Company registration number 03296382 (England and Wales)
PFEIFFER VACUUM LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
PFEIFFER VACUUM LTD
COMPANY INFORMATION
Director
D Saelzer
Secretary
I Baldwin
Company number
03296382
Registered office
16 Plover Close
Interchange Park
Newport Pagnell
Buckinghamshire
MK16 9PS
Accountants
Moore
Oakley House
Headway Business Park
3 Saxon Way West
Corby
Northamptonshire
NN18 9EZ
PFEIFFER VACUUM LTD
CONTENTS
Page
Strategic report
1 - 2
Director's report
3
Director's responsibilities statement
4
Independent auditor's report
5 - 7
Income statement
8
Statement of financial position
9
Statement of changes in equity
10
Notes to the financial statements
11 - 26
PFEIFFER VACUUM LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The director presents the strategic report for the year ended 31 December 2023.
Review of the business
The company is a wholly owned subsidiary of Pfeiffer Vacuum GmbH and operates as part of the group’s European division.
The principal activity of the company during the year continued to be the sale of components and systems for vacuum generation, measurement and analysis. There have not been any significant changes in the company’s principal activities in the year under review.
The company’s key financial and other performance indicators during the year were as follows:
2023 2022 Change
£ £ %
Turnover 25,149,979 20,253,893 +24
Profit for the year 1,716,020 1,371,790 +25
Shareholders’ funds 7,171,494 5,883,520 +22
Current ratio 341% 296% +18
Turnover for 2023 significantly increased by 24% compared to 2022. The contributors to this increase were from the industry market segment adding £2m to new sales compared to 2022 which also increased our market share. Increases in the scientific analytic market amounted to a 16% increase, with semiconductor also benefiting from a 29% increase from previous year. We saw an overall relatively small reduction of approximately £300k from R&D market segment, which can be contributed to loss of orders due to extended lead times.
Profit for 2023 increased due to higher sales volume and gross profit. Other administrative expenses were as expected with no unusual costs to be reported.
Shareholders’ funds increased by 18% as a result of higher profits compared to the dividend payment of £428,045. The company’s “current ratio” (current assets as a percentage of current liabilities) remains strong at 346%.
Principal risks and uncertainties
Our risk inventory is prepared quarterly in conjunction with the parent company. It identifies, among others, economic and information technology risks. Historically economic risks have mainly been in the analytical and semiconductor market segments which represent a significant part of our overall turnover through a relatively small number of customers.
The Pfeiffer Vacuum Group is dependent upon the risk-prone global development of the economy. One of the greatest threats to economic growth that can be seen at this time is an intensification and/or expansion of geopolitical conflicts. The ongoing war in Ukraine and the military conflicts in the Middle East represent high economic uncertainties. The ongoing conflict concerning the island of Taiwan could intensify and result in a further escalation between China and USA. Our parent company continuously monitors macroeconomic and socio-political developments and communicates the discusses their findings and assessments within the company-wide network of experts in order to identify potential risks in time and to find and implement suitable risk management measures. In order to reduce the risks stemming from dependence upon individual market segments, Pfeiffer Vacuum places a great deal of value on its broad-based alignment.
The Pfeiffer Vacuum Group is subject to strong competition and believes this risk is mitigated by selling products not on price but on quality. Our goal is to offer customers reliable, durable and high-performance products that are also energy efficient. There are significant opportunities to strengthen our competitive position in the vacuum technology industry in the strategic cooperation with Busch SE (Busch Group).
Information technology risks are loss of data, system outages and unauthorised access. We minimise these with daily data backup (copies stored in fireproof and remote locations), in house IT staff in UK and Germany reduce outages to a minimum, and we use regularly updated virus scanners and firewalls.
PFEIFFER VACUUM LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Future Developments
The company is in a strong financial position and working in a robust sector supplying growth markets. The strategic cooperation with Pfeiffer’s direct shareholder, Busch Group, further strengthens our future position.
D Saelzer
Director
11 September 2024
PFEIFFER VACUUM LTD
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
The director presents his 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 the sale of components and systems for vacuum generation, measurement and analysis.
Results and dividends
The results for the year are set out on page 8.
Ordinary dividends were paid amounting to £428,046. The director does not recommend payment of a final dividend.
Director
The director who held office during the year and up to the date of signature of the financial statements was as follows:
D Saelzer
Supplier payment policy
The company's current policy concerning the payment of trade creditors is to follow the CBI's Prompt Payers Code (copies are available from the CBI, Centre Point, 103 New Oxford Street, London WC1A 1DU).
The company's current policy concerning the payment of trade creditors is to:
settle the terms of payment with suppliers when agreeing the terms of each transaction;
ensure that suppliers are made aware of the terms of payment by inclusion of the relevant terms in contracts; and
pay in accordance with the company's contractual and other legal obligations.
Trade creditors of the company at the year end were equivalent to 21 day's purchases, based on the average daily amount invoiced by suppliers during the year.
Auditor
The auditor, Moore, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
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.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
On behalf of the board
D Saelzer
Director
11 September 2024
PFEIFFER VACUUM LTD
DIRECTOR'S RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
The director is responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the director to prepare financial statements for each financial year. Under that law the director has elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the director must not approve the financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the director is required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
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 director is responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. He is also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
PFEIFFER VACUUM LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF PFEIFFER VACUUM LTD
- 5 -
Opinion
We have audited the financial statements of Pfeiffer Vacuum Ltd (the 'company') for the year ended 31 December 2023 which comprise the income statement, the statement of financial position, the statement of changes in equity 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 101 Reduced Disclosure Framework (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 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 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 director 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 director is 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 director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the director's report have been prepared in accordance with applicable legal requirements.
PFEIFFER VACUUM LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF PFEIFFER VACUUM LTD (CONTINUED)
- 6 -
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 director's 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 director
As explained more fully in the director's responsibilities statement, the director is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the director determines 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 director is responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the director either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.
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.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
PFEIFFER VACUUM LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF PFEIFFER VACUUM LTD (CONTINUED)
- 7 -
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
The objectives of our audit in respect of fraud, are; to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses to those assessed risks; and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the company.
Our approach was as follows:
We obtained an understanding of the legal and regulatory requirements applicable to the company and considered that the most significant are the Companies Act 2006, UK financial reporting standards as issued by the Financial Reporting Council, and UK taxation legislation.
We assessed the risk of material misstatement of the financial statements, including the risk of material misstatement due to fraud and how it might occur, by holding discussions with management and those charged with governance.
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.
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.
Amanda Etty (Senior Statutory Auditor)
For and on behalf of Moore
13 September 2024
Chartered Accountants
Statutory Auditor
Oakley House
Headway Business Park
3 Saxon Way West
Corby
Northamptonshire
NN18 9EZ
PFEIFFER VACUUM LTD
INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
2023
2022
Notes
£
£
Revenue
3
25,149,979
20,253,893
Cost of sales
(20,940,983)
(16,866,504)
Gross profit
4,208,996
3,387,389
Administrative expenses
(1,975,992)
(1,695,465)
Operating profit
4
2,233,004
1,691,924
Investment income
6
14,315
430
Finance costs
7
(2,549)
(1,745)
Profit before taxation
2,244,770
1,690,609
Tax on profit
8
(528,750)
(318,819)
Profit and total comprehensive income for the financial year
1,716,020
1,371,790
PFEIFFER VACUUM LTD
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
31 December 2023
- 9 -
2023
2022
Notes
£
£
£
£
Non-current assets
Intangible assets - goodwill
10
42,881
42,881
Property, plant and equipment
11
459,793
354,437
502,674
397,318
Current assets
Inventories
12
3,127,022
2,184,744
Trade and other receivables
13
2,890,019
3,659,167
Cash and cash equivalents
3,707,759
2,608,296
9,724,800
8,452,207
Current liabilities
14
(2,854,820)
(2,856,290)
Net current assets
6,869,980
5,595,917
Total assets less current liabilities
7,372,654
5,993,235
Non-current liabilities
14
(192,141)
(99,600)
Provisions for liabilities
Deferred tax liabilities
17
(9,019)
(10,115)
Net assets
7,171,494
5,883,520
Equity
Called up share capital
19
100,000
100,000
Retained earnings
7,071,494
5,783,520
Total equity
7,171,494
5,883,520
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved and signed by the director and authorised for issue on 11 September 2024
D Saelzer
Director
Company registration number 03296382 (England and Wales)
PFEIFFER VACUUM LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
Share capital
Retained earnings
Total
Notes
£
£
£
Balance at 1 January 2022
100,000
4,754,345
4,854,345
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
1,371,790
1,371,790
Transactions with owners in their capacity as owners:
Dividends
9
-
(342,615)
(342,615)
Balance at 31 December 2022
100,000
5,783,520
5,883,520
Year ended 31 December 2023:
Profit and total comprehensive income for the year
-
1,716,020
1,716,020
Transactions with owners in their capacity as owners:
Dividends
9
-
(428,046)
(428,046)
Balance at 31 December 2023
100,000
7,071,494
7,171,494
PFEIFFER VACUUM LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
1
Accounting policies
Company information
Pfeiffer Vacuum Ltd is a private company limited by shares incorporated in England and Wales. The registered office is 16 Plover Close, Interchange Park, Newport Pagnell, Buckinghamshire, MK16 9PS. The company's principal activities and nature of its operations are disclosed in the director's report.
1.1
Accounting convention
The financial statements have been prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework (FRS 101) and in accordance with applicable accounting standards.
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.
As permitted by FRS 101, the company has taken advantage of the following disclosure exemptions from the requirements of IFRS:
inclusion of an explicit and unreserved statement of compliance with IFRS;
presentation of a statement of cash flows and related notes;
disclosure of the objectives, policies and processes for managing capital;
disclosure of the categories of financial instrument and the nature and extent of risks arising on these financial instruments;
the effect of financial instruments on the statement of comprehensive income;
comparative period reconciliations for the number of shares outstanding and the carrying amounts of property, plant and equipment and intangible assets;
disclosure of the future impact of new International Financial Reporting Standards in issue but not yet effective at the reporting date;
comparative narrative information;
for financial instruments measured at fair value and within the scope of IFRS 13, the valuation techniques and inputs used to measure fair value, the effect of fair value measurements with significant unobservable inputs on the result for the period and the impact of credit risk on the fair value; and
related party disclosures for transactions with the parent or wholly owned members of the group.
The results of Pfeiffer Vacuum Limited are included in the consolidated financial statements of Pfeiffer Vacuum Technology AG which are available to the public and may be obtained from Berliner Str.43, D-35614 Asslar, Germany.
1.2
Going concern
The director has at the time of approving the financial statements, a reasonable expectation that the truecompany has adequate resources to continue in operational existence for the foreseeable future. Thus the director continues to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Revenue
Revenue is measured based on the consideration specified in a contract with a customer and excludes amounts collected on behalf of third parties. The company recognises revenue when it transfers control of a product or service to a customer.
The company earns revenue from sale of components and systems for vacuum generation, measurement and analysis. Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (when the goods are delivered to the customer), 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.
PFEIFFER VACUUM LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 12 -
Service revenues are recognised when the underlying services are performed.
Transaction price
The transaction price is the fair value of the consideration received for the product less discounts/rebates and value added taxes.
In the case of individual contracts with variable consideration included in the transaction price, the amount of the variable consideration is determined either according to the expected value method or with the most probable amount and recorded as a reduction in sales revenue.
Payment of the transaction price is due in accordance with agreed credit terms on receipt of invoice.
A receivable is recognised when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.
Contract assets and receivables
Where goods or services are transferred to the customer before the customer pays consideration, or before payment is due, contract assets are recognised. Contract assets are included in the balance sheet and represent the right to consideration for products delivered.
Contract receivables (loans and advances) are recognised in the balance sheet when the company's right to consideration becomes unconditional.
Contract assets and receivables (loans and advances) are classified as current or non current based on the company's normal operating cycle and are assessed for impairment at each reporting date.
Contract liabilities
Contract liabilities and customer deposits are recognised in the balance sheet when the company has received consideration but still has an obligation to deliver products and meet performance obligations for that consideration.
Net basis of measurement of contract balances
Contract asset and contract liability positions are determined for each contract on a net basis. This is because the rights and obligations within each contract are considered inter-dependent . When two contracts are with the same or related entities, an assessment is made of whether contract assets and liabilities are inter-dependent and if so, contract balances are reported net.
Impairment of contract related balances
At each reporting date, the company determines whether or not such assets are impaired by comparing the carrying amount of the asset to the remaining amount of the consideration that the company expects to receive less the costs that relate to providing services under the relevant contract.
1.4
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 impairment losses.
The gain on a bargain purchase is recognised in profit or loss in the period of the acquisition.
The UK Companies Act requires goodwill to be amortised over its useful economic life. However, under IFRS 3, goodwill is not amortised. Consequently, the company does not amortise goodwill, but reviews it for impairment. The company is therefore invoking the 'true and fair override' to overcome the prohibition on the non-amortisation of goodwill in the Companies Act.
PFEIFFER VACUUM LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
1.5
Property, plant and equipment
Property, plant and equipment 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:
Right of use land and buildings
2 to 7 years
Leasehold improvements
3 to 5 years
Fixtures and fittings
2 to 5 years
Plant and equipment
2 to 5 years
Computers
2 to 3 years
Motor vehicles
3 to 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 recognised in the income statement.
1.6
Impairment of tangible and intangible assets
At each reporting end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
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.
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.
1.7
Inventories
Inventories 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 inventories to their present location and condition.
Inventories held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
Net realisable value is the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution.
PFEIFFER VACUUM LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
1.8
Cash and cash equivalents
Cash and cash equivalents 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.
1.9
Financial assets
Financial assets are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument. Financial assets are classified into specified categories, depending on the nature and purpose of the financial assets.
At initial recognition, financial assets classified as fair value through profit and loss are measured at fair value and any transaction costs are recognised in profit or loss. Financial assets not classified as fair value through profit and loss are initially measured at fair value plus transaction costs.
Financial assets at fair value through profit or loss
When any of the above-mentioned conditions for classification of financial assets is not met, a financial asset is classified as measured at fair value through profit or loss. Financial assets measured at fair value through profit or loss are recognized initially at fair value and any transaction costs are recognised in profit or loss when incurred. A gain or loss on a financial asset measured at fair value through profit or loss is recognised in profit or loss, and is included within finance income or finance costs in the statement of income for the reporting period in which it arises.
Financial assets held at amortised cost
Financial instruments are classified as financial assets measured at amortised cost where the objective is to hold these assets in order to collect contractual cash flows, and the contractual cash flows are solely payments of principal and interest. They arise principally from the provision of goods and services to customers (eg trade receivables). They are initially recognised at fair value plus transaction costs directly attributable to their acquisition or issue, and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment where necessary.
Financial assets at fair value through other comprehensive income
Debt instruments are classified as financial assets measured at fair value through other comprehensive income where the financial assets are held within the company’s business model whose objective is achieved by both collecting contractual cash flows and selling financial assets, and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
A debt instrument measured at fair value through other comprehensive income is recognised initially at fair value plus transaction costs directly attributable to the asset. After initial recognition, each asset is measured at fair value, with changes in fair value included in other comprehensive income. Accumulated gains or losses recognised through other comprehensive income are directly transferred to profit or loss when the debt instrument is derecognised.
The company has made an irrevocable election to recognize changes in fair value of investments in equity instruments through other comprehensive income, not through profit or loss. A gain or loss from fair value changes will be shown in other comprehensive income and will not be reclassified subsequently to profit or loss. Equity instruments measured at fair value through other comprehensive income are recognized initially at fair value plus transaction cost directly attributable to the asset. After initial recognition, each asset is measured at fair value, with changes in fair value included in other comprehensive income. Accumulated gains or losses recognized through other comprehensive income are directly transferred to retained earnings when the equity instrument is derecognized or its fair value substantially decreased. Dividends are recognized as finance income in profit or loss.
PFEIFFER VACUUM LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
Impairment of financial assets
Financial assets carried at amortised cost and FVOCI are assessed for indicators of impairment at each reporting end date.
The expected credit losses associated with these assets are estimated on a forward-looking basis. A broad range of information is considered when assessing credit risk and measuring expected credit losses, including past events, current conditions, and reasonable and supportable forecasts that affect the expected collectability of the future cash flows of the instrument.
For trade receivables, the simplified approach permitted by IFRS 9 is applied, which requires expected lifetime losses to be recognised from initial recognition of the receivables.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity.
1.10
Financial liabilities
The company recognises financial debt when the company becomes a party to the contractual provisions of the instruments. Financial liabilities are classified as either 'financial liabilities at fair value through profit or loss' or 'other financial liabilities'.
Other financial liabilities
Other financial liabilities, including borrowings, trade payables and other short-term monetary liabilities, are initially measured at fair value net of transaction costs directly attributable to the issuance of the financial liability. They are subsequently measured at amortised cost using the effective interest method. For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding.
Derecognition of financial liabilities
Financial liabilities are derecognised when, and only when, the company’s obligations are discharged, cancelled, or they expire.
1.11
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.12
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 income statement 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.
PFEIFFER VACUUM LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
Deferred tax
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary 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 income statement, 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.
1.13
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 inventories or non-current 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.
1.14
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.15
Leases
At inception, the company assesses whether a contract is, or contains, a lease within the scope of IFRS 16. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Where a tangible asset is acquired through a lease, the company recognises a right-of-use asset and a lease liability at the lease commencement date. Right-of-use assets are included within property, plant and equipment, apart from those that meet the definition of investment property.
The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date plus any initial direct costs and an estimate of the cost of obligations to dismantle, remove, refurbish or restore the underlying asset and the site on which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of other property, plant and equipment. The right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
PFEIFFER VACUUM LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 17 -
The lease liability is initially measured at the present value of the lease payments that are unpaid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the company's incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise fixed payments, variable lease payments that depend on an index or a rate, amounts expected to be payable under a residual value guarantee, and the cost of any options that the company is reasonably certain to exercise, such as the exercise price under a purchase option, lease payments in an optional renewal period, or penalties for early termination of a lease.
The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in: future lease payments arising from a change in an index or rate; the company's estimate of the amount expected to be payable under a residual value guarantee; or the company's assessment of whether it will exercise a purchase, extension or termination option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
The company has elected not to recognise right-of-use assets and lease liabilities for short-term leases of machinery that have a lease term of 12 months or less, or for leases of low-value assets including IT equipment. The payments associated with these leases are recognised in profit or loss on a straight-line basis over the lease term.
2
Critical accounting estimates and judgements
In the application of the company’s accounting policies, the director is required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised, 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 estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are outlined below.
Critical judgements
Taxation
Management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of future taxable profits together with an assessment of the effect of future tax planning strategies.
Goodwill
Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, measured at acquisition date fair value and the amount of any non-controlling interest in the acquiree. The choice of measurement of non-controlling interest, either at fair value or at the proportionate share of the acquiree's identifiable net assets is determined on a transaction by transaction basis. Acquisition costs incurred are expensed and included in administrative expenses. An impairment review utilises assumptions and forecasts which by their nature are estimates. A different assessment of estimates could result in a materially different value for goodwill.
PFEIFFER VACUUM LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
3
Revenue
2023
2022
£
£
Revenue analysed by class of business
Sale of vacuum pump technology
24,772,602
19,877,721
Sales commission received
377,377
376,172
25,149,979
20,253,893
2023
2022
£
£
Revenue analysed by geographical market
UK
24,772,602
19,877,721
Europe
377,377
376,172
25,149,979
20,253,893
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses/(gains)
44,502
(161,614)
Fees payable to the company's auditor for the audit of the company's financial statements
13,900
16,900
Depreciation of property, plant and equipment
175,799
171,356
Profit on disposal of property, plant and equipment
(21,717)
(2,900)
Cost of inventories recognised as an expense
20,490,724
16,415,882
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Sales
9
8
Administration
14
11
Service
4
5
Total
27
24
PFEIFFER VACUUM LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
5
Employees
(Continued)
- 19 -
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
1,470,968
1,355,385
Social security costs
156,982
143,847
Pension costs
128,308
110,316
1,756,258
1,609,548
6
Investment income
2023
2022
£
£
Interest income
Interest on bank deposits
14,315
396
Other interest income
34
Total income
14,315
430
7
Finance costs
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on lease liabilities
1,257
1,745
Other interest
1,292
2,549
1,745
8
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
529,846
317,667
Adjustments in respect of prior periods
-
(114)
Total UK current tax
529,846
317,553
Deferred tax
Origination and reversal of temporary differences
(1,096)
1,266
Total tax charge
528,750
318,819
On 1 April 2023, the main rate of corporation tax changed from 19% to 25%.
PFEIFFER VACUUM LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
8
Taxation
(Continued)
- 20 -
The charge for the year can be reconciled to the profit per the income statement as follows:
2023
2022
£
£
Profit before taxation
2,244,770
1,690,609
Expected tax charge based on a corporation tax rate of 25.00% (2022: 19.00%)
561,193
321,216
Effect of expenses not deductible in determining taxable profit
1,200
723
Permanent capital allowances in excess of depreciation
(315)
(3,549)
Under/(over) provided in prior years
-
(114)
Deferred tax adjustments in respect of prior years
2,500
315
Effect of change of deferred tax rate to 25%
(35,828)
228
Taxation charge for the year
528,750
318,819
9
Dividends
2023
2022
2023
2022
Amounts recognised as distributions:
per share
per share
Total
Total
£
£
£
£
Ordinary shares
Interim dividend paid
4.28
3.43
428,046
342,615
PFEIFFER VACUUM LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
10
Intangible fixed assets
Goodwill
£
Cost
At 31 December 2022
1,295,558
At 31 December 2023
1,295,558
Amortisation and impairment
At 31 December 2022
1,252,677
At 31 December 2023
1,252,677
Carrying amount
At 31 December 2023
42,881
At 31 December 2022
42,881
The goodwill recognised is in connection with the acquisition of the trade and net assets of Alcatel Vacuum Technology (UK) Ltd. In 2012 and 2015 impairments of £658,404 and £398,204 were identified and provided for in the accounts. The balance will be subject to annual impairment review.
PFEIFFER VACUUM LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
11
Property, plant and equipment
Right of use land and buildings
Leasehold improvements
Plant and equipment
Fixtures and fittings
Computers
Motor vehicles
Total
£
£
£
£
£
£
£
Cost
At 1 January 2023
526,880
54,215
128,560
380,610
22,470
163,794
1,276,529
Additions
179,765
19,398
19,492
62,500
281,155
Disposals
-
(11,163)
(2,072)
(41,791)
(55,026)
At 31 December 2023
706,645
54,215
136,795
398,030
22,470
184,503
1,502,658
Accumulated depreciation and impairment
At 1 January 2023
316,142
38,940
89,606
337,909
22,470
117,025
922,092
Charge for the year
92,746
5,800
19,003
28,137
30,113
175,799
Eliminated on disposal
(11,163)
(2,072)
(41,791)
(55,026)
At 31 December 2023
408,888
44,740
97,446
363,974
22,470
105,347
1,042,865
Carrying amount
At 31 December 2023
297,757
9,475
39,349
34,056
79,156
459,793
At 31 December 2022
210,738
15,275
38,954
42,701
46,769
354,437
PFEIFFER VACUUM LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
Property, plant and equipment includes right-of-use assets, as follows:
Right-of-use assets
2023
2022
£
£
Net values at the year end
Property
297,757
210,738
Total additions in the year
179,765
-
Depreciation charge for the year
Property
92,746
96,379
12
Inventories
2023
2022
£
£
Finished goods
3,127,022
2,184,744
13
Trade and other receivables
2023
2022
£
£
Trade receivables
2,749,745
3,307,269
Provision for bad and doubtful debts
(44,163)
(58,588)
2,705,582
3,248,681
Amount owed by parent undertaking
55,212
172,943
Amounts owed by subsidiary undertakings
18,135
152,332
Other receivables
41,012
28,924
Prepayments and accrued income
70,078
56,287
2,890,019
3,659,167
14
Liabilities
Current
Non-current
2023
2022
2023
2022
Notes
£
£
£
£
Trade and other payables
15
2,047,217
1,715,476
Corporation tax
9,846
31,667
-
-
Other taxation and social security
710,331
1,015,687
-
-
Lease liabilities
16
87,426
93,460
192,141
99,600
2,854,820
2,856,290
192,141
99,600
PFEIFFER VACUUM LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
15
Trade and other payables
2023
2022
£
£
Trade payables
64,132
28,301
Amount owed to parent undertaking
664,897
437,104
Amounts owed to subsidiary undertakings
722,100
807,378
Accruals and deferred income
596,088
442,693
2,047,217
1,715,476
16
Lease liabilities
2023
2022
Maturity analysis
£
£
Within one year
87,426
93,460
In two to five years
192,141
99,600
Total undiscounted liabilities
279,567
193,060
Lease liabilities are classified based on the amounts that are expected to be settled within the next 12 months and after more than 12 months from the reporting date, as follows:
2023
2022
£
£
Current liabilities
87,426
93,460
Non-current liabilities
192,141
99,600
279,567
193,060
2023
2022
Amounts recognised in profit or loss include the following:
£
£
Interest on lease liabilities
1,257
1,745
Other leasing information is included in note 20.
17
Deferred taxation
Liabilities
2023
2022
£
£
Deferred tax balances
9,019
10,115
PFEIFFER VACUUM LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
17
Deferred taxation
(Continued)
- 25 -
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon during the current and prior reporting period.
ACAs
£
Liability at 1 January 2022
8,849
Deferred tax movements in prior year
Charge/(credit) to profit or loss
1,266
Liability at 1 January 2023
10,115
Deferred tax movements in current year
Charge/(credit) to profit or loss
(1,096)
Liability at 31 December 2023
9,019
18
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
128,308
110,316
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.
19
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
100,000
100,000
100,000
100,000
All shares issued are non-redeemable and rank equally in terms of voting rights, dividend distributions and winding up.
20
Other leasing information
Lessee
Amounts recognised in profit or loss as an expense during the period in respect of lease arrangements are as follows:
2023
2022
£
£
Expense relating to short-term leases
2,736
3,022
PFEIFFER VACUUM LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
20
Other leasing information
(Continued)
- 26 -
Information relating to lease liabilities is included in note 16.
21
Related party transactions
During the year the company entered into the following transactions with related parties:
Sale of goods
Purchase of goods
2023
2022
2023
2022
£
£
£
£
Entities with joint control or significant influence over the company
125,365
136,165
7,378
10,702
The following amounts were outstanding at the reporting end date:
2023
2022
Amounts due to related parties
£
£
Entities with joint control or significant influence over the company
507
The following amounts were outstanding at the reporting end date:
2023
2022
Amounts due from related parties
£
£
Entities with joint control or significant influence over the company
1,361
119,115
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