The director presents the strategic report for the year ended 31 March 2024.
The group has made a profit for the year amounting to £3.67m (2023 - £13.57) whilst revenue remains at the level of £95m.The net assets of the group is £40.44m (2023 - £37.19m).
The turnover from business included £66.78m (2023 : £70.02m) from the UK subsidiary and £28.52 (2023 : £24.93m) from the Spanish subsidiary. The Gross profit contributions of the UK subsidiary was 15.12% (2023 : 17.54%) and Spanish subsidiary was 39.79% (2023 : 37.62%).
The UK subsidiary, Bristol Laboratories Ltd has focussed on increasing the production from its UK facilities, and consequently reducing its level of imported finished goods. This has ensured greater reliability of supply of product to the UK market, at the same time generating opportunities for increased sales from new product launches. Export business has remained consistent throughout the year, and is an area of enhanced focus for the company, leveraging the UK manufactured and regulated quality proposition to identified overseas markets. The outlook for the forthcoming year is looking very bright.
The Spain subsidiary, Brill Pharma, S.L. operates in the pharmaceutical industry, specifically focusing on ophthalmology and eye care products. The company achieved a strong financial performance during the financial year, with revenue growth of14.8%, aligns with the expanding global ophthalmic pharmaceutical market, driven by aging populations and increasing eye health concerns. Despite rising operating costs, net profit grew 9.6% to £ 4.79m, and total assets expanded to £22.6m. The industry's demand for innovative eye treatments and specialty medications supports Brill Pharma’s growth.
Principal risks and uncertainties
The principal financial risks to which the company is exposed are those of liquidity, market conditions, interest rates, foreign currency exchange rates and credit availability. Each of these are managed in accordance with Board-approved policies. These policies are set out below.
Liquidity risk
The group manages liquidity by maintaining access to a number of sources of short-term and medium-term funding at a level which is considered sufficient to meet its anticipated funding requirements. Specifically, the group uses confidential sales ledger financing (CID) and medium-term bank finance to manage its liquidity needs. The directors continue to review the group’s ongoing liquidity risks regularly.
Economic, market and price risk
The group’s performance is directly impacted by the economic environment, as evidenced in this years’ financial results. The group operates in highly competitive markets – significant product innovations, technical and scientific advances or the intensification of price competition could all adversely affect the group’s results.
The group continues to invest in research and development in order to ensure the introduction of both new generic formulations and improved production processes to allow the group to be at the forefront of its chosen markets. Furthermore, the group continually analyses its operating costs to ensure it remains competitive.
Foreign currency risk
The group operates foreign currency accounts and use spot buy/sell mechanism to manage and protect against foreign currency risks. An element of natural hedge is enjoyed as income from export sales partially offset cost of imported raw materials.
Credit risk
The group is at risk of exposure to financial losses should a counterparty fail to meet its obligations as and when they fall due. The group derives a significant proportion of its revenue from sales to large companies and multinationals. The failure of any such company to honour its debts could materially impact the group’s results. The group has taken necessary insurances to minimise such risks as they arise and credit limits are set and managed appropriately, based upon credit checks reviewed and approved for each customer.
Legal and compliance risk
The group operates in highly regulated healthcare sector. Additionally, government regulation imposes increasing demands on companies to demonstrate that they are doing the right thing. A failure to properly manage these requirements would expose the group to the risk of reputational damage, fines, penalties and cancellation of business license which is a severe disadvantage to the group's business. The group implemented a thoughtful approach supported by a comprehensive training, control, and monitoring framework to ensure full alignment with legal and regulatory standards.
The directors have identified the following Key Performance Indicators to help and understand and measure the performance of the group:
| 2024 | 2023 |
| £'000 | £'000 |
Revenue | 95,309 | 95,129 |
Operating profit / (loss) | 6,337 | 10,558 |
Gross operating margin (%) | 23.73 | 23.55 |
The directors also use non financial performance indicators. These include customer satisfaction reports, staff feedback reports. The directors review these reports on a timely manner.
Revenue measures our ability to maximise value from our current product portfolio and focus to generate revenue from new products or make decision to stop non-viable products. Group revenue has remained at same level compared to the previous financial year.
Operating profit measures group's ability to grow revenue and maintain quality while delivering efficiencies and ensuring cost control.
The emphasis on quality is the foundation for everything we do at Bristol Group. We always keep in mind the patients who use our medicines and maintain a focus on living up to our ‘Quality Values’ every day. This focus helps us to maintain the highest standards and assures our healthcare partners that each of our products produced is of the utmost quality. Regulatory compliance is the starting point for all of our quality processes. These processes meet the latest international requirements at each stage of production, from sourcing raw materials, manufacturing, through to finished products and distribution.
To achieve our ambitious goals, we need people who are committed and prepared to embrace our corporate philosophy. We offer plenty of opportunities for career advancement and skill improvement. Training at Bristol Group is a continuous process. While basic job training is given, people with a commitment and an aptitude for challenges are selected for training for growth and higher responsibilities.
Slavery and human trafficking statement
We have a zero tolerance to slavery in all its forms and are committed to implementing business practices that do not allow any form of slavery to take place, whether internally or as part of our supply chain. Our supply chain includes procurements of raw materials, packing materials, chemicals for testing finished pharmaceutical products, and machinery to produce the finished pharmaceutical goods. We carry out an annual review of our Anti-Slavery Policy to determine whether it may be improved for better understanding and applicability.
The in-house development of products is a key focus area for us, and we invest considerable resources in the development of new products. Research and development is an integral part of the group’s business. In view of exploring new products, the group has invested, and is committed to continuing to invest in the research and development activities. Our Research and Development laboratory is manned by a group of highly skilled scientists and dedicated analytical experts, constantly engaged in formulating sustained release products, effervescent products, semi-solids, liquids and other new drug delivery systems. The group continues to work towards achieving a large and promising development pipeline. The group continues to develop niche products with unique drug delivery systems, such as modified and slow release, in its expanded testing laboratory, and it is anticipated that this will have material impact on the growth of the group. To ensure that quality and consistency are maintained in the product development process, our scientists and technicians have the latest technical, monitoring and analytical tools at their disposal. The team is constantly engaged in investigating new ideas to improve efficiencies in existing processes to control costs, developing new capabilities and adding to our portfolio of generic products.
Our suppliers play a pivotal role to our business, in which we use the highest quality raw materials in our productions, and which are delivered to us promptly. Our suppliers keep us informed of any supply chain challenges, and notwithstanding the consequences of the global pandemic we have maintained strong relationships with our key suppliers. We are regularly in contact with our suppliers thereby ensuring our purchasing department retain an open relationship, and our suppliers are always aware of our ongoing requirements.
Customer relationships
Our customers are kept up to date with business achievements, future strategy and ongoing business activities and product developments, with a view to nurturing long term partnerships. Our objective is to provide the best level of customer service, fulfilling our customer’s sales order lists and ensuring that the products are of the high-quality standards, and are delivered in accordance to the customers requirements. Our staff and management continuously work hard to ensure we can offer competitive prices for our products to our customers.
This report was approved by the Board of Director, and signed on behalf of the board by:
On behalf of the board
The director presents his annual report and audited financial statements of the group and company for the year ended 31 March 2024.
The results for the year are set out on pages 11 to 12.
No ordinary dividends were paid. The director does not recommend payment of a further dividend.
The director who held office during the year and up to the date of signature of the financial statements was as follows:
The group made the following political donations in the current year:
Bristol Laboratories Ltd made a political donation of £10,000 to the Conservative Party.
Research and development activities continue to be a high priority with the development of new products and maintaining the technological excellence of existing products.
The group's policy is to consult and discuss with employees, through unions, staff councils and at meetings, matters likely to affect employees' interests.
Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the group's performance.
There is no employee share scheme at present, but the directors are considering the introduction of such a scheme as a means of further encouraging the involvement of employees in the group's performance.
The auditor, King & King, Chartered Accountants & Statutory Auditors is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Bristol Laboratories Limited’s environmental performance information is presented in accordance with the Streamlined Energy and Carbon Reporting (“SECR”) Policy. The table below represents Bristol Laboratories Limited’s energy use and greenhouse gas (GHG) emissions from electricity and fuel for the annual reporting period 01/04/2023 to 31/03/2024. The scope of the reporting includes all UK operations.
We have followed the HM Government Environmental Reporting Guidelines. We have also used the GHG Reporting Protocol – Corporate Standard and have used the 2021 UK Government’s Conversion Factors for Company Reporting.
The chosen intensity measurement ratio is total gross emissions in metric tonnes CO2e per employee, the recommended ratio for the sector.
Bristol Laboratories Limited’s strategy is to reduce its GHG emissions through improving energy efficiency to reduce consumption and by purchasing electricity from renewable sources. In 2021, Bristol Laboratories Limited made a conscious decision to purchase its UK electricity using REGO-backed renewable energy contracts. This purchasing covers all UK businesses and will reduce the total CO2e impacts. To improve energy efficiency, Bristol Laboratories Limited have made operational improvements across three asset areas (1) Buildings (2) Industrial Processes (3) Transport. These improvements include; upgrading HVAC and AHU systems, reducing manually operated controls and improving lighting. During the year enhancements have been made to our internal expenses system so that we can accurately capture, report and review emissions from differing vehicle types used by employees for business purposes.
The group made a profit before tax of £5,374,902 during the period and the balance sheet showed net assets of £40,443,509 at the period end. At the time of approving the financial statements, the director is of the opinion that the group has adequate resources to continue in operational existence for the foreseeable future on the understanding that the group has the on-going support of its bankers who are providing facilities to the group and sales financing to manage liquidity. Thus, the director has adopted the going concern basis of accounting in preparing the financial statements. |
We have audited the financial statements of Bristol Laboratories Group Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 March 2024 which comprise the group statement of comprehensive income, the group statement of financial position, the company statement of financial position, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
Basis for opinion
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the director with respect to going concern are described in the relevant sections of this report.
Other information
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
The information given in the strategic report and the director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
The strategic report and the director's report have been prepared in accordance with applicable legal requirements.
The extent to which the audit was considered capable of detecting irregularities, including fraud, is detailed below.
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. Owing to the inherent limitations of an audit, there is an unavoidable risk that material misstatements in the financial statements may not be detected, even though the audit is properly planned and performed in accordance with the ISAs (UK).
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
We obtained an understanding of the legal and regulatory frameworks that are applicable to the group and determined that the most significant which are directly relevant to specific assertions in the financial statements are those related to the reporting frameworks Financial Reporting Standard 102 and the Companies Act 2006;
We assessed the susceptibility of group's financial statements to material misstatement, including how fraud might occur, by making enquires of management, those charged with governance. We utilised internal and external information to corroborate these enquiries and to perform a fraud risk assessment for the group. We considered the risk of fraud to be significant within the areas of the recognition of revenue. Audit procedures performed by the engagement team included:
testing the occurrence and cut-off of revenues to supporting documentation including proof of delivery and receipt of payments;
identifying and testing journal entries considered by the engagement team to carry a significant risk of fraud.
In assessing the potential risks of material misstatement, we obtained an understanding of:
The group’s operations, including the nature of its revenue sources and revenue recognition policy, the assessment of material judgements made by management and the design of the control environment for the overall financial reporting process for the group;
the group’s control environment, including the policies and procedures implemented to comply with the requirements of Financial Reporting Standard 102 and the Companies Act 2006, the adequacy of procedures for authorisation of transactions within the business and the regularity of management’s review of management accounts for indicators of material misstatement.
We enquired of management and those charged with governance whether they were aware of any instances of non-compliance with laws and regulations or whether they had any knowledge of actual, suspected or alleged fraud;
Where any instances of non compliance with laws and regulations and / or fraud we assessed their potential impact and followed up where appropriate;
These audit procedures were designed to provide reasonable assurance that the financial statements were free from fraud or error. The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error and detecting irregularities that result from fraud is inherently more difficult than detecting those that result from error, as fraud may involve collusion, deliberate concealment, forgery or intentional misrepresentations. Also, the further removed non-compliance with laws and regulations is from events and transactions reflected in the financial statements, the less likely we would become aware of it;
The assessment of the appropriateness of the collective competence and capabilities of the engagement team included consideration of the engagement team’s:
understanding of, and practical experience with audit engagements of a similar nature and complexity through appropriate training and participation;
knowledge of the industry in which the client operates;
understanding of the requirements of Financial Reporting Standard 102 and the Companies Act 2006 and the application of the legal and regulatory requirements of these to the group.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £0 (2023 - £1 loss).
Bristol Laboratories Group Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Fifth Floor, Watson House, 54-60 Baker Street, London, W1U 7BU.
The group consists of Bristol Laboratories Group Limited and all of its subsidiaries.
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The consolidated group financial statements consist of the financial statements of the parent company Bristol Laboratories Group Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.
All financial statements are made up to 31 March 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
Investments in joint ventures and associates are carried in the group statement of financial position at cost plus post-acquisition changes in the group’s share of the net assets of the entity, less any impairment in value. The carrying values of investments in joint ventures and associates include acquired goodwill.
If the group’s share of losses in a joint venture or associate equals or exceeds its investment in the joint venture or associate, the group does not recognise further losses unless it has incurred obligations to do so or has made payments on behalf of the joint venture or associate.
Unrealised gains arising from transactions with joint ventures and associates are eliminated to the extent of the group’s interest in the entity.
Non-controlling interests
Minority interests in the net assets of consolidated subsidiaries are identified separately from the group’s equity. Minority interests consist of the amount of those interests at the date of the original business combination and the minority’s share of changes in equity since the date of the combination.
The proportions of profit or loss and changes in equity allocated to the owners of the parent and to the minority interests are determined on the basis of existing ownership interests and do not reflect the possible exercise or conversion of options or convertible instruments.
The group made a profit before tax of £5,374,902 during the period and the balance sheet showed net assets of £40,443,509 at the period end. At the time of approving the financial statements, the director is of the opinion that the group has adequate resources to continue in operational existence for the foreseeable future on the understanding that the group has the on-going support of its bankers who are providing facilities to the group and sales financing to manage liquidity. Thus, the director has adopted the going concern basis of accounting in preparing the financial statements.
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the group and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
The group manufactures, market and distribute generic medicines and eye health products. Revenue from sale of these products is recognised on point of delivery to the customers.
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the income statement.
The assets residual values and useful lives are reviewed, and adjusted, if appropriate, at the end of each reporting period. The effect of any change is accounted for prospectively.
Leased assets
At inception the group assesses agreements that transfer the right to use assets. The assessment considers whether the arrangement is, or contains, a lease based on substance of the arrangement.
Leases of assets that transfer substantially all the risks and rewards incidental to ownership are classified as finance leases.
Finance leases are capitalised at commencement of the lease as assets at the fair value of the leased assets or, if lower, the present value of the minimum lease payments calculated using the interest rate implicit in the lease. Where the implicit rate cannot be determined, the group's incremental borrowing rate is used.
Assets are depreciated over the shorter of the lease term and the estimated useful life of the asset. Assets are assessed for impairment at each reporting date.
The capital element of lease obligations is recorded as a liability on inception of the arrangement. Lease payments are apportioned between capital repayment and finance charge, using effective interest rate method, to produce constant rate of change on the balance of the capital repayments outstanding.
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Investments in associates are initially recognised at the transaction price (including transaction costs) and are subsequently adjusted to reflect the group’s share of the profit or loss, other comprehensive income and equity of the associate using the equity method. Any difference between the cost of acquisition and the share of the fair value of the net identifiable assets of the associate on acquisition is recognised as goodwill. Any unamortised balance of goodwill is included in the carrying value of the investment in associates.
Losses in excess of the carrying amount of an investment in an associate are recorded as a provision only when the company has incurred legal or constructive obligations or has made payments on behalf of the associate.
In the parent company financial statements, investments in associates are accounted for at cost less impairment.
Investment in a subsidiary company is held at cost less accumulated impairment losses.
At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the group estimates the recoverable amount of the cash-generating unit to which the asset belongs.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the group's statement of financial position when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the statement of financial position as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in other comprehensive income.
The trading results of group undertakings are translated into sterling at the average exchange rates for the year. The assets and liabilities of overseas undertakings are translated at the exchange rates ruling at the year-end. Exchange adjustments arising from the retranslation of opening net investments and from the translation of the profits or losses at average rates are recognised in ‘Other comprehensive income’ and allocated to non-controlling interest as appropriate.
In the application of the group’s accounting policies, the director is required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Inventories are valued at the lower of cost and net realisable value. Net realisable value includes, where necessary, provisions for slow moving and obsolete inventories. Calculation of these estimates require judgements to be made, which include forecasting consumer demand, competitive and economic environment and inventory loss trends. This is regularly reviewed by the management on a regular basis. |
Management reviews the useful lives of property, plant and equipment on a regular basis. Any changes in estimates may affect the carrying amounts of the respective property, plant and equipment with a corresponding effect on the related depreciation charge.
An estimate for costs associated with rented building dilapidation costs has been made that reflects potential costs and likelihood of incurring such costs. |
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
An allowance for bad debts is made when collection of the full amount is no longer probable. Bad debts are written off when identified. The trade receivables balance is assessed at the end of each reporting period whether there is objective evidence of impairment and recognises a bad debt allowance if such evidence arises.
In performing their impairment tests the directors have determined that the business unit represents the smallest identifiable group of assets that generate independent cash flows. In determining the value in use for comparison with the carrying amount of these assets management have estimated the future cash flows over the remaining useful life of these assets. In determining these cash flows the directors have used an implicit average growth rate which represents their best estimate of the expected future performance of the business. Expected future cash flows have been discounted using the company's estimated incremental borrowing rate. The result of these impairment tests have shown no impairment is required. As part of their ongoing review of the carrying amounts and useful lives of these assets management will continue to monitor these assets and the value in use to determine whether further impairment charges will be required in the future. |
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2023 - 2).
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
In the Spring Budget 2021, the UK Government announced that from 1 April 2023 the corporation tax rate would increase to 25%. This new law was substantively enacted on 24 May 2021.
The group disposed its wholly owned direct subsidiary Axcount Generika GmbH in German to a pharmaceutical company in German for a cash consideration of £5.08m resulting in 100% loss of control. The sale was completed on 07 October 2022.
A gain of £4,652,873 arose on the disposal, being the proceeds of the sale, less the carrying amount of the business assets and attributable goodwill, if any.
More information on impairment movements in the year is given in note .
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
Freehold land and buildings with a carrying amount of £16,530,000 (2023 - £16,340,000) have been pledged to secure borrowings of the company. The company is not allowed to pledge these assets as security for other borrowings or to sell them to another entity.
The company adopted the revaluation model to measure the freehold and leasehold land and buildings with effect from 31 March 2023. Freehold land and buildings with a carrying amount of £10,674,612 and leasehold land and buildings with a carrying amount of £995,032 were revalued at 31 March 2024 by Brown & Lee Commercial Surveyors LLP, independent valuers not connected with the company on the basis of market value. The valuation are in line with the 31 March 2024.
Freehold land and buildings and leasehold land and buildings are carried at valuation. If land and buildings were measured using the cost model, the carrying amounts would have been as follows:
Investment property comprises leasehold flats. The fair value of the investment property has been arrived at on the basis of a valuation carried out at 31 March 2024 by the directors. The valuation was made on an open market value basis by reference to market evidence of transaction prices for similar properties.
Details of associates at 31 March 2024 are as follows:
All the above associates are included in the consolidation.
The investments in associates are accounted on equity method.
Details of the investments in which the group and the parent company have an interest of 20% or more as at 31 March 2024 is as follows:
The company's investment in Bristol Laboratories Limited, UK is through direct ownership and all others are indirect ownership.
The direct subsidiary, Axcount Generika GmbH, Germany was sold on 07 October 2022 with a 100% loss of control.
The group has made an impairment allowance for expired goods amounting to £2,143,757 (2023 - £4,070,517 ).
The amount owned by related parties balance includes three loans amounting to £7,502,627 (2023 - £3,933,210 ) granted to companies related to the shareholders of Brill Pharma S.L. Spain. These loans bear an interest rate of 3% p.a. with an expiration date of 31 December 2030.
The bank loans and overdrafts include bank overdrafts obtained from Praetura Commercial Finance Limited are secured by way of fixed charge over all credit balances held. Included in bank overdrafts are amounts advanced in respect of sales discounting which is secured by way of fixed charge on book debts.
The bank loans and overdrafts include commercial property loan obtained from Investec (Channel Islands) Limited are secured by way of fixed charge over the property or the undertaking of the company. The loans are repayable over 60 months with an interest of 3.90% per annum.
Obligations under finance lease includes the three sale and lease back facilities obtained from The Praetura Asset Finance Limited over 60 months with equal monthly capital repayments. This finance lease was obtained on 19 May 2022.
Other borrowings include £815,890 (2023 - £815,890) loan from the Company's Pension Scheme for 5 years bearing interest at an annual rate of 4% and £613,887 (2023: Nil) loan from BRL Holdings Ltd.
Other creditors include £5,909,148 (2023 - £3,909,148) loan from the director Mr T Ramachandran and which is unsecured, repayable on demand and is non-interest bearing.
Amounts due to group undertakings are unsecured, interest free, have no fixed date of repayment and are repayable on demand.
The bank loans and overdrafts include commercial property loan obtained from Investec (Channel Islands) Limited are secured by way of fixed charge over the property or the undertaking of the company. The loans are repayable over 60 months with an interest of 3.90% per annum.
The bank overdrafts obtained from Praetura Commercial Finance Limited are secured by way of fixed charge over all credit balances held. Included in bank overdrafts are amounts advanced in respect of sales discounting which is secured by way of fixed charge on book debts. These loans are over 36 months with equal monthly capital repayments with interest. The interest charged at 2.95% over the Bank of England base rate. This loan was obtained on 19 May 2022.
Other loans include £815,890 (2023 - £815,890) loan from the Company's Pension Scheme for 5 years bearing interest at an annual rate of 4%.
Other borrowings include a loan of £613,887 (2023 - £ Nil) from BRL Holding Ltd.
The banks loans amounting to £236,903 (2023 - £244,006 ) and £ 1,479,372 (2023: Nil) obtained by Brill Pharma S.L. Spain from Santander Bank and Sabadell Bank respectively.
The bank loans are secured by way of fixed and floating charges which covers all the property or undertaking of the company.
Other loans includes a loan granted to Brill Pharma S.L. Spain by a public organisation destined to finance a research project. The interest rate of this loan is subsidised and is at zero rate. The loan has a 3 years grace period before the repayment commences and will be repaid over 7 years through equal instalments commencing from 2022 to 2029. The loan outstanding at the reporting period is £139,974 (2023 - £172,365 ).
Finance lease payments represent rentals payable by the company or group for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 5 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
The deferred tax asset set out above is expected to reverse within 24 months and relates to the utilisation of accelerated capital allowances against future expected profits of the same period.
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
At the balance sheet date the total amount payable to the pension fund amounted to £87,631 (2023 - £67,315), which is included in current liabilities under other creditors.
There is single class of ordinary shares. There are no restrictions on the distribution of dividends and the repayment of capital.
Share premium reserve - This reserve records the amount above the nominal value received for shares sold or issued , less transaction costs.
This reserve relates to the cumulative profit and loss less amounts distributed to shareholders.
Except for the following, the group did not have any other financial commitments, guarantees or contingent liabilities at year end other than those disclosed.
The component Bristol Laboratories Limited, UK has bank guarantees, bonds and indemnities of £40,000 (2023 - £40,000).
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
During the year the group recognised lease rentals amounting to £878,989 (2023 - £923,829) as expense.
The group did not have any other capital commitments, guarantees or contingent liabilities at year end other than those disclosed under contingencies.
There were no events or transactions occurred after the reporting date except the below that require adjustment or disclosure in the financial statements.
On 10 June 2024, Bristol Laboratories Ltd partially divested its investment in Brillpharma S.L. by disposing of a 29% equity stake for £6.7m, reducing its controlling interest from 70% to 49%, which would result in a reclassification from a subsidiary to an associate.
The following amounts were outstanding at the reporting end date:
The following amounts were outstanding at the reporting end date:
Brillpharma Private Limited has paid rent of £48,405 (2023: £47,280 ) to Mr T Ramachandran a director of the company.
Bristol Laboratories Limited owes £5,909,148 (2023: £3,909,148) to the director Mr T Ramachandran which is repayable on demand and is non-interest bearing. This is included in other current payables.