Company Registration No. 12420613 (England and Wales)
ACETO UK HOLDING LIMITED
ANNUAL REPORT AND CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
ACETO UK HOLDING LIMITED
COMPANY INFORMATION
Directors
J Steele
B Foster
R Young
(Appointed 31 July 2023)
Company number
12420613
Registered office
100 Avebury Boulevard
Milton Keynes
MK9 1FH
Auditor
Xeinadin Audit Limited
2 Hilliards Court
Chester Business Park
Chester
Cheshire
CH4 9QP
ACETO UK HOLDING LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 7
Profit and loss account
8
Group statement of comprehensive income
9
Group balance sheet
10
Company balance sheet
11
Group statement of changes in equity
12
Company statement of changes in equity
13
Group statement of cash flows
14
Notes to the financial statements
15 - 33
ACETO UK HOLDING 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
Aceto UK Holding Limited (“Aceto UK”) was incorporated on 23 January 2020 and is a subsidiary of Aceto Corporation.
The Company acquired 100% of the shares of:
Syntor Fine Chemicals (Holdings) Limited on 16 April 2020, a UK entity with operations and management predominantly based in the UK.
A&C American Chemicals Limited on 1 April 2021, a Canadian entity, to supply pharmaceutical products to Canada and the group distribution businesses in USA and Europe.
A&C Chemicals Europe Limited on 1 April 2021, an Irish entity, being the European distribution business.
Lukor Holdings Europe Limited on 7 October 2021, a holding company based in Ireland.
A&C Bio Buffer Limited on 7 October 2021, a manufacturer of specialty pharmaceutical products, based in Ireland.
Aceto UK was established because the UK is a common and relatively less complicated holding company jurisdiction with a robust and transparent legal system, has a large treaty network, and its proximity, political relationships, and strong business connections with jurisdictions where Aceto was expanding and expects to expand in the future.
The 2022 results show revenue at £34.4m (2021 £26.5m), gross profit of £11.7m (34% of sales) (2021 £7.3m (27% of sales) with an operating loss at £1.6m (2021 £0.8m profit), the main drivers being amortisation of intangibles and FX losses.
The Group’s balance sheet reflects investment in infrastructure / production areas to improve processes / expand product capability and be responsive to our customers on all products and stocks to service sales going into 2023.
To improve the results in future years, we continue to work with our customers to deliver best in class, cost effective solutions to new product opportunities underlining our strong capabilities in R&D, supply chain and delivery. Improved sales volumes, product diversification, price monitoring and cost control will support operating profit improvement in the medium / long term.
The Company is strategically focused on the continual improvement of its business facilities, manufacturing, processes and quality, working closely with customers to grow and achieve mutual benefits.
Principal risks and uncertainties
The company and group is exposed to general and industry specific business risks including the following:
Economic risk
We are exposed to the macro-economic risks of inflation, recession and de-stocking, like other companies. The directors propose to closely monitor the operations and impact to the business, and where possible, it will be mitigated, and supported by improvement projects / efficiencies.
Currency risks
There is the risk that a devaluation of a specific currency can negatively impact the financial results. However, where possible we try and match material costs to revenue, albeit that is not always possible. To mitigate some of the impact, we closely monitor sales prices for FX movements and target to minimise FX translation exposure.
ACETO UK HOLDING LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 2 -
Principle risks and uncertainties (continued)
Government regulations / geopolitical risks
Most of our business (over 95%) is conducted in countries that have stable governments and generally low risks of geopolitical challenges or sudden, drastic changes in regulations, for example, United Kingdom, Western Europe, USA and Canada. Other countries where we conduct business may have different risk profiles and some may experience rapid changes due to economic circumstances, regional or local geopolitical activities or regulatory standard modification or enforcement practices. To minimise the impact of these risks, we monitor overall customer exposure to limit its concentration by region, by country and by customer when entering an area that is perceived as less stable. Besides diversification, we occasionally may employ policies that include requiring payment in advance of goods, establishing low credit limits, etc. These policies may reduce revenue, but the intent is to match the revenue opportunity and the risk profile appropriately to maximise net results.
The current crisis in Ukraine with Russia has had minimal impact on the business.
Like other companies, we are exposed to the macro-economic of inflation, and where possible, it will be mitigated, and supported by improvement projects / efficiencies.
Key performance indicators
The group utilises specific key performance indicators (KPls) to measure and monitor success. These are reviewed regularly and action is taken to improve performance to achieve / exceed the targeted metrics. KPIs cover EHS, Quality, Productivity, Delivery, Process Improvements and Financial measures.
Development and performance
The Company is a holding company for acquisitions, mainly with a European presence.
Aceto UK Holding Limited, is a subsidiary of Aceto Corporation, who is based in USA and has significant interests in the EU. Aceto's ultimate parent is New Mountain Capital LLC, a large New York based investment firm. Further strategic acquisitions to expand Aceto are planned.
The Group has positioned its organisation and business activities to be successful in a balanced manner allowing us to adapt to changing market conditions. The proactive approach to new opportunities combined with the lean and balanced approach, allows quick adaption to changing requirements within the industry for products and operations.
B Foster
Director
31 August 2023
ACETO UK HOLDING LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 3 -
The directors present their annual report and financial statements for the year ended 31 December 2022.
Aceto UK Holding Limited was incorporated on 23 January 2020.
Principal activities
The principal activity of the company is that of a holding company and the group is that of chemical manufacturing.
Results and dividends
The results for the year are set out on page 8.
No ordinary dividends were paid or recommended.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
J Steele
A Luxenburger
(Resigned 1 July 2023)
B Foster
R Young
(Appointed 31 July 2023)
Qualifying third party indemnity provisions
The trading company, Syntor Fine Chemicals Limited, has made qualifying third party indemnity provisions for the benefit of its directors during the year. These provisions remain in force at the reporting date.
Post reporting date events
Since year end there have been various structural changes within the group:
Lukor Holdings Europe has been placed in a members voluntary liquidation
A&C Chemicals Europe Limited ongoing trading business has been transferred to A&C Bio Buffer Limited. The purpose of these structural changes are to simplify the organisation, strengthen sales synergies, improve distribution and organisational agility and streamline financial reporting.
Aceto UK has invested in 100% of the shares of Actylis Switzerland GmbH on 20 March 2023, a Swiss entity, to support the EU Management structure.
Auditor
In accordance with the company's articles, a resolution proposing that Xeinadin Audit Limited be reappointed as auditor of the group will be put at a General Meeting.
ACETO UK HOLDING LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 4 -
Statement of directors' responsibilities
The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the ;
prepare the on the going concern basis unless it is inappropriate to presume that the group and company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Strategic report
The truegroup has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the group's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of risks and future developments.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the auditor of the company is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the auditor of the company is aware of that information.
On behalf of the board
B Foster
Director
31 August 2023
ACETO UK HOLDING LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF ACETO UK HOLDING LIMITED
- 5 -
Opinion
We have audited the financial statements of Aceto UK Holding Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2022 which comprise the group profit and loss account, the group statement of 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 and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
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 loss 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.
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 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 group's and 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 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.
ACETO UK HOLDING LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ACETO UK HOLDING LIMITED
- 6 -
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 their 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 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 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 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.
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.
Enquiries of management and those charged with governance were held in order to identify any laws and regulations that could be expected to have a material impact on the financial statements. Throughout the audit, the team were updated with the outcomes of these enquiries including consideration as to where and how fraud may occur in the group.
The audit procedures undertaken to address any potential risk in relation to irregularities (which include fraud and non-compliance with laws and regulations) included: enquiries of management and those charged with governance on how the group complies with relevant laws, regulations and any cases of actual or potential litigation or claims; examination of appropriate legal correspondence; testing of journal entries for appropriateness; and analytical procedures on account balances to identify variances against expectation which may show indications of fraud.
No instances of material non-compliance were identified, although the prospect of detecting irregularities, including fraud, is inherently difficult. This is due to; difficulty in detecting irregularities; limits imposed by the effectiveness of the entity’s controls; and the nature, timing and extent of the audit procedures performed. Irregularities as a result of fraud are inherently more difficult to detect than those that resulting from error. Despite this, the audit being planned and performed in accordance with ISAs (UK), there is an unavoidable risk that material misstatements may not be detected.
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.
ACETO UK HOLDING LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ACETO UK HOLDING LIMITED
- 7 -
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.
Michael Caputo FCA (Senior Statutory Auditor)
For and on behalf of Xeinadin Audit Limited
31 August 2023
Chartered Accountants
Statutory Auditor
2 Hilliards Court
Chester Business Park
Chester
Cheshire
CH4 9QP
ACETO UK HOLDING LIMITED
GROUP PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 8 -
2022
2021
Notes
£
£
Turnover
3
34,433,046
26,545,907
Cost of sales
(22,707,058)
(19,249,307)
Gross profit
11,725,988
7,296,600
Administrative expenses
(14,318,000)
(6,908,383)
Other operating income
989,997
452,200
Operating (loss)/profit
4
(1,602,015)
840,417
Interest receivable and similar income
8
79,893
84,473
Interest payable and similar expenses
9
(2,937,871)
(1,282,593)
Loss before taxation
(4,459,993)
(357,703)
Tax on loss
10
(470,522)
(712,475)
Loss for the financial year
26
(4,930,515)
(1,070,178)
Loss for the financial year is all attributable to the owners of the parent company.
ACETO UK HOLDING LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2022
- 9 -
2022
2021
£
£
Loss for the year
(4,930,515)
(1,070,178)
Other comprehensive income
-
-
Total comprehensive income for the year
(4,930,515)
(1,070,178)
Total comprehensive income for the year is all attributable to the owners of the parent company.
ACETO UK HOLDING LIMITED
GROUP BALANCE SHEET
AS AT
31 DECEMBER 2022
31 December 2022
- 10 -
2022
2021
Notes
£
£
£
£
Fixed assets
Goodwill
11
30,060,907
33,193,382
Other intangible assets
11
27,286,479
28,797,701
Total intangible assets
57,347,386
61,991,083
Tangible assets
12
3,725,911
1,236,072
61,073,297
63,227,155
Current assets
Stocks
16
7,002,628
4,195,338
Debtors
17
11,025,069
12,141,928
Cash at bank and in hand
2,769,846
3,306,550
20,797,543
19,643,816
Creditors: amounts falling due within one year
18
(22,557,944)
(22,867,145)
Net current liabilities
(1,760,401)
(3,223,329)
Total assets less current liabilities
59,312,896
60,003,826
Creditors: amounts falling due after more than one year
19
(30,640,772)
(27,361,927)
Provisions for liabilities
Provisions
20
302,185
Deferred tax liability
21
24,496
4,815
(326,681)
(4,815)
Net assets
28,345,443
32,637,084
Capital and reserves
Called up share capital
23
1
1
Translation reserve
24
385,960
(252,914)
Other reserves
34,022,971
34,022,971
Profit and loss reserves
26
(6,063,489)
(1,132,974)
Total equity
28,345,443
32,637,084
The financial statements were approved by the board of directors and authorised for issue on 31 August 2023 and are signed on its behalf by:
31 August 2023
B Foster
Director
ACETO UK HOLDING LIMITED
COMPANY BALANCE SHEET
AS AT 31 DECEMBER 2022
31 December 2022
- 11 -
2022
2021
Notes
£
£
£
£
Fixed assets
Investments
13
57,040,730
57,040,730
Current assets
-
-
Creditors: amounts falling due within one year
18
(162,199)
(40,000)
Net current liabilities
(162,199)
(40,000)
Total assets less current liabilities
56,878,531
57,000,730
Creditors: amounts falling due after more than one year
19
(26,215,993)
(23,164,127)
Net assets
30,662,538
33,836,603
Capital and reserves
Called up share capital
23
1
1
Other reserves
34,022,971
34,022,971
Profit and loss reserves
26
(3,360,434)
(186,369)
Total equity
30,662,538
33,836,603
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £3,174,065 (2021 - £174,219 loss).
The financial statements were approved by the board of directors and authorised for issue on 31 August 2023 and are signed on its behalf by:
31 August 2023
B Foster
Director
Company registration number 12420613 (England and Wales)
ACETO UK HOLDING LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
- 12 -
Share capital
Translation reserve
Capital contribution
Profit and loss reserves
Total
£
£
£
£
£
Balance at 1 January 2021
1
18,694,808
(62,796)
18,632,013
Year ended 31 December 2021:
Loss and total comprehensive income
-
-
-
(1,070,178)
(1,070,178)
Transfers
-
-
15,328,163
-
15,328,163
Translation reserve movement
-
(252,914)
-
-
(252,914)
Balance at 31 December 2021
1
(252,914)
34,022,971
(1,132,974)
32,637,084
Year ended 31 December 2022:
Loss and total comprehensive income
-
-
-
(4,930,515)
(4,930,515)
Translation reserve movement
-
638,874
-
-
638,874
Balance at 31 December 2022
1
385,960
34,022,971
(6,063,489)
28,345,443
ACETO UK HOLDING LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
- 13 -
Share capital
Other reserves
Profit and loss reserves
Total
£
£
£
£
Balance at 1 January 2021
1
18,694,808
(12,150)
18,682,659
Year ended 31 December 2021:
Loss and total comprehensive income for the year
-
-
(174,219)
(174,219)
Capital contribution
-
15,328,163
-
15,328,163
Balance at 31 December 2021
1
34,022,971
(186,369)
33,836,603
Year ended 31 December 2022:
Loss and total comprehensive income for the year
-
-
(3,174,065)
(3,174,065)
Balance at 31 December 2022
1
34,022,971
(3,360,434)
30,662,538
ACETO UK HOLDING LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2022
- 14 -
2022
2021
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
31
4,433,688
4,135,898
Interest paid
(1,204,670)
(709,363)
Income taxes paid
(333,686)
(4,427,654)
Net cash inflow/(outflow) from operating activities
2,895,332
(1,001,119)
Investing activities
Purchase of business
-
2,028,778
Purchase of intangible assets
(111,342)
(73,225)
Purchase of tangible fixed assets
(2,746,101)
(85,649)
Proceeds from disposal of tangible fixed assets
(40)
-
Interest received
79,893
84,473
Net cash (used in)/generated from investing activities
(2,777,590)
1,954,377
Net increase in cash and cash equivalents
117,742
953,258
Cash and cash equivalents at beginning of year
3,306,550
2,100,378
Effect of foreign exchange rates
(654,446)
252,914
Cash and cash equivalents at end of year
2,769,846
3,306,550
ACETO UK HOLDING LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
- 15 -
1
Accounting policies
Company information
Aceto UK Holding Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is 100 Avebury Boulevard, Milton Keynes, MK9 1FH.
The group consists of Aceto UK Holding Limited and all of its subsidiaries.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
Aceto UK Holding Limited is a wholly owned subsidiary of Aceto US L.L.C. The results of Aceto UK Holding Limited are included in the consolidated financial statements of Aceto US L.L.C, a company registered in the USA.
1.2
Business combinations
In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.
Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.
ACETO UK HOLDING LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 16 -
1.3
Basis of consolidation
The consolidated group financial statements consist of the financial statements of the parent company Aceto UK Holding Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.
The financial statements of Aceto UK Holding Limited are made up to 31 December 2022. The subsidiaries Syntor Fine Chemicals (Holdings) Limited and Syntor Fine Chemicals Limited statutory financial statements are for the period 1 April 2022 to 31 December 2022 and as such the transactions from 1 January 2022 to 31 December 2022 for the subsidiaries have been included in the consolidated financial statements. The year end for Syntor Fine Chemicals (Holdings) Limited and Syntor Fine Chemicals Limited was changed from 31 March 2023 to 31 December 2022 to align the year ends to the group. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
1.4
Going concern
At the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.5
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
1.6
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 10 years.
For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.
ACETO UK HOLDING LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 17 -
1.7
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases annually:
Software
30% on cost
Patents & licences
10% on cost
Know how
8.33% on cost
Customer relationships
6.67% on cost
Non compete
33.33% on cost
1.8
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases annually:
Leasehold improvements
15% on cost or over life of lease
Plant and equipment
12.5%, 15%, 20% and 30% on cost
Fixtures and fittings
12.5%, 15% and 20% on cost
Motor vehicles
30% 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 profit and loss account.
1.9
Fixed asset investments
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
ACETO UK HOLDING LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 18 -
1.10
Impairment of fixed assets
At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible 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.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.11
Stocks
Stocks 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 stocks to their present location and condition.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.12
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
ACETO UK HOLDING LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 19 -
1.13
Financial instruments
The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.
ACETO UK HOLDING LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 20 -
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
1.14
Equity instruments
Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.
1.15
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
ACETO UK HOLDING LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 21 -
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is 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.
1.16
Provisions
Provisions are recognised when the group has a legal or constructive present obligation as a result of a past event, it is probable that the group will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.
1.17
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.18
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.19
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
1.20
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.
ACETO UK HOLDING LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 22 -
2
Judgements and key sources of estimation uncertainty
In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Stock provision
Stock is assessed for impairment at each reporting date. The carrying amount of stock is compared to its net realisable value, and any excess is recognised as an impairment loss immediately in profit or loss. Stock is held in the accounts at £7,002,628 (2021: £4,195,338).
3
Turnover and other revenue
2022
2021
£
£
Turnover analysed by class of business
Sales of goods
34,433,046
26,545,907
2022
2021
£
£
Turnover analysed by geographical market
United Kingdom
965,374
507,305
Europe
20,611,345
15,449,310
USA and Canada
11,847,957
9,313,870
Rest of the world
1,008,370
1,275,422
34,433,046
26,545,907
2022
2021
£
£
Other revenue
Interest income
79,893
84,473
ACETO UK HOLDING LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 23 -
4
Operating (loss)/profit
2022
2021
£
£
Operating (loss)/profit for the year is stated after charging/(crediting):
Exchange losses/(gains)
1,295,664
(317,966)
Depreciation of owned tangible fixed assets
313,340
122,628
Loss on disposal of tangible fixed assets
3,205
-
Amortisation of intangible assets
5,988,116
3,630,432
Operating lease charges
809,328
502,076
5
Auditor's remuneration
2022
2021
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
25,000
25,000
Audit of the financial statements of the company's subsidiaries
104,053
64,907
129,053
89,907
6
Employees
The average monthly number of persons (including directors) employed by the group and company during the year was:
Group
Company
2022
2021
2022
2021
Number
Number
Number
Number
Management
38
43
-
-
Production
57
48
-
-
Total
95
91
Their aggregate remuneration comprised:
Group
Company
2022
2021
2022
2021
£
£
£
£
Wages and salaries
4,837,129
3,263,813
Social security costs
277,096
133,799
-
-
Pension costs
32,352
25,154
5,146,577
3,422,766
ACETO UK HOLDING LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 24 -
7
Directors' remuneration
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 0 (2021 - 0).
As total directors' remuneration was less than £200,000 in the current year, no disclosure is provided for that year.
8
Interest receivable and similar income
2022
2021
£
£
Interest income
Interest on bank deposits
79,893
84,473
2022
2021
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
79,893
84,473
9
Interest payable and similar expenses
2022
2021
£
£
Interest on financial liabilities measured at amortised cost:
Other interest on financial liabilities
2,937,871
1,282,593
10
Taxation
2022
2021
£
£
Current tax
UK corporation tax on profits for the current period
418,359
709,625
Adjustments in respect of prior periods
42,443
Total current tax
460,802
709,625
Deferred tax
Origination and reversal of timing differences
7,217
2,850
Changes in tax rates
2,503
Total deferred tax
9,720
2,850
Total tax charge
470,522
712,475
ACETO UK HOLDING LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
10
Taxation
(Continued)
- 25 -
The actual charge for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
2022
2021
£
£
Loss before taxation
(4,459,993)
(357,703)
Expected tax credit based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
(847,399)
(67,964)
Tax effect of expenses that are not deductible in determining taxable profit
11,530
8,477
Unutilised tax losses carried forward
(108,369)
Change in unrecognised deferred tax assets
549,395
Effect of change in corporation tax rate
2,537
-
Group relief
13,052
Permanent capital allowances in excess of depreciation
(232,942)
(551)
Depreciation on assets not qualifying for tax allowances
45,700
51
Amortisation on assets not qualifying for tax allowances
1,302,494
243,869
Research and development tax credit
(10,218)
(6,764)
Effect of overseas tax rates
(260,595)
527,982
Under/(over) provided in prior years
(35,283)
(11,187)
Deferred tax adjustments in respect of prior years
(709)
Deferred tax
704
5,510
Hybrid and other mismatches adjustment
53,677
Taxation charge
470,522
712,475
ACETO UK HOLDING LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 26 -
11
Intangible fixed assets
Group
Goodwill
Software
Patents & licences
Know how
Customer relationships
Non compete
Total
£
£
£
£
£
£
£
Cost
At 1 January 2022
36,163,507
80,681
2,484,341
3,290,000
24,499,072
82,199
66,599,800
Additions
111,342
-
111,342
Exchange adjustments
506,357
4,460
40,545
759,015
3,640
1,314,017
At 31 December 2022
36,781,206
85,141
2,524,886
3,290,000
25,258,087
85,839
68,025,159
Amortisation and impairment
At 1 January 2022
2,970,125
17,101
225,100
469,354
906,487
20,550
4,608,717
Amortisation charged for the year
3,712,081
34,850
254,642
274,057
1,683,872
28,614
5,988,116
Exchange adjustments
38,093
945
3,041
37,951
910
80,940
At 31 December 2022
6,720,299
52,896
482,783
743,411
2,628,310
50,074
10,677,773
Carrying amount
At 31 December 2022
30,060,907
32,245
2,042,103
2,546,589
22,629,777
35,765
57,347,386
At 31 December 2021
33,193,382
63,580
2,259,241
2,820,646
23,592,585
61,649
61,991,083
The company had no intangible fixed assets at 31 December 2022 or 31 December 2021.
ACETO UK HOLDING LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 27 -
12
Tangible fixed assets
Group
Leasehold improvements
Plant and equipment
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 January 2022
21,927
1,271,071
88,229
3,809
1,385,036
Additions
199,597
2,527,632
18,872
2,746,101
Disposals
(4,019)
(4,019)
Exchange adjustments
802
61,000
3,300
210
65,312
At 31 December 2022
222,326
3,859,703
110,401
4,192,430
Depreciation and impairment
At 1 January 2022
9,463
121,807
16,885
809
148,964
Depreciation charged in the year
23,514
266,885
22,941
313,340
Eliminated in respect of disposals
(854)
(854)
Exchange adjustments
272
4,277
475
45
5,069
At 31 December 2022
33,249
392,969
40,301
466,519
Carrying amount
At 31 December 2022
189,077
3,466,734
70,100
3,725,911
At 31 December 2021
12,464
1,149,264
71,344
3,000
1,236,072
The company had no tangible fixed assets at 31 December 2022 or 31 December 2021.
13
Fixed asset investments
Group
Company
2022
2021
2022
2021
Notes
£
£
£
£
Investments in subsidiaries
14
57,040,730
57,040,730
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 1 January 2022 and 31 December 2022
57,040,730
Carrying amount
At 31 December 2022
57,040,730
At 31 December 2021
57,040,730
ACETO UK HOLDING LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 28 -
14
Subsidiaries
Details of the company's subsidiaries at 31 December 2022 are as follows:
Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Indirect
Syntor Fine Chemicals (Holdings) Limited
100 Avebury Boulevard, Milton Keynes, MK9 1FH, United Kingdom
Ordinary
100.00
-
Syntor Fine Chemicals Limited
100 Avebury Boulevard, Milton Keynes, MK9 1FH, United Kingdom
Ordinary
-
100.00
Syntor Fine Chemicals S.L.
Calle Muntaner, 572 P 1 PTA. 1 08022 Barcelona, Spain
Ordinary
-
100.00
Syntor Specialty Chemicals (Hong Kong) Limited
Rooms A-B, 25/F., King Plaza, 55 King Yip Street, Kwun Tong, Kowloon, Hong Kong
Orindary
-
100.00
A&C American Chemicals Ltd
3010 de Baene, Montreal QC H4S 1L2, Canada
Ordinary
100.00
-
A&C Chemicals Europe Ltd
Mawmore, Enniskeane, Co. Cork, Ireland
Ordinary
100.00
-
A&C Bio Buffer Ltd
Unit 1, Grange Business Centre, Skule Hill, Fedamore, Co. Limerick, Ireland
Ordinary
-
100.00
Lukor Holdings Europe Limited
Grange Business Park, Skule Hill, Fedamore, Co. Limerick, V35 RH74, Ireland
Ordinary
-
100.00
Syntor Fine Chemicals S.L. and Syntor Speciality Chemicals (Hong Kong) Limited have not been consolidated into the group as they are considered immaterial to the group.
15
Financial instruments
Group
Company
2022
2021
2022
2021
£
£
£
£
Carrying amount of financial assets
Debt instruments measured at amortised cost
10,283,777
11,771,596
-
-
Carrying amount of financial liabilities
Measured at amortised cost
53,072,420
49,834,955
162,199
40,000
16
Stocks
Group
Company
2022
2021
2022
2021
£
£
£
£
Raw materials and consumables
2,435,660
1,775,797
-
-
Goods in transit
901,845
1,144,311
-
-
Finished goods and goods for resale
3,665,123
1,275,230
7,002,628
4,195,338
-
-
ACETO UK HOLDING LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 29 -
17
Debtors
Group
Company
2022
2021
2022
2021
Amounts falling due within one year:
£
£
£
£
Trade debtors
7,139,231
7,732,811
Corporation tax recoverable
504,522
Other debtors
3,294,239
4,212,374
Prepayments and accrued income
87,077
196,743
11,025,069
12,141,928
-
-
18
Creditors: amounts falling due within one year
Group
Company
2022
2021
2022
2021
£
£
£
£
Trade creditors
3,430,890
4,304,472
Amounts owed to group undertakings
162,199
Corporation tax payable
347,340
Other taxation and social security
126,296
46,777
-
-
Other creditors
18,040,820
17,257,062
Accruals and deferred income
959,938
911,494
40,000
22,557,944
22,867,145
162,199
40,000
19
Creditors: amounts falling due after more than one year
Group
Company
2022
2021
2022
2021
£
£
£
£
Other creditors
30,640,772
27,361,927
26,215,993
23,164,127
20
Provisions for liabilities
Group
Company
2022
2021
2022
2021
£
£
£
£
302,185
-
-
-
Movements on provisions:
Group
£
Additional provisions in the year
302,185
ACETO UK HOLDING LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 30 -
21
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
Liabilities
Liabilities
2022
2021
Group
£
£
Accelerated capital allowances
69,015
4,815
Tax losses
(44,133)
-
Short term differences
(386)
-
24,496
4,815
The company has no deferred tax assets or liabilities.
Group
Company
2022
2022
Movements in the year:
£
£
Liability at 1 January 2022
4,815
-
Charge to profit or loss
17,178
-
Effect of change in tax rate - profit or loss
2,503
-
Liability at 31 December 2022
24,496
-
The deferred tax asset set out above is not expected to reverse within 12 months and relates to the utilisation of tax losses against future expected profits of the same period. The deferred tax liability set out above is not expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.
22
Retirement benefit schemes
2022
2021
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
32,352
25,154
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
23
Share capital
Group and company
2022
2021
2022
2021
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary of 1p each
100
100
1
1
ACETO UK HOLDING LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 31 -
24
Translation reserve
Group
Company
2022
2021
2022
2021
£
£
£
£
At the beginning of the year
(252,914)
-
Other movements
638,874
(252,914)
-
-
At the end of the year
385,960
(252,914)
This translation reserve is in relation to foreign exchange differences arising on consolidation.
25
Capital contribution
2022
2021
Group and company
£
£
At the beginning of the year
34,022,971
18,694,808
Additions
-
15,328,163
At the end of the year
34,022,971
34,022,971
The capital contribution reserve represents a contribution from Aceto US L.L.C. the parent of Aceto UK Holding Limited for the acquisition of Syntor Fine Chemicals (Holdings) Limited in 2020 for £18,694,808. In 2021 Aceto US L.L.C. contributed a further £15,328,163 for the acquisition of A&C American Chemicals Limited and A&C Chemicals Europe Limited. Therefore the total capital contribution from Aceto US L.L.C. is £34,022,971.
26
Profit and loss reserves
Group
Company
2022
2021
2022
2021
£
£
£
£
At the beginning of the year
(1,132,974)
(62,796)
(186,369)
(12,150)
Loss for the year
(4,930,515)
(1,070,178)
(3,174,065)
(174,219)
At the end of the year
(6,063,489)
(1,132,974)
(3,360,434)
(186,369)
ACETO UK HOLDING LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 32 -
27
Operating lease commitments
Lessee
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
Group
Company
2022
2021
2022
2021
£
£
£
£
Within one year
637,365
516,466
-
-
Between two and five years
988,860
1,006,322
-
-
In over five years
-
7,947
-
-
1,626,225
1,530,735
-
-
28
Events after the reporting date
Since year end there have been various structural changes within the group:
Lukor Holdings Europe has been placed in a members voluntary liquidation
A&C Chemicals Europe Limited ongoing trading business has been transferred to A&C Bio Buffer Limited. The purpose of these structural changes are to simplify the organisation, strengthen sales synergies, improve distribution and organisational agility and streamline financial reporting.
Aceto UK has invested in 100% of the shares of Actylis Switzerland GmbH on 20 March 2023, a Swiss entity, to support the EU Management structure.
All of the above are non-adjusting post balance sheet events.
29
Related party transactions
Aceto US L.L.C provided a capital contribution during 2021 for Aceto UK Holding Limited to acquire A&C American Chemicals Limited and A&C Chemicals Europe Limited. The total capital contribution amounted to £34,022,971 (2021: £34,022,971). This is non redeemable and included within other reserves in equity. In 2020 Aceto US L.L.C provided a capital contribution during the period for Aceto UK Holding Limited to acquire Syntor Fine Chemicals (Holdings) Limited. The total capital contribution amounted to £18,694,809 which is non redeemable and included within other reserves in equity.
Aceto U.S. L.L.C also provided a related party loan to Aceto UK Holding Limited of £23,017,758 in 2021. The loan was provided to acquire A&C Bio Buffer Limited. The loan is subject to an annual interest rate of 7.17% payable quarterly in arrears, unpaid interest is added to the principal loan amount. At the year ending 31 December 2022 the balance owed was £26,215,993 (2021: £23,164,126).
Aceto US L.L.C also provided a related party loan to A&C American Chemicals Limited in 2021. At the year ending 31 December 2022 the balance owed was £17,474,830 (2021: £16,615,250). £16,939,825 of this loan was provided as a promissory note in relation to their acquisition. The loan is subject to an annual interest rate of 7.035% payable quarterly in arrears, unpaid interest is added to the principal loan amount. The remaining amount of the loan £535,005 is in relation to amounts loaned for payment of transaction bonuses in connection with the A&C Chemicals Limited acquisition, it is unsecured, non-interest bearing and due on demand.
ACETO UK HOLDING LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 33 -
30
Controlling party
The immediate parent company of Aceto UK Holding Limited is Aceto US L.L.C a company registered in the USA.
The ultimate parent company is New Mountain Capital LLC. The directors believe there is no ultimate controlling party.
The smallest group in which the results of the company are consolidated is that headed by Aceto UK Holding Limited.
The largest group in which the results of the company are consolidated is that headed by Aceto Holdings, L.P. (registered office address: c/o New Mountain Capital, LLC, 1633 Broadway 48th Floor, New York, NY 10019), which is also the ultimate parent company.
31
Cash generated from group operations
2022
2021
£
£
Loss for the year after tax
(4,930,515)
(1,070,178)
Adjustments for:
Taxation charged
470,522
712,475
Finance costs
2,937,871
709,363
Investment income
(79,893)
(84,473)
Loss on disposal of tangible fixed assets
3,205
-
Amortisation and impairment of intangible assets
5,988,116
3,630,432
Depreciation and impairment of tangible fixed assets
313,340
122,628
Increase/(decrease) in provisions
302,185
(4,240,615)
Movements in working capital:
Increase in stocks
(2,807,290)
(518,155)
Decrease/(increase) in debtors
1,621,381
(5,793,275)
Increase in creditors
614,766
10,667,696
Cash generated from operations
4,433,688
4,135,898
32
Analysis of changes in net funds - group
1 January 2022
Cash flows
Exchange rate movements
31 December 2022
£
£
£
£
Cash at bank and in hand
3,306,550
117,742
(654,446)
2,769,846
2022-12-312022-01-01falseCCH SoftwareCCH Accounts Production 2023.200J SteeleA LuxenburgerB FosterR Young4930515124206132022-01-012022-12-3112420613bus:Director12022-01-012022-12-3112420613bus:Director32022-01-012022-12-3112420613bus:Director42022-01-012022-12-3112420613bus:Director22022-01-012022-12-3112420613bus:RegisteredOffice2022-01-012022-12-3112420613bus:Consolidated2022-12-31124206132022-12-3112420613bus:Consolidated2022-01-012022-12-3112420613bus:Consolidated2021-01-012021-12-31124206132021-01-012021-12-3112420613core:Goodwillbus:Consolidated2022-12-3112420613core:Goodwillbus:Consolidated2021-12-3112420613core:OtherResidualIntangibleAssetsbus:Consolidated2022-12-3112420613core:OtherResidualIntangibleAssetsbus:Consolidated2021-12-3112420613core:ComputerSoftwarebus:Consolidated2022-12-3112420613core:PatentsTrademarksLicencesConcessionsSimilarbus:Consolidated2022-12-3112420613core:Non-standardIntangibleAssetClass1ComponentIntangibleAssetsOtherThanGoodwillbus:Consolidated2022-12-3112420613core:Non-standardIntangibleAssetClass2ComponentIntangibleAssetsOtherThanGoodwillbus:Consolidated2022-12-3112420613core:ComputerSoftwarebus:Consolidated2021-12-3112420613core:PatentsTrademarksLicencesConcessionsSimilarbus:Consolidated2021-12-3112420613core:Non-standardIntangibleAssetClass1ComponentIntangibleAssetsOtherThanGoodwillbus:Consolidated2021-12-3112420613core:Non-standardIntangibleAssetClass2ComponentIntangibleAssetsOtherThanGoodwillbus:Consolidated2021-12-3112420613bus:Consolidated2021-12-3112420613core:LeaseholdImprovementsbus:Consolidated2022-12-3112420613core:PlantMachinerybus:Consolidated2022-12-3112420613core:FurnitureFittingsbus:Consolidated2022-12-3112420613core:MotorVehiclesbus:Consolidated2022-12-3112420613core:LeaseholdImprovementsbus:Consolidated2021-12-3112420613core:PlantMachinerybus:Consolidated2021-12-3112420613core:FurnitureFittingsbus:Consolidated2021-12-3112420613core:MotorVehiclesbus:Consolidated2021-12-31124206132021-12-3112420613core:ShareCapitalbus:Consolidated2022-12-3112420613core:ShareCapitalbus:Consolidated2021-12-3112420613core:OtherReservesSubtotalbus:Consolidated2022-12-3112420613core:OtherReservesSubtotalbus:Consolidated2021-12-3112420613core:OtherMiscellaneousReservebus:Consolidated2022-12-3112420613core:OtherMiscellaneousReservebus:Consolidated2021-12-3112420613core:ShareCapital2022-12-3112420613core:ShareCapital2021-12-3112420613core:OtherMiscellaneousReserve2022-12-3112420613core:OtherMiscellaneousReserve2021-12-3112420613core:RetainedEarningsAccumulatedLosses2022-12-3112420613core:ShareCapitalbus:Consolidated2020-12-3112420613core:ConvertibleDebtEquityComponentReservebus:Consolidated2020-12-3112420613core:RetainedEarningsAccumulatedLossesbus:Consolidated2020-12-3112420613core:RetainedEarningsAccumulatedLossesbus:Consolidated2021-12-3112420613core:RetainedEarningsAccumulatedLossesbus:Consolidated2022-12-3112420613core:ShareCapital2020-12-3112420613core:RetainedEarningsAccumulatedLosses2020-12-3112420613core:RetainedEarningsAccumulatedLosses2021-12-3112420613core:ConvertibleDebtEquityComponentReserve2020-12-3112420613core:OtherReservesSubtotal2022-12-3112420613core:OtherReservesSubtotal2021-12-3112420613bus:Consolidated2020-12-3112420613core:Goodwill2022-01-012022-12-3112420613core:IntangibleAssetsOtherThanGoodwill2022-01-012022-12-3112420613core:ComputerSoftware2022-01-012022-12-3112420613core:PatentsTrademarksLicencesConcessionsSimilar2022-01-012022-12-3112420613core:Non-standardIntangibleAssetClass1ComponentIntangibleAssetsOtherThanGoodwill2022-01-012022-12-3112420613core:Non-standardIntangibleAssetClass2ComponentIntangibleAssetsOtherThanGoodwill2022-01-012022-12-3112420613core:Non-standardIntangibleAssetClass3ComponentIntangibleAssetsOtherThanGoodwill2022-01-012022-12-3112420613core:LeaseholdImprovements2022-01-012022-12-3112420613core:PlantMachinery2022-01-012022-12-3112420613core:FurnitureFittings2022-01-012022-12-3112420613core:MotorVehicles2022-01-012022-12-3112420613core:UKTaxbus:Consolidated2022-01-012022-12-3112420613core:UKTaxbus:Consolidated2021-01-012021-12-3112420613bus:Consolidated12022-01-012022-12-3112420613bus:Consolidated12021-01-012021-12-3112420613bus:Consolidated22022-01-012022-12-3112420613bus:Consolidated22021-01-012021-12-3112420613bus:Consolidated32022-01-012022-12-3112420613bus:Consolidated32021-01-012021-12-3112420613bus:Consolidated42022-01-012022-12-3112420613bus:Consolidated42021-01-012021-12-3112420613core:Goodwillbus:Consolidated2021-12-3112420613core:ComputerSoftwarebus:Consolidated2021-12-3112420613core:PatentsTrademarksLicencesConcessionsSimilarbus:Consolidated2021-12-3112420613core:Non-standardIntangibleAssetClass1ComponentIntangibleAssetsOtherThanGoodwillbus:Consolidated2021-12-3112420613core:Non-standardIntangibleAssetClass2ComponentIntangibleAssetsOtherThanGoodwillbus:Consolidated2021-12-3112420613bus:Consolidated2021-12-3112420613core:Goodwillcore:ExternallyAcquiredIntangibleAssetsbus:Consolidated2022-01-012022-12-3112420613core:ComputerSoftwarecore:ExternallyAcquiredIntangibleAssetsbus:Consolidated2022-01-012022-12-3112420613core:PatentsTrademarksLicencesConcessionsSimilarcore:ExternallyAcquiredIntangibleAssetsbus:Consolidated2022-01-012022-12-3112420613core:Non-standardIntangibleAssetClass1ComponentIntangibleAssetsOtherThanGoodwillcore:ExternallyAcquiredIntangibleAssetsbus:Consolidated2022-01-012022-12-3112420613core:Non-standardIntangibleAssetClass2ComponentIntangibleAssetsOtherThanGoodwillcore:ExternallyAcquiredIntangibleAssetsbus:Consolidated2022-01-012022-12-3112420613core:ExternallyAcquiredIntangibleAssetsbus:Consolidated2022-01-012022-12-3112420613core:Goodwillbus:Consolidated2022-01-012022-12-3112420613core:ComputerSoftwarebus:Consolidated2022-01-012022-12-3112420613core:PatentsTrademarksLicencesConcessionsSimilarbus:Consolidated2022-01-012022-12-3112420613core:Non-standardIntangibleAssetClass1ComponentIntangibleAssetsOtherThanGoodwillbus:Consolidated2022-01-012022-12-3112420613core:Non-standardIntangibleAssetClass2ComponentIntangibleAssetsOtherThanGoodwillbus:Consolidated2022-01-012022-12-3112420613core:LeaseholdImprovementsbus:Consolidated2021-12-3112420613core:PlantMachinerybus:Consolidated2021-12-3112420613core:FurnitureFittingsbus:Consolidated2021-12-3112420613core:MotorVehiclesbus:Consolidated2021-12-3112420613core:LeaseholdImprovementsbus:Consolidated2022-01-012022-12-3112420613core:PlantMachinerybus:Consolidated2022-01-012022-12-3112420613core:FurnitureFittingsbus:Consolidated2022-01-012022-12-3112420613core:MotorVehiclesbus:Consolidated2022-01-012022-12-3112420613core:CurrentFinancialInstruments2022-12-3112420613core:CurrentFinancialInstruments2021-12-3112420613core:CurrentFinancialInstrumentsbus:Consolidated2022-12-3112420613core:CurrentFinancialInstrumentsbus:Consolidated2021-12-3112420613core:CurrentFinancialInstrumentscore:WithinOneYearbus:Consolidated2022-12-3112420613core:CurrentFinancialInstrumentscore:WithinOneYearbus:Consolidated2021-12-3112420613core:CurrentFinancialInstrumentscore:WithinOneYear2022-12-3112420613core:CurrentFinancialInstrumentscore:WithinOneYear2021-12-3112420613core:Non-currentFinancialInstrumentscore:AfterOneYearbus:Consolidated12022-12-3112420613core:Non-currentFinancialInstrumentscore:AfterOneYearbus:Consolidated12021-12-3112420613core:Non-currentFinancialInstrumentscore:AfterOneYear22022-12-3112420613core:Non-currentFinancialInstrumentscore:AfterOneYear22021-12-3112420613bus:PrivateLimitedCompanyLtd2022-01-012022-12-3112420613bus:FRS1022022-01-012022-12-3112420613bus:Audited2022-01-012022-12-3112420613bus:ConsolidatedGroupCompanyAccounts2022-01-012022-12-3112420613bus:FullAccounts2022-01-012022-12-31xbrli:purexbrli:sharesiso4217:GBP