge for the year |
|
|
|
|
Eliminated on disposal |
( |
( |
( |
( |
At 31 December 2023 |
- |
|
|
|
Carrying amount |
||||
At 31 December 2023 |
- |
- |
|
|
At 31 December 2022 |
|
|
|
|
The net book value of land and buildings above is £Nil (2022 - £6,114) in respect of short leasehold land and buildings.
Emmes Biopharma UK Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
Company
Short leasehold buildings |
Furniture, fittings and equipment |
Other tangible assets |
Total |
|
Cost or valuation |
||||
At 1 January 2023 |
|
|
|
|
Additions |
- |
- |
|
|
Disposals |
( |
( |
( |
( |
At 31 December 2023 |
- |
|
|
|
Depreciation |
||||
At 1 January 2023 |
|
|
|
|
Charge for the year |
|
|
|
|
Eliminated on disposal |
( |
( |
( |
( |
At 31 December 2023 |
- |
|
|
|
Carrying amount |
||||
At 31 December 2023 |
- |
- |
|
|
At 31 December 2022 |
|
|
|
|
The net book value of land and buildings above is £Nil (2022 - £6,114) in respect of short leasehold land and buildings.
Emmes Biopharma UK Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
Investments |
Company
2023 |
2022 |
|
Investments in subsidiaries |
|
|
Subsidiaries |
£ |
Cost or valuation |
|
At 1 January 2023 |
|
Revaluation on foreign exchange |
( |
At 31 December 2023 |
|
Carrying amount |
|
At 31 December 2023 |
|
At 31 December 2022 |
|
Details of undertakings
Details of the investments (including principal place of business of unincorporated entities) in which the company holds 20% or more of the nominal value of any class of share capital are as follows:
Undertaking |
Registered office |
Holding |
Proportion of voting rights and shares held |
|
2023 |
2022 |
|||
Subsidiary undertakings |
||||
|
B-209 West Gate
India |
|
|
|
|
Unit 3D North Point House
Ireland |
|
|
|
|
Pappelallee 78/79
Germany |
|
|
|
Emmes Biopharma UK Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
Subsidiary undertakings |
QED Clinical Services India Private Limited The principal activity of QED Clinical Services India Private Limited is |
Emmes Biopharma Ireland Ltd The principal activity of Emmes Biopharma Ireland Ltd is |
Orphan Reach GmbH The principal activity of Orphan Reach GmbH is |
Orphan Reach GmbH is owned 100% directly by Emmes Biopharma Ireland Ltd.
All of the above companies are included within consolidation figures.
Debtors |
Group |
Company |
||||
Current |
Note |
2023 |
2022 |
2023 |
2022 |
Trade debtors |
|
|
|
|
|
Amounts owed by related parties |
|
|
|
|
|
Other debtors |
|
|
- |
- |
|
Prepayments |
|
|
|
|
|
Accrued income |
|
|
|
|
|
Income tax asset |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
Group |
Company |
|||
2023 |
2022 |
2023 |
2022 |
|
Cash on hand |
- |
|
- |
- |
Cash at bank |
|
|
|
|
|
|
|
|
Emmes Biopharma UK Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
Creditors |
Group |
Company |
||||
Note |
2023 |
2022 |
2023 |
2022 |
|
Due within one year |
|||||
Trade creditors |
|
|
|
|
|
Amounts due to related parties |
- |
- |
|
- |
|
Social security and other taxes |
|
|
|
|
|
Outstanding defined contribution pension costs |
- |
|
- |
|
|
Other payables |
|
|
- |
- |
|
Accruals |
|
|
|
|
|
Deferred income |
|
|
|
|
|
|
|
|
|
See note 24 for charges held.
Provisions for liabilities |
Group
Deferred tax |
Total |
|
At 1 January 2023 |
|
|
At 31 December 2023 |
|
|
|
The company's provision for liabilities is the same as the group.
Pension and other schemes |
Defined contribution pension scheme
The group operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the group to the scheme and amounted to £
Contributions totalling £Nil (2022 - £
Emmes Biopharma UK Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
Share capital |
Allotted, called up and fully paid shares
2023 |
2022 |
|||
No. |
£ |
No. |
£ |
|
|
|
1,239 |
|
1,239 |
|
|
35 |
|
35 |
|
|
680 |
|
680 |
|
|
|
|
The Company has three classes of ordinary shares in issue:
- 12,390 Ordinary £0.10 shares carrying full voting rights and full rights to particpate in both dividends and capital.
- 350 Ordinary £0.10 shares carrying no voting rights and full rights to particpate in both dividends and capital.
- 680 Ordinary £1.00 shares carrying full voting rights and full rights to particpate in both dividends and capital.
Obligations under leases and hire purchase contracts |
Group
Operating leases - lessor
The total of future minimum lease payments is as follows:
2023 |
2022 |
|
Not later than one year |
|
|
Later than one year and not later than five years |
|
|
|
|
The commitment for the lease of the business premises was terminated in June 2023. There are no further commitments for the lease of business premises.
Dividends |
No dividends were paid in the current or prior period.
Emmes Biopharma UK Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
Commitments |
Group
Charges held
There is a fixed and floating charge held over all assets of the company and contains a negative pledge in favour of Midcap Financial Trust, as administrative agent for the group, dated September 2021.
Related party transactions |
Group and company
Summary of transactions with key management
Key management are considered to be solely the Directors of the company both in the current and prior year.
Summary of transactions with group companies
Company
The company has applied the exemption within FRS102 Section 33.1A not to disclose transactions with wholly owned members within the group.
There were inter company loans outstanding at the year end;
The Emmes Company LLC owed £7,324,837 to the company, (2022: £2,809,912)
Orphan Reach Limited (Ireland) was owed £15,285 by the company (2022: £21,498 owed to the company)
Inter company loans attract 6% interest per annum.
At the balance sheet date the following amounts were owed to the company as disclosed within the trade debtors (owed to the company) and trade creditors (owed by the company) note
Included within trade creditors are amounts owed to fellow group members totalling £918,489 (2022: £1,053,796)
Included within trade debtors are amounts owed by fellow group members totalling £311,203 (2022: £1,496,616)
Balances that arose under commercial trading terms are settled under normal trading terms and are disclosed with trade debtors and trade creditors.
Other transactions with directors
Two of the former Directors of the company owns the premises which the company leased during the current and prior period. This property is owned by a company registered in Spain, Enigma Studios S.L. The company paid for rent and services totalling £23,286 (2022: £48,000) to this company.
Emmes Biopharma UK Limited
Notes to the Financial Statements for the Year Ended 31 December 2023
Parent and ultimate parent undertaking |
The company's immediate parent is
The ultimate parent is