Company Registration Number: C95118
Annual Report and Consolidated Financial Statements
31 December 2023
BROWN’S PHARMA HOLDINGS PLC
Annual Report and Consolidated Financial Statements - 31 December 2023
Contents Pages
Directors’ Report 1 – 6
Corporate Governance - Statement of Compliance 7 – 11
Consolidated Statement of Profit or Loss and Other Comprehensive Income 12
Consolidated Statement of Financial Position 13 – 14
Consolidated Statement of Changes in Equity 15 – 17
Consolidated Statement of Cash Flows 18 – 19
Notes to the Consolidated Financial Statements 20 – 70
Independent Auditor’s Report 71 – 77
BROWN’S PHARMA HOLDINGS PLC
Annual Report and Consolidated Financial Statements - 31 December 2023
1
Directors’ Report
The Board of Directors present their annual report and the audited consolidated and separate financial
statements of the Group and the Company for the year ended 31 December 2023.
Principal activities
Review of the business, results and dividends
The Group and the Company continued its trading operations during the year and has reported positive
results. The consolidated and separate statement of profit or loss and other comprehensive income is set
out on page 12.
In 2023, the Group’s revenue registered an increase of 16% (2022: 6%) when compared to previous year.
This growth was the result of an organic grown of its existing retail operations; the acquisition and operation
of an additional pharmacy licence towards the second half of the year, as well as the acquisition of Mediva
Pharma Limited, a UK-based mail order pharmacy business specialising in the sale of aesthetic products to
UK-based healthcare professionals. The acquisition of Mediva Pharma Limited was an important milestone
in the Group’s internationalisation strategy.
Total expenditure increased by 21% to €34,565,805 (2022: €28,611,318). This increase is primarily attributed
to significantly higher, market driven, wages and salaries to pharmacists, and costs associated with the
restructuring of the Group’s UK operations following its acquisition. Management does not expect
extraordinary increases in HR costs during 2024, and expects Mediva Pharma Limited to make a profit during
the year ended 31 December 2024.
During the year ended 31 December 2023, the Company generated a profit before tax of €2,144,854 (2022:
€3,930,602). The decrease is mainly due to a decrease in dividends received during the year.
The level of business and the Group’s and the Company’s financial position remain satisfactory, and the
Board of Directors expect that the present level of activity will be improved in the foreseeable future. The
Group did not revalue its pharmacy licences during the year ended 31 December 2023. The last revaluation
was performed as at 31 December 2022 with a revaluation gain of €1,947,053 recorded in other
comprehensive income. The Board of Directors proposed an interim gross dividend of €1,153,846 (2022:
€Nil) and a final gross dividend of €954,340 (2022: €3,894,219) to the ordinary shareholders. These
dividends are being declared out of taxable profits resulting in a total net dividend to the ordinary
shareholders of €1,370,321 (2022: €2,531,242) equivalent to €0.07 (2022: €0.13) per share.
BROWN’S PHARMA HOLDINGS PLC
Annual Report and Consolidated Financial Statements - 31 December 2023
2
Directors’ Report – continued
Events after the reporting period
As noted in Note 33 of these consolidated and separate financial statements, there were no other adjusting
or other significant non-adjusting events between the end of the reporting year and the date of authorisation
by the Board of Directors.
Board of Directors
The Board of Directors of the Group who held office during the year ended 31 December 2023 and as at the
date of this report are:
Mr. Alexander Fenech (Retail Director)
Mr. Benjamin Muscat (Chairman)
Mr. David Camilleri (appointed on 1 August 2023)
Mr. Jean-Pierre Miceli
Mr. Joseph Caruana
Mr. Mark Grech
Mr. Paul Camilleri
Mr. Robert Spiteri
In accordance with the Group’s Articles of Association, the Board members are appointed every 1 year and
are eligible for re-appointment at the Annual General Meeting. All Directors shall retire from office, at least,
once every three (3) years but shall be eligible for re-election.
Statement of Board of Directors’ responsibilities
The Board of Directors are required by the Companies Act, 1995 to prepare consolidated and separate
financial statements which give a true and fair view of the state of affairs of the Group and the Company as
at the end of each financial year and of the profit or loss for that year.
In preparing the consolidated and separate financial statements, the Board of Directors are responsible for:
• ensuring that the consolidated and separate financial statements have been drawn up in accordance
with International Financial Reporting Standards as adopted by the European Union;
• selecting and applying appropriate accounting policies;
• making accounting estimates that are reasonable in the circumstances; and
• ensuring that the consolidated and separate financial statements are prepared on the going concern
basis unless it is inappropriate to presume that the Group and the Company will continue in business
as going concern;
BROWN’S PHARMA HOLDINGS PLC
Annual Report and Consolidated Financial Statements - 31 December 2023
3
Directors’ Report – continued
Statement of Board of Directors’ responsibilities – continued
The Board of Directors is also responsible for keeping proper accounting records which disclose with
reasonable accuracy at any time the financial position of the Group and the Company and to enable them to
ensure that the consolidated and separate financial statements comply with the Companies Act, 1995. This
responsibility includes designing, implementing, and maintaining such internal controls, as the Board of
Directors determines the necessary procedures to enable the preparation of the consolidation and separate
financial statements that are free from material misstatement, whether due to fraud or error. They are also
responsible for safeguarding the assets of the Group and the Company, and hence for taking reasonable
steps for the prevention and detection of fraud and other irregularities.
The financial statements of Brown’s Pharma Holdings plc, for the year ended 31 December 2023 are
included in the Annual Report 2023 which is published in iXBRL format, in line with the ESEF requirements,
and are made available on the Group’s website. In view of their responsibility for the controls over, and the
security of, the website, the Board of Directors are responsible for the maintenance and integrity of the
Annual Report on the website, https://browns.pharmacy/investor-relations. Access to information published
on the Group’s website is available in other countries and jurisdictions, where legislation governing the
preparation and dissemination of financial statements may differ from requirements or practice in Malta.
Financial reporting framework
The Board of Directors resolved to prepare the Group’s consolidated financial statements and the Company’s
separate financial statements for the year ended 31 December 2023 in accordance with International
Financial Reporting Standards as adopted by the European Union.
Disclosures in terms of the Capital Market Rules
Pursuant to the Capital Market Rule 5.62
Going Concern
The Board of Directors, as required by Capital Market Rule 5.62 have considered the Group’s and
Company’s operational performance, the statements of financial position as at year end as well as the
business plans for the coming year, and declare that they have a reasonable expectation that the Group and
the Company have adequate resources to continue in operational existence for the foreseeable future. For
this reason, in preparing the consolidated and separate financial statements, the Group and the Company
are in a position to continue operating as a going concern for the foreseeable future.
BROWN’S PHARMA HOLDINGS PLC
Annual Report and Consolidated Financial Statements - 31 December 2023
4
Directors’ Report – continued
Disclosures in terms of the Capital Market Rules – continued
Pursuant to the Capital Market Rule 5.64
Share capital structure
The Group’s and the Company’s authorised and issued share capital amounts to €14,662,916 Ordinary “A”
shares of €1 each and €5,423,270 Ordinary “B” shares of €1 each. Class ‘A’ shares have the right to appoint
1 director who shall have 2.5 votes each in meetings of the Board of Directors. Class ‘A’ and ‘B’ share shall,
together, be entitled to appoint 3 directors to the Board of Directors of the Group and the Company who shall
have 1 vote each in meetings of the Board of Directors. Each holder of ‘B’ shares shall have the right to
appoint 1 director to the Board of Directors of the Group who shall have 1 vote each in meetings of the Board
of Directors. Except as otherwise provided, all ordinary shares irrespective of class, shall rank equally in all
respects, including without limitation, equal participation in profits distributed by the Group and the Company
and equal rights upon distribution of the Group’s and Company’s assets upon its winding up. Each ordinary
share shall entitle the holder to 1 vote at each general meeting. No restrictions apply to the transfer of shares.
Holding in excess of 5% of the Share Capital
On the basis of the information available to the Company as at 31 December 2023, 13i Limited and N&N
Investments Limited held 7,331,458 ordinary shares of €1 each, which is equivalent to 36.5% each of the
Company’s authorized and issued share capital, whilst Elka Investments Limited and JLMX Investments
Limited held 2,711,635 ordinary shares of €1 each, which is equivalent to 13% each of the Company’s
authorized and issued share capital.
Appointment and Replacement of Directors
Board members are appointed every 1 year and are eligible for re-appointment at the Annual General
Meeting. All Directors shall retire from office, at least, once every three (3) years but shall be eligible for re-
election.
Board Member Powers
The powers of the Board members are contained in Article 54 of the Company’s Articles of Association.
Contracts with Board Members and Employees
The Company has no agreements between the Company and the Directors of the Company’s Board or
employees providing for compensation on termination or cessation of their office for any reason whatsoever.
It is hereby declared that as at 31 December 2023, information required under Capital Market Rules 5.64.4,
5.64.5, 5.64.6, 5.64.7 and 5.64.10 are not applicable to the Company.
BROWN’S PHARMA HOLDINGS PLC
Annual Report and Consolidated Financial Statements - 31 December 2023
5
Directors’ Report – continued
Disclosures in terms of the Capital Market Rules – continued
Pursuant to the Capital Market Rule 5.68
We confirm that to the best of our knowledge:
a) The consolidated and separate financial statements give a true and fair view of the consolidated and
separate financial position of the Group and the Company as at 31 December 2023, and of its consolidated
and separate financial performance and its cash flows for the year then ended in accordance with
International Financial Reporting Standards as adopted by the EU.
b) The annual report includes a fair review of the development and performance of the business and the
position of the Group and the Company, together with a description of the principal risks and uncertainties
that the Group and the Company faces.
Pursuant to the Capital Market Rule 5.70
There were no material contracts in relation to which a Director of the Group and the Company was directly
or indirectly interested.
Pursuant to the Capital Market Rule 5.70.2
The Company secretary is Mr. Jean Carl Farrugia and the registered address is 168, Triq Santa Margerita,
Siggiewi, SGW 1017,Malta.
Disclosure of information to auditors
At the date of making this report the Board of Directors confirm the following:
a) As far as each Director is aware, there is no relevant information needed by the independent auditor in
connection with preparing the audit report of which the independent auditor is unaware, and
b) Each Director has taken all steps that they ought to have taken as Directors in order to make themselves
aware of any relevant information needed by the independent auditor in connection with preparing the
audit report and to establish that the independent auditor is aware of that information.
Principal risks and uncertainties faced by the Group and the Company
The Board as a whole, including the Audit Committee members, considers the nature and extent of the risk
management framework and risk profile that is acceptable to the Board of Directors. The Audit Committee
regularly reviews the work carried out and ensures that risks are identified and mitigated in a timely manner
so as not to have any adverse impact on the Group and the Company.
The Group and the Company’s principal risks and uncertainties are included in Note 30 of these consolidated
and separate financial statements.
BROWN’S PHARMA HOLDINGS PLC
Annual Report and Consolidated Financial Statements - 31 December 2023
6
Directors’ Report – continued
Auditor
The auditor, Equis Assurance Limited, has intimated its willingness to continue in office and a resolution to
reappoint them as auditor of the Group and the Company will be proposed at the forthcoming Annual General
Meeting.
Registered address:
The registered office of the Group and the Company is Q3 , Level 2, Unit 1, Quad Central, Triq l -Esportaturi,
Signed on behalf of the Group’s and the Company’s Board of Directors on 24 April 2024 by Mr. Benjamin
Muscat (Chairman), Mr. Alexander Fenech (Retail Director) and Mr. Paul Camilleri (Director) as per the
Director’s Declaration on ESEF Annual Financial Report submitted in conjunction with the Annual Report and
Accounts 2023.
BROWN’S PHARMA HOLDINGS PLC
Annual Report and Consolidated Financial Statements - 31 December 2023
7
Corporate Governance - Statement of Compliance
The Capital Market Rules issued by the Malta Financial Services Authority, require listed companies to
observe The Code of Principles of Good Corporate Governance (the "Code"). Although the adoption of the
Code is not obligatory, Listed Companies are required to include, in their Annual Report, a Directors'
Statement of Compliance which deals with the extent to which Brown’s Pharma Holdings plc (the ‘Company’)
has adopted the Code of Principles of Good Corporate Governance and the effective measures that the
Company has taken to ensure compliance with the Code, accompanied by a report of the auditors thereon.
Compliance
The Company’s Board of Directors (the "Board") believe in the adoption of the Code and has endorsed them
except where the size and/or circumstances of the Company are deemed by the Board not to warrant the
implementation of specific recommendations. In this context, it is relevant to note that the Company has
issued bonds to the public and has no employees. Accordingly, some of the provisions of the Code are not
applicable whilst others are applicable to a limited extent.
The Board
The Board of Directors is responsible for devising a strategy, setting policies and the management of the
Company. It is also responsible for reviewing internal control procedures, financial performance and business
risks facing the Company. The Board is also responsible for decisions relating to the redemption of the Bond,
and for monitoring that its operations are in conformity with the Prospectus and all relevant rules and
regulations.
Throughout the year under review, the Board regularly reviewed management performance. The Company
has in place systems whereby the Board of Directors obtains timely information from the Retail Director, not
only at meetings of the Board but at regular intervals or when the need arises.
Chairperson and Chief Executive Officer
The Chairperson's main function is to lead the Board, set the agenda and ensure that all board members
partake in discussions of complex and contentious issues.
The Company did not appoint any Chief Executive Officer, however, the day-to-day operations of the Group
is under the responsibility of the Retail Director.
Composition of the Board
The Board is composed of one executive and seven non-executive directors, as listed below. The directors
were appointed on 5 March 2020, upon incorporation of the Company, while David Camilleri, was appointed
on 21
st
August 2023. All directors can be reappointed to their posts on a three-yearly basis.
Executive Director
Mr. Alexander Fenech (Retail Director)
BROWN’S PHARMA HOLDINGS PLC
Annual Report and Consolidated Financial Statements - 31 December 2023
8
Corporate Governance - Statement of Compliance – continued
Composition of the Board – continued
Non-Independent Non-Executive Directors
Mr. Jean-Pierre Miceli
Mr. Paul Camilleri
Mr. Robert Spiteri
Independent Non-Executive Directors
Mr. Benjamin Muscat (Chairman)
Mr. David Camilleri
Mr. Joseph Caruana
Mr. Mark Grech
Directors are appointed during the Company's Annual General Meeting for periods of one year, at the end of
which term they may stand again for re-election. All Directors shall retire from office at least once in each
three (3) years but shall be eligible for re-election. The Articles of Association of the Company clearly set out
the procedures to be followed in the appointment of directors.
Internal Control
The Board is responsible for the Company's system of internal controls and for reviewing its effectiveness.
Such a system is designed to achieve business objectives and to manage rather than to eliminate the risk of
failure to achieve business objectives and can only provide reasonable assurance against material error,
losses or fraud.
Authority to manage the Company is delegated to the Retail Director within the limits set by the Board of
Directors. Systems and procedures are in place for the Company to control, report, monitor and assess risks
and their financial implications, and to take timely corrective actions where necessary. Regular financial
budgets and strategic plans are prepared, and performance against these plans is actively monitored and
reported to the Board of Directors on a regular basis.
The Board also approves, after review and recommendation by the Audit Committee, the transfer of funds
and other amounts payable to companies within the same group and ensures that these are subject to terms
and conditions which are on an arm's length basis.
Directors' Attendance at Board Meetings
The Board believes that it has systems in place to fully comply with the principles of the Code. Board of
Directors meet regularly, mainly to review the financial performance of the Company and to review internal
control processes. Board members are notified of forthcoming meetings by the Company Secretary with the
issue of an agenda and supporting Board papers, which are circulated well in advance of the meeting. All the
directors have access to independent professional advice at the Company's expense should they so require.
BROWN’S PHARMA HOLDINGS PLC
Annual Report and Consolidated Financial Statements - 31 December 2023
9
Corporate Governance - Statement of Compliance – continued
Directors' Attendance at Board Meetings – continued
The Board met formally six times during the year under review. The number of board meetings attended by
Directors for the year ended 31 December 2023 is as follows:
Member Attended
Mr. Alexander Fenech 6
Mr. Benjamin Muscat 6
Mr. David Camilleri 3
Mr. Joseph Caruana 6
Mr. Jean-Pierre Miceli 5
Mr. Mark Grech 5
Mr. Paul Camilleri 6
Mr. Robert Spiteri 6
Committees
The Board of Directors believe that, due to the Company's size and operation, the remuneration, evaluation
and nominations committees that are suggested in the Code are not required, and that the function of these
can efficiently be undertaken by the board itself. However, the Board on an annual basis undertakes a review
of the remuneration paid to the Board of Directors and carries out an evaluation of their performance and of
the audit committee. The shareholders approve the remuneration paid to the Board of Directors at the annual
general meeting.
Audit Committee
The Board established an Audit Committee (the "Committee") in 2021 and has formally set out Terms of
Reference as outlined in the Principles laid out in the Capital Markets Rules. The purpose of the Committee
is to protect the interest of the Company's share and bondholders and assist the Board of Directors in
conducting their role effectively. The Audit Committee also monitors the financial reporting process, the
effectiveness of internal control and the audit of the annual financial statements. Additionally, it is responsible
for monitoring the performance of the entities borrowing funds from the Company, to ensure that budgets are
achieved and if not that corrective action is taken as necessary. It also scrutinises and supervises related
party transactions for materiality and ensures that these are carried out at arm's length basis.
The Members of the Audit Committee are:
Mr. Benjamin Muscat
Mr. Joseph Caruana (Chairman of the Audit Committee)
Mr. Mark Grech
BROWN’S PHARMA HOLDINGS PLC
Annual Report and Consolidated Financial Statements - 31 December 2023
10
Corporate Governance - Statement of Compliance – continued
Audit Committee – continued
Mr. Joseph Caruana graduated with a Bachelor of Mechanical Engineering (Hons.) in 1986 and obtained a
Master’s degree in Business Administration from Brunel University in 2000. An engineer by profession,
Joseph held various posts in several companies worldwide including Sulzer Escher-Wyss A.G., and Air Malta
Co. Ltd. He also acted as Operations Director and Deputy Chief Executive Officer at Toly Products and was
a General Manager in FXB Furniture Ltd., Marsovin Ltd., H.H. Ltd., and MGC Electronics Ltd. In 2005 he set
up Inspectra Limited, providing custom quality control inspections and sorting as well as calibration services
to the Maltese industry. Joseph acted as Chief Executive Officer of Mater Dei Hospital between 2011 and
2014 and currently is the joint-owner and director of Omnigene Medical Technologies Ltd.
Mr. Benjamin Muscat is a Certified Public Accountant by profession (Fellow of the Association of Chartered
and Certified Accountants – ACCA) with a long career in finance and management at senior executive
positions. He has worked in various industry sectors including switchgear manufacturing, food production,
beer and soft drink brewing and production and bottling, international fast food franchising, hospitality and
timeshare, construction and real estate development, including marketing and selling luxury condominiums.
In his capacity as Chief Executive Officer of MIDI Plc, a Maltese listed company, Benjamin was key in the
development of the Tigné Point Project. Benjamin was also instrumental in the promotion of the re-generation
of part of Malta’s historical Grand Harbour including the development of a cruise ship porting facility locally
known as the Valletta Waterfront project. He also has extensive experience in raising project specific funding
via banking facilities, third party investment, private placements, and issue of equity and debt instruments
through retail offers subsequently listed on the Malta Stock Exchange. Today, Benjamin provides professional
services as a freelance consultant and sits on the Board of Directors of a number of listed companies, three
on the MSE Main Market, namely; Merkanti Holdings Plc, Shoreline Mall Plc, Phoenicia Finance Company
Plc and The Convenience Shop (Holding) Plc (also listed on the Prospects MTF).
Mr. Mark Grech is a lawyer by profession (graduated as Doctor of Laws from the University of Malta in 2016)
with a passion for business. Mark co-founded One Culture Limited a company that specialises in mass events.
Mark is a co-founder of Eleven Entertainment Group and Thirteen Media Limited. In 2018, Mark co-founded
X Factor Malta and, in 2020, Malta’s Got Talent - two television entertainment-related projects.t
The Committee met formally six times during the year to 31 December 2023.
The Audit Committee is independent and is constituted in accordance with the requirements of the Capital
Market Rules. The Head of Finance and the external auditors of the Company attend the meetings of the
Committee by invitation. Other executive directors and external consultants are requested to attend when
required. The Company Secretary also acts as Secretary to the Audit Committee.
BROWN’S PHARMA HOLDINGS PLC
Annual Report and Consolidated Financial Statements - 31 December 2023
11
Corporate Governance - Statement of Compliance – continued
Remuneration Statement
In terms of the Company's Memorandum and Articles of Association, it is the shareholders of the Company
in the General Meeting who determine the maximum annual aggregate remuneration of the Board of
Directors.
None of the Board of Directors is employed or has a service contract with the Company.
No part of the remuneration paid to the Board of Directors is performance-based. The Directors of the
Company are not entitled to profit sharing, share options or pension benefits.
The Board of Directors of the Group received €193,841 in aggregate for services rendered to the Group
during 2023, whilst the Board of Directors of the Company received €49,800 in aggregate for services
rendered to the Company during 2023.
Relations with bondholders and the market
The Company publishes interim and annual financial statements, and when required, Company
announcements. The Board feels these provide the market with adequate information about its activities.
Conflicts of Interest
On joining the Board and regularly thereafter, directors and officers of the Company are informed and
reminded of their obligations on dealing in securities of the Company within the parameters of law and Capital
Markets Rules. The Company has also set reporting procedures in line with the Capital Markets Rules, Code
of Principles, and internal code of dealing.
Signed on behalf of the Group’s and the Company’s Board of Directors on 24 April 2024 by Mr. Benjamin
Muscat (Chairman), Mr. Alexander Fenech (Retail Director) and Mr. Paul Camilleri (Director) as per the
Director’s Declaration on ESEF Annual Financial Report submitted in conjunction with the Annual Report and
Accounts 2023
BROWN’S PHARMA HOLDINGS PLC
Annual Report and Consolidated Financial Statements - 31 December 2023
12
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Year ended 31 December
The Group
The Group
The Company
The Company
Notes
2023
2022
2023
2022
€
€
€
€
Revenue
2
-
-
Cost of Sales
3
(24,703,481 )
(20,822,696 )
-
-
Gross profit
-
-
Administrative expenses
3
(9,128,417 )
(7,006,303 )
(127,073)
(168,635)
Selling and distribution expenses
3
(733,907 )
(782,319 )
-
-
Other income
6
88,257
160,711
Operating profit/(loss)
(38,816)
(7,924)
Investment Income
5
2,718,490
4,480,740
Finance costs
7
(1,214,119 )
(1,069,450 )
(534,820)
(542,214)
Profit before income tax
2,144,854
3,930,602
Income tax
8
(1,258,894 )
(1,233,712 )
(774,533)
(1,399,360)
Profit for the year – attributable to
the owners of the Company
1,370,321
2,531,242
Other comprehensive income
Items that will not be reclassified
subsequently to profit or loss
Revaluation increase on
intangible assets
10
-
-
Deferred income tax increase
relating to components of other
comprehensive income
8
(681,469 )
-
-
Other comprehensive income
for the financial year, net of
income tax
-
-
Total comprehensive income for
the financial year – attributable to
the owners of the Company
1,370,321
2,531,242
not
The accounting policies and explanatory notes on pages 20 to 70 form an integral part of the consolidated
and separate financial statements.
BROWN’S PHARMA HOLDINGS PLC
Annual Report and Consolidated Financial Statements - 31 December 2023
13
Consolidated Statement of Financial Position
As at 31 December
The Group
The Group
The Company
The Company
Notes
2023
2022
2023
2022
€
€
€
€
ASSETS
Non-current assets
Intangible assets
10
-
-
Goodwill
12
-
-
Tangible assets
Property, plant and equipment
11
-
-
Right-of-use assets
13
-
-
Investments in subsidiaries
14
20,086,189
20,086,188
Trade and other receivables
17
13,272,362
14,394,134
Financial assets
Investments in financial assets
15
-
-
33,358,551
34,480,322
Current assets
Financial assets
Investments in financial assets
15
-
-
Inventories
16
-
-
Trade and other receivables
17
114,631
16,853
Current tax asset
26
-
-
Cash and cash equivalents
28
285,157
23,619
399,788
40,472
Total assets
33,758,339
34,520,794
EQUITY AND LIABILITIES
Capital and reserves
Share capital
Retained earnings
20
-
-
Revaluation reserve
19
-
-
Translation reserve
21
(4,198 )
-
-
Total equity
20,086,186
20,086,186
BROWN’S PHARMA HOLDINGS PLC
Annual Report and Consolidated Financial Statements - 31 December 2023
14
Consolidated Statement of Financial Position – continued
As at 31 December
The Group
The Group
The Company
The Company
Notes
2023
2022
2023
2022
€
€
€
€
LIABILITIES
Non-current liabilities
Interest-bearing borrowings
22
12,791,366
12,763,538
Deferred taxation
24
-
-
Lease liabilities
23
-
-
12,791,366
12,763,538
Current liabilities
Interest-bearing borrowings
22
-
-
Trade and other payables
25
880,787
1,671,070
Lease liabilities
23
-
-
880,787
1,671,070
Total liabilities
13,672,153
14,434,608
Total equity and liabilities
33,758,339
34,520,794
The official closing rate of exchange used by the European Central Bank between the Great Britain Pound
(GBP) and the Euro (EUR) at 31 December 2023 was 0.86905 (2022: 0.88693).
The accounting policies and explanatory notes on pages 20 to 70 form an integral part of the consolidated
and separate financial statements.
The consolidated and separate financial statements on pages 12 to 70 were approved and authorised for
issue by the Board of Directors on 24 April 2024 and signed on behalf of the Group’s and the Company’s
Board of Directors by Mr. Benjamin Muscat (Chairman), Mr. Alexander Fenech (Retail Director) and Mr. Paul
Camilleri (Director) as per the Directors’ Declaration on ESEF Annual Financial Report submitted in
conjunction with the Annual Report and Accounts 2023.
BROWN’S PHARMA HOLDINGS PLC
Annual Report and Consolidated Financial Statements - 31 December 2023
15
Consolidated Statement of Changes in Equity
The Group
Share
Retained
Revaluation
Note
capital
earnings
reserve
Total
€
€
€
€
Balance at 1 January 2022
Profit for the year
Other comprehensive income for the year
Total comprehensive income for the financial year
Transaction with owners
Dividends declared
9
(2,531,242 )
(2,531,242 )
Balance at 31 December 2022
BROWN’S PHARMA HOLDINGS PLC
Annual Report and Consolidated Financial Statements - 31 December 2023
16
Consolidated Statement of Changes in Equity – continued
The Group
Share
Retained
Revaluation
Translation
Note
capital
earnings
reserve
reserve
Total
€
€
€
€
€
Balance at 1 January 2023
Transfer upon acquisition of new subsidiary
(10,102 )
(10,102 )
Movement for the year
Profit for the year
Total comprehensive income for the financial year
Transaction with owners
Dividends declared
9
(1,370,321 )
(1,370,321 )
Balance at 31 December 2023
(4,198 )
BROWN’S PHARMA HOLDINGS PLC
Annual Report and Consolidated Financial Statements - 31 December 2023
17
Consolidated Statement of Changes in Equity – continued
The Company
Note
Share
Retained
capital
earnings
Total
€
€
€
Balance at 1 January 2022
20,086,186
-
20,086,186
Total comprehensive income
for the financial year
-
2,531,242
2,531,242
Transactions with owners
Dividends declared
9
-
(2,531,242)
(2,531,242)
Balance at 31 December 2022
20,086,186
-
20,086,186
Balance at 1 January 2023
20,086,186
-
20,086,186
Total comprehensive income
for the financial year
-
1,370,321
1,370,321
Transactions with owners
Dividends declared
9
-
(1,370,321)
(1,370,321)
Balance at 31 December 2023
20,086,186
-
20,086,186
The accounting policies and explanatory notes on pages 20 to 70 form an integral part of the consolidated
and separate financial statements.
BROWN’S PHARMA HOLDINGS PLC
Annual Report and Consolidated Financial Statements - 31 December 2023
18
Consolidated Statement of Cash Flows
Year ended 31 December
The Group
The Group
The Company
The Company
Notes
2023
2022
2023
2022
Operating activities
€
€
€
€
Cash generated from/(used in)
operations
27
(25,338)
(7,025)
Net tax paid
26
(391,122 )
(1,443,126 )
-
-
Net cash generated from/(used in)
operating activities
(25,338)
(7,025)
Investing activities
Interest received
-
-
Purchase of property,
plant and equipment
11
(712,210 )
(915,155 )
-
-
Purchase of website costs
10
(96,640 )
(80,510 )
-
-
Purchase of pharmacy licence
10
(1,515,000 )
(2,803,799 )
-
-
Purchase of shares in
subsidiary companies
Purchase of investment in
financial assets
15
(1,150,000 )
(1,000,000 )
-
-
Disposal of investment in
financial assets
15
-
-
Increase in amounts due from
subsidiaries net of dividend
-
-
2,908,269
(1,885,264)
Net cash (used in)/generated from
investing activities
(2,457,492 )
(4,798,591 )
2,908,268
(1,886,464)
Financing activities
Interest paid
(631,652 )
(522,386 )
(506,992)
(514,386)
(Redemption)/issue of redeemable
preference shares
(14 )
-
-
Increase in bank borrowings
22
-
-
Net movement in amounts held by
Trustee
57,460
3,939,143
Net movements in ultimate parent
companies balance (net of dividend
declared)
(1,098,998 )
(2,259,919 )
(2,169,539)
(1,510,049)
Net movements in other related
parties’ balances
Principal payments of lease liabilities
(1,074,979 )
(1,208,926 )
-
-
Net cash (used in)/generated from
financing activities
(829,691 )
(438,670 )
(2,621,392)
1,915,908
BROWN’S PHARMA HOLDINGS PLC
Annual Report and Consolidated Financial Statements - 31 December 2023
19
Consolidated Statement of Cash Flows – continued
Year ended 31 December
The Group
The Group
The Company
The Company
Notes
2023
2022
2023
2022
€
€
€
€
Effect of foreign exchange rate changes
-
-
Movement in cash and cash
equivalents
261,538
22,419
Cash and cash equivalents at
beginning of year
23,619
1,200
Cash and cash equivalents acquired
upon acquisition of subsidiary
-
-
Cash and cash equivalents at end of
year
28
285,157
23,619
The accounting policies and explanatory notes on pages 20 to 70 form an integral part of the consolidated
and separate financial statements.
BROWN’S PHARMA HOLDINGS PLC
Annual Report and Consolidated Financial Statements - 31 December 2023
20
Notes to the Financial Statements
BROWN’S PHARMA HOLDINGS PLC
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21
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67
-
-
-
-
-
-
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68
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70
32. Statutory information
Brown’s Pharma Holdings plc is a public limited company and is registered in Malta.
As at 31 December 2023, the ownership of Brown’s Pharma Holdings plc is ultimately shared between
13i Limited, N&N Investments Limited, Elka Investments Limited and JLMX Investments Limited. The
ownership of such Company’s share capital and voting rights related to such holding are such that no
particular individual or identifiable group may be deemed to exercise control over the Company.
71
Independent Auditor’s Report
To the Members of BROWN’S PHARMA HOLDINGS PLC
Report on the Audit of the Consolidated and Separate Financial Statements
Opinion
We have audited the consolidated and separate financial statements of Brown’s Pharma Holdings plc (the
“Company”) and its subsidiaries (collectively the “Group”), set out on pages 12 to 70, which comprise the
consolidated and separate statement of financial position as at 31 December 2023, the consolidated and separate
statement of profit or loss and other comprehensive income, the consolidated and separate statement of changes
in equity and the consolidated and separate statement of cash flows for the year then ended, and notes to the
consolidated and separate financial statements, including a summary of significant accounting policies.
In our opinion, the accompanying consolidated and separate financial statements give a true and fair view of the
financial position of the Group and the Company as at 31 December 2023, and of its financial performance for the
year then ended in accordance with International Financial Reporting Standards as adopted by the European Union
(EU IFRSs) and have been prepared in accordance with the requirements of the Companies Act (Cap. 386).
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated and
Separate Financial Statements section of our report. We are independent of the Group and the Company in
accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional
Accountants (IESBA Code) together with the ethical requirements that are relevant to our audit of the consolidated
and separate financial statements in accordance with the Accountancy Profession (Code of Ethics for Warrant
Holders) Directive issued in terms of the Accountancy Profession Act (Cap. 281) in Malta, and we have fulfilled our
other ethical responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the consolidated and separate financial statements of the current year. These matters were addressed in the
context of our audit of the consolidated and separate financial statements as a whole and in forming our opinion
thereon, and we do not provide a separate opinion on those matters.
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the consolidated and
separate financial statements section of our report, including in relation to these matters. Accordingly, our audit
included the performance of procedures designed to respond to our assessment of the risks of material
misstatement of the consolidated and separate financial statements. The results of our audit procedures, including
the procedures performed to address the matters below, provide the basis of our audit opinion on the
accompanying consolidated and separate financial statements.
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Independent Auditor’s Report – continued
Key Audit Matters – continued
(i) Intangible assets – Pharmacy licences
Included of the Group’s intangible assets is the revaluation of pharmacy licences purchased and operated by the Group,
which is being further described in Note 1 Accounting policies - Section h and Note 10 of the consolidated and separate
financial statements. This represents 63% of the total assets of the Group as at 31 December 2023.
Management assess the fair value of its pharmacy licences on a periodical basis. The fair value of these licences is
calculated on market-based valuation techniques by revaluing the acquisition price to pre-takeover turnover using the
most recent prices paid for the acquisition of the new licences by the Group.
The valuation of such licences at its fair value is highly dependent on estimates and assumptions made by
management. We have considered the valuation of the intangible assets as a key audit matter in view of the subjectivity
surrounding the judgement applied and our audit focus on this area.
We gained understanding of the design and implementation of key controls over the Group’s valuation process by
inquiring with the process owners. We have also gained understanding on the Group’s valuation methodology and
assumptions used in estimating the fair value of the intangible assets as at the reporting date. As part of our procedures,
we have analysed the key assumptions used by comparing to independent sources, market data and condition and
assessing the completeness, relevance and accuracy of the revenue values underlying the model with the audited
revenue figures per pharmacy. No issues were identified.
(ii) Investments in subsidiaries
The Company holds shares in Brown’s Pharma Limited, Brown’s Pharma IP Limited, Mediva Pharma Limited and JP
Pharma Holdings Limited as further explained in Note 1 Accounting policies - Section k and Note 14 of the separate
financial statements. This represents 59% of the total assets of the Company as at 31 December 2023.
During the year ended 31 December 2023, management carried out an assessment to establish whether the carrying
amount of the investments in subsidiaries in the separate financial statements at 31 December 2023 is impaired. We
focused on this area because of the significance of the investments in subsidiaries at 31 December 2023. Moreover,
the Board of Directors’ assessment process is complex and highly judgemental and is based on assumptions, such as
forecasted growth rates and profit margin which are driven by expected future market or economic conditions.
We evaluated the suitability and appropriateness of the impairment methodology applied by management to assess
the reliability of the Board of Directors’ forecasts and to challenge the methodology used and the underlying
assumptions. We concluded that the parameters utilised were reasonable. We also assessed the adequacy of the
disclosures made in the separate financial statements related to investments in subsidiaries including those concerning
the key assumptions used in assessing it carrying amount. Those disclosures specifically explain that the Board of
Directors have assessed the carrying amount of investments as at 31 December 2023 and concluded that no provision
for impairment of investments in subsidiaries was required.
73
Independent Auditor’s Report – continued
Other Information
The Board of Directors are responsible for the other information. The other information comprises the Directors’ Report
and the corporate governance – statement of compliance. Our opinion on the consolidated and separate financial
statements does not cover this information, including the Directors' report and the corporate government – statement
of compliance. In connection with our audit of the consolidated and separate financial statements, our responsibility is
to read the other information and, in doing so, consider whether the other information is materially inconsistent with the
consolidated and separate financial statements or our knowledge obtained in the audit, or otherwise appears to be
materially misstated.
With respect to the Directors’ Report, we also considered whether the Directors’ Report includes the disclosures
required by Article 177 of the Maltese Companies Act (Cap. 386). Based on the work we have performed, in our opinion:
▪ the information given in the Directors’ report for the financial year for which the consolidated and separate financial
statements are prepared is consistent with the financial statements; and
▪ the Directors’ Report has been prepared in accordance with the Maltese Companies Act (Cap.386).
In addition, in light of the knowledge and understanding of the Group and the Company and its environment obtained
in the course of the audit, we are required to report if we have identified material misstatements in the Directors’ Report.
We have nothing to report in this regard.
With respect to the Corporate Governance – Statement of Compliance, the Capital Market Rules issued by the Malta
Listing Authority require the Board of Directors to prepare and include in the Annual Report, the Corporate Governance
- Statement of Compliance within Appendix 5.1 to Chapter 5 of the Capital Market Rules. The Statement’s required
minimum contents are determined by reference to Capital Market Rule 5.97. The Statement provides explanation as to
how the Group has complied with the provisions of the Code, presenting the extent to which the Group has adopted
the Code and the effective measures that the Board has taken to ensure compliance throughout the accounting period
with those Principles.
We are required to report on the Corporate Governance - Statement of Compliance by expressing an opinion as to
whether, in light of the knowledge and understanding of the Group and its environment obtained in the course of the
audit, we have identified any material misstatements with respect to the information referred to in Capital Market Rules
5.97.4 and 5.97.5, giving an indication of the nature of any such misstatement.
We are also required to assess whether the Corporate Governance - Statement of Compliance includes all the other
information required to be presented as per Capital Market Rule 5.97.
We are not required to, and we do not consider whether the Board’s statements on internal control included in the
Corporate Governance - Statement of Compliance cover all risks and controls or form an opinion on the effectiveness
of the Group’s corporate governance procedures or its risk and control procedures.
In our opinion, the Corporate Governance - Statement of Compliance has been properly prepared in accordance with
the requirements of the Capital Market Rules issued by the Malta Listing Authority.
Responsibilities of the Board of Directors
The Board of Directors are responsible for the preparation of the consolidated and separate financial statements that
give a true and fair view in accordance with EU IFRSs, and for such internal control as the Board of Directors determine
is necessary to enable the preparation of consolidated and separate financial statements that are free from material
misstatement, whether due to fraud or error.
74
Independent Auditor’s Report – continued
Responsibilities of the Board of Directors – continued
In preparing the consolidated and separate financial statements, the Board of Directors are responsible for assessing
the Group’s and the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group
and the Company or to cease operations, or have no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the consolidated and separate Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated and separate 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 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 consolidated and separate financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism
throughout the audit. We also:
▪ Identify and assess the risks of material misstatement of the consolidated and separate financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control.
▪ Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Group’s and the Company’s internal control.
▪ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by the directors.
▪ Conclude on the appropriateness of the Board of Directors’ use of the going concern basis of accounting and
based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that
may cast significant doubt on the Group’s and the Company’s ability to continue as a going concern. If we conclude
that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures
in the consolidated and separate financial statements or, if such disclosures are inadequate, to modify our opinion.
Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future
events or conditions may cause the Group and the Company to cease to continue as a going concern.
▪ Evaluate the overall presentation, structure and content of the consolidated and separate financial statements,
including the disclosures, and whether the consolidated and separate financial statements represent the underlying
transactions and events in a manner that achieves fair presentation.
▪ Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
within the Group to express an opinion on the consolidated financial statements. We are responsible for the
direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
75
Independent Auditor’s Report – continued
Auditor’s Responsibilities for the Audit of the consolidated and separate Financial Statements – continued
We communicate with the Board of Directors regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify during our
audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most
significance in the audit of the financial statements of the current period and are therefore the key audit matters. We
describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because
the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such
communication.
Report on Other Legal and Regulatory Requirements
Report on compliance with the requirements of the European Single Electronic Format Regulatory Technical Standard
(the “ESEF RTS”), by reference to Capital Markets Rule 5.55.6
We have undertaken a reasonable assurance engagement in accordance with the requirements of Directive 6 issued
by the Accountancy Board in terms of the Accountancy Profession Act (Cap. 281) - the Accountancy Profession
(European Single Electronic Format) Assurance Directive (the “ESEF Directive 6”) on the Annual Financial Report of
Brown’s Pharma Holdings plc. for the year ended 31 December 2023, entirely prepared in a single electronic reporting
format.
Responsibilities of the Board of Directors
The Board of Directors are responsible for the preparation of the Annual Financial Report, including the consolidated
financial statements and the relevant mark-up requirements therein, by reference to Capital Markets Rule 5.56A, in
accordance with the requirements of the ESEF RTS.
Our responsibilities
Our responsibility is to obtain reasonable assurance about whether the Annual Financial Report, including the
consolidated financial statements and the relevant electronic tagging therein, comply in all material respects with the
ESEF RTS based on the evidence we have obtained. We conducted our reasonable assurance engagement in
accordance with the requirements of ESEF Directive 6.
Our procedures included:
▪ Obtaining an understanding of the Group’s financial reporting process, including the preparation of the Annual
Financial Report, in accordance with the requirements of the ESEF RTS.
▪ Obtaining the Annual Financial Report and performing validations to determine whether the Annual Financial Report
has been prepared in accordance with the requirements of the technical specifications of the ESEF RTS.
▪ Examining the information in the Annual Financial Report to determine whether all the required taggings therein
have been applied and whether, in all material respects, they are in accordance with the requirements of the ESEF
RTS.
76
Independent Auditor’s Report – continued
Report on Other Legal and Regulatory Requirements – continued
Report on compliance with the requirements of the European Single Electronic Format Regulatory Technical Standard
(the “ESEF RTS”), by reference to Capital Markets Rule 5.55.6 – continued
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Opinion
In our opinion, the Annual Financial Report for the year ended 31 December 2023 has been prepared, in all material
respects, in accordance with the requirements of the ESEF RTS.
Report on the Statement of Compliance with the Principles of Good Corporate Governance
The Capital Market Rules issued by the Malta Listing Authority (the “Capital Market Rules”) require the Board of
Directors to prepare and include in their Annual Report a Statement of Compliance providing an explanation of the
extent to which they have adopted the Code of Principles of Good Corporate Governance and the effective measures
that they have taken to ensure compliance throughout the accounting period with those Principles.
The Capital Market Rules also require us, as the auditor of the Group, to include a report on the Statement of
Compliance prepared by the Board of Directors.
We read the Corporate Governance - Statement of Compliance with the Code of Principles of Good Corporate
Governance and consider the implications for our report if we become aware of any apparent misstatements or material
inconsistencies with the consolidated financial statements included in the Annual Report. Our responsibilities do not
extend to considering whether this statement is consistent with any other information included in the Annual Report.
Our responsibilities and opinion over the Corporate Governance - Statement of Compliance is disclosed the Other
Information section of our report.
Other reporting requirements
Under the Maltese Companies Act (Cap. 386) we are required to report to you if, in our opinion:
▪ We have not received all the information and explanations we require for our audit.
▪ Adequate accounting records have not been kept, or that returns adequate for our audit have not been received
from branches not visited by us.
▪ The consolidated and separate financial statements are not in agreement with the accounting records and returns.
We have nothing to report to you in respect of these responsibilities.
Other matter – use of this report
Our report, including the opinions, has been prepared for and only for the Group’s and the Company’s members as a
body in accordance with Article 179 of the Maltese Companies Act (Cap. 386) and for no other purpose. We do not, in
giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report
is shown or into whose hands it may come save where expressly agreed by our prior written consent.
77
Independent Auditor’s Report – continued
Appointment
This is the third year that we were appointed as auditors of the Group and the Company with effect from 17 January
2022. Our total period of uninterrupted engagement appointment is 3 years. The Company became listed on a regulated
market on 15 July 2021.
Non-audit services
To the best of our knowledge and belief, we declare that non-audit services that we have provided to the Group and
the Company are in accordance with the applicable law and regulations in Malta and we have not provided non-audit
services that are prohibited under Article 18A(1) of the Accountancy Profession Act, Cap. 281 of the Laws of Malta
were provided by us to the Group and the Company. We remain independent of the Group and the Company as
described in the Basis for Opinion section of our report. No other services besides statutory audit services and services
disclosed in the annual report and in the consolidated and separate financial statements were provided by us to the
Group and the Company and its controlled undertakings.
Donatella Bondin
Director
For and on behalf of
Equis Assurance Limited
Certified Public Accountants
NOUV
MRO Frank Galea Road
Zebbug ZBG 9019
Malta
24 April 2024
