Literally it is basically "around here, in the area", so ann an is "in" because an on its own is actually in, but for clarity it has become common to add the ann. Tha x ann is "there is x" because it is saying "x is in the general area".
I just ran this sentence with the word bank. There wasn't a hyphenated word available, only taigh and beag. This might become a source of confusion for some when the answer that worked in the word bank is incorrect in other formats.