Financial Statements
Caerus UK 1 Limited
For the year ended 31 December 2023
Registered number: 13970414
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Company Information
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Vicky Harris (resigned 6 September 2024)
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Levine Chris Randiga (appointed 14 February 2023, resigned 27 September 2024)
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Roberto Simon Rabanal (appointed 6 March 2023, resigned 31 July 2024)
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Kevin Stephen Morgan (appointed 7 September 2023, resigned 10 September 2024)
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Jay Nadler (re-appointed 27 September 2024, resigned 6 March 2023)
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Cem Mehmet Baydar (appointed 6 March 2023, resigned 7 September 2023)
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Ramsey Hashem (resigned 27 January 2023)
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Chartered Accountants & Statutory Auditors
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Contents
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Director's responsibilities statement
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Independent auditor's report
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Statement of comprehensive income
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Statement of financial position
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Statement of changes in equity
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Notes to the financial statements
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Strategic report
For the year ended 31 December 2023
The director presents his strategic report for the year ended 31 December 2023.
The principal activity of the company is that of an investment holding company under the Norstella Group. The Company was established for the purpose of serving as a holding entity for the non-US operating entities of the Norstella Group that were acquired during 2022. It now operates as a holding company for all of the Norstella Group non-US subsidiary companies, all of which are wholly owned by the Company. Additionally, the Company performs services and facilitates the delivery of certain services performed by way of a Master Services Agreement and related Deeds of Adherence. It is intended to remain as such going forward. The company continues to have loan relationships with Group companies.
During the year, the company continued its intended purpose and acquired 100% of Evaluate Japan KK, Norstella Information Consulting (Shanghai) Co., Ltd., Evaluate Limited and Panalgo B.V. all of which are companies within the Norstella Group. Regular reviews of performance related to the operating subsidiaries were conducted at year end and resulted in an impairment loss of £31,579k.
The net assets as at 31 December 2003 amounted to £574,414k (2022: £584,479k).
Principal risks and uncertainties
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The Company has adopted a process for the identification, assessment, treatment, monitoring and reporting of risk. This process helps support business objectives by linking into business strategy, identifying and reacting to emerging risks and developing cost effective solutions to risk exposures.
Foreign currency risk
Foreign currency exchange risks are attributable to loans advanced to group undertakings and loans received from group undertakings not denominated in an entity’s functional currency, debt instruments, etc. and include exposures to the United States Dollar. The Company's functional and reporting currency is GBP. Transactions that are paid in a foreign currency are remeasured into GBP and recorded in the financial statements at prevailing currency exchange rates. A reduction in the value of the GBP against currencies of other countries could result in the use of additional cash to settle operating, administrative and tax liabilities. On an as-needed basis, foreign exchange hedge transactions are executed at the Norstella Group level to mitigate exposure to changes in foreign currency exchange rates.
Credit risk
Financial instruments that potentially subject the Company to credit risk primarily consist of cash, and intercompany receivable.
At 31 December 2023, the Company had £470 thousands of cash. The Company’s cash are maintained with various financial institutions and the deposits with these institutions may exceed the amount of insurance provided on such deposits. However, the Company regularly monitors the financial stability of its financial institutions and believes that the Company is not exposed to any significant default risk. At 31 December 2023 the Company's cash was held in banks that have a credit rating of A+.
For amounts due from related companies, the Company is exposed to credit risk in the event of non-payment by related parties to the extent of the amounts recorded on the balance sheet. This risk is managed by the fact that all amounts due from related parties are centrally managed by the accounting & finance teams of the Norstella Group. Additionally, if financial support was needed due to the non-payment of any amounts owed, the risk is further mitigated through the letter of support from the ultimate Parent, see below for additional information.
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Strategic report (continued)
For the year ended 31 December 2023
Principal risks and uncertainties (continued)
Liquidity risk
Liquidity risk is the risk that we will not be able to meet our financial obligations when due. Due to the specific set-up and role of the Company within the Group as a holding entity, the Company is fully dependent on the Parent for financial support. As stated in the Going Concern section of the Directors’ Report, the Company has obtained a letter of support from the ultimate Parent which confirms the Parent’s intent to provide sufficient financial support to enable the Company to meet its obligations as and when they fall due for the 12-month from the date of approval of signing the financial statements and that they have the ability to provide this support. We believe that the support from the Parent, in combination with our existing cash of approximately £470 thousands as of 31 December 2023, will be sufficient to meet our current working capital and debt repayment requirements.
Risk related to activity undertaken at subsidiaries
The inherent business structure of the Company as a holding entity creates a unique set of risks caused by activities undertaken by the Company’s subsidiaries. These risks could materially impact the value of investments made in these subsidiaries. The risks entailed include:
∙Operational risk: If the subsidiary fails to manage its operations effectively, it may yield poor financial performance negatively impacting its valuation. These activities may include supply chain disruption, inefficient management, technology obsolescence, or failure to meet market demands.
∙Regulatory risk: Subsidiaries have to comply with the specific regulations in their sector as well as those of the countries in which they operate. Any non-compliance or regulatory changes could lead to fines, increased operating costs, or even an inability to conduct business in certain jurisdictions.
∙Financial risk: A subsidiary's financial instability or underperformance may also endanger the value of the Company’s investment. This instability can arise from poor cash flow management, excessive credit exposure, or substantial losses.
∙Currency exchange risk: As the subsidiaries may operate globally, they are exposed to currency exchange risk. Fluctuations in exchange rates between the GBP and foreign currencies may also impact the investment value of each subsidiary.
The Company manages these risks with enhanced due diligence which involves continually assessing the subsidiary's operations, financials, and business environment to identify potential risks. This enables proactive risk mitigation. These risks and uncertainties are further managed through regular board meetings, where actions are taken, as needed, to mitigate the risks, as well as regular reviews by the Company and the Parent of financial and operational results at each subsidiary. Additionally, the Company’s investments in subsidiaries are assessed for impairment at least every reporting period, or more frequently when there is an indicator of impairment based on internal or external information. Furthermore, these risks are further mitigated by the fact that a shared management and governance team monitors and manages the activity at all Parent group subsidiaries.
Impairment risk
The Company’s assets most subject to the risk of impairment include the Company’s investments in subsidiaries. There is a risk that the carrying value of an investment exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The Company mitigates this risk by evaluating the recoverability of all investments in subsidiaries for possible impairment at least once per reporting period, or when events or changes in circumstances indicate that the carrying amount of such assets may not be fully recoverable. Such events and changes may include significant changes in performance relative to expected operating results, significant negative industry or economic trends, and changes in the Group’s business strategy. Refer to the Principal activities and review of the business section above, as well as Note 11 for additional information.
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Strategic report (continued)
For the year ended 31 December 2023
This report was approved by the board and signed on its behalf.
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Director's report
For the year ended 31 December 2023
The director presents his report and the financial statements for the year ended 31 December 2023.
Caerus UK 1 Limited (the “Company”) operates as a holding company for its subsidiary companies which are primarily engaged in the provision of online information for clients in the pharmaceutical industry.
The financial statements cover the year from 1 January to 31 December 2023. The prior year comparatives cover the 42-week period from date of incorporation on 11 March 2022 to 31 December 2022.
The loss for the year, after taxation, amounted to £10,065 thousand (2022: loss £526,609 thousand).
No dividends were paid during the year or proposed at the end of the year (2022: £Nil).
The directors who served during the year were:
Vicky Harris (resigned 6 September 2024)
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Levine Chris Randiga (appointed 14 February 2023, resigned 27 September 2024)
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Roberto Simon Rabanal (appointed 6 March 2023, resigned 31 July 2024)
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Kevin Stephen Morgan (appointed 7 September 2023, resigned 10 September 2024)
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Jay Nadler (re-appointed 27 September 2024, resigned 6 March 2023)
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Cem Mehmet Baydar (appointed 6 March 2023, resigned 7 September 2023)
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Ramsey Hashem (resigned 27 January 2023)
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During the year, the Company made no political contributions.
There are no future developments. The Company will continue as a holding company in the future.
Qualifying third party indemnity provisions
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No qualifying third-party indemnity provision has been in place for one or more directors of the company or of an associated company at any time during the financial year, or at the date of approval of the directors’ report.
Energy and carbon reporting
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The Company is part of a larger group where environmental and sustainability initiatives are a key part of how it does business. To the extent other members of the group in the United Kingdom are subject to these energy and carbon reporting obligations, appropriate information will be included in its or their annual Directors Report(s).
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Director's report (continued)
For the year ended 31 December 2023
Disclosure of information to auditor
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The director at the time when this Director's report is approved has confirmed that:
∙so far as is aware, there is no relevant audit information of which the Company's auditor is unaware, and
∙ has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditor is aware of that information.
Post balance sheet events
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On 12 April 2024, the Company completed a share purchase acquisition of A2Z Management Solutions Private Limited (now Norstella India Private Limited), for a total consideration of £3,764k.
The auditor, Grant Thornton, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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Director's responsibilities statement
For the year ended 31 December 2023
The director is responsible for preparing the Strategic report, the Director's report and the financial statements in accordance with applicable law and regulations.
Company law requires the director to prepare financial statements for each financial year. Under that law the director has elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 101 ‘Reduced Disclosure Framework’. Under company law the director must not approve the financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.
In preparing these financial statements, the director is required to:
∙select suitable accounting policies and then apply them consistently;
∙make judgments 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 financial statements;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The director is responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable him to ensure that the financial statements comply with the Companies Act 2006. He is also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
On behalf of the board
Jay Nadler
Director
Date: 29 January 2025
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Independent auditor's report to the members of Caerus UK 1 Limited
We have audited the financial statements of Caerus UK 1 Limited, which comprise the Statement of comprehensive income, the Statement of financial position, the Statement of changes in equity for the financial year ended 31 December 2023, and the related notes to the financial statements, including a summary of significant accounting policies.
The financial reporting framework that has been applied in the preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 101 ‘Reduced Disclosure Framework’.
In our opinion, Caerus UK 1 Limited's financial statements:
∙give a true and fair view in accordance with United Kingdom Generally Accepted Accounting Practice of the assets, liabilities and financial position of the Company as at 31 December 2023 and of its financial performance for the financial year then ended; 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 'Responsibilities of the auditor 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 United Kingdom, namely the FRC's Ethical Standard and the ethical pronouncements established by Chartered Accountants Ireland, applied as determined to be appropriate in the circumstances of the entity. 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
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In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for a period of at least twelve months from the date when the financial statements are authorised for issue.
Our responsibilities, and the responsibilities of the director, with respect to going concern are described in the relevant sections of this report.
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Independent auditor's report to the members of Caerus UK 1 Limited (continued)
The financial statements of Caerus UK1 Limited for the year ended 31 December 2022 were audited by Ernst & Young LLP who expressed a disclaimer of opinion on those statements on 24 July 2024.
Other information comprises the information included in the Annual Report, other than the financial statements and our Auditor's report thereon, including the Director's report and the Strategic report. The director are responsible for the other information. Our opinion on the financial statements does not cover the information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, 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 audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies in the financial statements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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 the audit:
∙the information given in the Director's report and the Strategic report for the financial year for which the financial statements are prepared is consistent with the financial statements, and
∙the Director's report and the Strategic report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
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In the light of the knowledge and understanding of the company and its environment we have obtained in the course of the audit, we have not identified material misstatements in the Director's report and the Strategic 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 director's remuneration specified by law are not made; or
∙we have not received all the information and explanations we require for our audit.
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Independent auditor's report to the members of Caerus UK 1 Limited (continued)
Responsibilities of management and those charged with governance for the financial statements
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Management is responsible for the preparation of the financial statements which give a true and fair view in accordance with United Kingdom Generally Accepted Accounting Practice, including FRS101 and for such internal control as the director 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, management is 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 management either intend to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company's financial reporting process.
Responsibilities of the auditor for the audit of the financial statements
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The objectives of an auditor 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 their 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.
A further description of an auditor's responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. Owing to the inherent limitations of an audit, there is an unavoidable risk that material misstatement in the financial statements may not be detected, even though the audit is properly planned and performed in accordance with ISAs (UK).
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below:
Based on our understanding of the Company and industry, we identified that the principal risks of non-compliance with laws and regulations related to compliance with data protection and Employment laws, Health and Safety Regulation and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulation that have a direct impact on the preparation of the financial statements such as Companies Act 2006 and UK tax legislation. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries to manipulate financial performance and management bias through judgements and assumptions in significant accounting estimates, in particular in relation to significant one-off or unusual transactions. We apply professional scepticism through the audit to consider potential deliberate omission or concealment of significant transactions, or incomplete/inaccurate disclosures in the financial statements.
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Independent auditor's report to the members of Caerus UK 1 Limited (continued)
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud (continued)
In response to these principal risks, our audit procedures included but were not limited to:
∙inquiries of management and board on the policies and procedures in place regarding compliance with laws and regulations, including consideration of known or suspected instances of non-compliance and whether they have knowledge of any actual, suspected or alleged fraud
∙inspection of the Company’s legal correspondence and review of minutes of board meetings during the financial year to corroborate inquiries made;
∙gaining an understanding of the internal controls established to mitigate risk related to fraud;
discussion amongst the engagement team in relation to the identified laws and regulations and regarding the risk of fraud, and remaining alert to any indications of non-compliance or opportunities for fraudulent manipulation of financial statements throughout the audit;
∙identifying and testing journal entries to address the risk of inappropriate journals and management override of controls
∙designing audit procedures to incorporate unpredictability around the nature, timing or extent of our testing;
∙challenging assumptions and judgements made by management in their significant accounting estimates, including impairment assessment of investments in subsidiaries and impairment of financial assets; and
∙review of the financial statements disclosures to underlying supporting documentation and inquiries of management.
The primary responsibility for the prevention and detection of irregularities including fraud rests with those
charged with governance and management. As with any audit, there remains a risk of non-detection or irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations or override of
internal controls.
The purpose of our audit work and to whom we owe our responsibilities
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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.
Tracey Sullivan (Senior statutory auditor)
for and on behalf of
Grant Thornton
Chartered Accountants &
Statutory Auditors
13-18 City Quay
Dublin 2
Date: 29 January 2025
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Statement of comprehensive income
For the year ended 31 December 2023
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Income from fixed assets investments
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All amounts relate to continuing operations.
There was no other comprehensive income for 2023 (2022: £Nil).
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The notes on pages 14 to 30 form part of these financial statements.
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Caerus UK 1 Limited
Registered number:13970414
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Statement of financial position
As at 31 December 2023
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 14 to 30 form part of these financial statements.
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Statement of changes in equity
For the year ended 31 December 2023
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Comprehensive income for the year
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Statement of changes in equity
For the year ended 31 December 2022
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Comprehensive income for the period
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Contributions by and distributions to owners
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Shares issued during the period
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The notes on pages 14 to 30 form part of these financial statements.
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Notes to the financial statements
For the year ended 31 December 2023
Caerus UK1 Limited ("the Company") is a private company limited by shares incorporated in the UK and was established on 11 March 2022. The registered office is at 3 More London Riverside, London, SE1 2AQ. The Company is an investment holding company under the Norstella Group. The Company was established for the purpose of serving as a holding entity for the non-US operating entities of the Norstella Group that were acquired during 2022. It now operates as a holding company for all of the Norstella Group non-US subsidiary companies, all of which are wholly owned by the Company. Additionally, the Company perfom services and facilitates the delivery of certain services performed by way of a Master Services Agreement and related Deeds of Adherence. Furthermore, the Company a Transitional Services Agreement with Informa Group Limited ("Informa") whereby the Company certain transitional services provided by Informa to the Company’s wholly-owned subsidiaries.
2.Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 101 'Reduced Disclosure Framework' and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 101 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:
Certain prior year amounts have been reclassified to align with the current year presentation. The reclassification had £Nil net impact to the financial statements.
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Exemption from preparing consolidated financial statements
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The Company has taken advantage of the exemption conferred by Section 401 of the Companies Act 2006 not to produce consolidated financial statements as it is included in the consolidated financial statements of a parent undertaking established under the law of Luxembourg. The financial statements contain information relating to the Company as an individual undertaking and do not contain consolidated financial information as the parent of a group.
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Financial Reporting Standard 101 - reduced disclosure exemptions
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The Company has taken advantage of the following disclosure exemptions under FRS 101:
∙the requirements of IFRS 7 Financial Instruments: Disclosures
∙the requirements of paragraphs 91-99 of IFRS 13 Fair Value Measurement
∙the requirements of the second sentence of paragraph 110 and paragraphs 113(a), 114, 115, 118, 119(a) to (c), 120 to 127 and 129 of IFRS 15 Revenue from Contracts with Customers
∙the requirement in paragraph 38 of IAS 1 'Presentation of Financial Statements' to present comparative information in respect of:
- paragraph 79(a)(iv) of IAS 1;
- paragraph 73(e) of IAS 16 Property, Plant and Equipment;
- paragraph 118(e) of IAS 38 Intangible Assets;
∙the requirements of paragraphs 10(d), 10(f), 16, 38A, 38B, 38C, 38D, 40A, 40B, 40C, 40D, 111 and 134-136 of IAS 1 Presentation of Financial Statements
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Notes to the financial statements
For the year ended 31 December 2023
2.Accounting policies (continued)
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Financial Reporting Standard 101 - reduced disclosure exemptions (continued)
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∙the requirements of IAS 7 Statement of Cash Flows
∙the requirements of paragraphs 30 and 31 of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors
∙the requirements of paragraph 17 and 18A of IAS 24 Related Party Disclosures
∙the requirements in IAS 24 Related Party Disclosures to disclose related party transactions entered into between two or more members of a group, provided that any subsidiary which is a party to the transaction is wholly owned by such a member
This information is included in the consolidated financial statements of Caerus PIKCo S.à r.l. as at 31 December 2023 and these financial statements may be obtained from 412F Route d’Esch, 1471, Luxembourg.
The accompanying financial statements have been prepared on the assumption that the Company will continue as a going concern.
As part of its assessment to continue as a going concern for the 12-month from the date of approval of signing the financial statements, the Company has considered the costs that it forecasts to incur over the period. Considering the amount of costs it will incur and given the Company is dependent upon cash contributions from its ultimate parent, the Company has obtained a letter of support from its ultimate parent undertaking, Caerus PikCo S.à.r.l. This letter confirms the intent to provide sufficient financial support to enable the Company to meet its obligations as and when they fall due for the 12-month from the date of approval of signing the financial statements and that they have the ability to provide this support.
Through the Company's facilitation of the TSA, the Company incurs costs related to the foreign employees subject to the TSA for services provided by those employees. These services benefit certain
other subsidiaries within the Caerus PikCo Group (the "Service Recipients"). The Service Recipients reimburse the Company for the actual costs incurred with no markup and are only allocated to the business benefiting from each activity. For the period ended 31 December 2023, £30,912 thousands (2022: £6,078 thousands) in costs were incurred by the Company on behalf of the Service Recipients in
relation to services under the TSA and £30,912 thousands (2022: £6,078 thousands) in reimbursements
were earned by the Company in relation to Service Recipients incurring costs under the TSA.
Principal versus agent considerations
When a third party is involved in providing goods or services to a customer, the Company analyses whether the Company acts as a principal or an agent in the transaction, based on whether the Company
obtains control of the product before it is transferred to the customer, using the indicators provided in
IFRS 15, including: primary responsibility for fulfilling the promise to provide the products to its customers, inventory risk before and after transfer to the customers and discretion in establishing the selling price of each product. When determined to be the agent in the arrangements, the Company recognises revenues in the net amount it expects to be entitled in exchange for the services transferred
to the customers.
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Notes to the financial statements
For the year ended 31 December 2023
2.Accounting policies (continued)
As the Company is not the primary obligor and does not have the ability to establish price, the Company is acting as an agent by facilitating the delivery of the TSA services and therefore recognizes revenues related to the TSA arrangement on a net basis. As there is no markup on the reimbursed fees, there is no net effect to the Income Statement.
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Foreign currency translation
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Functional and presentation currency
The Company's functional and presentational currency is GBP (£). The financial statements are presented in round thousands (£000).
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.
Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Statement of comprehensive income within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.
Interest income is recognised in profit or loss using the effective interest method.
Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
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Notes to the financial statements
For the year ended 31 December 2023
2.Accounting policies (continued)
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Current and deferred taxation
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Current Income Tax
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and laws used to compute the amount are those enacted or substantively enacted at the reporting date in the countries where the Company operates and generates taxable income. Current income tax relating to items recognized directly in equity is recognized in equity and not in the statement of profit or loss. Management periodically evaluates positions taken in the tax returns regarding situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
Deferred Tax
Deferred tax is provided using the liability method on temporary differences, that are controlled by the management of the Company and expected not to reverse in the future, between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.
Deferred tax liabilities are recognized for all taxable temporary differences, except:
∙When the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss
∙In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint arrangements, when the timing of the reversal of the temporary differences can be controller and it is probable that the temporary differences will not reverse in the foreseeable future.
Deferred tax assets are recognized for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilized, except:
∙When the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized. Unrecognized deferred tax assets are re-assessed at each reporting date and are recognized to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
In assessing the recoverability of deferred tax assets, the Company relies on the same forecast assumptions used elsewhere in the financial statements and in other management reports.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.
Page 17
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Notes to the financial statements
For the year ended 31 December 2023
2.Accounting policies (continued)
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Current and deferred taxation (continued)
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Deferred tax relating to items recognized outside profit or loss is recognized outside profit or loss. Deferred tax items are recognized in correlation to the underlying transaction either in OCI or directly in equity.
The Company offsets deferred tax assets and deferred tax liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realize the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.
Investments in subsidiaries are measured at cost less accumulated impairment.
Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at arm’s length, for similar assets or observable market prices less incremental costs of disposing of the asset.
Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
Cash is represented by deposits with financial institutions repayable without penalty on notice of not more than 24 hours.
Creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers.
Creditors are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.
Page 18
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Notes to the financial statements
For the year ended 31 December 2023
2.Accounting policies (continued)
The Company recognises financial instruments when it becomes a party to the contractual arrangements of the instrument. Financial instruments are de-recognised when they are discharged or when the contractual terms expire. The Company's accounting policies in respect of financial instruments transactions are explained below:
Financial assets and financial liabilities are initially measured at fair value.
Financial assets
All recognised financial assets are subsequently measured in their entirety at either fair value or amortised cost, depending on the classification of the financial assets.
Fair value through profit or loss
All of the Company's financial assets are subsequently measured at fair value at the end of each reporting period, with any fair value gains or losses being recognised in profit or loss to the extent they are not part of a designated hedging relationship. The net gain or loss recognised in profit or loss includes any dividend or interest earned on the financial asset.
Impairment of financial assets
Receivables are reviewed regularly to assess the adequacy of the provision for expected credit losses (ECL) in accordance with IFRS 9. The exposure to credit risk in relation to related party receivables are managed on a group basis. Credit risk covering related party balances is reviewed based on historical performance, credit worthiness, and other factors including forward-looking information relevant to the related party. There are no assessed credit risks as of 2023 and 2022 and such, no provision for ECL has been made.
Financial liabilities
Fair value through profit or loss
Financial liabilities are classified as at fair value through profit or loss, when the financial liability is held for trading, or is designated as at fair value through profit or loss. This designation may be made if such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise, or the financial liability forms part of a group of financial instruments which is managed and its performance is evaluated on a fair value basis, or the financial liability forms part of a contract containing one or more embedded derivatives, and IFRS 9 permits the entire combined contract to be designated as at fair value through profit or loss. Any gains or losses arising on changes in fair value are recognised in profit or loss to the extent that they are not part of a designated hedging relationship.
Page 19
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Notes to the financial statements
For the year ended 31 December 2023
2.Accounting policies (continued)
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Financial instruments (continued)
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At amortised cost
Financial liabilities which are neither contingent consideration of an acquirer in a business combination, held for trading, nor designated as at fair value through profit or loss are subsequently measured at amortised cost using the effective interest method. This is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or where appropriate a shorter period, to the amortised cost of a financial liability.
After initial recognition, loans owed to immediate parent are subsequently measured at amortized cost using the effective interest method. Amortized cost is calculated by considering any issue costs and any discount or premium on settlement. Loans owed to immediate parent are presented net of amortized issue costs on the balance sheet. Refer to Note 16 for additional detail
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Judgments in applying accounting policies and key sources of estimation uncertainty
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When preparing the financial statements, management undertakes a number of judgments, estimates and assumptions about recognition and measurement of assets, liabilities, income and expenditure. Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
Critical accounting estimates and assumptions
The Company makes estimates and assumptions concerning the future. The resulting accounting estimates will seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below:
Impairment of investments in subsidiaries
Investments in subsidiaries are measured at cost less provision for any impairment in value. The initial measurement of the investment in subsidiary cost has been deemed to include directly attributable acquisition-related transaction costs, which primarily included fees for legal, tax, and accounting services.
A recoverable amount is determined based on the greater of fair value less costs to sell and a value in use basis, which is used for a calculation of impairment. Any impairment is recognized immediately in the Statement of comprehensive income. In accordance with IAS 36 Impairment of Assets, impairment reviews are undertaken when there is an indicator of impairment. Key assumptions used in estimating the value in use for each investment in subsidiary for which the estimate is most sensitive include the discount rate, perpetual growth rate, revenue growth rate, and cash conversion ratio. Key assumptions used in estimating the fair value for each investment in subsidiary for which the estimate is most sensitive includes the earnings before interest, taxes, depreciation, and amortization (“EBITDA”) multiple.
Page 20
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Notes to the financial statements
For the year ended 31 December 2023
3.Judgments in applying accounting policies (continued)
Impairment of financial assets
The Company measures expected credit losses of a financial instrument in a way that reflects an unbiased and probability-weighted amount that is determined by evaluating a range of possible outcomes, the time value of money and information about past events, current conditions and forecasts of future economic conditions. When measuring ECL the Company uses reasonable and supportable forward-looking information, which is based on assumptions for the future movement
Critical judgements in applying the entity's accounting policies
Revenue Recognition – Agent vs principal
Judgment may be required when determining whether the Company acts as the principal or agent in sales transactions, which is determined through evaluating the nature of its promise to the customer. Further details on revenue recognition criteria is disclosed in Note 2.
Functional currency
The Company is an investment holding company and as such the determination of its functional currency is not directly determinable from the primary indications, being the currency influencing sales and cost prices, described in paragraph 9 IAS 21 – The Effects of Changes in Foreign Exchange Rates. Therefore, the Company has used judgement in determining the functional currency of the Company to be GBP (‘£’). This judgement was based on the following factors:
a)The Company’s investment are made in the UK based trading subsidiaries in GBP and it is exposed to GBP denominated risks and rewards in those investments;
b)Any future dividend income which Company will receive from subsidiaries will be in GBP;
c)All costs incurred by the Company from third party service providers and subsequently reimbursed to other group companies are in GBP.
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The operating profit/(loss) is stated after charging:
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Integration-related costs
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Page 21
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Notes to the financial statements
For the year ended 31 December 2023
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During the year, the Company obtained the following services from the Company's auditor and its associates:
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Fees for the audit of the Company
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The audit fee is borne by another company within the group.
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The Company has no employees and the director, does not receive any remuneration from the Company (2022 - £NIL).
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During the year, the group underwent a restructuring wherein the direct subsidiary Redwood Midco Limited distributed their remaining assets up the chain to Caerus UK 1 Limited.
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Interest receivable from group companies
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Page 22
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Notes to the financial statements
For the year ended 31 December 2023
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Interest payable similar expenses
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Loans from group undertakings
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Factors affecting tax charge for the year/period
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The tax assessed for the year/period is higher than (2022 - higher than) the standard rate of corporation tax in the UK of 23.5% (2022 - 19%). The differences are explained below:
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Loss on ordinary activities before tax
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Loss on ordinary activities multiplied by standard rate of corporation tax in the UK of 23.5% (2022 - 19%)
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Deferred tax not recognized on interest carry forwards
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Other disallowed expenses
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Group relief surrendered for nil consideration
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Total tax charge for the year/period
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Factors that may affect future tax charges
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There were no factors that may affect future tax charges.
Page 23
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Notes to the financial statements
For the year ended 31 December 2023
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Investments in subsidiary companies
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The direct subsidiary investments of the Company at 31 December 2023 were as follows:
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C&D Intelligence U.K. Limited
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Software, Data and Services
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Ordinary A shares and Ordinary B shares
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Pharma Intelligence U.K. Limited
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Software, Data and Services
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Ordinary A shares and Ordinary B shares
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Caerus Australia Bidco Pty Limited
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Software, Data and Services
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Software, Data and Services
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Page 24
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Notes to the financial statements
For the year ended 31 December 2023
Subsidiary undertakings (continued)
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Norstella Information Consulting (Shanghai) Co., Ltd.
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Software, Data and Services
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Software, Data and Services
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Software, Data and Services
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On 1 June 2022 the Company acquired 100% of the share capital of C&D Intelligence U.K. Limited for the consideration of £66,065 thousands.
On 1 June 2022 the Company acquired 100% of the share capital of Pharma Intelligence U.K. Limited for the consideration of £883,440 thousands.
On 1 June 2022 the Company acquired 100% of the share capital of Caerus Australia Bidco Pty Limited for the consideration of £10 thousands.
On 1 June 2022 the Company acquired 100% of the share capital of Caerus Services Limited for the consideration of £1.
On 31 October 2022 the Company acquired 100% of the share capital of Redwood Midco Limited for the consideration of £403,113 thousands.
On 27 December 2023 the Company acquired 100% of the share capital of Evaluate Japan KK for the consideration of £25 thousands.
On 27 December 2023 the Company acquired 100% of the share capital of Evaluate Limited for the consideration of £40,000 thousands.
The following were indirect subsidiary undertakings of the Company:
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Software, Data and Services
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Page 25
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Notes to the financial statements
For the year ended 31 December 2023
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Clinerion Turkey Teknoloji Arastirma Limited
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Software, Data and Services
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For direct and indirect subsidiaries, the registered offices are as follows:
For the subsidiaries incorporated in the United Kingdom: 3 More London Riverside, London SE1 2AQ, United Kingdom.
For Caerus Australia BidCo Pty Ltd .: Suite 3A16, Level 14, 275 Alfred Street N, North Sydney NSW 2060, Australia.
For Evaluate Japan KK: 2-5 Toranomon 2-chome, Minato-ku, Tokyo, Japan.
For Evaluate Pharma USA Inc. and Clinerion Inc .: United Agent Group, Inc. 1521 Concord Pike, Suite 201, Wilmington, DE 19803 United States of America.
For Bioscience Advisors Inc .: 7801 Folsom Boulevard, #202 Sacramento, CA, 95826, United States of America.
For Clinerion AG: Elisabethenanlage 11, 4051 Basel, Switzerland.
For Clinerion Turkey Teknoloji Arastirma Limited: Barbaros Mah. Ak Zambak Sok. Uphill Towers A Blk D.N.87 K15 Atasehir, Istanbul, Turkey.
Impairment
During the year, the Company recognised an additional impairment of £31,579k (2022: £496,797k). The impairment loss was recognised following the annual review of impairment indicators whereby Management determined that the economic performance of Pharma Intelligence UK Limited and C&D Intelligence UK Limited may be worse than what was originally expected based on the forecast financial performance of each business. As this was considered by Management as an impairment indicator in accordance with IAS 36 Impairment of Assets, Management performed an impairment review where Management determined the recoverable amounts of the investments and compared the resulting figures to their carrying amounts.
Value in use ("VIU")
Management performed a value in use calculation using cash flow projections from financial budgets approved by senior management covering a ten year period. The Company is currently in a stage of accelerated growth and development, therefore, the perpetual growth rates used more appropriately capture mature and sustained future growth only after the year-ten projection period. Accordingly, management elected to use the extended discrete period, as opposed to the alternative use of a 2-stage model in order to capture the extended periods of higher growth.
Page 26
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Notes to the financial statements
For the year ended 31 December 2023
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Fixed asset investments (continued)
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Key assumptions used in estimating the value in use for each investment in subsidiary for which the estimate is most sensitive include the following:
∙Discount rate: A 10% (2022: 10%) discount rate used in discounting the cash flows reasonably reflects the weighted average cost of capital (WACC) of the subsidiaries.
∙Perpetual growth rate: A perpetual growth rate of 4.25% (2022: 4.25%) was used in the value in use calculation for each investment in subsidiary. This rate was calculated using a Gordon Growth Model based on future levels of inflation, industry growth expectations for a high-growth entity, general economic growth, and the Company's future projections.
∙Revenue growth rate: The growth rates used in projecting revenue reflects the subsidiaries’ expected performance within the projection period and objectively considers the historical performance, currently available information, and current and future efforts/plans for the business of the subsidiaries. Further, as part of determining the earnings before interest, taxes, depreciation and amortisation (EBITDA), the rates used in projecting the costs are reasonable and also reflects the subsidiaries’ expected performance within the projection period and also considers the historical performance, currently available information, and current and future efforts/plans for the business of the subsidiaries.
∙Cash conversion ratio: A cash conversion ratio (CCR) of 75% (2022: 72.0%) was used in lieu of the detailed capital expenditure and working capital requirements of the subsidiaries which reflects the expected free cash flow from the EBITDA for each projection period. The CCR used is based on the group CCR and the rate used is conservative as the expected CCRs for the subsidiaries are in fact higher than 75% based current data available
Fair Value less costs of disposal ("FVLCD")
Management then considered the FVLCD of the assets using a market approach based on projected earnings (defined as net income) before interest, taxes, depreciation, and amortization (EBITDA). The fair value measurement uses primarily Level 2 and Level 3 inputs from the fair value hierarchy. Key assumptions used in estimating the fair value for each investment in subsidiary for which the estimate is most sensitive include the following:
∙EBITDA multiple: An enterprise value to EBITDA multiple of 18.0x (2022: 18.0x) was used in the market approach calculation for the determination of fair value for each investment in subsidiary.
Recoverable amount
The recoverable amount for each investment in subsidiary was determined as the higher of its fair value less costs of disposal (FVLCD) and its value in use (VIU). For all investments excluding Pharma Intelligence UK Limited and C&D Intelligence UK Limited, the value in use for each was determined to be higher than its fair value less costs of disposal.
An impairment loss in the amount of £31,579k (2022: £496,797k) has been included within Impairment on investment in subsidiary in the Company's Income Statement related to the investment in the Pharma Intelligence U.K. Limited and C&D Intelligence UK Limited subsidiaries.
Page 27
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Notes to the financial statements
For the year ended 31 December 2023
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Debtors: Amounts falling due within one year
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Due after more than one year
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Amounts owed by group undertakings
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Prepayments and accrued income
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Amounts owed by group undertakings are unsecured, repayable on demand, and interest free.
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Creditors: Amounts falling due within one year
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Amounts owed to group undertakings
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Current portion of loan to group undertakings
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Amounts owed to group undertakings are non-trade balances that are unsecured, interest-free, and repayable
on demand.
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Page 28
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Notes to the financial statements
For the year ended 31 December 2023
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Creditors: Amounts falling due after more than one year
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Amounts owed to group undertakings
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Loans owed to immediate parent consist of a balance of £261,827 thousands ($316,506 thousands), which bears variable interest rate of 10.94% (2022: 10.13%), and a balance of £4,246 thousands ($5,120 thousands) which bears variable interest rate of 11.15% (2022: 9.88%). The Company makes quarterly payments on each loan, consisting of 0.25% of the initial principal of each loan and all accrued interest. The $316,506 thousands and $5,120 thousands loans (starting principal) both mature on May 25, 2029 and are listed on TISE.
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The Company has 702 (2022: 702) alloted, called up and fully paid ordinary shares of £0.01 each (2022: £0.01 each).
The company's ordinary shares, which carry no right to fixed income, each carry the right to one vote at general meetings of the company.
Share capital
Nominal value of share capital subscribed for.
Share premium account
Amount in excess of nominal value of share capital.
Profit and loss account
Cumulative profits or losses, net of dividends paid and other adjustments.
On 12 April 2024, the Company completed a share purchase acquisition of A2Z Management Solutions Private Limited (now Norstella India Private Limited), for a total consideration of £3,764k.
Page 29
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Notes to the financial statements
For the year ended 31 December 2023
The Company’s immediate parent company is Caerus Debtco S.à r.l., a company incorporated and registered in the UK.
The Company’s ultimate parent company is Caerus PIKCo S.a.r.l., a company incorporated and registered in Luxembourg.
The smallest and largest group undertakings for which group accounts are drawn up and of which the Company is included is the group headed by Caerus PIKCo S.a.r.l.
Copies of the consolidated financial statements of Caerus PIKCo S.a.r.l are available on request from 412F Route d’Esch, 1471, Luxembourg.
Page 30
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