Registered number: 05501977
The Brewery On Chiswell Street Limited
Financial statements
For the year ended 31 January 2023
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The Brewery On Chiswell Street Limited
Company Information
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J E C Varah (appointed 5 June 2023)
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B4 Parkside Knowledge Gateway
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Chartered Accountants & Statutory Auditor
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168 Shoreditch High Street
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The Brewery On Chiswell Street Limited
Contents
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Independent auditors' report
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Statement of profit or loss and other comprehensive income
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Statement of financial position
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Statement of changes in equity
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Notes to the financial statements
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The Brewery On Chiswell Street Limited
Strategic report
For the year ended 31 January 2023
The directors present their Strategic report, Directors' report and the financial statements for the year ended 31 January 2023.
Business review
The company had record sales in the first full year of operations following lockdown as sales were boosted by strong first half with events postponed due to the pandemic being rescheduled in the year.
The company generated revenues of £21.6m (2022: £7.5m) which was 16.% ahead of FY20 (the last full year of operations before lockdown). The gross margin was 56.9% (2022: 55.6%) which decreased from 61.3% (FY20) due to cost inflation and pricing lag. Indirect costs were better leveraged as they dropped to 40.1% (2022: 42%) from 43.8% (FY20).
EBITDA rose 121% from £3.3m (FY20) to £7.3m. EBITDA in 2022 was £(398,951).
Financial key performance indicators
The key performance indicators of the company are turnover, gross profit and margin. This information allows management to monitor activity and cost levels. Gross profit for the year ended 31 January 2023 was £12,210,821 (2022: £4,163,855) achieving a margin on sales of 57% (2022: 56%). Restoring gross margins to pre-pandemic levels has been a key focus in the year just finished, given inflationary pressures that affected direct labour and materials costs.
Page 1
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The Brewery On Chiswell Street Limited
Strategic report (continued)
For the year ended 31 January 2023
Principal risks and uncertainties
Currency risk
All of the company's revenues and costs are denominated in Sterling. Therefore the directors consider that the company has no material exposure to currency risk.
Credit risk
The company's principal financial assets are cash and trade debtors. There is minimal credit risk associated with the company's cash balances as these are all held with recognized financial institutions. The company's principal credit risk is the recovery of trade debtor amounts. This risk is managed by the setting of credit limits for customers based on a combination of third party credit reference agency limits or trading experience and payment history. There is a credit control function to actively chase outstanding debts.
Interest and liquidity risk
The company seeks to manage its financial risk to ensure that sufficient liquidity is available to meet foreseeable needs in both the short and the long term.
This report was approved by the board and signed on its behalf.
Page 2
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The Brewery On Chiswell Street Limited
Directors' report
For the year ended 31 January 2023
The directors present their report and the financial statements for the year ended 31 January 2023.
The principal activity of the company continued to be the operation of 'The Brewery' for the provision of conferencing and banqueting services.
The director who served during the year was:
PR Lewin
The profit for the year, after taxation, amounted to £2,335,975 (2022: loss £3,293,143).
Interim dividends of £Nil were paid during the year (2022: £Nil). No final dividend is recommended.
Directors' responsibilities statement
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The directors are responsible for preparing the Strategic report, Directors' report and the financial statements, in accordance with applicable law.
Company law requires the directors to prepare financial statements for each financial year. Under that law they have elected to prepare the financial statements in accordance with International Financial Reporting Standards (IFRS) in conformity with the requirements of the Companies Act 2006.
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 the financial statements, the directors are required to:
∙select suitable accounting policies and then apply them consistently;
∙make judgements and estimates that are reasonable and prudent;
∙state whether they have been prepared in accordance with IFRS in conformity with the requirements of the
Companies Act 2006, subject to any material departures disclosed and explained in the financial statements;
∙assess the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and
∙use the going concern basis of accounting unless they either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.
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 responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.
Matters covered in the strategic report
Items required under schedule 7 to be disclosed in the directors' report are set out in the strategic report in
accordance with s.414C(11) Companies Act 2006.
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The Brewery On Chiswell Street Limited
Directors' report (continued)
For the year ended 31 January 2023
As we complete the third quarter of FY24, contractually committed business for the year exceeds £21m and the level of enquiries suggest a further record year.
The rapid and consistent recovery from the pandemic has encouraged the management team to revisit its plans to expand the business and negotiations are at an advanced stage to open another major venue in the City of London.
Disclosure of information to auditors
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Each of the persons who are directors at the time when this Directors' report is approved has confirmed that:
∙so far as the directors are aware, there is no relevant audit information of which the Company's auditors are unaware, and
∙the directors have taken all the steps that ought to have been taken as directors in order to be aware of any relevant audit information and to establish that the Company's auditors are aware of that information.
The auditors, Kreston Reeves LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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The Brewery On Chiswell Street Limited
Independent auditors' report to the members of The Brewery On Chiswell Street Limited
We have audited the financial statements of The Brewery On Chiswell Street Limited for the year ended 31 January 2023 which comprise the Statement of profit or loss and other comprehensive income, the Statement of financial position, the Statement of cash flows, the Statement of changes in equity and the related notes, including a summary of significant accounting policies set out on pages 15 - 22. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) in conformity with the requirements of the Companies Act 2006.
In our opinion, the financial statements:
∙give a true and fair view of the state of the Company's affairs as at 31 January 2023 and of its profit for the year then ended;
∙have been properly prepared in accordance with IFRSs in conformity with the requirements of the Companies Act 2006; 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 auditors' 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 United Kingdom, including the Financial Reporting Council'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
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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. Our evaluation of the directors' assessment of the Company's ability to continue to adopt the going concern basis of accounting included:
∙Examining the post year end performance of the company, using management accounts which show it has returned to making profits.
∙Examining forecasts prepared up to 31 January 2025 which detail the company's continued strong results and high levels of bookings.
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 directors are responsible for the other information. The other information comprises the information included in the Annual report, other than the financial statements and our auditors' 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.
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The Brewery On Chiswell Street Limited
Independent auditors' report to the members of The Brewery On Chiswell Street Limited (continued)
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinion on other matters prescribed by the Companies Act 2006
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In our opinion, based on the work undertaken in the course of the 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.
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 or the Directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
∙adequate accounting records have not been kept, 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 directors' remuneration specified by law are not made; or
∙we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement on page 3, 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.
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The Brewery On Chiswell Street Limited
Independent auditors' report to the members of The Brewery On Chiswell Street Limited (continued)
Auditors' 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 auditors' 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:
Capability of the audit in detecting irregularities, including fraud
Based on our understanding of the company and industry, and through discussion with the directors and other management (as required by auditing standards), we identified that the principal risks of non-compliance with laws and regulations related to The Food Safety Act 1990, The Food Safety and Hygiene (England) Regulations 2018, health and safety, anti-bribery and employment law. We considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006, taxation and pension legislation. We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries to increase revenue or reduce expenditure, management bias in accounting estimates and judgemental areas of the financial statements such as valuation of right-of-use assets, investments in subsidiaries and goodwill. Audit procedures performed by the engagement team included:
∙Discussions with management and assessment of known or suspected instances of non-compliance with laws and regulations (including health and safety) and fraud; and
∙Assessment of identified fraud risk factors; and
∙Identifying and assessing the design effectiveness of controls that management has in place to prevent and detect fraud; and
∙Testing of internal controls procedures relating to expenditure potentially more susceptible to fraud and other irregularities including cash and payroll expenditure; and
∙Challenging assumptions and judgements made by management in its significant accounting estimates; and
∙Confirmation of related parties with management, and review of transactions throughout the period to identify any previously undisclosed transactions with related parties outside the normal course of business; and
∙Performing analytical procedures with automated data analytics tools to identify any unusual or unexpected relationships, including related party transactions, that may indicate risks of material misstatement due to fraud; and
∙Reading minutes of meetings of those charged with governance and reviewing correspondence with relevant tax and regulatory authorities; and
∙Review of internal controls and physical inspection of tangible assets susceptible to fraud or irregularity; and
∙Review of significant and unusual transactions and evaluation of the underlying financial rationale supporting the transactions; and
∙Identifying and testing journal entries, in particular any manual entries made at the year end for financial statement preparation.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
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The Brewery On Chiswell Street Limited
Independent auditors' report to the members of The Brewery On Chiswell Street Limited (continued)
As part of an audit in accordance with ISAs (UK), we exercise professional judgement and maintain professional scepticism throughout the audit. We also:
∙Identify and assess the risks of material misstatement of the 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 of the effectiveness of 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 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 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 auditors' report to the related disclosures in the 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 auditors' report. However, future events or conditions may cause the Company to cease to continue as a going concern.
∙Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance 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.
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 auditors' 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.
Stephen Tanner BSc(Econ) FCA (Senior Statutory Auditor)
for and on behalf of
Kreston Reeves LLP
Chartered Accountants
Statutory Auditor
London
1 November 2023
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The Brewery On Chiswell Street Limited
Statement of profit or loss and other comprehensive income
For the year ended 31 January 2023
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Profit/(loss) from operations
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Profit/(loss) for the year
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Total comprehensive income
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The notes on pages 15 to 38 form part of these financial statements.
The results for the year reflect trading from continuing operations.
Total comprehensive income is allocated in full to the owners of the Company.
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The Brewery On Chiswell Street Limited
Registered number: 05501977
Statement of financial position (continued)
As at 31 January 2023
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Property, plant and equipment
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Trade and other receivables
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Trade and other receivables
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Cash and cash equivalents
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The Brewery On Chiswell Street Limited
Registered number: 05501977
Statement of financial position (continued)
As at 31 January 2023
Issued capital and reserves
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The financial statements on pages 14 to 38 were approved and authorised for issue by the board of directors and were signed on its behalf by:
The notes on pages 15 to 38 form part of these financial statements.
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The Brewery On Chiswell Street Limited
Statement of changes in equity
For the year ended 31 January 2023
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Retained earnings (restated)
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At 1 February 2021 (as previously stated)
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At 1 February 2021 (as restated)
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Comprehensive income for the year
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Total comprehensive income for the year
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Contributions by and distributions to owners
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Comprehensive income for the year
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Total comprehensive income for the year
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Contributions by and distributions to owners
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The notes on pages 15 to 38 form part of these financial statements.
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Page 12
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The Brewery On Chiswell Street Limited
Statement of cash flows
For the year ended 31 January 2023
Cash flows from operating activities
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Profit/(loss) for the year
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Depreciation of property, plant and equipment
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Amortisation of intangible fixed assets
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Adjustment to amortisation on reclassifcation of website costs to intangible assets
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Movements in working capital:
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(Increase)/decrease in trade and other receivables
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Increase in amounts owed to related parties
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(Increase)/decrease in inventories
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Increase in trade and other payables
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Increase in amounts owed to group undertakings
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Cash generated from operations
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Net cash from operating activities
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Cash flows from investing activities
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Purchases of property, plant and equipment
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Net cash used in investing activities
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Cash flows from financing activities
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Proceeds from bank borrowings
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Payment of lease interest liabilities
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Repayment of leasing liabilities
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Net cash used in financing activities
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Net increase/(decrease) in cash and cash equivalents
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Cash and cash equivalents at the beginning of year
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Cash and cash equivalents at the end of the year
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The notes on pages 15 to 38 form part of these financial statements.
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The Brewery On Chiswell Street Limited
Statement of cash flows (continued)
For the year ended 31 January 2023
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Net debt reconciliation
As at 31 January 2023
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Borrowings repayable within one year
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Borrowings repayable greater than one year
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Net debt as at 31 January 2022
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The Brewery On Chiswell Street Limited
Notes to the financial statements
For the year ended 31 January 2023
The Brewery On Chiswell Street Limited (the 'Company') is a private company, limited by shares, incorporated in England. The Company's registered office is at B4 Parkside Knowledge Gateway, Nesfield Road, Colchester, Essex, England, CO4 3ZL. The Company's principal activity is the provision of conferencing and banqueting services and the company's principal place of business is The Brewery, 52 Chiswell Street, London, EC1Y 4SD.
2.Accounting policies
On 31 December 2020, IFRS as adopted by the European Union at that date was brought into UK law and became UK-adopted International Accounting Standards, with future changes being subject to endorsement by the UK Endorsement Board. The financial statements of the Company have been prepared in accordance with UK-adopted International Accounting Standards and with the requirements of the Companies Act 2006 as applicable to companies reporting under those standards.
The financial statements have been prepared on a going concern basis under the historical cost basis except for derivative financial instruments which are stated at fair value. The directors believes that preparing the accounts on the going concern is appropriate.
The financial statements of the Company are for the year ended 31 January 2022. The financial statements were authorised for issue by the directors on the date specified on the Statement of financial position.
Details of the accounting policies applied, including changes in the year, are as follows:
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Adoption of new and revised standards
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a)New standards, interpretations and amendments adopted from 1 January 2023
New standards that have been adopted in the annual financial statements for the year ended 31 January 2023, but have not had a significant effect on the Company are:
∙Onerous Contracts - Cost of Fulfilling a Contract (Amendments to IAS37);
∙Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16);
∙Annual Improvments to IFRS Standards 2018-2020 (Amendments to IFRS 1, IFRS 9, IFRS 16 and
∙IAS 41) and;
∙References to Conceptual Framework (Amendments to IFRS 3).
These amendments to various IFRS standards are mandatorily effective for reporting periods beginning
on or after 1 January 2022.
The Company does not expect any other standards issued by the IASB, but not yet effective, to have a material impact on the Company.
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The Brewery On Chiswell Street Limited
Notes to the financial statements
For the year ended 31 January 2023
2.Accounting policies (continued)
The financial statements have been prepared on a going concern basis the Company reporting a profit after tax in the year to 31 January 2023 of £2,335,975 (2022: Loss of £3,293,143). As at the Statement of Financial Position date, the Company is also in a net liability position of £21,246,448 (2022: £23,582,423). However removing the right of use asset and its associated liability as mandated by IFRS 16, the Company is in a net liability position at the balance sheet date of £7,204,000 (2022: £9,076,722).
In 2021, the Company's leasehold interest in the Brewery premises was valued at £32.5m post pandemic by independent hospitality real estate experts, engaged by the Company's bankers. This asset, which has not been recognised for accounting purposes due to the historical cost convention, comfortably exceeds the Company's net liability position referred to above.
The directors have, at the time of approving the financial statements, a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Since re-opening in August 2021, revenues have exceeded to 2019 levels seen before the UK lockdown took place. The current order book is ahead of the order book at this stage for FY20, which was the last completed year before lockdown. Management accounts show the company made a substantial profit for the year ended 31 January 2023 and contractually committed business for the current year exceeds £17m.
Thus, the directors believe that preparing the accounts on the going concern basis is appropriate.
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Foreign currency transactions
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Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
Monetary assets or liabilities denominated in foreign currencies are translated at balance date at the foreign exchange rate ruling at that date. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items that are stated at fair value are translated at the foreign exchange rate ruling at the date the fair value was determined. Foreign exchange differences arising on their translation are recognised in the statement of comprehensive income and classified according to the nature of the foreign exchange difference.
The Company recognises revenue from room hire and associated services on the day the event takes place.
Revenue from the sale of food and drink is recognised in the statement of comprehensive income when the significant risk and rewards have been transferred to the buyer, which is on the day of the relevant event that the food and drink was sold.
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The Brewery On Chiswell Street Limited
Notes to the financial statements
For the year ended 31 January 2023
2.Accounting policies (continued)
Government grants are not recognised until there is reasonable assurance that the Company will comply with the conditions attaching to them and that the grants will be received.
Government grants are recognised in profit or loss on a systematic basis over the periods in which the Company recognises as expenses the related costs for which the grants are intended to compensate. Specifically, government grants whose primary condition is that the Company should purchase, construct or otherwise acquire non-current assets are recognised as deferred revenue in the consolidated statement of financial position and transferred to profit or loss on a systematic and rational basis over the useful lives of the related assets.
Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Company with no future related costs are recognised in profit or loss in the period in which they become receivable.
The benefit of a government loan at a below-market rate of interest is treated as a government grant, measured as the difference between proceeds received and the fair value of the loan based on prevailing market interest rates.
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Property, plant and equipment
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Items of property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment losses.
If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment. Any gain or loss on disposal of an item of property, plant and equipment is recognised in profit or loss. Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the Company.
Depreciation is provided on all other items of property, plant and equipment so as to write off their carrying value over their expected useful economic lives. It is provided at the following rates:
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Improvement to leasehold property
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straight line basis over life of loan
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Intangible assets acquired separately
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Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated amortisation and accumulated impairment losses. Amortisation is recognised on a straight-line basis over their estimated useful lives. The estimated useful life and amortisation method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis. Intangible assets with indefinite useful lives that are acquired separately are carried at cost less accumulated impairment losses.
Page 17
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The Brewery On Chiswell Street Limited
Notes to the financial statements
For the year ended 31 January 2023
2.Accounting policies (continued)
Inventories are stated at the lower of cost and net realisable value. Costs of inventories are determined on a first in, first out basis. Net realisable value represents the estimated selling price for inventories less all estimated costs of completion and costs necessary to make the sale.
All regular way purchases or sales of financial assets are recognised and derecognised on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace.
All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on the classification of the financial assets.
(i) Classification of financial assets
Debt instruments that meet the following conditions are subsequently measured at amortised cost:
∙the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and
∙the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Debt instruments that meet the following conditions are subsequently measured at fair value through other comprehensive income (FVOCI):
∙the financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling the financial assets; and
∙the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
By default, all other financial assets are subsequently measured at fair value through profit or loss (FVTPL).
Despite the aforegoing, the Company may make the following irrevocable election/designation at initial recognition of a financial asset:
∙the Company may irrevocably elect to present subsequent changes in fair value of an equity instrument in other comprehensive income if certain criteria are met; and
∙the Company may irrevocably designate a debt investment that meets the amortised cost or FVOCI criteria as measured at FVTPL if doing so eliminates or significantly reduces an accounting mismatch.
Page 18
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The Brewery On Chiswell Street Limited
Notes to the financial statements
For the year ended 31 January 2023
2.Accounting policies (continued)
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Financial liabilities and equity instruments
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Financial liabilities
All financial liabilities are subsequently measured at amortised cost using the effective interest method or at FVTPL.
However, financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition or when the continuing involvement approach applies, financial guarantee contracts issued by the Company, and commitments issued by the Company to provide a loan at below-market interest rate are measured in accordance with the specific accounting policies set out below.
Financial liabilities subsequently measured at amortised cost
Financial liabilities that are not (i) contingent consideration of an acquirer in a business combination, (ii) held for trading, or (iii) designated as at FVTPL, are subsequently measured at amortised cost using the effective interest method.
The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the amortised cost of a financial liability.
Derecognition of financial liabilities
The Company derecognises financial liabilities when, and only when, the Company's obligations are discharged, cancelled or have expired. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.
Financial assets and financial liabilities are recognised when an entity becomes a party to the contractual provisions of the instruments.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.
Dividends are recognised when they become legally payable. In the case of interim dividends to equity shareholders, this is when declared by the directors. In the case of final dividends, this is when approved by the shareholders at the AGM.
Page 19
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The Brewery On Chiswell Street Limited
Notes to the financial statements
For the year ended 31 January 2023
2.Accounting policies (continued)
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
The Company assesses whether a contract is or contains a lease, at inception of a contract. The Company recognises a right-of-use asset and a corresponding lease liability with respect to all lease agreements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low-value assets (defined as leases valued at less than £5,000). For these leases, the Company recognises the lease payments as an operating expense on a straight-line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Company uses its incremental borrowing rate. The Company has assessed its incremental borrowing rate using a series of inputs including: government gilt rates between now and the end of the lease term and considering other borrowing rates within the market for similar companies.
Lease payments included in the measurement of the lease liability comprise:
∙fixed lease payments (including in-substance fixed payments), less any lease incentives;
The lease liability is included in the 'Loans and borrowings' line in the Statement of financial position.
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made.
The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses.
Right-of-use assets are depreciated on a straight line basis over the shorter period of lease term and useful life of the underlying asset. If a lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the Company expects to exercise a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation starts at the commencement date of the lease.
The right-of-use assets are included in the 'Property, Plant and Equipment' line in the Statement of financial position.
The Company applies IAS 36 to determine whether a right-of-use asset is impaired and accounts for any identified impairment loss as described in note 2.7.
As a practical expedient, IFRS 16 permits a lessee not to separate non-lease components, and instead account for any lease and associated non-lease components as a single arrangement. The Company has used this practical expedient.
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Defined contribution schemes
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Contributions to defined contribution pension schemes are charged to the statement of comprehensive income in the year to which they relate.
Page 20
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The Brewery On Chiswell Street Limited
Notes to the financial statements
For the year ended 31 January 2023
2.Accounting policies (continued)
Income tax expense represents the sum of the tax currently payable and deferred tax.
(i) Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from ‘profit before tax’ as reported in the Statement of profit or loss and other comprehensive income because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Company's current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.
(ii) Deferred tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. In addition, deferred tax liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill.
Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries and associates, and interests in joint ventures, except where the Company is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
For the purposes of measuring deferred tax liabilities and deferred tax assets for investment properties that are measured using the fair value model, the carrying amounts of such properties are presumed to be recovered entirely through sale, unless the presumption is rebutted. The presumption is rebutted when the investment property is depreciable and is held within a business model whose objective is to consume substantially all of the economic benefits embodied in the investment property over time, rather than through sale. The directors of the Company reviewed the Company's investment property portfolios and concluded that none of the Company's investment properties are held under a business model whose objective is to consume substantially all of the economic benefits embodied in the investment properties over time, rather than through sale. Therefore, the directors have determined that the ‘sale’ presumption set out in the amendments to IAS 12 is not rebutted. As a result, the Company has not recognised any deferred taxes on changes in fair value of the investment properties as the Company is not subject to any income taxes on the fair value changes of the investment properties on disposal.
Page 21
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The Brewery On Chiswell Street Limited
Notes to the financial statements
For the year ended 31 January 2023
2.Accounting policies (continued)
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Cash and cash equivalents
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Cash and cash equivalents comprise cash on hand and demand deposits, together with other short-term, highly liquid investments maturing within 90 days from the date of acquisition that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value.
The financial statements have been prepared in accordance with International Financial Reporting Standards, International Accounting Standards and Interpretations as adopted by the UK (collectively IFRSs).
Details of the Company's accounting policies, including changes during the year, are included in note 2.
In preparing these financial statements, management has made judgments, estimates and assumptions that affect the application of the Company accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised prospectively.
The areas where judgments and estimates have been made in preparing the financial statements and their effects are disclosed in note 5.
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Functional and presentation currency
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These financial statements are presented in pound sterling, which is the Company's functional currency. All amounts have been rounded to the nearest pound, unless otherwise indicated.
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Accounting estimates and judgements
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The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts in the financial statements. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recongised prosepctively.
Information about critical judgements in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements is included in the following notes:
∙Note 2.3: Going concern, the Directors' going concern assessment is based upon future forecasts of the Company's trading. These forecasts are based upon committed bookings to date, the venues capacity, managements' experience of the costs of running these events and there not being any reintroduction of Covid restrictions by the government, that would impact on the Company's ability to continue to trade as normal.
∙Note 12: Property, plant and equipment, as part of the right of use asset and its associated liability, management have considered the length of the lease. There is a revisionary lease however management haven't included this in the lease term, as part of the calculation, as there is no certainty that this will be exercised.
∙Note 16: Lease liabilities have been recognised using an effective interest rate. This has been calculated from the gilt market and other external factors.
Page 22
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The Brewery On Chiswell Street Limited
Notes to the financial statements
For the year ended 31 January 2023
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The revenue, profit before taxation and net assets are attributable to the one principal activity of the Company, the letting and operating of conferencing and banqueting services, from the Company's location in the UK. Consequently the Company has one business and one geographic segment.
The following is an analysis of the Company's revenue for the year from continuing operations:
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Revenue from core services
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During the year, the Company obtained the following services from the Company's auditors:
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Fees payable to the Company's auditors for the audit of the Company's
financial statements
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Fees payable to the company's auditor for non audit services
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Employee benefit expenses
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Employee benefit expenses (including directors) comprise:
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Employers national insurance
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Defined contribution pension cost
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The monthly average number of persons, including the directors, employed by the Company during the year was as follows:
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Management and administration
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Page 23
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The Brewery On Chiswell Street Limited
Notes to the financial statements
For the year ended 31 January 2023
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Finance income and expense
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Recognised in profit or loss
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Total interest income arising from financial assets measured at amortised cost or FVOCI
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Interest on lease liabilities
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Net finance expense recognised in profit or loss
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Page 24
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The Brewery On Chiswell Street Limited
Notes to the financial statements
For the year ended 31 January 2023
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10.1 Income tax recognised in profit or loss
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Origination and reversal of timing differences
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The reasons for the difference between the actual tax charge for the year and the standard rate of corporation tax in the United Kingdom applied to losses for the year are as follows:
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Profit/(loss) for the year
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Income tax credit/expense (including income tax on associate, joint venture and discontinued operations)
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Profit/(loss) before income taxes
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Tax using the Company's domestic tax rate of 19% (2022: 19%)
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Capital allowances for the year in excess of depreciation
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Capitalised revenue expenditure allowable on accounts basis
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Changes in provisions leading to an increase/(decrease) in the tax charge
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Unutilised tax losses carried forward/(losses utilised)
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Changes in tax rates and factors affecting the future tax charges
Since 1 April 2017 there has been a single rate of corporation tax of 19% in place. From 1 April 2023, the main rate of corporation tax will rise up to 25% for companies with profits over £250,000. For companies with profits of £50,000 or less, they will pay corporation tax at the small profits rate of 19%. Where a company's profits fall between £50,000 and £250,000 they will pay corporation tax at a marginal rate. The upper and lower limits will be proportionally reduced for short accounting periods and where there are associated companies.
Page 25
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The Brewery On Chiswell Street Limited
Notes to the financial statements
For the year ended 31 January 2023
10.Tax expense (continued)
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10.2 Deferred tax balances
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The following is the analysis of deferred tax assets/(liabilities) presented in the statement of financial position:
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Recognised in profit or loss
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Fixed asset timing differences
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Short term timing differences
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Tax losses carried forward
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Page 26
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The Brewery On Chiswell Street Limited
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Notes to the financial statements
For the year ended 31 January 2023
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10.Tax expense (continued)
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10.2 Deferred tax balances (continued)
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Recognised in profit or loss
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Recognised in other comprehensive income
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Recognised directly in equity
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Reclassified from equity to profit or loss
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Fixed asset timing differences
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Short term timing differences
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Tax losses carried forward
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Page 27
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The Brewery On Chiswell Street Limited
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Notes to the financial statements
For the year ended 31 January 2023
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Property, plant and equipment
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Improvements to leasehold property
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Transferred to intangible assets
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Page 28
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The Brewery On Chiswell Street Limited
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Notes to the financial statements
For the year ended 31 January 2023
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11.Property, plant and equipment (continued)
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Improvements to leasehold property
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Accumulated depreciation and impairment
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Charge owned for the year
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Charge owned for the year
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Transferred to intangible assets
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The right of use asset under IFRS 16 is made up of leasehold properties.
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Page 29
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The Brewery On Chiswell Street Limited
Notes to the financial statements
For the year ended 31 January 2023
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Trade and other receivables
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Total non-current trade and other receivables
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Receivables from related parties
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Total financial assets other than cash and cash equivalents classified as loans and receivables
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Prepayments and accrued income
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Total current trade and other receivables
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Amounts receivable from customers are non-interest bearing and are generally on 60 day payment terms before the date of the event. The company believes the credit quality of these trade receivables to be good. The ageing of the company's receivables which are over 60 days or more but are not impaired are as follows: £75k (2022: £41k).
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Page 30
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The Brewery On Chiswell Street Limited
Notes to the financial statements
For the year ended 31 January 2023
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Payables to related parties
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Total financial liabilities, excluding loans and borrowings, classified as financial liabilities measured at amortised cost
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Other payables - tax and social security payments
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Total current trade and other payables
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Total loans and borrowings
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The Company's loan with AIB Group (UK) PLC is secured by way of a fixed and floating charge over the property assets of the Company.
The carrying value of loans and borrowings classified as financial liabilities measured at amortised cost approximates fair value.
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Page 31
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The Brewery On Chiswell Street Limited
Notes to the financial statements
For the year ended 31 January 2023
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The undiscounted maturity analysis of lease liabilities at 31 January 2023 is as follows:
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Minimum lease payments due - Lease liabilities
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Financial instruments by category
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Assets as per Statement of financial position
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Trade and other receivables at amortised cost
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Short term liabilities as per Statement of financial position
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Trade and other payables at amortised cost
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Long term liabilities as per Statement of financial position
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Trade and other payables at amortised cost
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Financial assets measured at amortised cost comprise of trade debtors, other debtors and amounts owing to group undertakings.
Financial liabilities measured at amortised cost comprise of trade creditors, lease liabilities, other creditors, loans and accruals.
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Treasury risk management policy
As its parent company, the company follows City Brewery Limited’s treasury risk management policy as detailed below. City Brewery treasury has responsibility for the identification and management of the group's financial risks and conducts the group's treasury activities in accordance with the group's treasury policy. Group treasury policy sets out the policies with respect to the internal controls (including segregation of duties), organisational relationships, functions, delegated authority levels, interest rate exposures and counterparty credit limits and requires regular reporting to the board of directors of exposures to derivative financial instruments.
The group's board of directors have an oversight role which involves ratification of group treasury policy, delegation of authorities and consideration of reports on implementation, effectiveness and compliance.
Page 32
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The Brewery On Chiswell Street Limited
Notes to the financial statements
For the year ended 31 January 2023
The group's treasury policy manages the following financial risks:
- Liquidity risk;
- Interest rate risk:
- Counterparty credit risk
The group's policy towards risk management is to take an active approach to identify and manage financial risks and ensure that adequate risk management systems exist within the group such that risks are identified and appropriately managed. Financial asset and liability transactions are to be structured to enable the achievement of planned outcomes, reduce volatility and provide increased certainty.
The objectives relating to management of financial risks are as follows:
Liquidity risk
Liquidity risk is identified across the entire group.
The aim of liquidity risk management is to ensure that the group has an appropriate level of liquidity and access to sufficient cash resources (including reserves, banking facilities and standby borrowing facilities) to maintain normal operations, meet its financial obligations as they fall due, pay dividends, meet capital expenditure commitments and undertake investment strategic opportunities as they arise. To do this, debt maturity profile must be appropriately structured, taking into account the group's core assets and working capital funding requirements, asset and liability matching and refinancing risks.
lnterest rate risk
lnterest rate risk is the risk of a reduction in earnings and cashflow as a consequence of adverse movements in interest rates. This includes exposures that may arise if the group was to fix interest rates in a falling interest rate environment. lnterest rate risk is measured by the effect of interest rate movements on the total portfolio of current and forecast debt, interest rate hedging transactions and financial market risks.
The majority of the group's interest rate risk arises from borrowings. The group's objective is to ensure that it is not exposed to interest rate movements to the extent that interest expense adversely impacts the group's ability to meet operating obligations as they arise.
Counterparty credit risk
Counterparty credit risk represents the potential loss which the group could incur if counterparties failed to meet their obligations under their respective contracts or arrangement with the group. Credit risk for financial assets which have been recognised in the Statement of financial position is generally the carrying amount, net of any provisions for doubtful debts.
Trade receivables consist of a number of customers. If there is no independent rating, management assesses the credit quality of the customer taking into account its financial position, past experience and other factors. Individual risk limits are set based on internal ratings. Management monitors the utilisation of credit limits regularly.
Page 33
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The Brewery On Chiswell Street Limited
Notes to the financial statements
For the year ended 31 January 2023
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Authorised, issued and fully paid
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Ordinary shares of £1.00 each
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At 1 February and 31 January
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The holders of the ordinary shares are entitled to dividends as declared from time to time and have equal voting rights at meetings of the Company, and rank equally with regard to the Company's residual assets on winding up.
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The company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. The pension cost charge represents contributions payable by the company to the fund and amounted to £100,815 (2022: £71,493). Outstanding contributions totaling £21,897 (2022: £67,143) were payable to the fund at the balance sheet date.
Profit & loss account
This reserve comprises all current and prior period retained profits and losses after deducting any distributions made to the company's shareholders.
Page 34
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The Brewery On Chiswell Street Limited
Notes to the financial statements
For the year ended 31 January 2023
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Accumulated amortisation and impairment
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Transferred from tangible assets
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Charge for the year - owned assets
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Page 35
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The Brewery On Chiswell Street Limited
Notes to the financial statements
For the year ended 31 January 2023
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At the balance sheet date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases.
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Lease liabilities are due as follows:
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Contractual undiscounted cash flows due
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Between one year and five years
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Lease liabilities included in the Statement of financial position at 31 January
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Leases where the lessor retains substantially all the risks and benefits of ownership of the asset are classified as operating leases. Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.
Operating lease payments are recognised as an expense in the statement of comprehensive income on a straight line basis over the lease term, with any deferred lease payments recorded in the statement of financial position as an asset or liability until released to the profit and loss. The Company leases equipment under operating leases.
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The following amounts in respect of leases have been recognised in profit or loss:
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Interest expense on lease liabilities
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Expenses relating to short-term leases
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Expenses relating to leases of low-value assets, excluding short-term leases of low-value assets
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Page 36
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The Brewery On Chiswell Street Limited
Notes to the financial statements
For the year ended 31 January 2023
22.Leases (continued)
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Extension options and termination options
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Future cash outflows in periods after the date on which an extension option or termination option may be exercised are only included in lease liabilities if it is reasonably certain that a lease will be extended or will not be terminated. Lease liabilities recognised and potential future lease payments not included in lease liabilities by type of leased asset are as follows:
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Potential future lease payments not included in lease liabilities (discounted)
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Historical rate of exercise of extension options and termination options
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The Company has the option to extend one of its leases, however as the extension option isn't until 2031, management are unable to confirm currently whether this option will be exercised however as the Company approaches this date, they will reassess this option.
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Related party transactions
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23.1 Loans to related parties
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Advanced to related parties
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City Brewery Limited owns 100% of the share capital in The Brewery On Chiswell Street Limited, with a registered office at B4 Parkside Knowledge Gateway, Nesfield Road, Colchester, Essex, England, CO4 3ZL.
Instant Covid Tests London Limited is a fellow group company and a wholly owned subsidiary of City Brewery Limited. During the year, the company incurred expenses on behalf of Instant Covid Tests London Limited of £4,855 (2022: £716,342) and the loan is non-interest bearing. The company impaired the year end balance with Instant Covid Tests London Limited totalling £4,855 (2022: £716,342), which has resulted in there being no year end balance between the company and Instant Covid Tests London Limited.
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Page 37
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The Brewery On Chiswell Street Limited
Notes to the financial statements
For the year ended 31 January 2023
The directors consider the company's immediate and ultimate parent undertaking to be City Brewery Limited. P R Lewin is the ultimate controlling party as he owns 100% of the Ordinary share capital of City Brewery Limited.
The consolidated financial statements of City Brewery Limited can be obtained from the Registered Office, which is B4 Parkside Knowledge Gateway, Nesfield Road, Colchester, Essex, England, CO4 3ZL.
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Notes supporting statement of cash flows
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Cash at bank available on demand
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Cash and cash equivalents in the statement of cash flows
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