Company registration number 11031998 (England and Wales)
EPISTEM LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
PAGES FOR FILING WITH REGISTRAR
EPISTEM LIMITED
CONTENTS
Page
Balance sheet
1
Notes to the financial statements
2 - 10
EPISTEM LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2022
31 December 2022
- 1 -
2022
2021
Notes
£
£
£
£
Fixed assets
Intangible assets
3
14,861
23,729
Tangible assets
4
141,506
286,502
156,367
310,231
Current assets
Stocks
12,904
157,387
Debtors
5
1,018,202
1,134,184
Cash at bank and in hand
714,031
1,511,077
1,745,137
2,802,648
Creditors: amounts falling due within one year
6
(844,356)
(1,869,707)
Net current assets
900,781
932,941
Total assets less current liabilities
1,057,148
1,243,172
Creditors: amounts falling due after more than one year
7
(3,200,482)
(3,131,760)
Provisions for liabilities
(71,680)
Net liabilities
(2,143,334)
(1,960,268)
Capital and reserves
Called up share capital
9
117
117
Share premium account
423,271
423,271
Profit and loss reserves
(2,566,722)
(2,383,656)
Total equity
(2,143,334)
(1,960,268)
The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.true
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements were approved by the board of directors and authorised for issue on 18 August 2023 and are signed on its behalf by:
Mr J A Fullerton-Batten
Director
Company Registration No. 11031998
EPISTEM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
- 2 -
1
Accounting policies
Company information
Epistem Limited is a private company limited by shares incorporated in England and Wales. The registered office is The Incubator Building, Grafton Street, Manchester, M13 9XX.
1.1
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 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
1.2
Going concern
The trueDirectors have prepared detailed profit and loss, cashflow and balance sheet projections displaying the company's ability to operate within the available financing facilities for the period of at least 12 months from the date of these accounts. In preparing these projections, the Directors have taken into consideration the inherent uncertainties and constraints in their assumptions, primarily those around revenue, and the timing of certain creditor payments.
The Loan Note Instrument held by the main funder was due for redemption in June 2023. Although no formal extension is yet in place, the Company has been assured by the Loan Note holder that they will agree to an extension of the redemption date, and continue to hold the Loan Notes on the same terms as currently within the Loan Note Instrument.
On this basis, at the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. The company has sufficient headroom within its facilities to continue trading for a period not less than 12 months from the date of approval,
Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
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.
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 entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.
EPISTEM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 3 -
1.4
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 6 years.
1.5
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Patents & licences
60 months straight line
Amortisation rates were deemed to be accurate, however subject to impairment testing at the year end it was deemed appropriate to write down the remaining value of goodwill to nil.
1.6
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Plant and equipment
25% straight line
Fixtures and fittings
25% straight line
Computers
25% straight line
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 credited or charged to profit or loss.
1.7
Stocks
Stocks are stated at the lower of cost, which comprises direct materials and estimated selling price less costs to complete and sell.
1.8
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks.
1.9
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.
EPISTEM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 4 -
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. Financial assets classified as receivable within one year are not amortised.
Basic financial liabilities
Basic financial liabilities, including creditors, and bank loans, 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.
1.10
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
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 profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
EPISTEM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 5 -
1.11
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of 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.
1.12
Leases
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 balance sheet 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 leases asset are consumed.
1.13
Foreign exchange
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 profit or loss.
2
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2022
2021
Number
Number
Total
35
38
EPISTEM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 6 -
3
Intangible fixed assets
Goodwill
Other
Total
£
£
£
Cost
At 1 January 2022 and 31 December 2022
1,752,308
48,290
1,800,598
Amortisation and impairment
At 1 January 2022
1,752,308
24,561
1,776,869
Amortisation charged for the year
8,868
8,868
At 31 December 2022
1,752,308
33,429
1,785,737
Carrying amount
At 31 December 2022
14,861
14,861
At 31 December 2021
23,729
23,729
4
Tangible fixed assets
Plant and machinery etc
£
Cost
At 1 January 2022
923,039
Additions
38,642
At 31 December 2022
961,681
Depreciation and impairment
At 1 January 2022
636,537
Depreciation charged in the year
183,638
At 31 December 2022
820,175
Carrying amount
At 31 December 2022
141,506
At 31 December 2021
286,502
EPISTEM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 7 -
5
Debtors
2022
2021
Amounts falling due within one year:
£
£
Trade debtors
291,807
839,742
Corporation tax recoverable
194,233
123,900
Other debtors
46,106
19,528
Prepayments and accrued income
486,056
151,014
1,018,202
1,134,184
6
Creditors: amounts falling due within one year
2022
2021
£
£
Obligations under finance leases
51,169
100,085
Trade creditors
172,196
404,037
Taxation and social security
32,908
116,873
Other creditors
141,573
168,437
Accruals and deferred income
446,510
1,080,275
844,356
1,869,707
Obligations under finance leases are secured on the assets to which they relate.
Included within other creditors is £130,000 (2021: £111,589) which is secured by a fixed and floating charge over the company's assets.
7
Creditors: amounts falling due after more than one year
2022
2021
Notes
£
£
Obligations under finance leases
13,316
64,486
Other creditors
3,187,166
3,067,274
3,200,482
3,131,760
The aggregate of secured creditors under finance leases are secured on the assets to which they relate.
The other creditors of £3,187,166 (2021: £3,067,274) are secured by way of a fixed and floating charge covering all property and undertaking of the company.
EPISTEM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 8 -
8
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2022
2021
Balances:
£
£
Fixed asset timing differences
-
86,208
Short term timing differences - trading
-
(14,569)
Adjustment to prior period
-
41
-
71,680
2022
Movements in the year:
£
Liability at 1 January 2022
71,680
Credit to profit or loss
(71,680)
Liability at 31 December 2022
-
EPISTEM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 9 -
9
Called up share capital
2022
2021
2022
2021
Ordinary share capital
Number
Number
£
£
6667 Ordinary A Shares of 1p each
6,667
6,667
67
67
1703 Ordinary B1 Shares of 1p each
1,703
1,703
17
17
834 Ordinary B2 shares of 2p each
834
834
17
17
852 Ordinary C shares of 1p each
852
852
9
9
666 Ordinary D shares of 1p each
666
666
7
7
10,722
10,722
117
117
The Directors consider there to be no difference between par value and fair value.
EPISTEM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 10 -
10
Audit report information
As the income statement has been omitted from the filing copy of the financial statements, the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006:
The auditor's report was unqualified.
Senior Statutory Auditor:
Alexander Kelly
Statutory Auditor:
MHA Moore and Smalley
11
Related party transactions
On 8 June 2018, the company entered into a loan agreement with Foresight Regional Investment LP, a shareholder. The principal amount of £1,800,000 was used to fund the acquisition of specific trading activities from Genedrive plc. The loan bears an annual interest charge of 10% and was repayable on 6 June 2023. At the period end the interest accrued of £981,749 (2021: £728,863) and the principal amount of £1,800,000 (2021: £1,800,000) was included within other borrowings falling due after more than one year.
During a previous period, the company entered into loan agreements with two directors. The loans bear an annual interest charge of 1%. During the year the accounts accrued interest of £195. At the balance sheet date the company was owed £19,705 (2021: £19,509). There were no repayments in the year, and no amounts were waived or written off. This is included within other debtors due in less than one year.
2022-12-312022-01-01false18 August 2023CCH SoftwareCCH Accounts Production 2023.200No description of principal activityThis audit opinion is unqualifiedMr J A Fullerton-BattenDr N W AshDr C BoothMr M W PomroyMr B J ReedMs J A TudorMr A J Edwards110319982022-01-012022-12-31110319982022-12-31110319982021-12-3111031998core:NetGoodwill2022-12-3111031998core:IntangibleAssetsOtherThanGoodwill2022-12-3111031998core:NetGoodwill2021-12-3111031998core:IntangibleAssetsOtherThanGoodwill2021-12-3111031998core:OtherPropertyPlantEquipment2022-12-3111031998core:OtherPropertyPlantEquipment2021-12-3111031998core:CurrentFinancialInstrumentscore:WithinOneYear2022-12-3111031998core:CurrentFinancialInstrumentscore:WithinOneYear2021-12-3111031998core:Non-currentFinancialInstrumentscore:AfterOneYear2022-12-3111031998core:Non-currentFinancialInstrumentscore:AfterOneYear2021-12-3111031998core:CurrentFinancialInstruments2022-12-3111031998core:CurrentFinancialInstruments2021-12-3111031998core:Non-currentFinancialInstruments2022-12-3111031998core:Non-currentFinancialInstruments2021-12-3111031998core:ShareCapital2022-12-3111031998core:ShareCapital2021-12-3111031998core:SharePremium2022-12-3111031998core:SharePremium2021-12-3111031998core:RetainedEarningsAccumulatedLosses2022-12-3111031998core:RetainedEarningsAccumulatedLosses2021-12-3111031998core:ShareCapitalOrdinaryShares2022-12-3111031998core:ShareCapitalOrdinaryShares2021-12-3111031998bus:Director12022-01-012022-12-3111031998core:Goodwill2022-01-012022-12-3111031998core:IntangibleAssetsOtherThanGoodwill2022-01-012022-12-3111031998core:PatentsTrademarksLicencesConcessionsSimilar2022-01-012022-12-3111031998core:PlantMachinery2022-01-012022-12-3111031998core:FurnitureFittings2022-01-012022-12-3111031998core:ComputerEquipment2022-01-012022-12-31110319982021-01-012021-12-3111031998core:NetGoodwill2021-12-3111031998core:IntangibleAssetsOtherThanGoodwill2021-12-31110319982021-12-3111031998core:NetGoodwill2022-01-012022-12-3111031998core:OtherPropertyPlantEquipment2021-12-3111031998core:OtherPropertyPlantEquipment2022-01-012022-12-3111031998core:Non-currentFinancialInstruments12022-12-3111031998core:Non-currentFinancialInstruments12021-12-3111031998bus:PrivateLimitedCompanyLtd2022-01-012022-12-3111031998bus:SmallCompaniesRegimeForAccounts2022-01-012022-12-3111031998bus:FRS1022022-01-012022-12-3111031998bus:Audited2022-01-012022-12-3111031998bus:Director22022-01-012022-12-3111031998bus:Director32022-01-012022-12-3111031998bus:Director42022-01-012022-12-3111031998bus:Director52022-01-012022-12-3111031998bus:Director62022-01-012022-12-3111031998bus:Director72022-01-012022-12-3111031998bus:FullAccounts2022-01-012022-12-31xbrli:purexbrli:sharesiso4217:GBP