REGISTERED NUMBER: 09566234 (England and Wales) |
Group Strategic Report, Report of the Director and |
Audited Consolidated Financial Statements for the Year Ended 31 December 2022 |
for |
Tanner Pharma UK Limited |
REGISTERED NUMBER: 09566234 (England and Wales) |
Group Strategic Report, Report of the Director and |
Audited Consolidated Financial Statements for the Year Ended 31 December 2022 |
for |
Tanner Pharma UK Limited |
Tanner Pharma UK Limited (Registered number: 09566234) |
Contents of the Consolidated Financial Statements |
for the Year Ended 31 December 2022 |
Page |
Company Information | 1 |
Group Strategic Report | 2 |
Report of the Director | 4 |
Report of the Independent Auditors | 6 |
Consolidated Income Statement | 10 |
Consolidated Other Comprehensive Income | 11 |
Consolidated Balance Sheet | 12 |
Company Balance Sheet | 13 |
Consolidated Statement of Changes in Equity | 14 |
Company Statement of Changes in Equity | 15 |
Consolidated Cash Flow Statement | 16 |
Company Cash Flow Statement | 17 |
Notes to the Cash Flow Statements | 18 |
Notes to the Consolidated Financial Statements | 20 |
Tanner Pharma UK Limited |
Company Information |
for the Year Ended 31 December 2022 |
DIRECTOR: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
AUDITORS: |
Oakingham House |
Frederick Place |
High Wycombe |
Buckinghamshire |
HP11 1JU |
Tanner Pharma UK Limited (Registered number: 09566234) |
Group Strategic Report |
for the Year Ended 31 December 2022 |
The director presents his strategic report of the company and the group for the year ended 31 December 2022. |
REVIEW OF BUSINESS |
The Director aims to present a balanced and comprehensive review of the development and performance of the Group during the above referenced year and its position at the year end. The review is consistent with the size and nature of the Company and its subsidiaries and is written in the context of the opportunities, risks and uncertainties faced by the Group. Considered were the key performance indicators (i.e., these being turnover, profit margin and cash flow) that communicate the financial performance and strength of the Group as a whole. |
The Group's turnover has decreased from £468,489,000 in 2021 to £382,812,000 in 2022, or by 18%. This decrease was mainly a result of lower-volume contracts with the UK Health Security Agency (UKHSA), which is an executive agency of the Department of Health and Social Care (DHSC), as the Group supported the United Kingdom government's urgent response to the SARS-CoV-2 pandemic. |
Overall gross profit has decreased from £98,446,000 (21.0%) in 2021 to £83,320,000 (21.7%) in 2022 with the margins increasing slightly. Operating profit has decreased from £78,419,000 (16.7%) in 2021 to £67,697,000 (17.7%) in 2022. After taxation, £54,924,000 has been added to reserves. |
Total cash flow for 2022 was a decrease of £1,429,000. This was due to a decreased operating cash flow of £74,673,000. The Group maintains high cash balances, £13,985,000, at the year-end. Carrying a large cash balance in anticipation of future orders also helps the Group remain unaffected by occasional changes in the regular collection of receivables. |
Cash flow management remains a priority and the Group aims to maintain a strong positive cash balance. Cash flow management involves prompt invoicing of the Group's clients and agreeing and adhering to fair terms with all its suppliers. As for many businesses of the Group's size, the business environment in which we operate continues to be challenging. We continue to work hard for the Group's clients to ensure that the Group continues to maintain and grow its turnover. With these risks and uncertainties in mind, we are aware that any plans for the future development of the business may be subject to unforeseen events outside of the Group's control. |
PRINCIPAL RISKS AND UNCERTAINTIES |
The Group continues to pursue an effective corporate governance and risk management policy wherever possible. The Group maintains a strategy of strong cash flow and working capital management, which is reflected in its positive, net cash position. The principal risks to the business are loss of key accounts or decreased supply by primary suppliers. While acknowledging the uncommon opportunity provided to the Group by the UKHSA to support its response to the unprecedented SARS-Cov-2 pandemic, and the trust afforded to the Group by the product manufacturers it represented, it is expected that the budget allocated by the UKHSA to the pandemic response will continue to wane as the global pandemic is brought under control. In anticipation of a likely decline in turnover, the Group has a flexible, adaptable approach to its business and a stable basis of non-government business on which we rely. The Group is confident in its proven ability to respond quickly to its customers' and suppliers' needs, to communicate clearly and effectively with them, and to add value in both directions of the supply chain to improve the lives of those who receive the Group's healthcare products. |
Tanner Pharma UK Limited (Registered number: 09566234) |
Group Strategic Report |
for the Year Ended 31 December 2022 |
SECTION 172(1) STATEMENT |
The directors of the company are required under section 172 of the Companies Act 2006 ('s.172') to act in a way that promotes the success of the company for the benefit of its shareholders as a whole, whilst having regard to the following matters (amongst other things): the likely long term consequences; the interests of the company's employees; the business relationships with suppliers and customers; the impact on the community and the environment; reputation for high standards of business conduct; and acting fairly between shareholders. |
The governance framework adopted by the Tanner Pharma UK Limited has been applied by the company and its subsidiaries, Tannerlac UK Limited, Tanner Pharma IE Limited and Tanner Pharma CH GmbH, and the matters that the directors of the company are responsible for considering under s.172 have been considered to an appropriate extent by the Board in relation to both company and its subsidiaries. Further details of how the Board has considered the matters set out in s.172 (for the group and for the company) are set out in the Tanner Pharma UK Limited Annual Report and Accounts, which does not form part of this report. During the year, the directors have also considered, both individually and together, relevant matters where appropriate. |
ON BEHALF OF THE BOARD: |
Tanner Pharma UK Limited (Registered number: 09566234) |
Report of the Director |
for the Year Ended 31 December 2022 |
The director presents his report with the financial statements of the company and the group for the year ended 31 December 2022. |
PRINCIPAL ACTIVITY |
The principal activity of the group in the year under review was that of pharmaceutical supplies. |
DIVIDENDS |
Interim dividends totalling £762.11123 per share were paid during the year. The director recommends that no final dividend be paid. |
The total distribution of dividends for the year ended 31 December 2022 will be £ 76,211,123 . |
FUTURE DEVELOPMENTS |
The prime group objective is to deliver sustainable growth in shareholder value. This requires growth in the long term combined with strong cash generation. The strategy is to drive high quality performance in what the group does for existing and prospective customers and to further promote the organization and its services. |
EVENTS SINCE THE END OF THE YEAR |
Information relating to events since the end of the year is given in the notes to the financial statements. |
DIRECTOR |
STATEMENT OF DIRECTOR'S RESPONSIBILITIES |
The director is responsible for preparing the Group Strategic Report, the Report of the Director and the financial statements in accordance with applicable law and regulations. |
Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the company and the group and of the profit or loss of the group for that period. In preparing these financial statements, the director is required to: |
- | select suitable accounting policies and then apply them consistently; |
- | make judgements and accounting estimates that are reasonable and prudent; |
- | state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; |
- | prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. |
The director is responsible for keeping adequate accounting records that are sufficient to show and explain the company's and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group and enable him to ensure that the financial statements comply with the Companies Act 2006. He is also responsible for safeguarding the assets of the company and the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. |
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
So far as the director is aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and he has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the group's auditors are aware of that information. |
Tanner Pharma UK Limited (Registered number: 09566234) |
Report of the Director |
for the Year Ended 31 December 2022 |
AUDITORS |
The auditors, Haines Watts High Wycombe Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting. |
ON BEHALF OF THE BOARD: |
Report of the Independent Auditors to the Members of |
Tanner Pharma UK Limited |
Opinion |
We have audited the financial statements of Tanner Pharma UK Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2022 which comprise the group income statement, the group statement of other comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows, the company statement of cashflows and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice). |
In our opinion, except for the effects of the matter described in the Basis for Qualified Opinion paragraph, the financial statements: |
- give a true and fair view of the state of the group's and the parent company's affairs as at 31 December 2022 and of the group's profit for the year then ended; |
- have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and |
- have been prepared in accordance with the requirements of the Companies Act 2006. |
Basis for qualified opinion |
We are aware of a contractual claim made by a third party against the company during the year ended 31 December 2021. We were unable to satisfy ourselves by available means concerning the extent and nature of this claim, and its impact on the financial statements. Consequently, we have been unable to conclude as to whether any adjustment or additional disclosure was necessary. Were any adjustment required, the Strategic Report would also need to be amended. |
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 group and parent 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. |
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 the 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 |
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. |
As described in the basis for qualified opinion section of our report, our scope has been limited in respect of the claim referred to in these financial statements in Note 17. |
Report of the Independent Auditors to the Members of |
Tanner Pharma UK Limited |
Opinions on other matters prescribed by the Companies Act 2006 |
Except for the possible effects of the matters described in the basis for qualified opinion section of our report, in our opinion, based on the work undertaken in the course of our audit: |
- the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
- the strategic report and the directors' report have been prepared in accordance with applicable legal requirements. |
In addition, were any adjustments be required, the strategic report would also need to be amended. |
Matters on which we are required to report by exception |
In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Report of the Director. |
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: |
- | adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or |
- | the parent company financial statements are not in agreement with the accounting records and returns; or |
- | certain disclosures of director's remuneration specified by law are not made; or |
- | we have not received all the information and explanations we require for our audit. |
Responsibilities of director |
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 parent 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 parent company or to cease operations, or have no realistic alternative but to do so. |
Report of the Independent Auditors to the Members of |
Tanner Pharma UK Limited |
Auditors' 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. |
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: |
Explanation as to the extent to which the audit was considered capable of detecting irregularities, including fraud |
During the audit we identify and assess the risk of material misstatements of the financial statements due to fraud or error; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud and error; and to respond appropriately to those risks. |
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, our procedures included the following: |
- We obtained an understanding of the legal and regulatory frameworks applicable to the parent company and group and the sector in which they operate. We determined that the following laws and regulations were most significant: The Companies Act 2006, UK GAAP, UK corporation tax laws, the Data Protection Act. |
- We obtained an understanding of how the parent company and group are complying with those legal and regulatory frameworks and made enquiries to the management of known or suspected instances of fraud and non-compliance with laws and regulations. |
- We corroborated our enquiries, where possible through our review of board minutes, other relevant meeting minutes and review of correspondence with regulatory bodies and also obtained management representations regarding compliance with applicable laws and regulations. |
We assessed the susceptibility of the parent company and group's financial statements to material misstatement, including how fraud might occur. Audit procedures performed by the audit team included: |
- Identifying and assessing the controls management has in place to prevent and detect fraud, including the existence of supervisory controls; |
- Understanding how those charged with governance considered and addressed the potential for override of controls or other inappropriate influence over the financial reporting process including the existence of monthly management accounts review process; |
- Challenging assumptions and judgements made by management in its significant accounting estimates and judgements, (in particular in relation to depreciation, provisioning and contingent liabilities); |
- Identifying and testing journal entries, in particular journal entries posted with unusual account combinations; and |
- Assessing the extent of compliance with the relevant laws and regulations. |
There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations are from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusions. There is always the unavoidable risk that material misstatements in the financial statements may not be detected despite the audit being properly performed in accordance with UK Auditing standards. |
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors. |
Report of the Independent Auditors to the Members of |
Tanner Pharma UK Limited |
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 a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed. |
for and on behalf of |
Oakingham House |
Frederick Place |
High Wycombe |
Buckinghamshire |
HP11 1JU |
Tanner Pharma UK Limited (Registered number: 09566234) |
Consolidated Income Statement |
for the Year Ended 31 December 2022 |
31.12.22 | 31.12.21 |
Notes | £'000 | £'000 |
TURNOVER | 3 | 382,812 | 468,489 |
Cost of sales | 299,492 | 370,043 |
GROSS PROFIT | 83,320 | 98,446 |
Administrative expenses | 15,758 | 20,027 |
OPERATING PROFIT | 5 | 67,562 | 78,419 |
Interest receivable and similar income | 135 | - |
PROFIT BEFORE TAXATION | 67,697 | 78,419 |
Tax on profit | 6 | 12,773 | 14,805 |
PROFIT FOR THE FINANCIAL YEAR |
Profit attributable to: |
Owners of the parent | 54,924 | 63,614 |
Tanner Pharma UK Limited (Registered number: 09566234) |
Consolidated Other Comprehensive Income |
for the Year Ended 31 December 2022 |
31.12.22 | 31.12.21 |
Notes | £'000 | £'000 |
PROFIT FOR THE YEAR | 54,924 | 63,614 |
OTHER COMPREHENSIVE INCOME | - | - |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
54,924 |
63,614 |
Total comprehensive income attributable to: |
Owners of the parent | 54,924 | 63,614 |
Tanner Pharma UK Limited (Registered number: 09566234) |
Consolidated Balance Sheet |
31 December 2022 |
31.12.22 | 31.12.21 |
Notes | £'000 | £'000 | £'000 | £'000 |
FIXED ASSETS |
Tangible assets | 9 | 25 | 6 |
Investments | 10 | - | - |
25 | 6 |
CURRENT ASSETS |
Stocks | 11 | 470 | 42,954 |
Debtors | 12 | 7,799 | 57,941 |
Cash at bank | 13,985 | 15,414 |
22,254 | 116,309 |
CREDITORS |
Amounts falling due within one year | 13 | 13,692 | 86,441 |
NET CURRENT ASSETS | 8,562 | 29,868 |
TOTAL ASSETS LESS CURRENT LIABILITIES |
8,587 |
29,874 |
CAPITAL AND RESERVES |
Called up share capital | 15 | 63 | 63 |
Other reserves | 16 | 8 | 8 |
Retained earnings | 16 | 8,516 | 29,803 |
SHAREHOLDERS' FUNDS | 8,587 | 29,874 |
The financial statements were approved by the director and authorised for issue on 29 September 2023 and were signed by: |
Mr R F Bourne - Director |
Tanner Pharma UK Limited (Registered number: 09566234) |
Company Balance Sheet |
31 December 2022 |
31.12.22 | 31.12.21 |
Notes | £'000 | £'000 | £'000 | £'000 |
FIXED ASSETS |
Tangible assets | 9 |
Investments | 10 |
CURRENT ASSETS |
Stocks | 11 |
Debtors | 12 |
Cash at bank |
CREDITORS |
Amounts falling due within one year | 13 |
NET CURRENT ASSETS |
TOTAL ASSETS LESS CURRENT LIABILITIES |
CAPITAL AND RESERVES |
Called up share capital | 15 |
Retained earnings | 16 |
SHAREHOLDERS' FUNDS |
Company's profit for the financial year | 54,965 | 63,784 |
The financial statements were approved by the director and authorised for issue on |
Tanner Pharma UK Limited (Registered number: 09566234) |
Consolidated Statement of Changes in Equity |
for the Year Ended 31 December 2022 |
Called up |
share | Retained | Other | Total |
capital | earnings | reserves | equity |
£'000 | £'000 | £'000 | £'000 |
Balance at 1 January 2021 | 63 | 39,111 | 8 | 39,182 |
Changes in equity |
Dividends | - | (72,922 | ) | - | (72,922 | ) |
Total comprehensive income | - | 63,614 | - | 63,614 |
Balance at 31 December 2021 | 63 | 29,803 | 8 | 29,874 |
Changes in equity |
Dividends | - | (76,211 | ) | - | (76,211 | ) |
Total comprehensive income | - | 54,924 | - | 54,924 |
Balance at 31 December 2022 | 63 | 8,516 | 8 | 8,587 |
Tanner Pharma UK Limited (Registered number: 09566234) |
Company Statement of Changes in Equity |
for the Year Ended 31 December 2022 |
Called up |
share | Retained | Total |
capital | earnings | equity |
£'000 | £'000 | £'000 |
Balance at 1 January 2021 |
Changes in equity |
Dividends | - | ( |
) | ( |
) |
Total comprehensive income | - |
Balance at 31 December 2021 |
Changes in equity |
Dividends | - | ( |
) | ( |
) |
Total comprehensive income | - |
Balance at 31 December 2022 |
Tanner Pharma UK Limited (Registered number: 09566234) |
Consolidated Cash Flow Statement |
for the Year Ended 31 December 2022 |
31.12.22 | 31.12.21 |
Notes | £'000 | £'000 |
Cash flows from operating activities |
Cash generated from operations | 1 | 89,462 | 107,791 |
Tax paid | (14,789 | ) | (25,572 | ) |
Net cash from operating activities | 74,673 | 82,219 |
Cash flows from investing activities |
Purchase of tangible fixed assets | (26 | ) | - |
Interest received | 135 | - |
Net cash from investing activities | 109 | - |
Cash flows from financing activities |
Equity dividends paid | (76,211 | ) | (72,922 | ) |
Net cash from financing activities | (76,211 | ) | (72,922 | ) |
(Decrease)/increase in cash and cash equivalents | (1,429 | ) | 9,297 |
Cash and cash equivalents at beginning of year |
2 |
15,414 |
6,117 |
Cash and cash equivalents at end of year | 2 | 13,985 | 15,414 |
Tanner Pharma UK Limited (Registered number: 09566234) |
Company Cash Flow Statement |
for the Year Ended 31 December 2022 |
31.12.22 | 31.12.21 |
Notes | £'000 | £'000 |
Cash flows from operating activities |
Cash generated from operations | 1 |
Tax paid | ( |
) | ( |
) |
Net cash from operating activities |
Cash flows from investing activities |
Purchase of tangible fixed assets | ( |
) |
Interest received |
Dividends received |
Net cash from investing activities |
Cash flows from financing activities |
Equity dividends paid | ( |
) | ( |
) |
Net cash from financing activities | ( |
) | ( |
) |
(Decrease)/increase in cash and cash equivalents | ( |
) |
Cash and cash equivalents at beginning of year |
2 |
5,883 |
Cash and cash equivalents at end of year | 2 | 12,509 | 14,273 |
Tanner Pharma UK Limited (Registered number: 09566234) |
Notes to the Cash Flow Statements |
for the Year Ended 31 December 2022 |
1. | RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS |
Group |
31.12.22 | 31.12.21 |
£'000 | £'000 |
Profit before taxation | 67,697 | 78,419 |
Depreciation charges | 7 | 11 |
Finance income | (135 | ) | - |
67,569 | 78,430 |
Decrease/(increase) in stocks | 42,484 | (42,734 | ) |
Decrease in trade and other debtors | 52,158 | 22,065 |
(Decrease)/increase in trade and other creditors | (72,749 | ) | 50,030 |
Cash generated from operations | 89,462 | 107,791 |
Company |
31.12.22 | 31.12.21 |
£'000 | £'000 |
Profit before taxation | 67,607 | 78,483 |
Depreciation charges |
Finance income | (1,175 | ) | (1,136 | ) |
66,437 | 77,357 |
Decrease/(increase) in stocks | ( |
) |
Decrease in trade and other debtors |
(Decrease)/increase in trade and other creditors | ( |
) |
Cash generated from operations |
2. | CASH AND CASH EQUIVALENTS |
The amounts disclosed on the Cash Flow Statements in respect of cash and cash equivalents are in respect of these Balance Sheet amounts: |
Group | Company |
Year ended 31 December 2022 |
31.12.22 | 1.1.22 | 31.12.22 | 1.1.22 |
£'000 | £'000 | £'000 | £'000 |
Cash and cash equivalents | 13,985 | 15,414 | 12,509 | 14,273 |
Year ended 31 December 2021 |
31.12.21 | 1.1.21 | 31.12.21 | 1.1.21 |
£'000 | £'000 | £'000 | £'000 |
Cash and cash equivalents | 15,414 | 6,117 | 14,273 | 5,883 |
Tanner Pharma UK Limited (Registered number: 09566234) |
Notes to the Cash Flow Statements |
for the Year Ended 31 December 2022 |
3. | ANALYSIS OF CHANGES IN NET FUNDS |
Group |
At 1.1.22 | Cash flow | At 31.12.22 |
£'000 | £'000 | £'000 |
Net cash |
Cash at bank | 15,414 | (1,429 | ) | 13,985 |
15,414 | (1,429 | ) | 13,985 |
Total | 15,414 | (1,429 | ) | 13,985 |
Company |
At 1.1.22 | Cash flow | At 31.12.22 |
£'000 | £'000 | £'000 |
Net cash |
Cash at bank | 14,273 | (1,764 | ) | 12,509 |
14,273 | ( |
) | 12,509 |
Total | 14,273 | (1,764 | ) | 12,509 |
Tanner Pharma UK Limited (Registered number: 09566234) |
Notes to the Consolidated Financial Statements |
for the Year Ended 31 December 2022 |
1. | STATUTORY INFORMATION |
Tanner Pharma UK Limited is a |
2. | ACCOUNTING POLICIES |
Basis of preparing the financial statements |
These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. |
The financial statements have been prepared under the historical cost convention and have been rounded to the nearest thousand pounds. |
Tanner Pharma UK Limited (Registered number: 09566234) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2022 |
2. | ACCOUNTING POLICIES - continued |
Basis of consolidation |
The group consolidated financial statements include the financial statements of the company and all of its subsidiary undertakings together with the group’s share of the results of associates made up to 31 December. |
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. Where the group owns less than 50% of the voting powers of an entity but controls the entity by virtue of an agreement with other investors which give it control of the financial and operating policies of the entity, it accounts for that entity as a subsidiary. |
Where a subsidiary has different accounting policies to the group, adjustments are made to those subsidiary financial statements to apply the group’s accounting policies when preparing the consolidated financial statements. |
An associate is an entity, being neither a subsidiary nor a joint venture, in which the group holds a long-term interest and where the group 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. The results of associates are accounted for using the equity method of accounting. |
Any subsidiary undertakings or associates sold or acquired during the year are included up to, or from, the dates of change of control or change of significant influence respectively. |
Where control of a subsidiary is lost, the gain or loss is recognised in the consolidated income statement. The cumulative amounts of any exchange differences on translation, recognised in equity, are not included in the gain or loss on disposal and are transferred to retained earnings. The gain or loss also includes amounts included in other comprehensive income that are required to be reclassified to profit or loss but excludes those amounts that are not required to be reclassified. |
Where control of a subsidiary is achieved in stages, the initial acquisition that gave the group control is accounted for as a business combination. Thereafter where the group increases its controlling interest in the subsidiary the transaction is treated as a transaction between equity holders. Any difference between the fair value of the consideration paid and the carrying amount of the non-controlling interest acquired is recognised directly in equity. No changes are made to the carrying value of assets, liabilities or provisions for contingent liabilities. |
Where the group has established employee benefit trusts (‘EBT’) or employee share ownership plans (‘ESOP’) and is the sponsoring entity, notwithstanding the legal duties of the trustees, the group considers that it has ‘de facto’ control of such entities. Such arrangements are accounted for as assets and liabilities of the sponsoring company and included in the consolidated financial statements as appropriate. The company’s equity instruments held by the EBT or ESOP are accounted for as if they were the company’s own equity and are treated as treasury shares. No gain or loss is recognised in profit or loss or other comprehensive income on the purchase, sale or cancellation of the company’s own equity held by either the EBT or ESOP. |
All intra-group transactions, balances, income and expenses are eliminated on consolidation. Adjustments are made to eliminate the profit or loss arising on transactions with associates to the extent of the group’s interest in the entity. |
Tanner Pharma UK Limited (Registered number: 09566234) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2022 |
2. | ACCOUNTING POLICIES - continued |
Turnover |
Turnover is recognised to the extent that it is probable that the economic benefits will flow to the Group and the turnover can be reliably measured. Turnover is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before turnover is recognised: |
Sales of goods |
Turnover from the sale of goods is recognised when all of the following conditions are satisfied: |
- the Group has transferred the significant risks and rewards of ownership to the buyer; |
- the Group retains neither continuing managerial involvement to the the degree usually associated with ownership nor effective control over the goods sold; |
- the amount of turnover can be measured reliably; |
- it is probable that the Group will receive the consideration due under the transaction; and |
- the costs incurred or to be incurred in respect of the transaction can be measured reliably. |
Tangible fixed assets |
Fixtures and fittings | - |
Computer equipment | - |
Stocks |
Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items. |
Tanner Pharma UK Limited (Registered number: 09566234) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2022 |
2. | ACCOUNTING POLICIES - continued |
Financial instruments |
De-recognised assets/liabilities |
The group only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in non-puttable ordinary shares. |
Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. |
Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or financed at a rate of interest that is not a market rate or in the case of an out-right short-term loan not at market rate, the financial asset or liability is measured, initially, at the present value of the future cash flow discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost. |
Investments in non-convertible preference shares and in non-puttable ordinary and preference shares are measured: at fair value with changes recognised in the Statement of comprehensive income if the shares are publicly traded or their fair value can otherwise be measured reliably; |
at cost less impairment for all other investments. |
Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Statement of comprehensive income. |
For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract. |
For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the Company would receive for the asset if it were to be sold at the reporting date. |
Financial assets and liabilities are offset and the net amount reported in the Statement of financial position when there is an 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. |
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 income as appropriate. |
Tanner Pharma UK Limited (Registered number: 09566234) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2022 |
2. | ACCOUNTING POLICIES - continued |
Taxation |
Current tax is recognised for the amount of income tax payable in respect of the taxable profit for the current or past reporting periods using the tax rates and laws that that have been enacted or substantively enacted by the reporting date. |
Deferred tax is recognised in respect of all timing differences at the reporting date, except as otherwise indicated. |
Deferred tax assets are only 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. |
If and when all conditions for retaining tax allowances for the cost of a fixed asset have been met, the deferred tax is reversed. |
Deferred tax is recognised when income or expenses from a subsidiary or associate have been recognised, and will be assessed for tax in a future period, except where: |
- the group is able to control the reversal of the timing difference; and |
- it is probable that the timing difference will not reverse in the foreseeable future. |
A deferred tax liability or asset is recognised for the additional tax that will be paid or avoided in respect of assets and liabilities that are recognised in a business combination. The amount attributed to goodwill is adjusted by the amount of deferred tax recognised. |
Deferred tax is calculated using the tax rates and laws that that have been enacted or substantively enacted by the reporting date that are expected to apply to the reversal of the timing difference. |
With the exception of changes arising on the initial recognition of a business combination, the tax expense (income) is presented either in profit or loss, other comprehensive income or equity depending on the transaction that resulted in the tax expense (income). |
Deferred tax liabilities are presented within provisions for liabilities and deferred tax assets within debtors. |
Deferred tax assets and deferred tax liabilities are offset only if: |
- the group has a legally enforceable right to set off current tax assets against current tax liabilities, and |
- the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities simultaneously. |
Hire purchase and leasing commitments |
Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease. |
Pension costs and other post-retirement benefits |
The group operates a defined contribution pension scheme. Contributions payable to the group's pension scheme are charged to profit or loss in the period to which they relate. |
Debtors and creditors |
Debtors and creditors with no stated interest rate and receivable or payable within one year are recorded at transaction price. Any losses arising from impairment are recognised in the income statement in other operating expenses. |
Significant judgements and estimates |
Preparation of the financial statements requires management to make significant judgements and estimates. The items in the financial statements where these judgements and estimates have been made include revenue recognition. |
Tanner Pharma UK Limited (Registered number: 09566234) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2022 |
3. | TURNOVER |
The turnover and profit before taxation are attributable to the one principal activity of the group. |
An analysis of turnover by class of business is given below: |
31.12.22 | 31.12.21 |
£'000 | £'000 |
UK Government | 373,182 | 460,487 |
Pharmaceutical company | 9,630 | 8,002 |
382,812 | 468,489 |
An analysis of turnover by geographical market is given below: |
31.12.22 | 31.12.21 |
£'000 | £'000 |
United Kingdom | 373,666 | 460,487 |
Europe | 7,615 | 7,525 |
United States of America | 657 | 30 |
South America | 33 | 145 |
Asia | 217 | 302 |
North America excl USA | 99 | - |
Oceania | 112 | - |
Africa | 413 | - |
382,812 | 468,489 |
4. | EMPLOYEES AND DIRECTORS |
31.12.22 | 31.12.21 |
£'000 | £'000 |
Wages and salaries | 9,616 | 5,716 |
Social security costs | 57 | 47 |
Other pension costs | 68 | 66 |
9,741 | 5,829 |
The average number of employees during the year was as follows: |
31.12.22 | 31.12.21 |
Average staff numbers |
31.12.22 | 31.12.21 |
£ | £ |
Director's remuneration | - | - |
Tanner Pharma UK Limited (Registered number: 09566234) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2022 |
5. | OPERATING PROFIT |
The operating profit is stated after charging/(crediting): |
31.12.22 | 31.12.21 |
£'000 | £'000 |
Other operating leases | 148 | 132 |
Depreciation - owned assets | 7 | 11 |
Foreign exchange differences | (2,439 | ) | 862 |
6. | TAXATION |
Analysis of the tax charge |
The tax charge on the profit for the year was as follows: |
31.12.22 | 31.12.21 |
£'000 | £'000 |
Current tax: |
UK corporation tax | 12,642 | 14,699 |
Foreign tax | 131 | 106 |
Tax on profit | 12,773 | 14,805 |
UK corporation tax has been charged at 19 % (2021 - 19 %). |
Reconciliation of total tax charge included in profit and loss |
The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained below: |
31.12.22 | 31.12.21 |
£'000 | £'000 |
Profit before tax | 67,697 | 78,419 |
Profit multiplied by the standard rate of corporation tax in the UK of 19 % (2021 - 19 %) |
12,862 |
14,900 |
Effects of: |
Expenses not deductible for tax purposes | - | 1 |
Income not taxable for tax purposes | (198 | ) | (216 | ) |
Capital allowances in excess of depreciation | (5 | ) | - |
Depreciation in excess of capital allowances | - | 2 |
Other adjustments related to subsidiary tax charges | 114 | 118 |
Total tax charge | 12,773 | 14,805 |
7. | INDIVIDUAL INCOME STATEMENT |
As permitted by Section 408 of the Companies Act 2006, the Income Statement of the parent company is not presented as part of these financial statements. |
Tanner Pharma UK Limited (Registered number: 09566234) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2022 |
8. | DIVIDENDS |
31.12.22 | 31.12.21 |
£'000 | £'000 |
Interim | 76,211 | 72,922 |
9. | TANGIBLE FIXED ASSETS |
Group |
Fixtures |
and | Computer |
fittings | equipment | Totals |
£'000 | £'000 | £'000 |
COST |
At 1 January 2022 | 54 | 34 | 88 |
Additions | 26 | - | 26 |
At 31 December 2022 | 80 | 34 | 114 |
DEPRECIATION |
At 1 January 2022 | 48 | 34 | 82 |
Charge for year | 7 | - | 7 |
At 31 December 2022 | 55 | 34 | 89 |
NET BOOK VALUE |
At 31 December 2022 | 25 | - | 25 |
At 31 December 2021 | 6 | - | 6 |
Company |
Fixtures |
and | Computer |
fittings | equipment | Totals |
£'000 | £'000 | £'000 |
COST |
At 1 January 2022 |
Additions |
At 31 December 2022 |
DEPRECIATION |
At 1 January 2022 |
Charge for year |
At 31 December 2022 |
NET BOOK VALUE |
At 31 December 2022 |
At 31 December 2021 |
Tanner Pharma UK Limited (Registered number: 09566234) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2022 |
10. | FIXED ASSET INVESTMENTS |
Company |
Shares in |
group |
undertakings |
£'000 |
COST |
At 1 January 2022 |
and 31 December 2022 |
NET BOOK VALUE |
At 31 December 2022 |
At 31 December 2021 |
The group or the company's investments at the Balance Sheet date in the share capital of companies include the following: |
Subsidiaries |
Tannerlac UK Limited |
Registered office: 2 Adelaide Street, St Albans, AL3 5BH |
Nature of business: Wholesale of pharmaceutical goods |
% |
Class of shares: | holding |
Ordinary | 100.00 |
Tanner Pharma IE Limited |
Registered office: 11 Bellevue Court, Frankfield, Douglas, Cork, T12 E06D |
Nature of business: Wholesale of pharmaceutical goods |
% |
Class of shares: | holding |
Ordinary | 100.00 |
Tanner Pharma CH GmbH |
Registered office: Alte Steinhauserstrasse 21 Cham, ZUG, 6330 Switzerland |
Nature of business: Wholesale of pharmaceutical goods |
% |
Class of shares: | holding |
Ordinary | 100.00 |
11. | STOCKS |
Group | Company |
31.12.22 | 31.12.21 | 31.12.22 | 31.12.21 |
£'000 | £'000 | £'000 | £'000 |
Stocks | 470 | 42,954 |
Tanner Pharma UK Limited (Registered number: 09566234) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2022 |
12. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
Group | Company |
31.12.22 | 31.12.21 | 31.12.22 | 31.12.21 |
£'000 | £'000 | £'000 | £'000 |
Trade debtors | 1,678 | 35,054 |
Amounts owed by group undertakings | - | - |
Other debtors | 955 | 11,195 |
Tax | 4,545 | 2,529 |
VAT | 293 | - |
Prepayments | 328 | 9,163 |
7,799 | 57,941 |
13. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
Group | Company |
31.12.22 | 31.12.21 | 31.12.22 | 31.12.21 |
£'000 | £'000 | £'000 | £'000 |
Payments on account | 19 | 221 |
Trade creditors | 762 | 32,774 |
Amounts owed to group undertakings | - | - |
Amounts owed to related undertakings | 1,083 | 4,287 | 805 | 4,303 |
Social security and other taxes | 670 | 1,532 |
VAT | - | 38,400 | - | 38,400 |
Other creditors | 1 | 3,632 |
Accrued expenses | 11,157 | 5,595 |
13,692 | 86,441 |
14. | FINANCIAL INSTRUMENTS |
Financial assets measured at fair value through profit or loss £13,985,000 (2021 - £15,414,000) |
Financial assets measured at fair value through profit or loss comprise cash at bank and in hand. |
There are no liabilities measure at fair value through profit or loss. |
15. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 31.12.22 | 31.12.21 |
value: | £ | £ |
Ordinary | $1 | 62,500 | 62,500 |
Tanner Pharma UK Limited (Registered number: 09566234) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 December 2022 |
16. | RESERVES |
Group |
Retained | Other |
earnings | reserves | Totals |
£'000 | £'000 | £'000 |
At 1 January 2022 | 29,803 | 8 | 29,811 |
Profit for the year | 54,924 | 54,924 |
Dividends | (76,211 | ) | (76,211 | ) |
At 31 December 2022 | 8,516 | 8 | 8,524 |
Company |
Retained |
earnings |
£'000 |
At 1 January 2022 |
Profit for the year |
Dividends | ( |
) |
At 31 December 2022 |
17. | CONTINGENT LIABILITIES |
A claim has been brought against the company in the United States District Court, W.D. North Carolina, Charlotte Division by a contractual counterparty. The claim is at a very early procedural stage and the group disputes the claim in its entirety. Given the uncertainties inherent to such litigation, it is impracticable to assess the financial effect or timing of the same. Even were a reliable assessment possible, it would not be disclosed per para 21.17 of FRS102. |
18. | RELATED PARTY DISCLOSURES |
During the year, total dividends of £76,211,123 (2021 - £72,921,932) were paid to the director . |
Tanner Pharma UK Limited and its Group is related to Tanner Pharma Group, Inc through common directors and shareholders. During the period no trading activities arose between the companies. At the end of the year Tanner Pharma UK Limited and its Group owed Tanner Pharma Group, Inc £1,083,000 (2021 - £4,287,000) |
The company has availed of the exemptions in FRS102 Section 33, Paragraph 33.1A which allows non disclosure of transactions between two or more members of a group, provided that any subsidiary which is a party to the transaction is wholly owned by such a member. |
19. | POST BALANCE SHEET EVENTS |
As a result of the end of the compulsory testing for Covid-19 following the end of the global pandemic, going forward, there is expected to be a significant fall in revenue due to the decreased demand for Covid-19 test kits. |
20. | ULTIMATE CONTROLLING PARTY |
The ultimate controlling party is R F Bourne. |