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Registered number: 05708493









Baker Perkins Limited









Annual Report and Financial Statements

For the Period Ended 30 September 2023

 
Baker Perkins Limited
 
 
Company Information


Directors
D J Spooner 
M Thomson 




Registered number
05708493



Registered office
Manor Drive
Paston Parkway

Peterborough

PE4 7AP




Independent auditors
Hurst Accountants Limited
Chartered Accountants & Statutory Auditors

3 Stockport Exchange

Stockport

SK1 3GG





 
Baker Perkins Limited
 

Contents



Page
Strategic Report
 
1 - 4
Directors' Report
 
5 - 7
Independent Auditors' Report
 
8 - 11
Statement of Comprehensive Income
 
12
Balance Sheet
 
13
Statement of Changes in Equity
 
14
Notes to the Financial Statements
 
15 - 43


 
Baker Perkins Limited
 
 
Strategic Report
For the Period Ended 30 September 2023

Introduction
 
The directors present the strategic report for the 9 month period ended 30 September 2023. The previous accounting period covers the 12 months ended 31 December 2022.
The current period ran for nine months from 1 January 2023. Following the acquisition of the group the company lies within by Hillenbrand Inc on 1 September 2023, the company changed its year end to align with the group headed by Hillenbrand Inc. The results are therefore not wholly comparable with those of the prior year.
The principal activity of the Company continued to be the engineering, manufacturing and installation of equipment, principally for the dry foods industry. The Company operates in a global market.

Business review
 
Company turnover for the period ended was £28.1m (year to Dec 2022: £39.0m), which when apportioning the previous periods revenue to 9 months represents a 4.0% decrease. This decrease is driven by supply chain challenges, notably extended lead times on electrical-related components used in manufacturing.
The company has an operating loss for the year of £5.2m (
2022: loss of £3.0m), driven in part by the lower turnover, also cost inflation on certain long-term projects resulting in a reduction of gross margin from 31.5% to 23.2% and adverse UK utility market fluctuations in late 2022. The company works to mitigate risk on costs through various strategies and have put into place enhanced bidding and procurement initiatives.
The company continues with ongoing investment in targeted marketing and development costs to support the business. 2024-24 has a positive outlook with strong orderbook (backlog) and sales forecast.
Following the acquisition of the group within which the company resides by Hillenbrand Inc, the company's investment in Baker Perkins Inc, a company incorporated in the United States of America, was sold to a fellow group company, recording a profit of £19.6m which is shown in the Statement of comprehensive income. 
The statement of financial position demonstrates that the company's position continues to be robust in terms of net current assets of £24.2m (
Dec 2022: £12.8m) and a current ratio of 2.63 (Dec 2022: 1.58).

Page 1

 
Baker Perkins Limited
 

Strategic Report (continued)
For the Period Ended 30 September 2023

Principal risks and uncertainties
 
The company operates in a changing and competitive market place where continuing global competitiveness is dependent on maintaining existing customer relationships and developing our supply chain. The company is confident that it can achieve these objectives and minimise the risk of falling short of its targets by providing outstanding quality of service to its customers at competitive prices, whilst improving efficiency. 
A number of the risks and uncertainties that are faced by the company are set out below. 
Product Safety 
Product safety is a potential risk given the type of equipment we produce. The direct financial expense of product safety failures is limited by our product liability insurance and the indirect costs are mitigated by careful selection of raw materials and suppliers, extensive product testing and monitoring of end-customer product satisfaction. 
Technological advancement 
Obsolescence as a result of technological advances is also considered to be a risk given the type of industry we operate in. This is mitigated by a strategic focus and investment in research and development to ensure our products meet the high standards of innovation, productivity and safety that we have set ourselves. 
Workforce 
Like any other similar business, retaining a suitable skilled workforce is also a challenge faced by our business. We also have policies and procedures to ensure qualified and appropriate staff are hired and maintained. Staff are encouraged to fully contribute to the business as the directors recognise that the future success of the business depends on the retention and dedication of key employees, Targeted remuneration packages which the directors consider to be attractive by industry standards are offered to mitigate the risk and encourage development. 
Supply Chain 
The Russia-Ukraine conflict has had an impact on our supply chain causing delays in order completion and increased cost in the medium term. Risk has been mitigated where possible by utilising alternative supply routes in the interim but whilst the conflict continues the risk to our supply chain remains a factor.

Financial and other key performance indicators
 
Turnover and profitability are key performance indicators. These KPI's continue to be monitored and have been detailed in the paragraphs above. 
The company also uses non-financial KPI's as part of its overall assessment strategy. This includes measures such as on-time delivery performance in both our capital and aftermarket sectors, which were in line with the prior year. 
Cost of poor quality is measured, in terms of complaints received and corrective action costs. Within the year, complaints are similar to last year, and warranty costs continue to be a focus. 
Customer services' profit margins have continued at the previous consistent levels. 
We continue to focus on our safety regime and monitor the number of incidents in each period, incident trends and the length of time since the last RIDDOR reportable injury occurred. One RIDDOR (Reporting of Incidents, Diseases and Dangerous Occurrences Regulations 2013) accident occurred this period compared to one in the previous year. 
Furthermore, Baker Perkins Limited once again retained its ISO9001 quality standard.

Page 2

 
Baker Perkins Limited
 

Strategic Report (continued)
For the Period Ended 30 September 2023

Directors' statement of compliance with duty to promote the success of the Company
 
Section 172 of the Companies Act 2006 requires a director of a company to act in the way he or she considers, in good faith, would most likely promote the success of the Company for the benefit of its members as a whole. In doing this section 172 requires a director to have regard, amongst other matters, to the: 
 - Likely consequences of any decisions in the long term; 
 - Interest of the Company's employees; 
 - Need to foster the Company's business relationships with suppliers, customers and others; 
 - Impact of the Company's operations on the community and environment;
 - Desirability of the Company maintaining a reputation for high standards of business conduct; and 
 - Need to act fairly as between members of the Company. 
In discharging our section 172 duties we have regard to the matters set out above.
The s172 Director's Duty is to 'promote the success of the Company for the benefit of its members as a whole', whilst having regard to other stakeholders interest. The Duty emphasises that the Board must consider the wider impact of their decision, rather than just the financial and strategic elements. The Board should create a culture whereby the long-term consequences of its actions and the long-term success of the Company are given due consideration. These pages and references in the Strategic report show how the Board has applied s172 requirements to its decision making throughout the year. 
The directors take care to consider the interest of all stakeholders when deciding on courses of action, but also recognise that the result will not always be a positive one for all stakeholder groups. The directors take into consideration the strategy, purpose, values and culture of the business when making decisions. 
At every meeting, the directors and executive team receive reports on matters including safety and security performance, financial and operational performance, sales and marketing and new business developments. Over the course of the financial year, the director also review other matters including the Company's business strategy, key risks, stakeholder-related matters and governance, compliance and legal matters. 
We define employees as the combination of employees and those contractors who work for us for periods in excess of 3 months per year. The Company's long-term success is predicted on the commitment of our workforce to our purpose and its demonstration of our values on a daily basis.
We engage with our workforce to ensure that we are fostering an environment that they are happy to work in and that best supports their well-being. We Invest significantly in our workforce as we believe that maintaining low staff turnover rates across the entire workforce is the source of our industry-leading efficiency and productivity rates. 
Suppliers 
We have a large supplier base from international to local independent family run businesses. Our suppliers are fundamental to the quality of our products and to ensuring that as a business we meet the high standards of conduct that we set ourselves. We have various communication channels open to suppliers and pride ourselves in targeting 'to terms' payment. 
Customers 
Engaging with our customers helps us to understand their needs and identify opportunities and challenges. Collaborating with our customers enables us to use our expertise to Improve the safety and efficiency of their manufacturing processes, enhance their end-product quality and reduce their costs. Senior-level dialogue is maintained with all key customers, including visits to customer sites.
Community 
We are committed to maintaining positive relationships with the communities in which we operate. Our social responsibility activities complement our values and we encourage our employees to engage with communities and groups local to our operations, We encourage participation with local volunteering initiatives and support many local charities through sponsorship/ donation. 

 
Page 3

 
Baker Perkins Limited
 

Strategic Report (continued)
For the Period Ended 30 September 2023


Environment 
Good environmental management is aligned with our focus on cost optimisation excellence. We engage with appropriate organisations to ensure that we are complying with regulatory requirements. 
Shareholders 
Management reporting information is provided on a regular basis.


This report was approved by the board and signed on its behalf.



................................................
D J Spooner
Director

Date: 30 October 2024

Page 4

 
Baker Perkins Limited
 
 
 
Directors' Report
For the Period Ended 30 September 2023

The directors present their report and the financial statements for the period ended 30 September 2023.

Directors' responsibilities statement

The directors are responsible for preparing the Strategic Report, the Directors' 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 101 ‘Reduced Disclosure Framework’. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.

 In preparing these financial statements, the directors are required to:


select suitable accounting policies and then apply them consistently;

make judgements and accounting estimates that are reasonable and prudent;

state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Results and dividends

The profit for the period, after taxation, amounted to £12,846,280 (2022 -loss £2,345,795).

No dividends (2022: £Nil) were paid during the year.
The directors do not recommend payment of a final dividend.

Directors

The directors who served during the period were:

D J Spooner 
M Thomson 

Future developments

On September 1, 2023, the whole of the share capital of Baker Perkins Holdings Limited, of which Baker Perkins Limited is a subsidiary, was purchased by Hillenbrand Holdings UK Limited. The ultimate holding company is Hillenbrand Inc, a NYSE listed entity. This acquisition gives Baker Perkins Limited access to the wider group’s global presence, providing opportunities for future growth.

Page 5

 
Baker Perkins Limited
 
 
 
Directors' Report (continued)
For the Period Ended 30 September 2023

Disabled persons

Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the company continues and that the appropriate training is arranged. It is the policy of the company that the training, career development and promotion if disabled persons shoud, as far as possiblem be identical to that of other employees.
Engagement with employees
We have an Employee Consultation Group that meets on a monthly basis. 
Staff receive an online Weekly Team Brief updating them on current events, and linked to this there is an online communications channel.
Further to this, there are regular discussion forums held alongside the trade union that represents our factory workforce.

Engagement with suppliers, customers and others

Engagement with suppliers, customers and others is covered in the Strategic Report under the section "Directors statement of compliance with duty to promote the success of the company."

Qualifying third party indemnity provisions

The company has in place qualifying third party indemnity provisions for the benefit of its directors.

Greenhouse gas emissions, energy consumption and energy efficiency action

The Company's greenhouse gas emissions and energy consumption are as follows: 


9 months ended
30 September
12 months ended
31 December
2023
2022

Emissions resulting from activities for which the Company is responsible involving the combustion of gas or consumption of fuel for the purposes of transport (in tonnes of CO2 equivalent)
1,090
1,424

Emissions resulting from the purchase of the electricity by the Company for its own use, including the purposes of transport (in tonnes of CO2 equivalent)
729
1,141

Energy consumed from activities for which the Company is responsible involving the combustion of gas, or the consumption of fuel for the purposes of transport, and the annual quantity of energy consumed resulting from the purchase of electricity by the Company for its own use, including for the purposes of transport, in MWh
9,811
12,387

Carbon emissions have been calculated in accordance with the Greenhouse Gas (GHG) protocol. Management have used the relevant government conversion factors to calculate the relevant figures.
Data analysed was for the 12 months ended 31 December 2023. As the period ended 30 September 2023 is a short period, management have elected to pro-rate the data when arriving at the figures above. The comparatives are for 12 months and therefore not entirely comparable. 

Management have elected to disclose tonnes of CO2e per £'000 of turnover. In 2023 this was 6.5% (2022: 6.6%).

Page 6

 
Baker Perkins Limited
 
 
 
Directors' Report (continued)
For the Period Ended 30 September 2023

Disclosure of information to auditors

Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the Company's auditors are unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

Going concern and post balance sheet events

The company has made an operating loss in the period of £5.2 million (year ended 31 December 2022: £2.98 million) but retains strong current net assets of £24.1 million (December 2022: £11.2 million).
Operating losses have continued into 2024, albeit at lower levels to prior years. The directors have prepared budgets which have identified that the company will return to profit in the year to 30 September 2025.
The company's ultimate parent, Hillenbrand Inc, has confirmed it intends to provide support wherever necessary to ensure that the company will continue to be able to pay all debts as they fall due for a period not less than 12 months from the date of approval of these financial statements.
As a result of the above, the directors have deemed it appropriate to prepare the financial statements on a going concern basis.
There have been no post balance sheet events affecting the company since the year end.

Auditors

The auditors, Hurst Accountants Limited, were appointed in the year and will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board and signed on its behalf.
 





................................................
D J Spooner
Director

Date: 30 October 2024

Page 7

 
Baker Perkins Limited
 
 
 
Independent Auditors' Report to the Members of Baker Perkins Limited
 

Opinion


We have audited the financial statements of Baker Perkins Limited (the 'Company') for the period ended 30 September 2023, which comprise the Statement of Comprehensive Income, the Balance Sheet, the Statement of Changes in Equity and the related notes, including a summary of significant accounting policiesThe 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 30 September 2023 and of its profit for the period then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.


Basis for opinion


We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.


Conclusions relating to going concern


In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.


Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.


Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.


Other information


The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' Report thereon. The directors are responsible for the other information contained within the Annual ReportOur 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.


Page 8

 
Baker Perkins Limited
 
 
 
Independent Auditors' Report to the Members of Baker Perkins Limited (continued)


Opinion on other matters prescribed by the Companies Act 2006
 

In our opinion, based on the work undertaken in the course of the audit:


the information given in the Strategic Report and the Directors' Report for the financial period for which the financial statements are prepared is consistent with the financial statements; and
the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.


Matters on which we are required to report by exception
 

In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors' Report.


We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:


adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of 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 Directors' Responsibilities Statement 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.


Page 9

 
Baker Perkins Limited
 
 
 
Independent Auditors' Report to the Members of Baker Perkins Limited (continued)


Auditors' responsibilities for the audit of the financial statements
 

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' 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:

Identifying and assessing potential risks related to irregularities
In identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following:
• The nature of the industry and sector in which the company operates; the control environment and business     performance including key drivers for directors' remuneration, bonus levels and performance targets.
• The outcome of enquiries of local management and parent company management, including whether management    was aware of any instances of non-compliance with laws and regulations, and whether management had knowledge   of any actual, suspected, or alleged fraud. 
• Supporting documentation relating to the Company's policies and procedures for:
    - Identifying, evaluating, and complying with laws and regulations
    - Detecting and responding to the risks of fraud
• The internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations.
• The outcome of discussions amongst the engagement team regarding how and where fraud might occur in the    financial statements and any potential indicators of fraud.
• The legal and regulatory framework in which the Company operates, particularly those laws and regulations which    have a direct effect on the financial statements, such as the Companies Act 2006, pensions and tax legislation, or    which had a fundamental effect on the operations of the Company, including General Data Protection requirements,   and Anti-bribery and Corruption.
Audit response to risks identified
Our procedures to respond to the risks identified included the following:
• Reviewing the financial statements disclosures and testing to supporting documentation to assess compliance with    the provisions of those relevant laws and regulations which have a direct effect on the financial statements.
• Discussions with management, including consideration of known or suspected instances of non-compliance with laws  and regulations and fraud.
• Evaluation of the operating effectiveness of management’s controls designed to prevent and detect irregularities.
• Enquiring of management about any actual and potential litigation and claims.
• Performing analytical procedures to identify any unusual or unexpected relationships which may indicate risks of    material misstatement due to fraud.




 
Page 10

 
Baker Perkins Limited
 
 
 
Independent Auditors' Report to the Members of Baker Perkins Limited (continued)


We have also considered the risk of fraud through management override of controls by:
• Testing the appropriateness of journal entries and other adjustments. We have used data analytics software to    identify accounting transactions which may pose a heightened risk of material misstatement, whether due to fraud or   error.
• Challenging assumptions made by management in their significant accounting estimates, and assessing whether the    judgements made in making accounting estimates are indicative of a potential bias; and
• Evaluating the business rationale of any significant transactions that are unusual or outside the normal course of    business.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
There are inherent limitations in the audit procedures described above, and the further removed non-compliance with laws and regulations are from the events and transactions reflected in the financial statements, the less likely we would become aware of them.  Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.


A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' Report.


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 2006Our 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 Auditors' 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.





Anthony Woodings (Senior Statutory Auditor)
for and on behalf of
Hurst Accountants Limited
Chartered Accountants & Statutory Auditors
3 Stockport Exchange
Stockport
SK1 3GG

31 October 2024
Page 11

 
Baker Perkins Limited
 
 
Statement of Comprehensive Income
For the Period Ended 30 September 2023

9 months ended
30 September
12 months ended
31 December
2023
2022
Note
£
£

  

Revenue
 4 
28,069,237
38,988,425

Cost of sales
  
(21,560,575)
(26,687,667)

Gross profit
  
6,508,662
12,300,758

Administrative expenses
  
(12,372,023)
(15,284,627)

Other operating income
 5 
662,798
-

Operating loss
 6 
(5,200,563)
(2,983,869)

Profit on disposal of investments
 15 
19,647,582
-

Investment income
 10 
3,894
9,287

Finance costs
 11 
(724,209)
(315,551)

Profit/(loss) before tax
  
13,726,704
(3,290,133)

Tax on profit/(loss)
 12 
(880,424)
944,338

Profit/(loss) for the year/period
  
12,846,280
(2,345,795)

There was no other comprehensive income for 2023 (2022:£NIL).

The notes on pages 15 to 43 form part of these financial statements.

Page 12

 
Baker Perkins Limited
Registered number: 05708493

Statement of Financial Position
As at 30 September 2023

30 September
31 December
2023
2022
Note
£
£

  

Non-current assets
  

Intangible assets
 13 
244,679
326,239

Property, plant and equipment
 14 
9,093,748
7,553,805

Investments
 15 
86,362
92

  
9,424,789
7,880,136

Current assets
  

Inventories
 16 
4,520,038
5,487,842

Trade and other receivables
 17 
35,323,008
25,916,146

Cash and cash equivalents
 18 
3,081,078
3,359,327

  
42,924,124
34,763,315

Current liabilities
 19 
(18,713,289)
(22,000,450)

Net current assets
  
 
 
24,210,835
 
 
12,762,865

Total assets less current liabilities
  
33,635,624
20,643,001

  

Non-current liabilities
  
(5,404,501)
(4,842,000)

  
28,231,123
15,801,001

Provisions for liabilities
  

Deferred taxation
 23 
(561,561)
-

Other provisions
 24 
(3,592,169)
(4,569,888)

  
 
 
(4,153,730)
 
 
(4,569,888)

  

Net assets
  
24,077,393
11,231,113


Equity
  

Called up share capital 
 25 
1,000,000
1,000,000

Profit and loss account
 26 
23,077,393
10,231,113

  
24,077,393
11,231,113


The financial statements were approved and authorised for issue by the board and were signed on its behalf on 30 October 2024.

................................................
D J Spooner
Director

The notes on pages 15 to 43 form part of these financial statements.

Page 13

 
Baker Perkins Limited
 

Statement of Changes in Equity
For the Period Ended 30 September 2023


Called up share capital
Profit and loss account
Total equity

£
£
£


At 1 January 2022
1,000,000
12,576,908
13,576,908


Comprehensive income for the year

Loss for the year
-
(2,345,795)
(2,345,795)



At 1 January 2023
1,000,000
10,231,113
11,231,113


Comprehensive income for the period

Profit for the period
-
12,846,280
12,846,280


At 30 September 2023
1,000,000
23,077,393
24,077,393


The notes on pages 15 to 43 form part of these financial statements.

Page 14

 
Baker Perkins Limited
 
 
 
Notes to the Financial Statements
For the Period Ended 30 September 2023

1.


General information

Baker Perkins Limited is a private company limited by shares incorporated in England and Wales. The registered office is Manor Drive, Paston Parkway, Peterborough, PE4 7AP. The company's principal activities and nature of its operations are disclosed in the strategic report.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 101 'Reduced Disclosure Framework'  and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 101 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies (see note 3).

The following principal accounting policies have been applied:

 
2.2

Financial Reporting Standard 101 - reduced disclosure exemptions

The Company has taken advantage of the following disclosure exemptions under FRS 101:
the requirements of IFRS 7 Financial Instruments: Disclosures
the requirements of the second sentence of paragraph 110 and paragraphs 113(a), 114, 115, 118, 119(a) to (c), 120 to 127 and 129 of IFRS 15 Revenue from Contracts with Customers
the requirements of paragraph 52, the second sentence of paragraph 89, and paragraphs 90, 91 and 93 of IFRS 16 Leases. The requirements of paragraph 58 of IFRS 16, provided that the disclosure of details in indebtedness relating to amounts payable after 5 years required by company law is presented separately for lease liabilities and other liabilities, and in total
the requirement in paragraph 38 of IAS 1 'Presentation of Financial Statements' to present comparative information in respect of:
 - paragraph 79(a)(iv) of IAS 1;
 - paragraph 73(e) of IAS 16 Property, Plant and Equipment;
 - paragraph 118(e) of IAS 38 Intangible Assets;
the requirements of paragraphs 10(d), 10(f), 16, 38A, 38B, 38C, 38D, 40A, 40B, 40C, 40D, 111 and 134-136 of IAS 1 Presentation of Financial Statements
the requirements of IAS 7 Statement of Cash Flows
the requirements of paragraphs 30 and 31 of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors
the requirements of paragraph 17 and 18A of IAS 24 Related Party Disclosures
the requirements in IAS 24 Related Party Disclosures to disclose related party transactions entered into between two or more members of a group, provided that any subsidiary which is a party to the transaction is wholly owned by such a member


 
Page 15

 
Baker Perkins Limited
 
 
 
Notes to the Financial Statements
For the Period Ended 30 September 2023

2.Accounting policies (continued)


2.2
Financial Reporting Standard 101 - reduced disclosure exemptions (continued)

This information is included in the consolidated financial statements of Hillenbrand Inc as at 30 September 2023 and these financial statements may be obtained from the Hillenbrand website, as indicated in the controlling party note.

  
2.3

Exemption from preparing consolidated financial statements

The Company is a parent company that is also a subsidiary included in the consolidated financial statements of a larger group by a parent undertaking established under the law of a state other than the United Kingdom and is therefore exempt from the requirement to prepare consolidated financial statements under section 401 of the Companies Act 2006.

 
2.4

Going concern

The company has made an operating loss in the period of £5.2 million (year ended 31 December 2022: £2.98 million) but retains strong current net assets of £24.1 million (December 2022: £11.2 million).
Operating losses have continued into 2024, albeit at lower levels to prior years. The directors have prepared budgets which have identified that the company will return to profit in the year to 30 September 2025.
The company's ultimate parent, Hillenbrand Inc, has confirmed it intends to provide support wherever necessary to ensure that the company will continue to be able to pay all debts as they fall due for a period not less than 12 months from the date of approval of these financial statements.
As a result of the above, the directors have deemed it appropriate to prepare the financial statements on a going concern basis.

 
2.5

Impact of new international reporting standards, amendments and interpretations

The following amendments are effective for the period beginning 1 October 2024:
-   Leases - Liability in a sale and leaseback (Amendment to IFRS 16);
-   Classification of Liabilities as Current or Non-Current (Amendments to IAS 1 Presentation of     Financial Statements);
-   Non-current Liabilities with Covenants (Amendments to IAS 1 Presentation of Financial Statements);    and
-   Supplier Finance Arrangements (Amendments to IAS 7 Statement of Cash Flows and IFRS 7      Financial Instruments: Disclosures).
The following amendments are effective for the period beginning 1 October 2025:
-   Lack of Exchangeability (Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates).
The directors anticipate that the adoption of these Standards in future periods may have an impact on the results and net assets of the Company, however, it is too early to quantify this.
The directors anticipate that the adoption of other Standards and interpretations that are not yet effective in future periods will only have an impact on the presentation in the financial statements of the Company.

Page 16

 
Baker Perkins Limited
 
 
 
Notes to the Financial Statements
For the Period Ended 30 September 2023

2.Accounting policies (continued)

 
2.6

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is GBP.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.

 
2.7

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

The Company has contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, the Company adjusts the transaction prices of these contracts for the time value of money.

Sale of goods

Revenue from the sale of goods is recognised on the satisfaction of performance obligations, such as the transfer of a promised good, identified in the contract between the Company and the customer.

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.

Rendering of services

Revenue from providing services is recognised in the accounting period in which the services are rendered.

For fixed-price contracts, revenue is recognised based on the actual service provided to the end of the reporting period as a proportion of the total services to be provided because the customer receives and uses the benefits simultaneously.

Page 17

 
Baker Perkins Limited
 
 
 
Notes to the Financial Statements
For the Period Ended 30 September 2023

2.Accounting policies (continued)


2.7
Revenue (continued)

Further detail regarding recognition of revenue is provided below:
Capital contracts 
The company designs, manufactures and implements machinery used for the production of various food products. It also provides service contracts to carry out necessary upkeep and maintenance.
IFRS 15, revenue from contracts with customers, stipulates a five step process that should be. Each step is summarised below in respect of the company's revenue recognition process:
Step 1 - Identification of contract
The company holds signed contracts with all of its customers, which clearly stipulate the rights of the customer and supplier, the payment terms and conditions and confirms that contracts cannot be cancelled without due reason, as clearly set out in the contract, together with any penalty fees.
Each project is carefully costed prior to quoting a sales price, ensuring that the project has commercial substance as defined by IFRS 15.
Step 2 - Identification of performance obligations
Management have considered different performance obligations. Where an asset is being constructed, the completion of construction is typically viewed as the sole performance obligation. Where an asset is to be installed, it is deemed that it is immaterial to recognise this as a separate performance obligation.
Step 3 - Identifiy transaction price
Transaction prices are usually easily identifiable from the original signed contract. Where costs are expected to vary significantly from original estimates, management will consider whether the contract price will also be adjusted. Minor adjustments are added to the contract price and measured against the total costs when determining the amount of revenue to be recognised. More major variations are considered as to whether they give rise to a new contract.
Steps 4 and 5 - Link transaction price to performance obligations and recognition of revenue thereon
Typically, there is only one performance obligation, and therefore revenue shall be recognised based on a percentage of completion method, driven by costs incurred to date.
Spares sales
Spares sales are typically recognised as revenue at the despatch of goods.
Service contracts
Where revenue for a service contract is anticipated to be in excess of £100,000, revenue is recognised in the same way as capital contracts.
For service contracts that are less than £100,000, revenue is recognised at the point of completion of the service to the customer's satisfaction. To recognise revenue over a period of time is not necessary as the value of such contracts and the time incurred on them is not sufficient to create a material difference. 
For annual maintenance contracts, revenue is recognised on a straight line basis over the contract term.

Page 18

 
Baker Perkins Limited
 
 
 
Notes to the Financial Statements
For the Period Ended 30 September 2023

2.Accounting policies (continued)

 
2.8

Leases

The Company as a lessee

The Company assesses whether a contract is or contains a lease, at inception of a contract. The Company recognises a right-of-use asset and a corresponding lease liability with respect to all lease agreements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets. For these leases, the Company recognises the lease payments as an operating expense on a straight-line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Company uses its incremental borrowing rate, which is provided by it's ultimate parent, based on its own incremental borrowing rate.

Lease payments included in the measurement of the lease liability comprise:

fixed lease payments (including in-substance fixed payments), less any lease incentives;


The lease liability is included in 'Creditors' on the Balance Sheet.

The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made.

The Company remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:

a change in ownership gives rise to a change in discount rate, meaning a change in the lease assets and liabilities should be considered.

The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses.

Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset. If a lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the Company expects to exercise a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation starts at the commencement date of the lease.

The right-of-use assets are included in the 'Intangible Assets', 'Tangible Fixed Assets' and 'Investment Property' lines, as applicable, in the Balance Sheet.

The Company applies IAS 36 to determine whether a right-of-use asset is impaired and accounts for any identified impairment loss as described in note 2.15.

As a practical expedient, IFRS 16 permits a lessee not to separate non-lease components, and instead account for any lease and associated non-lease components as a single arrangement. The Company has used this practical expedient.

Page 19

 
Baker Perkins Limited
 
 
 
Notes to the Financial Statements
For the Period Ended 30 September 2023

2.Accounting policies (continued)

 
2.9

Research and development

In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research shall be recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured. The capitalised development costs are subsequently amortised on a straight-line basis over their useful economic lives, which range from 3 to 6 years.
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.

 
2.10

Interest income

Interest income is recognised in profit or loss using the effective interest method.

 
2.11

Finance costs

Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

 
2.12

Pensions

Defined contribution pension plan

The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance Sheet. The assets of the plan are held separately from the Company in independently administered funds.

Page 20

 
Baker Perkins Limited
 
 
 
Notes to the Financial Statements
For the Period Ended 30 September 2023

2.Accounting policies (continued)

 
2.13

Current and deferred taxation

The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

 
2.14

Intangible assets

Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

 
2.15

Property, plant and equipment

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Page 21

 
Baker Perkins Limited
 
 
 
Notes to the Financial Statements
For the Period Ended 30 September 2023

2.Accounting policies (continued)


2.15
Property, plant and equipment (continued)

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following basis:

Long-term leasehold property
-
Life of the lease
Plant and machinery
-
5 - 10 Years
Motor vehicles
-
2 - 5 Years
Fixtures and fittings
-
2 - 10 Years

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

 
2.16

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

 
2.17

Inventories

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a weighted average basis. Work in progress and finished goods include labour and attributable overheads.

At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.

 
2.18

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

 
2.19

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

 
2.20

Creditors

Creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers.

Creditors are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.

Page 22

 
Baker Perkins Limited
 
 
 
Notes to the Financial Statements
For the Period Ended 30 September 2023

2.Accounting policies (continued)

 
2.21

Provisions for liabilities

Provisions are recognised when an event has taken place that gives rise to a legal or constructive obligation, a transfer of economic benefits is probable and a reliable estimate can be made.
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
 
Increases in provisions are generally charged as an expense to profit or loss.

 
2.22

Financial instruments



The Company recognises financial instruments when it becomes a party to the contractual arrangements of the instrument. Financial instruments are de-recognised when they are discharged or when the contractual terms expire. The Company's accounting policies in respect of financial instruments transactions are explained below:

Financial assets and financial liabilities are initially measured at fair value. 

Financial assets

All recognised financial assets are subsequently measured in their entirety at either fair value or amortised cost, depending on the classification of the financial assets.

Debt instruments at amortised cost

Debt instruments are subsequently measured at amortised cost where they are financial assets held within a business model whose objective is to hold financial assets in order to collect contractual cash flows and selling the 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. Amortised cost is calculated using the effective interest method and represents the amount measured at initial recognition less repayments of principal plus the cumulative amortisation using the effective interest method of any difference between the initial amount and the maturity amount, adjusted for any loss allowance.

Impairment of financial assets

The Company recognises a loss allowance for expected credit losses on investments in debt instruments that are measured at amortised or at FVOCI. The amount of expected credit losses is updated at each reporting date to reflect changes in credit risk since initial recognition of the respective financial instrument.

The Company always recognises lifetime ECL for trade receivables and amounts due on contracts with customers. The expected credit losses on these financial assets are estimated based on the Company's historical credit loss experience, adjusted for factors that are specific to the debtors, general economic conditions and an assessment of both the current as well as the forecast direction of conditions at the reporting date, including time value of money where appropriate. Lifetime ECL represents the expected credit losses that will result from all possible default events over the expected life of a financial instrument.

Page 23

 
Baker Perkins Limited
 
 
 
Notes to the Financial Statements
For the Period Ended 30 September 2023

2.Accounting policies (continued)


2.22
Financial instruments (continued)

Financial liabilities
Fair value through profit or loss
Financial liabilities are classified as at fair value through profit or loss, when the financial liability is held for trading, or is designated as at fair value through profit or loss. This designation may be made if such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise, or the financial liability forms part of a group of financial instruments which is managed and its performance is evaluated on a fair value basis, or the financial liability forms part of a contract containing one or more embedded derivatives, and IFRS 9 permits the entire combined contract to be designated as at fair value through profit or loss. Any gains or losses arising on changes in fair value are recognised in profit or loss to the extent that they are not part of a designated hedging relationship.
At amortised cost
Financial liabilities which are neither contingent consideration of an acquirer in a business combination, held for trading, nor designated as at fair value through profit or loss are subsequently measured at amortised cost using the effective interest method. This is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or where appropriate a shorter period, to the amortised cost of a financial liability.

Page 24

 
Baker Perkins Limited
 
 
 
Notes to the Financial Statements
For the Period Ended 30 September 2023

3.


Judgements in applying accounting policies and key sources of estimation uncertainty

In the application of the company's accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. 
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period In which the estimate is revised, 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.
Criticial judgements
Contract balances
Contract revenue is recognised in accordance with IFRS 15 input methodology on a percentage of completion basis. The directors estimate the percentage of completion based on the costs incurred to date as a proportion of total estimate costs of fulfilling the contract. The main estimation uncertainty is related to the costs to complete the project which is based on detailed project plans and the experience of the production team.
Leases
Discount rate 
Management have concluded that the interest rate implicit in the leases cannot be readily determined therefore the leases have been discounted by the incremental borrowing rate (IBR), being the rate if interest that the company would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain assets of a similar value to the right-of-use assets in a similar economic environment. 
The rates of 6.27% (
2022: 6.11%) for buildings and 5.89% (2022: 5.89%) for vehicles have been applied. These rates are consistent with those applied across the Hillenbrand Group and are based on the groups borrowing position, which are considered to be appropriate for the specific leased assets in question. 
During the year, an adjustment was required in respect of the company's IFRS 16 leases which is explained in more detail in note 5.
Lease term 
On transition to IFRS 16, management calculated the lease term for each lease to be from the date of initial application (being 1 April 2019) to the lease expiration date as permitted by the standards. Management assessed this to be initial break option in 2032, as at initial application it was not reasonably certain the lease would be extended past this point. There have been no changes in circumstances that would invalidate this judgement 
Inventory obsolesence 
In determining inventory provision, future demand is evaluated and appropriate provision are made to reflect the risk of obsolescence. This methodology is significantly affected by forecasted requirements for inventory. If actual demand or usage were to be lower than estimated, additional inventory provisions for excess or obsolete inventory may be required, which could have a material adverse effect on the business, financial position and results of operations. 
Warranty provision
Warranties are provided for in the normal course of business based on an assessment of future claims with reference to past claims. Such costs are generally incurred over the product warranty period.

 
Page 25

 
Baker Perkins Limited
 
 
 
Notes to the Financial Statements
For the Period Ended 30 September 2023

3.Judgements in applying accounting policies (continued)

Remedial work provision
Provisions for remedial work are provided in the normal course of business based on an assessment of the costs to be incurred in respect of good and services supplied. Such costs are generally incurred over the product lifecycle. 
Dilapidiations provisions
Dilapidation costs are determined by way of a professional valuation, and are accrued over the period of the lease. 


4.


Revenue

An analysis of revenue by class of business is as follows:


9 months ended
30 September
12 months ended
31 December
2023
2022
£
£

Capital contracts (recognised over time)
19,431,212
28,707,044

Spares (recognised at a point in time)
6,104,299
6,914,256

Servicing (recognised at a point in time)
2,533,726
3,367,125

28,069,237
38,988,425


Analysis of revenue by country of destination:

9 months ended
30 September
12 months ended
31 December
2023
2022
£
£

United Kingdom
5,114,535
4,275,923

Rest of Europe
5,082,341
4,622,199

Rest of the world
17,872,361
30,090,303

28,069,237
38,988,425


Page 26

 
Baker Perkins Limited
 
 
 
Notes to the Financial Statements
For the Period Ended 30 September 2023

5.


Other operating income

9 months ended
30 September
12 months ended
31 December
2023
2022
£
£

Reversal of impairment of tangible assets
662,798
-


During the year, the company was acquired by Hillenbrand Inc, via intermediate parent Hillenbrand UK Holdings Limited. At this time, the company re-assessed it's right of use assets and liabilities under IFRS 16, primarily on its land and buildings. 
It was noted by management that there was limited support available to substantiate the figures previously used by the company prior to the acquisition by Hillenbrand Inc. As a result, it was agreed that, upon acquisition, the right of use asset and liability should be re-measured using the discount rates as agreed with Hillebrand Inc, with the resultant adjustment being written back through the Statement of comprehensive income, as the difference was not deemed sufficently material to warrant the need for a prior year re-statement. 
The following adjustments were therefore made to the right-of use assets and liabilities:
 - Increase to the right of use asset of £1,598,721, as shown in note 14;
 - Increase of £935,923 in the lease liability, which is disclosed in note 21;
 - The balance of £662,798 has been credited to the Statement of comprehensive income as shown     above.


6.


Operating loss

The operating loss is stated after charging:

9 months ended
30 September
12 months ended
31 December
2023
2022
£
£

Research & development charged as an expense
427,200
365,313

Exchange differences
(54,183)
(196,368)

Page 27

 
Baker Perkins Limited
 
 
 
Notes to the Financial Statements
For the Period Ended 30 September 2023

7.


Auditors' remuneration

During the period, the Company obtained the following services from the Company's auditors and their associates:


9 months ended
30 September
12 months ended
31 December
2023
2022
£
£

Fees payable to the Company's auditors and their associates for the audit of the Company's financial statements
51,000
88,000

Fees payable to the Company's auditors and their associates in respect of:

Audit-related assurance services
5,000
-

Taxation compliance services
5,000
6,000

All non-audit services not included above
-
75,000


8.


Employees

Staff costs, including directors' remuneration, were as follows:


9 months ended
30 September
12 months ended
31 December
2023
2022
£
£

Wages and salaries
9,864,895
13,279,260

Social security costs
1,055,086
1,480,800

Cost of defined contribution scheme
1,170,189
1,631,051

12,090,170
16,391,111


The average monthly number of employees, including the directors, during the period was as follows:


   9 months ended
     30 September
   12 months ended
      31 December
        2023
        2022
            No.
            No.







Selling
25
27



Administration
27
27



Production
266
282



Apprentices
9
5

327
341

Page 28

 
Baker Perkins Limited
 
 
 
Notes to the Financial Statements
For the Period Ended 30 September 2023

9.


Directors' remuneration

9 months ended
30 September
12 months ended
31 December
2023
2022
£
£

Directors' emoluments
82,428
327,000

Company contributions to defined contribution pension schemes
39,676
73,000

122,104
400,000


During the period retirement benefits were accruing to 1 director (2022 -2) in respect of defined contribution pension schemes.

The highest paid director received remuneration of £82,428 (2022 -£221,000).

The value of the Company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £39,676 (2022 -£43,000).


10.


Investment income

9 months ended
30 September
12 months ended
31 December
2023
2022
£
£


Interest receivable from group companies
-
8,621

Other interest receivable
3,894
666

3,894
9,287


11.


Finance costs

9 months ended
30 September
12 months ended
31 December
2023
2022
£
£


Loans from group undertakings
402,095
-

Interest on lease liabilities
322,114
315,551

724,209
315,551

Page 29

 
Baker Perkins Limited
 
 
 
Notes to the Financial Statements
For the Period Ended 30 September 2023

12.


Taxation


9 months ended
30 September
12 months ended
31 December
2023
2022
£
£

Corporation tax


Current tax on profits for the year
-
(95,338)

Adjustments in respect of previous periods
(389,374)
(15,000)


Total current tax
(389,374)
(110,338)

Deferred tax


Origination and reversal of timing differences
174,798
(834,000)

Deferred tax asset not recognised
1,095,000
-

Total deferred tax
1,269,798
(834,000)


Taxation on profit/(loss) on ordinary activities
880,424
(944,338)
Page 30

 
Baker Perkins Limited
 
 
 
Notes to the Financial Statements
For the Period Ended 30 September 2023
 
12.Taxation (continued)


Factors affecting tax charge for the period/year

The tax assessed for the period/year is lower than (2022 -lower than) the standard rate of corporation tax in the UK of 23.02% (2022 -19.00%). The differences are explained below:

9 months ended
30 September
12 months ended
31 December
2023
2022
£
£


Profit/(loss) on ordinary activities before tax
13,726,704
(3,290,133)


Profit/(loss) on ordinary activities multiplied by standard rate of corporation tax in the UK of 23.02% (2022 -19.00%)
3,159,887
(625,125)

Effects of:


Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
4,868
94,000

Capital allowances for period/year in excess of depreciation
(9,742)
(48,213)

Adjustments to tax charge in respect of prior periods
(389,374)
(158,000)

Adjustments to deferred tax charge in respect of prior periods
248,502
(207,000)

Movement in deferred tax not recognised
2,506,727
-

Gain on disposal of subsidiary not taxable
(4,522,850)
-

Changes in tax rates
(117,528)
-

Other differences leading to an increase (decrease) in the tax charge
(66)
-

Total tax charge for the period/year
880,424
(944,338)


Factors that may affect future tax charges

In April 2023, the Corporation tax rate increased to 25% for companies making profits greater than £250,000. This
rate change may impact the amount of future tax payments made by the Company.

Page 31

 
Baker Perkins Limited
 
 
 
Notes to the Financial Statements
For the Period Ended 30 September 2023

13.


Intangible assets






Development expenditure

£



Cost


At 1 January 2023
326,239



At 30 September 2023

326,239



Amortisation


Charge for the period on owned assets
81,560



At 30 September 2023

81,560



Net book value



At 30 September 2023
244,679



At 31 December 2022
326,239




Page 32

 
Baker Perkins Limited
 
 
 
Notes to the Financial Statements
For the Period Ended 30 September 2023

14.


Property, Plant and Equipment







Long-term leasehold property
Plant and machinery
Motor vehicles
Fixtures and fittings
Total

£
£
£
£
£



Cost


At 1 January 2023
5,863,039
4,489,584
12,627
950,758
11,316,008


Additions
1,598,721
605,743
-
225,120
2,429,584


Disposals
-
(14,737)
-
-
(14,737)



At 30 September 2023

7,461,760
5,080,590
12,627
1,175,878
13,730,855



Depreciation


At 1 January 2023
1,170,722
1,906,015
12,627
672,839
3,762,203


Charge for the period on owned assets
-
285,841
-
138,626
424,467


Charge for the period on right-of-use assets
465,174
-
-
-
465,174


Disposals
-
(14,737)
-
-
(14,737)



At 30 September 2023

1,635,896
2,177,119
12,627
811,465
4,637,107



Net book value



At 30 September 2023
5,825,864
2,903,471
-
364,413
9,093,748



At 31 December 2022
4,692,317
2,583,569
-
277,919
7,553,805


The net book value of owned and leased assets included as "Tangible fixed assets" in the Balance Sheet is as follows:

30 September
31 December
2023
2022
£
£


Tangible fixed assets owned
3,267,884
2,861,488

Right-of-use tangible fixed assets
5,825,864
4,692,317

9,093,748
7,553,805

Page 33

 
Baker Perkins Limited
 
 
 
Notes to the Financial Statements
For the Period Ended 30 September 2023

           14.Property, Plant and Equipment (continued)

Information about right-of-use assets is summarised below:

Net book value

30 September
31 December
2023
2022
£
£

Property
5,825,864
4,692,317

Depreciation charge for the period ended

30 September
31 December
2023
2022
£
£

Property
465,174
540,000


Additions to right-of-use assets

30 September
2023
£

Additions to right-of-use assets
1,598,721

Further details regarding adjustments made to right of use assets and liabilities is disclosed in note 5.


15.


Investments








Investments in subsidiary companies

£



Cost 


At 1 January 2023
92


Additions
86,340


Disposals
(70)



At 30 September 2023
86,362




Page 34

 
Baker Perkins Limited
 
 
 
Notes to the Financial Statements
For the Period Ended 30 September 2023

Subsidiary undertakings


The following were subsidiary undertakings of the Company:

Name

Class of shares

Holding

Baker Perkins Inc (see below)
Ordinary
100%
Baker Perkins SAS
Ordinary
100%

The aggregate of the share capital and reserves as at 30 September 2023 and the profit or loss for the period ended on that date for the subsidiary undertakings were as follows:

Name
Aggregate of share capital and reserves
Profit/(Loss)
£
£

Baker Perkins SAS
86,340
-

-
-

Incorporation of Baker Perkins SAS
During the year, the company acquired the shares of Baker Perkins SAS for £86,340.
Sale of Baker Perkins Inc
During the year, the company sold its investment in Baker Perkins Inc to another company within the group controlled by its ultimate parent. A profit on disposal of £19,647,582 was recognised in the Statement of comprehensive income. 


16.


Inventories

30 September
31 December
2023
2022
£
£

Raw materials and consumables
3,369,760
3,452,976

Work in progress (goods to be sold)
1,150,278
2,034,866

4,520,038
5,487,842



The difference between purchase price or production cost of inventories and their replacement cost is not material.
Impairment losses in relation to inventories recognised during the year as an expense were £114,011 (
2022: £74,795).

Page 35

 
Baker Perkins Limited
 
 
 
Notes to the Financial Statements
For the Period Ended 30 September 2023

17.


Trade and Other Receivables

30 September
31 December
2023
2022
£
£


Trade receivables
3,115,678
2,161,257

Receivables from contracts with customers
3,368,566
3,224,151

Amounts owed by group undertakings
26,945,873
17,970,901

Other receivables
874,302
990,056

Prepayments and accrued income
1,018,589
861,544

Deferred taxation
-
708,237

35,323,008
25,916,146


Impairment losses
No impairment losses were recognised on the company's receivables from contracts with customers (2022: £Nil).
No impairment losses were recognised on the company's trade debtors (
2022: £Nil).
Amounts owed by group undertakings
Amounts owed by group undertakings totalling £18,142,652 attract interest at a fixed rate. The loan is repayable on demand and must be settled in full by 1 September 2028.
All other amounts owed by group undertakings are interest free and repayable on demand.
All amounts owed by group undertakings are unsecured.


18.


Cash and cash equivalents

30 September
31 December
2023
2022
£
£

Cash at bank and in hand
3,081,078
3,359,327


Page 36

 
Baker Perkins Limited
 
 
 
Notes to the Financial Statements
For the Period Ended 30 September 2023

19.


Current Liabilities

30 September
31 December
2023
2022
£
£

Trade payables
5,432,449
5,135,709

Amounts owed to group undertakings
930,571
5,480,338

Other taxation and social security
394,340
393,107

Lease liabilities
574,604
183,014

Other payables
2,973,330
2,822,334

Accruals and deferred income
1,397,969
1,279,950

Contract liabilities
7,010,026
6,705,998

18,713,289
22,000,450


The following liabilities were secured:

30 September
31 December
2023
2022
£
£



Lease liabilities
574,604
183,014

Details of security provided:

Lease liabilities are secured on the assets to which they relate, primarily the land and buildings leased by the company.
Amounts owed to group undertakings are unsecured, interest free and repayable on demand.

Page 37

 
Baker Perkins Limited
 
 
 
Notes to the Financial Statements
For the Period Ended 30 September 2023

20.


Non-Current Liabilities

30 September
31 December
2023
2022
£
£

Lease liabilities
5,404,501
4,842,000


The following liabilities were secured:

30 September
31 December
2023
2022
£
£



Lease liabilities
5,404,501
4,842,000

Details of security provided:

Lease liabilities are secured on the assets to which they relate, primarily the land and buildings leased by the company.

Page 38

 
Baker Perkins Limited
 
 
 
Notes to the Financial Statements
For the Period Ended 30 September 2023

21.

Leases

Company as a lessee

The Company assesses whether a contract is or contains a lease, at contract inception, The Company recognises a right- of-use asset and a corresponding lease liability with respect to all lease agreements in which is it the lessee, except for short term leases (defined as leases with a lease term of 12 months or less) and lease of low value assets. For these leases, the Company recognises the lease payments as an operating expense on a straight line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed. 
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Company uses its incremental borrowing rate. 
Lease payments included in the measurement of the lease liability comprise: . fixed lease payments (including in-substance fixed payments), less any lease incentives. The lease liability is included in 'Creditors' on the Statement of Financial Position. The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made. The Company remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever: . the lease term has changed or there is a change in the assessment of exercise of a purchase option, in which case the lease liability is remeasured by discounting the revised discount rate. The right of use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement date, any initial direct costs and any expected future costs in relation to dilapidations. They are subsequently measured at cost less accumulated depreciation and impairment losses. 
Depreciation of right-of-use assets 
Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset. If a lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the Company expect to exercise a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation starts at the commencement date of the lease. 
The right-of-use assets are included in 'property, plant and equipment' in the statement of financial position. The Company applies IAS 36 to determine whether a right-of-use asset is impaired and accounts for any identified impairment loss. 
As a practical expedient, IFRS 16 permits a lessee not to separate non-lease components, and instead account for any lease and associated non-lease components as a single arrangement. The Company has used this practical expedient.

Lease liabilities are due as follows:


2023
2022
£
£

Not later than one year
574,604
183,014

Between one year and five years
2,693,939
1,822,000

Later than five years
2,710,562
3,020,000

5,979,105
5,025,014

Page 39

 
Baker Perkins Limited
 
 
 
Notes to the Financial Statements
For the Period Ended 30 September 2023

21.Leases (continued)



The following amounts in respect of leases, where the Company is a lessee, have been recognised in profit or loss:


2023
2022
£
£

Interest expense on lease liabilities
322,114
315,551


22.


Contract liabilities

Where amounts invoiced by the company in respect of contractual revenue are in advance of revenue that can be recognised based on the assessment of how complete the performance obligations are on that contract, the balance is held in contract liabilities within creditors.
As progress is made on performance obligations, revenue is recognised by way of a release of revenue from contract liabilities. Further invoices raised are credited to contract liabilities as they arise.
In respect of contracts that constitute "capital sales," these can take several years to complete, and therefore in some cases it can be several years before the revenue on these contracts is fully recognised.
In respect of contracts that constitue "service sales," these are typically completed within one year, and therefore the contract liabilities are released within one year.
In respect of contracts that consitiute "spares sales," these are typically invoiced at despatch, and therefore no contract liabilities are recognised for such sales. 


23.


Deferred taxation






2023
2022


£

£






At beginning of year
708,237
(125,763)


(Charged)/credited to profit or loss
(1,269,798)
834,000



At end of year
(561,561)
708,237

Page 40

 
Baker Perkins Limited
 
 
 
Notes to the Financial Statements
For the Period Ended 30 September 2023
 
23.Deferred taxation (continued)

The deferred taxation balance is made up as follows:

30 September
31 December
2023
2022
£
£


Accelerated capital allowances
(561,561)
(387,000)

Tax losses carried forward
-
1,095,237

(561,561)
708,237

Due to uncertainty as to the timing of their recoverability, deferred tax arising on carried forward losses of £2,374,377 have not been recognised.


24.


Provisions






Warranty provision
Dilapidations provision
Remedial provisions
Total

£
£
£
£





At 1 January 2023
931,642
1,435,600
2,202,646
4,569,888


Charged to profit or loss
139,427
-
(1,117,146)
(977,719)



At 30 September 2023
1,071,069
1,435,600
1,085,500
3,592,169

Warranty provision
The company holds provision for potential defects on machines sold that would be covered by the warranty offered to customers. Terms on these vary from customer to customer but typically last not more than two years from the date of commissioning.
Dilapidations provision
The company is required to incur costs to undo amends it has made to the property which it occupies under a lease due to expire in 2037. The costs expected to be incurred have been independently verified and have been included in the financial statements.
Remedial provisions
The company holds provision for certain contracts where it is expected that additional costs above those accrued might be incurred.

Page 41

 
Baker Perkins Limited
 
 
 
Notes to the Financial Statements
For the Period Ended 30 September 2023

25.


Share capital

30 September
31 December
2023
2022
£
£
Allotted, called up and fully paid



1,000,000 (2022 -1,000,000) Ordinary shares of £1.00 each
1,000,000
1,000,000



26.


Reserves

Profit and loss account
The profit and loss account includes all profits and losses accumulated since incorporation, net of dividends paid.


27.


Contingent liabilities

The company has provided bank guarantees to customers totalling £2,541,000 (2022: £830,000).


28.


Pension commitments

The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company  in an independently administered fund. The pension cost charge represents contributions payable by the Company  to the fund and amounted to £1,170,189 (2022: £1,631,051) . Contributions totalling £149,054 (2022: £152,720) were payable to the fund at the balance sheet date and are included in creditors.


29.


Related party transactions

The entity has taken the available exception conferred by IAS 24 Related Party Disclosures not to disclose related party transactions entered into between two or more members of a group, provided that any subsidiary which is a party to the transaction is wholly owned by such a member.
Following the acquisition of the group within which the company resides by Hilenbrand Inc, the company's investment in Baker Perkins Inc, a company incorporated in the United States of America, to a fellow group company, recording a profit of £19.6m which is shown in the Statement of comprehensive income.

Page 42

 
Baker Perkins Limited
 
 
 
Notes to the Financial Statements
For the Period Ended 30 September 2023

30.


Controlling party

The Company's immediate parent is Baker Perkins Holdings Limited by virtue of its 100% stake in the voting share capital.
On 1 September 2023, Hillenbrand Inc. completed an acquisition of a division of Schenck Process, which included Baker Perkins Holdings and all subsidiaries. Therefore, from this date, the ultimate parent is Hillenbrand Inc.
The smallest group in which these financial statement are consolidated are those of Schenck Process Holding GmbH. The results are included up to the date of sale of the company by that parent, being 1 September 2023. 
The largest group in which the results of the Company are consolidated is that headed by Hillenbrand Inc, a country incorporated in the United States of America and listed on the New York Stock Exchange. Copies of the parent company's consolidated financial statements may be obtained from the company's website. Results were consolidated from 1 September 2023 and the balance sheet of the Company is included within the consolidated financial statements of Hillenbrand Inc. 
The link to the annual report for the year ended 30 September 2023 can be found below:
https://d1io3yog0oux5 .cloudfront.net/_4f5c34e3425c799e45b2ce9921d1ee5c /hillenbrand /db/1218/12066 /annual_report/Hillenbrand_23AR .pdf

 
Page 43