Company registration number 13682296 (England and Wales)
INSPIRIT PADDINGTON BIDCO LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
INSPIRIT PADDINGTON BIDCO LIMITED
COMPANY INFORMATION
Directors
Mr. A Farrant
Mr W Stamp
Company number
13682296
Registered office
2 Babmaes Street
London
SW1Y 6HD
Auditor
Azets Audit Services
Fleet House
New Road
Lancaster
United Kingdom
LA1 1EZ
INSPIRIT PADDINGTON BIDCO LIMITED
CONTENTS
Page
Strategic report
1 - 4
Directors' report
5 - 6
Independent auditor's report
7 - 9
Statement of comprehensive income
10
Balance sheet
11
Statement of changes in equity
12
Notes to the financial statements
13 - 19
INSPIRIT PADDINGTON BIDCO LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

The directors present the strategic report for the year ended 31 December 2023.

 

Inspirit Paddington Bidco is the parent company of Pelta Medical Papers Ltd and therefore asseses its performance based on the results and performance of Pelta Medical Papers Ltd which was acquired on 31 October 2021. Whilst the comparative period in these accounts covers the 14.5 month period ended 31 December 2022 the strategic report below has used Pelta Medical Papers comparative performance indicators for the period from 1 January 2022 to 31 December 2022. This is to ensure figures are comparable.

Principal activity and review of the business

Pelta Medical Papers Ltd is a manufacturer of sterile barrier papers used for the packaging of both re-usable and single-use medical devices. Production is carried out at the specialised paper mill situated in Milnthorpe, UK, and products are sold globally to customers in 48 countries (2022: 48). Surplus capacity is used to manufacture grease resistant paper for quick service restaurants.

During 2023, the business continued the implementation of a focused business strategy towards the medical packaging market, which resulted in the Sales mix of medical versus non-medical grade paper growing by 3% to 66% of total volume.

The strategy will see Pelta Medical Papers Ltd transform into a focused partner to the medical packaging industry; with continued investment to upgrade the manufacturing facility to medical standards and to add enhanced quality capability; through development and expansion of the medical products portfolio; and achieve an industry leading position in the business’ Environmental, Social, Governance (ESG) position.

Overview

The company’s key financial and other performance indicators during the year were as follows;

            

2023

2022

% Change

Total Revenue (£’000)        

45,421

58,108

-21.8%

Trading EBITDA     (£’000)    

-2,598

1,263

-305.7%

Trading EBITDA     margin    

-5.7%

2.2%

-7.4 points

Sales Tonnes

24,932

35,518

-29.8%

Production Tonnes

24,895

34,196

-27.2%

 

INSPIRIT PADDINGTON BIDCO LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Principal risks and uncertainties

Following on from the challenges of the European energy cost crisis, the business entered into a hedged position at the end of 2022 to protect it from volatile swings in the wholesale market through 2023. As a result, the business was unable to access favourable market rates in 2023 as prices fell. Energy costs remained a significant proportion of variable costs in 2023 and despite an overall reduction in total cost (£14,421k in prior year, down 14.5% to £12,327 in 2023), the cost per tonne increased 18.5% to £493/t (from £416/t in prior year). The difference between the price of forward bought energy versus open market prices in 2023 was £3,995k, which would have resulted in a positive Trading EBITDA of £1,632k.

A further challenge to the business was global de-stocking, which saw a dramatic fall in demand from Q2 through Q4 in all subsegments. Both sales and production tonnes saw significant reductions year on year, with revenue falling 21.8% to £45,421k from prior year (£58,108k).

Despite the market backdrop during 2023 the business made good progress with the implementation of various strategic initiatives. With the enriched medical Sales mix resulting in an overall improvement in average selling price (ASP) from prior year to partly offset the energy cost hedge; and achievement of Ecovadis Silver ESG certification.

Innovation and business development remained firmly in focus as a new high-added value product was launched to address an opportunity identified in North America, and the continued market interest in usage of high-end reinforced medical papers created a strong pipeline of projects that are now in validation phase.

During 2023 a strategic reorganisation of the Management Board team was undertaken to accelerate the business transformation and growth in the target markets.

Given the positive trading performance once adjustment is made for the hedged energy position, which is a realised position from Q2 2024 onwards; and also following a recovery in market demand, with January and February 2024 sales circa 25% up on the latter months of 2023.

Investments and capital employed

Net fixed asset additions in 2023 amounted to £1,101k (2022: £1,644k). Major projects totalled £1,048k, with major investments in upgrading the mill to bring it inline with medical production requirements. Minor projects totalled £53k.

Depreciation charged in the year was £778k (2022: £860k) and capital employed (total assets less current liabilities) as at 31st December 2023 totalled £8.6m (2022: £12.4m).

INSPIRIT PADDINGTON BIDCO LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
Significant risks and uncertainties

Pelta Medical Papers Ltd is affected by the general economic climate, changes in exchange rates and other factors that are more specific to the company. Pelta Medical Papers Ltd endeavours to minimise risk through preventive measures. Wherever possible, risk is hedged or insured against. The following describes the factors that are significant in assessing Pelta Medical Papers Ltd’s operating risk and financial risk.

Operating risks

Description of Risks

Risk Management

Variations in market prices and volumes

for products

The customer base is subject to change. Customer agreements are made with consideration and respect of pricing, volumes, payment, stock terms and conditions. These are typically re-negotiated regularly on a three-six month basis. Major customers are incentivised through

retrospective bonus agreements.

Customer dependence and credit risk

 

Customers range from being large international, listed packaging groups through to privately-owned SMEs. Typically carrying out conversion of paper into bags and wrappings. Customer agreements and relations go back many years. Credit terms vary with market and product and credit is insured and managed by the Finance Team.

Fibre price risk

 

Pulp supply agreements are negotiated and secured with suppliers through a pooled purchasing association.

Energy price risk

 

A purchasing strategy is in place to mitigate the risk of market price increases by arranging forward contracts.

Environmental impact

Permits are obtained from The Environment Agency to regulate and minimise environmental impact. Key staff are trained in environmental issues to ensure the impact is managed.

Seasonal variations

 

Pelta Medical Paper Ltd is relatively unaffected by seasonality. Orders remain constant throughout the year, with the only impact being a 2 week shutdown of production in Summer, and reduced sales volumes prior to Christmas.

Financial risks

Description of Risks

Risk Management

Currency risk - transaction exposure

All currency transactions are made at spot rate. Where possible we ensure that receipts in currency are utilised to pay suppliers in the same currency. Currency exposure is restricted by trading in Euros, GBPs and US Dollars.

INSPIRIT PADDINGTON BIDCO LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
Other information and explanations

The Directors of the Company must act in accordance with a set of personal duties. These duties are detailed in s172 of the UK Companies Act 2006 summarised as follows:

 

A director of a company must act in the way he considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to:

 

 

In particular Pelta Medical Papers Ltd's Directors ensure:

 

On behalf of the board

Mr. A Farrant
Director
12 March 2025
INSPIRIT PADDINGTON BIDCO LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 5 -

The directors present their annual report and financial statements for the year ended 31 December 2023.

Principal activities

The principal activity of the company is that of a holding company.

Results and dividends

The results for the year are set out on page 10.

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

Mr. A Farrant
Mr W Stamp
Statement of directors' responsibilities

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

 

 

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

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

INSPIRIT PADDINGTON BIDCO LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 6 -
On behalf of the board
Mr. A Farrant
Director
12 March 2025
INSPIRIT PADDINGTON BIDCO LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF INSPIRIT PADDINGTON BIDCO LIMITED
- 7 -
Opinion

We have audited the financial statements of Inspirit Paddington Bidco Limited (the 'company') for the year ended 31 December 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

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

Emphasis of matter - financial statements prepared on a basis other than going concern

We draw attention to note 1.3 in the financial statements which explain that the company's trading subsidiary entered administration in December 2024. Therefore, the directors do not consider it to be appropriate to adopt the going concern basis of accounting. Accordingly, the financial statements have been prepared on a basis other than going concern as described in Note 1.3. Our opinion is not modified in respect of this matter.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's 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.

Opinions on other matters prescribed by the Companies Act 2006

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

INSPIRIT PADDINGTON BIDCO LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF INSPIRIT PADDINGTON BIDCO LIMITED
- 8 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

 

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

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

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.

INSPIRIT PADDINGTON BIDCO LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF INSPIRIT PADDINGTON BIDCO LIMITED
- 9 -

Extent to which 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 and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.

 

We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework.  Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.  This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.

 

In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:

 

 

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation.  This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance.  The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

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.

Susanna Cassey
Senior Statutory Auditor
For and on behalf of Azets Audit Services
12 March 2025
Chartered Accountants
Statutory Auditor
Fleet House
New Road
Lancaster
United Kingdom
LA1 1EZ
INSPIRIT PADDINGTON BIDCO LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
Year
Period
ended
ended
31 December
31 December
2023
2022
Notes
£
£
Administrative expenses
(65,318)
-
0
Fair value gain on financial derivatives
5
-
260,000
Impairment of investments in subsidiaries
(2,062,675)
-
0
(Loss)/profit before taxation
(2,127,993)
260,000
Tax on (loss)/profit
-
0
-
0
(Loss)/profit for the financial year
(2,127,993)
260,000
INSPIRIT PADDINGTON BIDCO LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 11 -
2023
2022
Notes
£
£
£
£
Fixed assets
Investments
7
-
0
2,062,675
Current assets
-
-
Creditors: amounts falling due within one year
10
(1,867,013)
(601,695)
Net current liabilities
(1,867,013)
(601,695)
Total assets less current liabilities
(1,867,013)
1,460,980
Creditors: amounts falling due after more than one year
-
0
(1,200,000)
Net (liabilities)/assets
(1,867,013)
260,980
Capital and reserves
Called up share capital
11
980
980
Profit and loss reserves
(1,867,993)
260,000
Total equity
(1,867,013)
260,980
The financial statements were approved by the board of directors and authorised for issue on 12 March 2025 and are signed on its behalf by:
Mr. A Farrant
Director
Company Registration No. 13682296
INSPIRIT PADDINGTON BIDCO LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 15 October 2021
-
0
-
0
-
Period ended 31 December 2022:
Profit and total comprehensive income for the period
-
260,000
260,000
Issue of share capital
11
980
-
980
Balance at 31 December 2022
980
260,000
260,980
Year ended 31 December 2023:
Loss and total comprehensive income for the year
-
(2,127,993)
(2,127,993)
Balance at 31 December 2023
980
(1,867,993)
(1,867,013)
INSPIRIT PADDINGTON BIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 13 -
1
Accounting policies
Company information

Inspirit Paddington Bidco Limited is a private company limited by shares incorporated in England and Wales. The registered office is 2 Babmaes Street, London, Englan, SW1Y 6HD.

1.1
Reporting period

The comparative period covers from incorporation on 15 October 2021 to 31 December 2022. Therefore, the comparative amounts are not entirely comparable.

1.2
Accounting convention

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 certain financial instruments at fair value. The principal accounting policies adopted are set out below.

This 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:

 

 

The financial statements of the company are consolidated in the financial statements of Inspirit Paddington Topco Limited. These consolidated financial statements are available from its registered office, 2 Babmaes Street, London, United Kingdom, SW16 6HD.

The company has taken advantage of the exemption under section 400 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.

 

The financial statements of the company are consolidated in the financial statements of Inspirit Paddington Topco Ltd. The consolidated financial statements for this group are available from the registered office, 2 Babmaes Street, London, United Kingdom, SW16 6HD.

1.3
Going concern

Following the administration of the company's trading subsidiary (Pelta Medical Papers Ltd) in December 2024 the expectation of Directors is that the company will be liquidated in the foreseeable future. As a result, the financial statements have been prepared on a basis other than that of a going concern which includes, where appropriate, writing down the company’s assets to net realisable value. The financial statements do not include any provision for the future costs of terminating the business of the company except to the extent that such costs were committed at the balance sheet date. As a result of preparing the accounts on this basis the company's investment in subsidiaries has been written down to £Nil resulting in an impairment loss of £2,062,675.true

INSPIRIT PADDINGTON BIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
1.4
Fixed asset investments

Interests in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

1.5
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.6
Financial instruments

The company 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 company's balance sheet when the company becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset, with 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

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.

Impairment of financial assets

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.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company 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.

INSPIRIT PADDINGTON BIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
Classification of financial liabilities

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 company after deducting all of its liabilities.

Basic financial 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.

Other financial liabilities

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.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.7
Equity instruments

Equity instruments issued by the company 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 company.

INSPIRIT PADDINGTON BIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 16 -
2
Judgements and key sources of estimation uncertainty

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised 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.

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Fair value of financial derivatives

On completion of the acquisition of Pelta Medical Papers Ltd the company received a vendor loan of £1.5m. Repayments due on this loan were contingent on the trading performance of the subsidiary, the loan was therefore classified as a non-basic financial liability held at fair value through profit and loss.

 

On 8 February 2023 it was agreed that the vendor loan would be settled for £1.2m. As a result of the loan being settled with a third party within close proximity of the period end it was deemed appropriate to use this as the period end fair value for the period ended 31 December 2022. The resulting gain of £260k was recognised in the profit and loss account in the period ended 31 December 2022.

 

As this loan has now been fully repaid there is no balance as at 31 December 2023.

3
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
3,500
5,000
4
Employees

The average monthly number of persons employed by the company during the year was:

2023
2022
Number
Number
Total
-
0
-
0
INSPIRIT PADDINGTON BIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
5
Amounts written off investments
2023
2022
£
£
Fair value gains/(losses) on financial instruments
Gain on financial liabilities held at fair value through profit or loss
-
0
260,000
Other gains/(losses)
Other gains and losses
(2,062,675)
-
(2,062,675)
260,000
Discontinued operations
(2,062,675)
-
-
260,000
6
Impairments

Impairment tests have been carried out where appropriate and the following impairment losses have been recognised in profit or loss:

2023
2022
Notes
£
£
In respect of:
Fixed asset investments
7
2,062,675
-
Recognised in:
Amounts written off investments
2,062,675
-

The impairment losses in respect of financial assets are recognised in other gains and losses in the profit and loss account.

7
Fixed asset investments
2023
2022
Notes
£
£
Investments in subsidiaries
8
-
0
2,062,675
INSPIRIT PADDINGTON BIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
7
Fixed asset investments
(Continued)
- 18 -
Movements in fixed asset investments
Shares in subsidiaries
£
Cost or valuation
At 1 January 2023 & 31 December 2023
2,062,675
Impairment
At 1 January 2023
-
Impairment losses
2,062,675
At 31 December 2023
2,062,675
Carrying amount
At 31 December 2023
-
At 31 December 2022
2,062,675
8
Subsidiaries

Details of the company's subsidiaries at 31 December 2023 are as follows:

Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Indirect
Pelta Medical Papers Germany GmbH
Germany
Ordinary
-
100.00
Pelta Trading (Shanghai) Co. Ltd
China
Ordinary
-
100.00
Pelta Medical Papers Ltd
UK
Ordinary
100.00
-
9
Financial instruments
2023
2022
£
£
Carrying amount of financial liabilities
Measured at fair value through profit or loss
- Other financial liabilities
-
1,200,000

On completion of the acquisition of Pelta Medical Papers Ltd the company received a vendor loan of £1.5m. Repayments due on this loan were contingent on the trading performance of the subsidiary, the loan was therefore classified as a non-basic financial liability held at fair value through profit and loss.

 

On 8 February 2023 the vendor loan was settled for £1.2m.

INSPIRIT PADDINGTON BIDCO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
10
Creditors: amounts falling due within one year
2023
2022
£
£
Amounts owed to group undertakings
1,813,725
601,695
Accruals and deferred income
53,288
-
0
1,867,013
601,695
11
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary A Shares of £1 each
850
850
850
850
Ordinary B Shares of £1 each
130
130
130
130
980
980
980
980
12
Financial commitments, guarantees and contingent liabilities

The company has entered an unlimited cross company guarantee to meet liabilities of Pelta Medical Papers Ltd in respect of Arbuthnot Latham & Co. Ltd. As at the balance sheet date the maximum potential liability under this arrangement amounted to £6,904,396 (2022: £6,038,800).

 

The company has entered an unlimited cross company guarantee to meet liabilities of Pelta Medical Papers Ltd in respect of Inspirit Paddington Topco Limited. As at the balance sheet date the maximum potential liability under this arrangement amounted to £1,945,426 (2022: £1,748,772).

13
Events after the reporting date

On 11 January 2024 the company issued 112 £1 A ordinary shares for consideration of £1,000,000.

 

Post year end the company has taken an additional loan of £1m.

 

Pelta Medical Papers Ltd entered administration in December 2024.

14
Related party transactions
2023
2022
Amounts due to related parties
£
£
Entities over which the entity has control, joint control or significant influence
1,813,725
601,695
15
Ultimate controlling party

The immediate parent undertaking is Inspirit Paddington Topco Ltd. The smallest and largest group in which the results of the company are consolidated is that headed by Inspirit Paddington Topco Ltd. The consolidated financial statements for this group are available from the registered office, 105 Piccadilly, London, United Kingdom, W1J 7NJ.

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