Company registration number 11685363 (England and Wales)
CELLTRION HEALTHCARE UNITED KINGDOM LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
CELLTRION HEALTHCARE UNITED KINGDOM LIMITED
COMPANY INFORMATION
Directors
Mr H Lee
Dongsik Kim
(Appointed 16 March 2023)
Company number
11685363
Registered office
The Switch
1-7 The Grove
Slough
SL1 1QP
Auditor
Kirk Rice LLP
The Courtyard
High Street
Ascot
Berkshire
SL5 7HP
CELLTRION HEALTHCARE UNITED KINGDOM LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Independent auditor's report
4 - 6
Statement of comprehensive income
7
Statement of financial position
8
Statement of changes in equity
9
Statement of cash flows
10
Notes to the financial statements
11 - 21
CELLTRION HEALTHCARE UNITED KINGDOM LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 1 -
The directors present the strategic report for the year ended 31 December 2022.
Fair review of the business
The Company is a member of Celltrion Healthcare Co, Ltd (the “Group”). The Company is a private company limited by its shares and it is incorporated and domiciled in United Kingdom (England). The address of the registered office is The Switch, 1-7 The Grove, Slough, SL1 1QP.
The company made a profit before corporation tax for the financial year of £1,154,451 (2021: profit of £2,868,565). The Directors are of the opinion that the current level of activity and the year end financial position are satisfactory and will remain so in the foreseeable future.
The profit after corporation tax for the financial year of £929,400 will be transferred to reserves (2021: profit for the financial year of £2,321,902 transferred to reserves).
Principal risks and uncertainties
The management of the business and the execution of the of the Company’s strategy are subject to a number of risks. The most significant is VPAS (Voluntary Scheme for Branded Medicines pricing and access) and its impact on the company. All of the company’s products are biosimilars and almost all of the company’s revenue is subject to VPAS cost. The company is facing stark choices to remain profitable in the UK.
Development and performance
The company’s performance in 2022 has been on target. Commercially, the growth aspiration for 2023 is very strong. The Company is focused on organic growth within existing products and a launch of 2-3 products within the next two years. Celltrion Group has the largest biosimilar portfolio in the world. The Company’s aim is to bring all those products to the UK market.
Key performance indicators
The Directors monitor the activities and the performance of the Company on a regular basis. The Directors also monitor the performance of the individual products on a regular basis. There are no other financial and non-financial performance indicators being used at present.
Mr H Lee
Director
21 September 2023
CELLTRION HEALTHCARE UNITED KINGDOM LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 2 -
The directors present their annual report and financial statements for the year ended 31 December 2022.
Principal activities
The principal activity of the company continued to be that of selling, marketing and distribution of pharmaceutical products in the UK.
Results and dividends
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 H Lee
Mr J Shin
(Resigned 16 March 2023)
Dongsik Kim
(Appointed 16 March 2023)
Supplier payment policy
The company's current policy concerning the payment of trade creditors is to follow the CBI's Prompt Payers Code (copies are available from the CBI, Centre Point, 103 New Oxford Street, London WC1A 1DU).
The company's current policy concerning the payment of trade creditors is to:
settle the terms of payment with suppliers when agreeing the terms of each transaction;
ensure that suppliers are made aware of the terms of payment by inclusion of the relevant terms in contracts; and
pay in accordance with the company's contractual and other legal obligations.
Trade creditors of the company at the year end were equivalent to 8 day's purchases, based on the average daily amount invoiced by suppliers during the year.
Future developments
After a very successful launch of Regkirona (Covid antibody medicine) in EU countries we are in the final process of becoming a Marker Authorisation Holder for the product in UK and receiving an approval from MHRA for the sale and distribution of the product in UK.
Auditor
Kirk Rice LLP were appointed as auditor to the company during the year and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
CELLTRION HEALTHCARE UNITED KINGDOM LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 3 -
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 International Financial Reporting Standards (IFRSs) as adopted by the United Kingdom. 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, International Accounting Standard 1 requires that directors:
properly select and apply accounting policies;
present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;
provide additional disclosures when compliance with the specific requirements in IFRSs are insufficient to enable users to understand the impact of particular transactions, other events and conditions on the entity's financial position and financial performance; and
make an assessment of the company's ability to continue as a going concern.
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
Each director in office at the date of approval of this annual report confirms that:
so far as the director is aware, there is no relevant audit information of which the company's auditor is unaware, and
the director has taken all the steps that he / she ought to have taken as a director in order to make himself / herself aware of any relevant audit information and to establish that the company's auditor is aware of that information.
This confirmation is given and should be interpreted in accordance with the provisions of section 418 of the Companies Act 2006.
Going concern
The Directors have made an assessment of the Company’s ability to continue as a going concern. As a result of our assessment, we consider that the Company is able to continue to operate as a going concern and that it is appropriate to prepare the financial statements on a going concern basis.
VPAS has had a negative impact on the business and requires careful management of both future investment and cash flow.
The Directors have taken into account that as part of the Group, the company has the ability to request the support from the Group where necessary and can take actions to ensure business continuity through operational channels as well as the ability to manage variable costs.
On behalf of the board
Mr H Lee
Director
21 September 2023
CELLTRION HEALTHCARE UNITED KINGDOM LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CELLTRION HEALTHCARE UNITED KINGDOM LIMITED
- 4 -
Opinion
We have audited the financial statements of Celltrion Healthcare United Kingdom Limited (the 'company') for the year ended 31 December 2022 which comprise the statement of comprehensive income, the statement of financial position, the statement of changes in equity, the statement of cash flows 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 International Financial Reporting Standards (IFRSs) as adopted by the United Kingdom.
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 December 2022 and of its profit for the year then ended;
have been properly prepared in accordance with UK adopted international accounting standards; and
have been prepared in accordance with the requirements of the Companies Act 2006.
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.
Conclusions relating to going concern
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 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:
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.
CELLTRION HEALTHCARE UNITED KINGDOM LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CELLTRION HEALTHCARE UNITED KINGDOM LIMITED
- 5 -
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:
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.
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.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Our audit approach was developed by obtaining an understanding of the company’s activities, the key functions undertaken on behalf of the Board by management and by service organisations, and the overall control environment. Based on this understanding we assessed those aspects of the company’s transactions and balances which were most likely to give rise to a material misstatement and were most susceptible to irregularities including fraud or error. Specifically, we identified what we considered to be key audit risks and planned our audit approach accordingly.
We gained an understanding of the legal and regulatory framework applicable to the company and the industry in which it operates, and considered the risk of acts by the company which were contrary to applicable laws and regulations, including fraud. These included but were not limited to compliance with Companies Act 2006, IFRS, and regulations which affect the company’s products.
We designed audit procedures to respond to the risk, recognising that 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, misrepresentations or through collusion.
We focused on laws and regulations that could give rise to a material misstatement in the company's financial statements. Our tests included, but were not limited to:
CELLTRION HEALTHCARE UNITED KINGDOM LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CELLTRION HEALTHCARE UNITED KINGDOM LIMITED
- 6 -
There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. As in all of our audits we also addressed the risk of management override of internal controls, including testing journals and evaluating whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud.
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.
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.
Graham Jennings (Senior Statutory Auditor)
For and on behalf of Kirk Rice LLP
21 September 2023
Statutory Auditor
The Courtyard
High Street
Ascot
Berkshire
SL5 7HP
CELLTRION HEALTHCARE UNITED KINGDOM LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2022
- 7 -
2022
2021
as restated
Notes
£
£
Revenue
3
53,935,589
28,651,900
Cost of sales
(36,926,288)
(20,896,564)
Gross profit
17,009,301
7,755,336
Administrative expenses
(15,660,126)
(4,802,483)
Operating profit
4
1,349,175
2,952,853
Finance costs
7
(194,724)
(84,288)
Profit before taxation
1,154,451
2,868,565
Income tax expense
8
(225,051)
(546,663)
Profit and total comprehensive income for the year
19
929,400
2,321,902
The income statement has been prepared on the basis that all operations are continuing operations.
CELLTRION HEALTHCARE UNITED KINGDOM LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2022
31 December 2022
- 8 -
2022
2021
as restated
Notes
£
£
Non-current assets
Property, plant and equipment
9
173,343
215,261
Current assets
Inventories
10
1,611,411
3,385,007
Trade and other receivables
11
24,844,324
12,097,462
Cash and cash equivalents
1,756,822
1,128,534
28,212,557
16,611,003
Current liabilities
Trade and other payables
14
22,408,381
7,671,819
Current tax liabilities
259,698
315,071
Borrowings
13
1,500,000
5,500,000
Lease liabilities
15
95,591
85,624
24,263,670
13,572,514
Net current assets
3,948,887
3,038,489
Non-current liabilities
Lease liabilities
15
70,853
134,809
Deferred tax liabilities
16
6,517
3,481
77,370
138,290
Net assets
4,044,860
3,115,460
Equity
Called up share capital
18
490,100
490,100
Retained earnings
19
3,554,760
2,625,360
Total equity
4,044,860
3,115,460
The financial statements were approved by the board of directors and authorised for issue on 21 September 2023 and are signed on its behalf by:
Mr H Lee
Director
Company registration number 11685363
CELLTRION HEALTHCARE UNITED KINGDOM LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
- 9 -
Share capital
Retained earnings
Total
£
£
£
Balance at 1 January 2021
490,100
303,458
793,558
Year ended 31 December 2021
Profit and total comprehensive income for the year (as restated)
-
2,321,902
2,321,902
Balance at 31 December 2021 (as restated)
490,100
2,625,360
3,115,460
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
929,400
929,400
Balance at 31 December 2022
490,100
3,554,760
4,044,860
CELLTRION HEALTHCARE UNITED KINGDOM LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2022
- 10 -
2022
2021
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
23
5,194,433
(4,623,090)
Interest paid
(194,724)
(33,695)
Income taxes paid
(277,388)
(313,954)
Net cash inflow/(outflow) from operating activities
4,722,321
(4,970,739)
Investing activities
Purchase of property, plant and equipment
(14,709)
(4,812)
Net cash used in investing activities
(14,709)
(4,812)
Financing activities
Repayment of bank loans
(4,000,000)
5,500,000
Payment of lease liabilities
(79,324)
(82,736)
Net cash (used in)/generated from financing activities
(4,079,324)
5,417,264
Net increase in cash and cash equivalents
628,288
441,713
Cash and cash equivalents at beginning of year
1,128,534
686,821
Cash and cash equivalents at end of year
1,756,822
1,128,534
CELLTRION HEALTHCARE UNITED KINGDOM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
- 11 -
1
Accounting policies
Company information
Celltrion Healthcare United Kingdom Limited is a private company limited by shares incorporated in England and Wales. The registered office is The Switch, 1-7 The Grove, Slough, SL1 1QP. The company's principal activities and nature of its operations are disclosed in the directors' report.
1.1
Accounting convention
The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted for use in the United Kingdom and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS, except as otherwise stated.
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 prepared under the historical cost convention. The principal accounting policies adopted are set out below.
1.2
Going concern
The Directors have made an assessment of the Company’s ability to continue as a going concern. As a result of our assessment, we consider that the Company is able to continue to operate as a going concern and that it is appropriate to prepare the financial statements on a going concern basis.true
VPAS has had a negative impact on the business and requires careful management of both future investment and cash flow.
The Directors have taken into account that as part of the Group, the company has the ability to request the support from the Group where necessary and can take actions to ensure business continuity through operational channels as well as the ability to manage variable costs.
1.3
Revenue
Revenue from the sale of pharmaceutical goods is recognised when the significant risks and rewards of the ownership of goods have passed to the buyer (usually on dispatch on inspected 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 cost incurred or to be incurred in respect of the transaction can be measured reliably.
1.4
Property, plant and equipment
Property, plant and equipment 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:
Leasehold land and buildings
Over useful life of lease
Computers
20% on cost
Motor vehicles
33% on cost
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the income statement.
CELLTRION HEALTHCARE UNITED KINGDOM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 12 -
1.5
Impairment of tangible and intangible assets
At each reporting end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
1.6
Inventories
Inventories are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition.
Inventories held for distribution at no or nominal consideration are measured the lower of replacement cost and cost, adjusted where applicable for any loss of service potential.
Net realisable value is the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution.
Inventories are valued using the weighted average cost method. Goods with the shortest expiry dates are dispatched first.
1.7
Cash and cash equivalents
Cash and cash equivalents 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.
1.8
Financial assets
Financial assets are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument. Financial assets are classified into specified categories, depending on the nature and purpose of the financial assets.
At initial recognition, financial assets classified as fair value through profit and loss are measured at fair value and any transaction costs are recognised in profit or loss. Financial assets not classified as fair value through profit and loss are initially measured at fair value plus transaction costs.
1.9
Financial liabilities
The company recognises financial debt when the company becomes a party to the contractual provisions of the instruments. Financial liabilities are classified as either 'financial liabilities at fair value through profit or loss' or 'other financial liabilities'.
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 income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
CELLTRION HEALTHCARE UNITED KINGDOM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 13 -
Deferred tax
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset 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.
1.11
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.12
Leases
At inception, the company assesses whether a contract is, or contains, a lease within the scope of IFRS 16. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Where a tangible asset is acquired through a lease, the company recognises a right-of-use asset and a lease liability at the lease commencement date. Right-of-use assets are included within property, plant and equipment, apart from those that meet the definition of investment property.
The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date plus any initial direct costs and an estimate of the cost of obligations to dismantle, remove, refurbish or restore the underlying asset and the site on which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of other property, plant and equipment. The right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
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.
CELLTRION HEALTHCARE UNITED KINGDOM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 14 -
2
Critical accounting estimates and judgements
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, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are outlined below.
Critical judgements
Impairments
Determine whether there are indicators of impairment of the Company’s fixed assets. Factors taken into consideration in reaching such a decision include the economic viability and expected future financial performance of the asset and where it is a component of a larger cash-generating unit, the viability and expected future performance of that unit.
Key sources of estimation uncertainty
Depreciation
Tangible fixed assets are depreciated over their useful lives taking into account residual values, where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on the number of factors. In re-assessing asset lives, factors such as technological innovation, product life cycles and maintenance programmes are taken into account. Residual value assessments consider issues such as future market conditions, the remaining life of the asset and projected disposal values.
The Company’s directors are of the opinion that there are no other judgements and no estimates or assumptions that have a significant risk of causing material adjustment to the carrying value of assets and liabilities for the company within the next financial year.
3
Revenue
2022
2021
£
£
as restated
Revenue analysed by class of business
Product sales
53,935,589
28,651,900
4
Operating profit
2022
2021
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses/(gains)
21,844
(623,618)
Fees payable to the company's auditor for the audit of the company's financial statements
30,000
27,950
Depreciation of property, plant and equipment
81,962
83,709
Cost of inventories recognised as an expense
36,926,288
20,896,564
CELLTRION HEALTHCARE UNITED KINGDOM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 15 -
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2022
2021
Number
Number
23
17
Their aggregate remuneration comprised:
2022
2021
£
£
Wages and salaries
2,257,256
1,585,529
Social security costs
265,694
179,751
Pension costs
110,640
84,344
2,633,590
1,849,624
6
Directors' remuneration
2022
2021
£
£
Remuneration for qualifying services
174,466
54,401
7
Finance costs
2022
2021
£
£
Interest on bank overdrafts and loans
174,978
52,364
Interest on lease liabilities
19,344
11,402
Other interest payable
402
20,522
Total interest expense
194,724
84,288
8
Income tax expense
2022
2021
£
£
as restated
Current tax
UK corporation tax on profits for the current period
222,015
546,683
Deferred tax
Origination and reversal of temporary differences
3,036
(20)
Total tax charge
225,051
546,663
CELLTRION HEALTHCARE UNITED KINGDOM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
8
Income tax expense
(Continued)
- 16 -
The charge for the year can be reconciled to the profit per the income statement as follows:
2022
2021
£
£
as restated
Profit before taxation
1,154,451
2,868,565
Expected tax charge based on a corporation tax rate of 19.00% (2021: 19.00%)
219,346
545,027
Effect of expenses not deductible in determining taxable profit
4,981
1,755
Deferred tax adjustment
724
(119)
Taxation charge for the year
225,051
546,663
9
Property, plant and equipment
Leasehold land and buildings
Computers
Motor vehicles
Total
£
£
£
£
Cost
At 1 January 2021
215,852
21,374
79,466
316,692
Additions
4,812
19,227
24,039
At 31 December 2021
215,852
26,186
98,693
340,731
Additions
14,709
25,335
40,044
At 31 December 2022
215,852
40,895
124,028
380,775
Accumulated depreciation and impairment
At 1 January 2021
35,976
2,948
2,837
41,761
Charge for the year
49,104
4,917
29,688
83,709
At 31 December 2021
85,080
7,865
32,525
125,470
Charge for the year
41,404
6,962
33,596
81,962
At 31 December 2022
126,484
14,827
66,121
207,432
Carrying amount
At 31 December 2022
89,368
26,068
57,907
173,343
At 31 December 2021
130,772
18,321
66,168
215,261
CELLTRION HEALTHCARE UNITED KINGDOM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
9
Property, plant and equipment
(Continued)
- 17 -
Property, plant and equipment includes right-of-use assets, as follows:
Right-of-use assets
2022
2021
£
£
Net values at the year end
Property
89,368
130,772
Motor vehicles
57,908
66,168
147,276
196,940
Total additions in the year
25,335
19,227
Depreciation charge for the year
Property
41,404
49,104
Motor vehicles
33,596
29,688
75,000
78,792
10
Inventories
2022
2021
£
£
Finished goods
1,611,411
3,385,007
11
Trade and other receivables
2022
2021
£
£
Trade receivables
23,750,127
11,995,296
Other receivables
888,576
-
Prepayments
205,621
102,166
24,844,324
12,097,462
12
Trade receivables - credit risk
Fair value of trade receivables
The directors consider that the carrying amount of trade and other receivables is approximately equal to their fair value.
No significant receivable balances are impaired at the reporting end date.
CELLTRION HEALTHCARE UNITED KINGDOM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 18 -
13
Borrowings
2022
2021
£
£
Borrowings held at amortised cost:
Bank loans
1,500,000
5,500,000
Celltrion Healthcare Co., Ltd (the ultimate controlling company) has provided a guarantee over the bank loan borrowing facility.
14
Trade and other payables
2022
2021
£
£
Trade payables
1,101,593
481,258
Amounts owed to fellow group undertakings
14,479,141
5,010,455
Accruals
3,436,553
330,179
Social security and other taxation
3,391,094
1,849,927
22,408,381
7,671,819
Amounts owed to group undertakings are unsecured and repayable on demand. Interest is charged on overdue inter-company invoices at a rate of 4.6% per annum.
15
Lease liabilities
2022
2021
Maturity analysis
£
£
Within one year
95,591
85,624
In two to five years
70,853
134,809
Total undiscounted liabilities
166,444
220,433
Lease liabilities are classified based on the amounts that are expected to be settled within the next 12 months and after more than 12 months from the reporting date, as follows:
2022
2021
£
£
Current liabilities
95,591
85,624
Non-current liabilities
70,853
134,809
166,444
220,433
2022
2021
Amounts recognised in profit or loss include the following:
£
£
Interest on lease liabilities
19,344
11,402
CELLTRION HEALTHCARE UNITED KINGDOM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
15
Lease liabilities
(Continued)
- 19 -
The fair value of the company's lease obligations is approximately equal to their carrying amount.
16
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon during the current and prior reporting period.
ACAs
£
Liability at 1 January 2021
3,501
Deferred tax movements in prior year
Charge/(credit) to profit or loss
(20)
Liability at 1 January 2022
3,481
Deferred tax movements in current year
Charge/(credit) to profit or loss
3,036
Liability at 31 December 2022
6,517
17
Retirement benefit schemes
Defined contribution schemes
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
The total costs charged to income in respect of defined contribution plans is £110,640 (2021 - £84,344).
18
Share capital
2022
2021
2022
2021
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £10 each
49,010
49,010
490,100
490,100
19
Retained earnings
The retained earnings reserve represents cumulative profits and losses.
20
Capital risk management
The company is not subject to any externally imposed capital requirements.
CELLTRION HEALTHCARE UNITED KINGDOM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 20 -
21
Related party transactions
Remuneration of key management personnel
The total remuneration of directors and other members of key management in 2022 (including gross salaries, social security costs, pension costs and other benefits) was £198,534 (2021: £60,750).
Other information
Total purchases made from Celltrion Healthcare Hungary Kft (the parent company) during the year were £38,222,823 (2021: £16,350,696), and trade payables to Celltrion Healthcare Hungary Kft as at 31 December 2022 was £14,440,407 (2021: £5,010,455).
Total purchases made from Celltrion Healthcare Ireland Limited (a fellow subsidiary company) during the year were £78,722 (2021: £nil), and trade payables to Celltrion Healthcare Ireland Limited as at 31 December 2022 was £78,733 (2021: £nil).
Other costs charged to Celltrion Healthcare CO., LTD. (the ultimate parent company) during the year were £1,408 (2021: £1,349), and trade receivables from Celltrion Healthcare CO., LTD. as at 31 December 2022 was £1,408 (2021: £nil).
22
Controlling party
The Company's immediate parent company is Celltrion Healthcare Hungary KFT (a company incorporated in Hungary) by virtue of its 100% direct shareholding in Celltrion Healthcare United Kingdom Limited.
The Company's ultimate parent company is Celltrion Healthcare Co., Ltd (a company incorporated and listed in South Korea) by virtue of its 100% indirect shareholding in Celltrion Healthcare United Kingdom Limited.
There is no ultimate controlling party of the Company.
The smallest group in which the results of the Company are consolidated is that headed by Celltrion Healthcare Hungary KFT. The consolidated accounts of the Company may be obtained from Váci út 1-3, WestEnd Office building B torony, 1062 Hungary.
The largest group in which the results of the Company are consolidated is that headed by Celltrion Healthcare Co., Ltd. The consolidated accounts of the Company may be obtained from 4th Floor, 19 Academyro, 51 beon-gil, Yeonsu-Gu, Incheon, 22014, Korea.
23
Cash generated from/(absorbed by) operations
2022
2021
£
£
Profit for the year before income tax
1,154,451
2,868,565
Adjustments for:
Finance costs
194,724
84,288
Depreciation and impairment of property, plant and equipment
81,962
83,709
Movements in working capital:
Decrease in inventories
1,773,596
5,063,431
Increase in trade and other receivables
(12,746,862)
(9,110,866)
Increase/(decrease) in trade and other payables
14,736,562
(3,612,217)
Cash generated from/(absorbed by) operations
5,194,433
(4,623,090)
CELLTRION HEALTHCARE UNITED KINGDOM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 21 -
24
Prior period adjustment
Changes to the statement of financial position
At 31 December 2021
Previously reported
Adjustment
As restated
£
£
£
Creditors due within one year
Taxation
(30,388)
(284,683)
(315,071)
Net assets
3,400,143
(284,683)
3,115,460
Capital and reserves
Retained earnings
2,910,043
(284,683)
2,625,360
Total equity
3,400,143
(284,683)
3,115,460
Changes to the income statement
Period ended 31 December 2021
Previously reported
Adjustment
As restated
£
£
£
Revenue
29,380,233
(728,333)
28,651,900
Administrative expenses
(5,530,816)
728,333
(4,802,483)
Taxation
(261,980)
(284,683)
(546,663)
Profit for the financial period
2,606,585
(284,683)
2,321,902
Notes to reconciliation
A prior year adjustment has been recognised in order to reclassify wholesaler distribution fees from administrative expenses to revenue to comply with IFRS 15.
A second prior year adjustment has been recognised in order to reflect an amendment made to the corporation tax return for the year ended 31 December 2021.
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