Registered number:
For the Period Ended
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Baker Perkins Limited
Company Information
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Baker Perkins Limited
Contents
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Baker Perkins Limited
Strategic Report
For the Period Ended 30 September 2023
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.
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).
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Baker Perkins Limited
Strategic Report (continued)
For the Period Ended 30 September 2023
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.
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.
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Baker Perkins Limited
Strategic Report (continued)
For the Period Ended 30 September 2023
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.
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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.
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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.
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 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.
The directors who served during the period were:
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.
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Baker Perkins Limited
Directors' Report (continued)
For the Period Ended 30 September 2023
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 is covered in the Strategic Report under the section "Directors statement of compliance with duty to promote the success of the company."
The company has in place qualifying third party indemnity provisions for the benefit of its directors.
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%).
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Baker Perkins Limited
Directors' Report (continued)
For the Period Ended 30 September 2023
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.
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.
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Baker Perkins Limited
Independent Auditors' Report to the Members of Baker Perkins Limited
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 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).
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.
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' Report thereon. The directors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
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Baker Perkins Limited
Independent Auditors' Report to the Members of Baker Perkins Limited (continued)
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.
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.
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Baker Perkins Limited
Independent Auditors' Report to the Members of Baker Perkins Limited (continued)
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.
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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.
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 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.
for and on behalf of
Chartered Accountants & Statutory Auditors
3 Stockport Exchange
SK1 3GG
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Baker Perkins Limited
Statement of Comprehensive Income
For the Period Ended 30 September 2023
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Baker Perkins Limited
Registered number: 05708493
Statement of Financial Position
As at
The financial statements were approved and authorised for issue by the board and were signed on its behalf on
The notes on pages 15 to 43 form part of these financial statements.
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Baker Perkins Limited
Statement of Changes in Equity
For the Period Ended 30 September 2023
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Baker Perkins Limited
Notes to the Financial Statements
For the Period Ended 30 September 2023
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
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:
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
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Baker Perkins Limited
Notes to the Financial Statements
For the Period Ended 30 September 2023
2.Accounting policies (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.
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.
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.
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.
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Baker Perkins Limited
Notes to the Financial Statements
For the Period Ended 30 September 2023
2.Accounting policies (continued)
Functional and presentation currency
Transactions and balances
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Baker Perkins Limited
Notes to the Financial Statements
For the Period Ended 30 September 2023
2.Accounting policies (continued)
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.
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Baker Perkins Limited
Notes to the Financial Statements
For the Period Ended 30 September 2023
2.Accounting policies (continued)
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Baker Perkins Limited
Notes to the Financial Statements
For the Period Ended 30 September 2023
2.Accounting policies (continued)
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.
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Baker Perkins Limited
Notes to the Financial Statements
For the Period Ended 30 September 2023
2.Accounting policies (continued)
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Baker Perkins Limited
Notes to the Financial Statements
For the Period Ended 30 September 2023
2.Accounting policies (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:
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.
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Baker Perkins Limited
Notes to the Financial Statements
For the Period Ended 30 September 2023
2.Accounting policies (continued)
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
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
Impairment of financial assets
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Baker Perkins Limited
Notes to the Financial Statements
For the Period Ended 30 September 2023
2.Accounting policies (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.
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Baker Perkins Limited
Notes to the Financial Statements
For the Period Ended 30 September 2023
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.
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Baker Perkins Limited
Notes to the Financial Statements
For the Period Ended 30 September 2023
3.Judgements in applying accounting policies (continued)
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.
Analysis of revenue by country of destination:
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Baker Perkins Limited
Notes to the Financial Statements
For the Period Ended 30 September 2023
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Baker Perkins Limited
Notes to the Financial Statements
For the Period Ended 30 September 2023
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Baker Perkins Limited
Notes to the Financial Statements
For the Period Ended 30 September 2023
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Baker Perkins Limited
Notes to the Financial Statements
For the Period Ended 30 September 2023
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Baker Perkins Limited
Notes to the Financial Statements
For the Period Ended 30 September 2023
12.Taxation (continued)
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.
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Baker Perkins Limited
Notes to the Financial Statements
For the Period Ended 30 September 2023
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Baker Perkins Limited
Notes to the Financial Statements
For the Period Ended 30 September 2023
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Baker Perkins Limited
Notes to the Financial Statements
For the Period Ended 30 September 2023
14.Property, Plant and Equipment (continued)
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Baker Perkins Limited
Notes to the Financial Statements
For the Period Ended 30 September 2023
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Baker Perkins Limited
Notes to the Financial Statements
For the Period Ended 30 September 2023
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Baker Perkins Limited
Notes to the Financial Statements
For the Period Ended 30 September 2023
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.
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Baker Perkins Limited
Notes to the Financial Statements
For the Period Ended 30 September 2023
Lease liabilities are secured on the assets to which they relate, primarily the land and buildings leased by the company.
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Baker Perkins Limited
Notes to the Financial Statements
For the Period Ended 30 September 2023
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Baker Perkins Limited
Notes to the Financial Statements
For the Period Ended 30 September 2023
21.Leases (continued)
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Baker Perkins Limited
Notes to the Financial Statements
For the Period Ended 30 September 2023
23.Deferred taxation (continued)
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Baker Perkins Limited
Notes to the Financial Statements
For the Period Ended 30 September 2023
Profit and loss account
The profit and loss account includes all profits and losses accumulated since incorporation, net of dividends paid.
The company has provided bank guarantees to customers totalling £2,541,000 (2022: £830,000).
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.
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Baker Perkins Limited
Notes to the Financial Statements
For the Period Ended 30 September 2023
The Company's immediate parent is
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 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 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
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