Company Registration No. 09822843 (England and Wales)
DENBIES WINE ESTATE LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
DENBIES WINE ESTATE LIMITED
COMPANY INFORMATION
Directors
Mr C A White
Mr R S Potton
Secretary
Mr R S Potton
Company number
09822843
Registered office
London Road
Dorking
Surrey
RH5 6AA
Auditor
Carpenter Box
5 Peveril Court
6-8 London Road
Crawley
West Sussex
RH10 8JE
DENBIES WINE ESTATE LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Notes to the financial statements
11 - 21
DENBIES WINE ESTATE LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
- 1 -
The directors present the strategic report for the year ended 31 December 2021.
Results and performance
The income from the hospitality side of the businesses has been detrimentally affected during the early part of the year due to the COVID-19 pandemic. However, with tight cost control, the help of the Coronavirus Job Retention Scheme and a solid trading period the rest of the year, we ensured that the overall business made a healthy operating profit.
Considering these challenges, we are very pleased with how the business has fared. We made considerable investments in the business just prior to the COVID-19 pandemic, the return on these investments have started to bear fruit and have supported a strong bounce back in growth.
Business environment
We are experiencing anticipated levels of income but remain cautious and ready to react to any potential adverse impacts on the business brought about by high inflation and rising interest rates.
The growing season in 2022 has started, we have avoided the late spring frosts, giving us the potential for a high level of fruitfulness.
We have a strong wine sales order book and increasing number of bookings for functions and events to fulfil.
The new Denbies Vineyard hotel continues to perform better than forecast and further investment has been made to expand the hospitality offering, enhance the guest experience and maintain a zero-carbon footprint.
Strategy
Our strategy is to continue to diversify the business so that we can expand our target market, maximise the potential for direct wine sales and spread risk. We will invest capital as required to grow income and increase the value of the business. With all new capital projects, a best practice in environmental consideration is adopted on each investment.
Principal risks and uncertainties
Market risk
Whilst competition continues to grow we continue to invest in our team of employees, invest in technology, and invest capital into areas that have opportunity to grow and diversify the business further.
Liquidity risk
The company manages its cash and borrowing requirements centrally in order to maximise interest income and minimise interest expense, whilst ensuring the company has sufficient liquid resources to meet the operating needs of the business.
Interest rate risk
The company is exposed to interest rate risk on its variable rate bank overdraft facility and loan.
Foreign currency risk
The company's principal foreign currency exposures arise from purchases from European suppliers.
Credit risk
Investments of cash surpluses and borrowings are made through banks and companies which must fulfil credit rating criteria approved by the directors. Trade debtors are monitored on an ongoing basis and provision is made for doubtful debts where necessary.
Technology risk
The company is subject to risks relating to its ability to implement and maintain effective systems to process a high volume of transactions with customers. A failure to manage technology infrastructure and systems affect company performance. The company engages third party professionals to assist and advise with all aspects of technology including hardware, software and storage.
DENBIES WINE ESTATE LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 2 -
COVID-19
The COVID-19 pandemic has brought many businesses unprecedented uncertainties and risk whilst the support provided by the government for business and individuals not seen in recent history. Whilst trading restrictions for the hospitality and leisure sectors have impacted on the traditional business activities and delivery thereof, revised processes and exploring new opportunities have protected the business and placed it in a good position for the future.
Brexit
Brexit has had a relatively minimal impact on our business to date. In respect of access to EU and other foreign works for viticulture activity, we minimise the risk via continued use of mechanical picking and relationships with contractors. Lead times have increased on goods imported from Europe as have logistical complexities and therefore we have adopted a more strategic approach to our purchases rather than a “just in time” delivery method on key materials.
Key performance indicators
The company monitors progress across a range of financial targets. The main key performance indicators are:
2021 2020
£ £
Cash at bank 1,384,456 609,879
EBITDA 1,699,548 111,143
Future developments
The business will continue to maximise organic growth in all departments, and review all options for future opportunities and investment to expand current operations.
Mr C A White
Director
8 September 2022
DENBIES WINE ESTATE LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
- 3 -
The directors present their annual report and financial statements for the year ended 31 December 2021.
Principal activities
The principal activity of the company continued to be the growing of grapes, and the production and the sale of wine. The company also provides tourism, retail and hospitality services.
Results and dividends
The results for the year are set out on page 8.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr C A White
Mr R S Potton
Auditor
The auditor, Carpenter Box, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Strategic report
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of financial instruments and the associated risks and future developments.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
On behalf of the board
Mr C A White
Director
8 September 2022
DENBIES WINE ESTATE LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2021
- 4 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the 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 directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
DENBIES WINE ESTATE LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF DENBIES WINE ESTATE LIMITED
- 5 -
Opinion
We have audited the financial statements of Denbies Wine Estate Limited (the 'company') for the year ended 31 December 2021 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 December 2021 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
DENBIES WINE ESTATE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF DENBIES WINE ESTATE LIMITED
- 6 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report and the directors' report.
We have nothing to report in respect of the following matters where 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 remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
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. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, our procedures included the following:
Obtaining an understanding of the legal and regulatory framework that the company operates in, focusing on those laws and regulations that had a direct effect on the financial statements and operations;
Obtaining an understanding of the company’s policies and procedures on fraud risks, including knowledge of any actual, suspected or alleged fraud
Discussing among the engagement team how and where fraud might occur in the financial statements and any potential indicators of fraud through our knowledge and understanding of the company and our sector-specific experience.
As a result of these procedures, we considered the opportunities and incentives that may exist within the company for fraud. We are also required to perform specific procedures to respond to the risk of management override. As a result of performing the above, we identified the following areas as those most likely to have an impact on the financial statements: health & safety, employment law and compliance with the UK Companies Act.
DENBIES WINE ESTATE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF DENBIES WINE ESTATE LIMITED
- 7 -
In addition to the above, our procedures to respond to risks identified included the following:
Making enquiries of management about any known or suspected instances of non-compliance with laws and regulations and fraud;
Assessment of matters recorded on the company’s health & safety incident register;
Challenging assumptions and judgements made by management in their significant accounting estimates, in particular in relation to stock valuations and depreciation; and
Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness.
Due to the inherent limitations of an audit, there is an unavoidable risk that some material misstatements in the financial statements may not be detected, even though the audit is properly planned and performed in accordance with the ISAs (UK). For instance, the further removed non-compliance is from the events and transactions reflected in the financial statements, the less likely the auditor is to become aware of it or to recognise the non-compliance.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
Tony Summers BA FCA (Senior Statutory Auditor)
For and on behalf of Carpenter Box
8 September 2022
Chartered Accountants
Statutory Auditor
Crawley
Carpenter Box is a trading name of Carpenter Box Limited
DENBIES WINE ESTATE LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2021
- 8 -
2021
2020
Notes
£
£
Turnover
3
7,232,991
4,631,152
Cost of sales
(2,720,228)
(2,065,972)
Gross profit
4,512,763
2,565,180
Distribution costs
(61,950)
(49,565)
Administrative expenses
(3,472,673)
(3,301,102)
Other operating income
603,673
757,285
Operating profit/(loss)
4
1,581,813
(28,202)
Interest receivable and similar income
8
1,189
Interest payable and similar expenses
9
(57,520)
(64,614)
Profit/(loss) before taxation
1,524,293
(91,627)
Tax on profit/(loss)
10
(345,500)
82,971
Profit/(loss) for the financial year
1,178,793
(8,656)
The profit and loss account has been prepared on the basis that all operations are continuing operations.
DENBIES WINE ESTATE LIMITED
BALANCE SHEET
AS AT 31 DECEMBER 2021
31 December 2021
- 9 -
2021
2020
Notes
£
£
£
£
Fixed assets
Tangible assets
11
455,565
545,675
Current assets
Stocks
12
1,700,056
1,600,938
Debtors
13
3,427,383
2,883,728
Cash at bank and in hand
1,384,456
609,879
6,511,895
5,094,545
Creditors: amounts falling due within one year
14
(1,467,053)
(1,162,500)
Net current assets
5,044,842
3,932,045
Total assets less current liabilities
5,500,407
4,477,720
Creditors: amounts falling due after more than one year
15
(1,579,964)
(1,782,270)
Provisions for liabilities
Deferred tax liability
18
106,500
60,300
(106,500)
(60,300)
Net assets
3,813,943
2,635,150
Capital and reserves
Called up share capital
20
500
500
Share premium account
1,352,940
1,352,940
Profit and loss reserves
2,460,503
1,281,710
Total equity
3,813,943
2,635,150
The financial statements were approved by the board of directors and authorised for issue on 8 September 2022 and are signed on its behalf by:
Mr R S Potton
Director
Company Registration No. 09822843
DENBIES WINE ESTATE LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2021
- 10 -
Share capital
Share premium account
Profit and loss reserves
Total
£
£
£
£
Balance at 1 January 2020
500
1,352,940
1,290,366
2,643,806
Year ended 31 December 2020:
Loss and total comprehensive income for the year
-
-
(8,656)
(8,656)
Balance at 31 December 2020
500
1,352,940
1,281,710
2,635,150
Year ended 31 December 2021:
Profit and total comprehensive income for the year
-
-
1,178,793
1,178,793
Balance at 31 December 2021
500
1,352,940
2,460,503
3,813,943
DENBIES WINE ESTATE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
- 11 -
1
Accounting policies
Company information
Denbies Wine Estate Limited is a private company limited by shares incorporated in England and Wales. The registered office is London Road, Dorking, Surrey, RH5 6AA.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in Sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues'.
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Denbies Holdings Limited. These consolidated financial statements are available from its registered office, Denbies Wine Estate, London Road, Dorking, Surrey, United Kingdom, RH5 6AA.
1.2
Going concern
The financial statements have been prepared on a going concern basis. The directors have considered relevant information, including the annual budget, forecast future cash flows and the impact of subsequent events in making their assessment. The COVID-19 pandemic and the ensuing economic shutdown has had a significant impact on the company’s operations. In response to the COVID-19 pandemic, the directors have performed a robust analysis of forecast future cash flows taking into account the potential impact on the business of possible future scenarios arising from the impact of COVID-19. This analysis also considers the effectiveness of available measures to assist in mitigating the impacttrue
Based on these assessments and having regard to the resources available to the entity, the directors have concluded that there is no material uncertainty and that they can continue to adopt the going concern basis in preparing the annual report and accounts.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
1.4
Research and development expenditure
Research and development expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.
1.5
Tangible fixed assets
Tangible fixed assets are measured at cost, net of depreciation and any impairment losses.
DENBIES WINE ESTATE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 12 -
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Leasehold improvements
Evenly over the term of the lease
Plant and equipment
10% - 25% per annum on a straight line basis
Fixtures and fittings
20% per annum on a straight line basis
Vines
5% per annum on a straight line basis
Assets under the course of construction are only depreciated when brought into use.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.6
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
1.7
Cash at bank and in hand
Cash and cash equivalents are basic financial assets and include deposits held at call with banks.
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans and loans from fellow group companies are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.10
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
DENBIES WINE ESTATE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 13 -
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
1.11
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
1.14
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
DENBIES WINE ESTATE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
2
Judgements and key sources of estimation uncertainty
(Continued)
- 14 -
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Stock valuation
Director's have estimated the valuation of stock by considering all costs involved in bringing the product to a saleable condition.
Depreciation
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their estimated useful lives, on the bases set out in note 1.5.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2021
2020
£
£
Turnover analysed by class of business
Agriculture and production
2,809,599
1,985,684
Hospitality and leisure
4,416,351
2,629,484
Other
7,041
15,984
7,232,991
4,631,152
2021
2020
£
£
Other significant revenue
Interest income
-
1,189
Commissions received
1,028
Grants received
441,836
555,284
2021
2020
£
£
Turnover analysed by geographical market
United Kingdom
7,232,991
4,631,152
4
Operating profit/(loss)
2021
2020
Operating profit/(loss) for the year is stated after charging/(crediting):
£
£
Government grants
(441,836)
(555,284)
Depreciation of owned tangible fixed assets
117,735
136,290
Depreciation of tangible fixed assets held under finance leases
3,055
(Profit)/loss on disposal of tangible fixed assets
(3,500)
310,453
Operating lease charges
91,144
171,154
DENBIES WINE ESTATE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 15 -
5
Auditor's remuneration
2021
2020
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
6,500
6,500
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2021
2020
Number
Number
Admin
14
9
Hospitality and leisure
106
111
Agriculture and production
14
15
Total
134
135
Their aggregate remuneration comprised:
2021
2020
£
£
Wages and salaries
2,017,272
1,756,978
Social security costs
147,601
116,682
Pension costs
29,937
27,522
2,194,810
1,901,182
7
Directors' remuneration
2021
2020
£
£
Remuneration for qualifying services
137,970
71,063
Company pension contributions to defined contribution schemes
1,296
786
139,266
71,849
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2020 - 1).
8
Interest receivable and similar income
2021
2020
£
£
Interest income
Interest on bank deposits
1,189
DENBIES WINE ESTATE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 16 -
9
Interest payable and similar expenses
2021
2020
£
£
Interest on bank overdrafts and loans
45,458
54,377
Interest on finance leases and hire purchase contracts
12,062
10,237
57,520
64,614
10
Taxation
2021
2020
£
£
Current tax
UK corporation tax on profits for the current period
300,000
62,313
Deferred tax
Origination and reversal of timing differences
26,800
(145,284)
Changes in tax rates
18,700
Total deferred tax
45,500
(145,284)
Total tax charge/(credit)
345,500
(82,971)
The actual charge/(credit) for the year can be reconciled to the expected charge/(credit) for the year based on the profit or loss and the standard rate of tax as follows:
2021
2020
£
£
Profit/(loss) before taxation
1,524,293
(91,627)
Expected tax charge/(credit) based on the standard rate of corporation tax in the UK of 19.00% (2020: 19.00%)
289,616
(17,409)
Tax effect of expenses that are not deductible in determining taxable profit
2,506
Tax effect of income not taxable in determining taxable profit
(665)
Depreciation on assets not qualifying for tax allowances
36,571
9,816
Deferred tax adjustments in respect of prior years
(77,884)
Effect of AIA super deduction
(1,324)
Difference between current and deferred tax rate
21,302
Taxation charge/(credit) for the year
345,500
(82,971)
DENBIES WINE ESTATE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 17 -
11
Tangible fixed assets
Leasehold improvements
Plant and equipment
Fixtures and fittings
Vines
Total
£
£
£
£
£
Cost
At 1 January 2021
240,086
664,271
58,108
101,873
1,064,338
Additions
27,625
27,625
At 31 December 2021
240,086
691,896
58,108
101,873
1,091,963
Depreciation and impairment
At 1 January 2021
209,526
241,677
41,991
25,469
518,663
Depreciation charged in the year
30,560
72,834
9,247
5,094
117,735
At 31 December 2021
240,086
314,511
51,238
30,563
636,398
Carrying amount
At 31 December 2021
377,385
6,870
71,310
455,565
At 31 December 2020
30,560
422,594
16,117
76,404
545,675
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2021
2020
£
£
Plant and equipment
15,275
12
Stocks
2021
2020
£
£
Raw materials and consumables
114,200
64,419
Work in progress
398,468
400,625
Finished goods and goods for resale
1,187,388
1,135,894
1,700,056
1,600,938
DENBIES WINE ESTATE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 18 -
13
Debtors
2021
2020
Amounts falling due within one year:
£
£
Trade debtors
526,730
178,054
Amounts owed by group undertakings
2,808,768
2,588,228
Other debtors
47,817
37,915
Prepayments and accrued income
42,268
78,431
3,425,583
2,882,628
Deferred tax asset (note 18)
1,800
1,100
3,427,383
2,883,728
14
Creditors: amounts falling due within one year
2021
2020
Notes
£
£
Bank loans
16
202,379
200,089
Obligations under finance leases
17
1,222
Trade creditors
70,634
155,887
Corporation tax
300,000
62,313
Other taxation and social security
287,508
184,382
Other creditors
404,641
315,421
Accruals and deferred income
201,891
243,186
1,467,053
1,162,500
Amounts due under bank loans are secured against the company's assets.
Amounts due under finance leases are secured against the assets to which they relate.
15
Creditors: amounts falling due after more than one year
2021
2020
Notes
£
£
Bank loans and overdrafts
16
1,579,964
1,782,270
Amounts due under bank loans are secured against the company's assets.
DENBIES WINE ESTATE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 19 -
16
Loans and overdrafts
2021
2020
£
£
Bank loans
1,782,343
1,982,359
Payable within one year
202,379
200,089
Payable after one year
1,579,964
1,782,270
The bank loans are secured by fixed and floating charges over all assets and undertakings of the company, including all present and future freehold and leasehold property, book and other debts, chattels, goodwill and uncalled capital, both present and future.
Interest is charged at 2.3% per annum above base rate.
All freehold land and buildings were transferred to the parent, Denbies Holdings Limited, in the prior year and an unlimited multilateral guarantee has been given by Denbies Holdings Limited in respect of these loans.
17
Finance lease obligations
2021
2020
Future minimum lease payments due under finance leases:
£
£
Within one year
1,222
Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
18
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
Assets
Assets
2021
2020
2021
2020
Balances:
£
£
£
£
Accelerated capital allowances
106,500
60,300
-
-
Retirement benefit obligations
-
-
1,800
1,100
106,500
60,300
1,800
1,100
DENBIES WINE ESTATE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
18
Deferred taxation
(Continued)
- 20 -
2021
Movements in the year:
£
Liability at 1 January 2021
59,200
Charge to profit or loss
26,800
Effect of change in tax rate - profit or loss
18,700
Liability at 31 December 2021
104,700
The directors have considered the deferred tax liabilities noted above and concluded that it is not possible to state the estimated liabilities which will reverse in the next 12 months. This is due to the level of reversal being dependant on events which are not yet known.
19
Retirement benefit schemes
2021
2020
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
29,937
27,522
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
20
Share capital
2021
2020
£
£
Ordinary share capital
Issued and fully paid
500 Ordinary shares of £1 each
500
500
The shares have attached to them full voting, dividend and capital distribution rights.
21
Financial commitments, guarantees and contingent liabilities
An overdraft facility of £500,000 has been provided by HSBC UK Bank plc. The amount due under this agreement has been secured by way of a cross guarantee with the parent company Denbies Holdings Limited.
The company has a debenture including Fixed Charge over all present freehold and leasehold property; First Fixed Charge over book and other debts, chattels, goodwill and uncalled capital, both present and future; and First Floating Charge over all assets and undertaking both present and future dated 17 December 2015.
DENBIES WINE ESTATE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 21 -
22
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2021
2020
£
£
Within one year
9,526
98,116
Between two and five years
31,424
40,951
40,950
139,067
23
Ultimate controlling party
The immediate parent company is Denbies Holdings Limited, a company registered in England. The registered office is Denbies Wine Estate, London Road, Dorking, Surrey, RH5 6AA.
The ultimate controlling parties are the Trustees of The A E White 1977 Settlement Trust and the Trustees of The Anchorage Trust by virtue of the shares held in Denbies Holdings Limited.
The financial statements of the company are consolidated in the financial statements of Denbies Holdings Limited. Copies of the consolidated financial statements are available from Companies House.
2021-12-312021-01-01falseCCH SoftwareCCH Accounts Production 2022.200Mr C A WhiteMr R PottonMr R S Potton098228432021-01-012021-12-3109822843bus:Director12021-01-012021-12-3109822843bus:CompanySecretaryDirector12021-01-012021-12-3109822843bus:CompanySecretary12021-01-012021-12-3109822843bus:Director22021-01-012021-12-3109822843bus:RegisteredOffice2021-01-012021-12-31098228432021-12-31098228432020-01-012020-12-3109822843core:RetainedEarningsAccumulatedLosses2020-01-012020-12-3109822843core:RetainedEarningsAccumulatedLosses2021-01-012021-12-31098228432020-12-3109822843core:LeaseholdImprovements2021-12-3109822843core:PlantMachinery2021-12-3109822843core:FurnitureFittings2021-12-3109822843core:Non-standardPPEClass1ComponentTotalPropertyPlantEquipment2021-12-3109822843core:LeaseholdImprovements2020-12-3109822843core:PlantMachinery2020-12-3109822843core:FurnitureFittings2020-12-3109822843core:Non-standardPPEClass1ComponentTotalPropertyPlantEquipment2020-12-3109822843core:CurrentFinancialInstrumentscore:WithinOneYear2021-12-3109822843core:CurrentFinancialInstrumentscore:WithinOneYear2020-12-3109822843core:Non-currentFinancialInstrumentscore:AfterOneYear2021-12-3109822843core:Non-currentFinancialInstrumentscore:AfterOneYear2020-12-3109822843core:ShareCapital2021-12-3109822843core:ShareCapital2020-12-3109822843core:SharePremium2021-12-3109822843core:SharePremium2020-12-3109822843core:RetainedEarningsAccumulatedLosses2021-12-3109822843core:RetainedEarningsAccumulatedLosses2020-12-3109822843core:ShareCapital2019-12-3109822843core:SharePremium2019-12-3109822843core:RetainedEarningsAccumulatedLosses2019-12-31098228432019-12-3109822843core:LeaseholdImprovementscore:LeasedAssetsHeldAsLessee2021-01-012021-12-3109822843core:PlantMachinery2021-01-012021-12-3109822843core:FurnitureFittings2021-01-012021-12-3109822843core:FinancialAssetsAmortisedCost2021-01-012021-12-3109822843core:FinancialLiabilitiesAmortisedCost2021-01-012021-12-3109822843core:FurnitureFittingscore:OwnedAssets2021-01-012021-12-3109822843core:OwnedAssets2020-01-012020-12-3109822843core:LeasedAssets2021-01-012021-12-3109822843core:LeasedAssets2020-01-012020-12-3109822843core:UKTax2021-01-012021-12-3109822843core:UKTax2020-01-012020-12-310982284312021-01-012021-12-310982284312020-01-012020-12-310982284322021-01-012021-12-310982284322020-01-012020-12-310982284332021-01-012021-12-310982284332020-01-012020-12-3109822843core:LeaseholdImprovements2020-12-3109822843core:PlantMachinery2020-12-3109822843core:FurnitureFittings2020-12-3109822843core:Non-standardPPEClass1ComponentTotalPropertyPlantEquipment2020-12-31098228432020-12-3109822843core:LeaseholdImprovements2021-01-012021-12-3109822843core:Non-standardPPEClass1ComponentTotalPropertyPlantEquipment2021-01-012021-12-3109822843core:CurrentFinancialInstruments2021-12-3109822843core:CurrentFinancialInstruments2020-12-3109822843core:Non-currentFinancialInstruments2021-12-3109822843core:Non-currentFinancialInstruments2020-12-3109822843core:WithinOneYear2021-12-3109822843core:WithinOneYear2020-12-3109822843core:BetweenTwoFiveYears2021-12-3109822843core:BetweenTwoFiveYears2020-12-3109822843bus:PrivateLimitedCompanyLtd2021-01-012021-12-3109822843bus:FRS1022021-01-012021-12-3109822843bus:Audited2021-01-012021-12-3109822843bus:FullAccounts2021-01-012021-12-31xbrli:purexbrli:sharesiso4217:GBP