LIVERPOOL_SCIENCE_PARK_LI - Accounts

P B Vickerman

C T Costello (Appointed 1 February 2021)

Liverpool Science Park

131 Mount Pleasant

Liverpool

United Kingdom

L3 5TF

Statutory Auditor 4 Brindley Place Birmingham

United Kingdom

B1 2HZ

1

The principal objectives of the company are;

-

to promote the development of Liverpool Science Park

-

to encourage and support the development of new and growing businesses in the fields of science and knowledge-based technologies

Liverpool Science Park comprises three buildings; IC1, IC2 and IC3. On 13 May 2020 the existing shareholders exchanged their membership in the company for shares in Sciontec Development Limited (Sciontec), at which time Sciontec became the sole member of Liverpool Science Park Limited. At the same time additional shares were issued in Sciontec to allow for investment by Bruntwood SciTech.

Bruntwood SciTech is the UK's leading property provider dedicated to driving the growth of the science and technology sector. Working alongside the existing partners from Liverpool's Knowledge Quarter Innovation District (KQ Liverpool) Bruntwood's investment will ensure that the company continues to play its part in the rapidly growing life science, digital tech and creative cluster in the Liverpool City Region.

The result for the 12-month period was an operating profit of £237k (compared to £345k for the 18 months to September 2020). A 3% pro rata increase in profitability despite the impacts of the Pandemic. The company made a profit before tax of £92,227 (2020: £141,542).

Profitability was largely increased due to continually improving occupancy and reduced administrative costs. Debt collection remained strong despite the economic challenges arising from the coronavirus pandemic. Occupancy at the end of the period was 92% (2020: 90%).

The company took action to limit costs during the pandemic and its performance demonstrates the strength and resilience of its customers (tenants) in the science, health, education and technology sectors.

The Balance Sheet shows a net current liability position of £465k. This is primarily made up of deferred rental income and is common for property investment companies. The company has a healthy cash balance and access to additional funding if required.

In line with Liverpool Science Park's ongoing commitment to reinvest in its portfolio a £1m refurbishment programme commenced in October 2020 and with the first phase, the new main entrance, external lighting, CCTV upgrades and IC1 main stairwell, completed in June 2021. Further modernisation is planned in 2021/22, including the IC1 toilets and showers.

The Directors have obtained confirmation from the related parties that they do not intend to demand payment of the loans, over and above those amounts scheduled for the period, in the twelve-month period from the date of signature of these financial statements and will provide support to enable the company to meet its commitments as they fall due.

The directors have considered the ability and intent of the related parties to provide this support and are satisfied that this will remain available.

2

The Directors therefore consider it appropriate to prepare the financial statements on a going concern basis.

The directors, who served throughout the year except as noted, were as follows:

P B Vickerman

Other changes in directors holding office are as follows:

C T Costello - appointed 1 February 2021

P A Crowther - appointed 1 February 2021

P A Kemp – resigned 1 February 2021

Each of the directors at the date of approval of this report confirms that:

(i)

so far as the director is aware, there is no relevant audit information of which the company's auditor is unaware; and

(ii)

This report has been prepared in accordance with the provisions of Part 15 of the Companies Act 2006 relating to small companies.

M A Power - Director

Date:

3

-

select suitable accounting policies and then apply them consistently;

-

make judgements and accounting estimates that are reasonable and prudent; and

-

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

4

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

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

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

The other information comprises the information included in the directors' report, other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the directors' 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.

5

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.

We considered the nature of the company's industry and its control environment, and reviewed the company's documentation of their policies and procedures relating to fraud and compliance with laws and regulations. We also enquired of management and those charged with governance about their own identification and assessment of the risks of irregularities.

We obtained an understanding of the legal and regulatory framework that the company operates in, and identified the key laws and regulations that:

- had a direct effect on the determination of material amounts and disclosures in the financial statements. These included UK Companies Act, Money Laundering regulations, Health and Safety at work legislation, Data Protection Act, pensions legislation, tax legislation and Bribery Act; and

- do not have a direct effect on the financial statements but compliance with which may be fundamental to the company's ability to operate or to avoid a material penalty.

We discussed among the audit engagement team including relevant internal specialists such as tax, and IT regarding the opportunities and incentives that may exist within the organisation for fraud and how and where fraud might occur in the financial statements.

As a result of performing the above, we identified the greatest potential for fraud in the following areas, and our specific procedures performed to address them are prescribed below:

- In addressing this risk, we performed procedures including understanding and testing on the design and implementation of relevant controls in revenue, substantive testing on a sample of transactions to supporting evidence and review of manual journal entries to revenue.

In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override. In addressing the risk of fraud through management override of controls, we tested the appropriateness of journal entries and other adjustments; assessed whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluated the business rationale of any significant transactions that are unusual or outside the normal course of business.

In addition to the above, our procedures to respond to the risks identified included the following:

- reviewing financial statement disclosures by testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;

- performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;

- enquiring of management concerning actual and potential litigation and claims, and instances of non-compliance with laws and regulations; and

6

- reading minutes of meetings of those charged with governance.

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

-

the information given in the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-

the directors' report has been prepared in accordance with applicable legal requirements.

Under the Companies Act 2006 we are required to report in respect of the following matters if, in our opinion:

-

adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

-

the financial statements are not in agreement with the accounting records and returns; or

-

certain disclosures of directors' remuneration specified by law are not made; or

-

we have not received all the information and explanations we require for our audit; or

-

the directors were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemptions in preparing the directors' report and from the requirement to prepare a strategic report.

We have nothing to report in respect of these matters.

Jonathan Dodworth (Senior Statutory Auditor) for and on behalf of Deloitte LLP

Statutory Auditor Birmingham

United Kingdom

7

Administrative expenses

Interest payable and similar expenses

Tax on profit

Retained losses at beginning of year/period

The notes form part of these financial statements

8

Intangible assets

Tangible assets

Investments

Debtors

Cash at bank

Retained losses

The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.

The financial statements of company number 04798049 were approved by the Board of Directors and authorised for issue on and were signed on its behalf by:

M A Power - Director

The notes form part of these financial statements

9

1.

10

Website development costs

4 years

Equipment, including computers and software with a minimum value of £2k and fixtures and fittings with a minimum value of £1k, is capitalised at cost and depreciated over 4 years.

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.

Interests in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

Interests in subsidiaries are assessed for impairment at each reporting date. Any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

Grants for capital expenditure are credited to a deferred income account and are released to the profit and loss on a systematic basis over the expected life of the asset.

Interest directly attributable to the construction of tangible fixed assets, incurred up to the time that identifiable major capital projects are ready for service is capitalised as part of the cost of the assets.

11

1.

i.

Debt instruments that comply with all of the condition of paragraph 11.9 of FRS 102 are classified as ‘basic'. For debt instruments that do not meet the conditions of FRS 102.11.9, the company considers whether the debt instrument is consistent with the principle in paragraph 11.9A of FRS 102 in order to determine whether it can be classified as basic. Instruments classified as ‘basic' financial instruments are measured subsequently at amortised cost using the effective interest method. Debt instruments that have no stated interest rate (and do not constitute financing transaction) and are classified as payable or receivable within one year are initially measured at an undiscounted amount of the cash or other consideration expected to be paid or received, net of impairment.

Other debt instruments not meeting conditions of being ‘basic' financial instruments are measured at fair value through profit or loss.

Commitments to make and receive loans which meet the conditions mentioned above are measured at cost (which may be nil) less impairment.

Financial assets are derecognised when and only when a) the contractual rights to the cash flows from the financial asset expire or are settled, b) the Company transfers to another party substantially all of the risks and rewards of ownership of the financial asset, or c) the Company, despite having retained some, but not all, significant risks and rewards of ownership, has transferred control of the asset to another party.

Financial liabilities are derecognised only when the obligation specified in the contract is discharged, cancelled or expires.

12

1.

Current UK corporation tax is provided at amounts expected to be paid using the tax rates and laws that have been enacted or substantively enacted by the statement of financial position date.

Current tax assets and liabilities are offset only when there is a legally enforceable right to set off the amounts and the Company intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.

For defined contribution schemes the amount charged to the profit and loss account in respect of pension costs and other retirement benefits is the contributions payable in the year. Differences between contributions payable in the year and contributions actually paid are shown as either accruals or prepayments in the balance sheet.

i.

The entity as lessee - operating leases

Rentals applicable to operating leases where substantially all of the benefits and risks of ownership remain with the lessor are charged against profits on a straight-line basis over the period of the lease.

ii.

The Directors do not consider there to be any critical accounting judgements or sources of estimation.

13

2.

Rental income

Other income

3.

Salaries

Pension costs

Social security costs

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

Average administrative staff

None of the directors have received any emoluments during the period for services to the company (2020: £nil). During the year or prior period, there were no out of pocket expenses reimbursed to the directors.

14

4.

The operating profit is stated after charging/(crediting):

Depreciation on owned assets

Amortisation

Operating lease costs - Land and buildings

Auditor's remuneration

5.

Interest on loan from Liverpool John Moores University

Sciontec Developments Limited

Interest on loan from Liverpool City Council

6.

The tax charge on the profit for the period was as follows:

Deferred tax:

Timing differences, origination and reversal

Effect of change in tax rate

Total deferred tax

Tax on profit

UK corporation tax has been charged at 19% (2020: 19%).

15

6.

Profit before tax

            141,542

Profit multiplied by the standard rate of corporation tax in the UK of 19%

(2020 - 19%)

Effects of:

Income not taxable for tax purposes

Fixed asset differences

Impact of rate change on deferred tax

Impact of rate change on deferred tax in respect of prior periods

Total tax charge

16

7.

At 1 October 2020

Additions

At 30 September 2021

At 1 October 2020

Amortisation for period

At 30 September 2021

At 30 September 2021

           2,517

At 30 September 2020

8.

At 1 October 2020

Additions

At 30 September 2021

At 1 October 2020

Charge for period

At 30 September 2021

At 30 September 2021

At 30 September 2020

17

8.

An external valuation of the company's buildings obtained by management in May 2019 reported the value at £13.3m. This was significantly below the carrying value in the accounts of £17.8m (2020: £17.5m).

However the valuation did not take into account the public benefit aspect of the company and only looks at the commercial value of the property using rental yields.

The buildings were not deemed to be impaired because they were not designed to generate large profits, their contribution is based upon the wider impact on the Liverpool Knowledge Quarter.

9.

The company's investments at the Statement of Financial Position date in the share capital of companies include the following:

Liverpool Science Park Development Limited Registered office: 131 Mount Pleasant, Liverpool, L3 5TF Nature of business: Dormant

%

Class of shares:

holding

Ordinary shares

100.00

10.

Trade debtors

Amounts owed by participating interests

Accrued income

Other debtors and prepayments

Amounts owed by group undertakings are unsecured, interest free and repayable on demand.

11.

Trade creditors

Amounts owed to related parties

Loans from related parties

Accruals and deferred income

VAT

Other creditors

18

11.

12.

Amounts owed to related parties

Deferred capital grant

13.

Within one year

Between one and five years

In more than five years (Superior Landlord Archdiocese of Liverpool)

14.

Deferred tax

Capital allowances in excess of depreciation                                                                                  192,134

19

14.

Balance at 1 October 2020

Charge to Statement of Income and Retained Earnings during period                                                                          94,401

Balance at 30 September 2021                                                                                                                                       192,134

15.

The company had capital commitments of £nil at 30 September 2021 (2020: £50k).

16.

    Liverpool City Council Interest

Liverpool Business Rates

University of Liverpool Rental Income

Liverpool John Moores University Interest

Liverpool John Moores University Rental Income

The following amounts were outstanding in relation to related parties at the reporting date:

Liverpool City Council Loan

University of Liverpool Loan

Sciontec Developments Limited

Liverpool John Moores University Loans

Liverpool John Moores University Interest

Liverpool University Rental Income

20

16.

Liverpool City Council Loan

University of Liverpool Loan

Sciontec Developments Limited

Liverpool John Moores University Loans

Liverpool John Moores University Interest

Liverpool University Rental Income

17.

21