Registered number: 03829460
Bancroft Wines Limited
Annual Report and Financial Statements
For the Year Ended 30 September 2023
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Bancroft Wines Limited
Company Information
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30 Great Guildford Street
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Statutory Auditor & Chartered Accountants
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Bancroft Wines Limited
Contents
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Directors' Responsibilities Statement
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Independent Auditors' Report
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Statement of Comprehensive Income
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Notes to the Financial Statements
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Bancroft Wines Limited
Strategic Report
For the Year Ended 30 September 2023
Bancroft Wines is an award-winning wine importer and distributor specialising in representing family-run wineries
from around the world.
It has been a challenging year for the industry with the general economic background, the Cost of Living Crisis and high inflation challenging the business. The sector has seen falling sales volume in the wider wine market ranging from 4% to 14%, depending on the category. Despite a good start, revenue for the year was down 6% to £15.6m. The drop was mostly from lower activity in the National Grocery Sector and some decline in the Off-Trade. However, there was a strong performance in the company’s traditional market, the On-Trade, which grew 10% over the prior year. The company continued to successfully drive new business with 135 new accounts opened in the year.
Despite the fall in revenue margin improved to 19.6%, from 18.2%, this was driven from the mix of sales. The directors believe the wine portfolio offering the company has is strong and capable of delivering improved results as we move into the next financial year.
The company has continued to invest in the future with further additions to staff levels, this, and the inflationary impact of higher general costs, impacted the Operating Profit, seeing it fall from £352k to £130k. However, this will help the business continue to offer excellent customer service to its clients and a strong platform for future growth.
The company has a strong balance sheet with Net Assets now at £784,000 and positive cash flow, reducing Net debt by £81,000 in the year.
Principal risks and uncertainties
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Competitive and pricing risks
The company is exposed to significant competitive and pricing risks in its market which affect the ability to retain
existing customers and also to win new business. The company manages these risks by ensuring that it is both competitive in terms of pricing to customers, continually strengthens its award-winning portfolio of wines and provides excellent customer service.
Credit risk
Trade debtors are managed in respect of credit and cash flow risk by policies concerning the credit limit and payment terms offered to customers and the regular monitoring of both time and credit limits.
Foreign Exchange
As an importer of wine from around the world the majority of purchases are in various foreign currencies and therefore the company is exposed to adverse movements in foreign exchange. The company mitigates this risk by entering into forward exchange contracts.
Liquidity risk
Liquidity is managed through forecasting of future cash flow requirements for the business and maintaining sufficient cash balances to support the operations.
Economic risk
The company is subject to many of the same general economic risks faced by other businesses in the sector. The company seeks to mitigate these risks by having a diverse customer base together with robust forecasting and planning.
Page 1
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Bancroft Wines Limited
Strategic Report (continued)
For the Year Ended 30 September 2023
Financial key performance indicators
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The directors regularly review KPIs in order to assess and measure the company's performance and its financial position. These include turnover, profit margins, balance sheet indicators and cash flow.
The forward view includes consolidating on the previous expansion of our sales team to provide greater support to customers nationally, as well seeking out select partners to help the company progress in certain geographic markets. The planning for the re-location of warehousing and delivery operations took place during the year and the project will conclude soon. We are excited by this project and the improvements it will bring that allow the company to offer the highest level of customer service possible.
We are well positioned to benefit positively from the changes we are looking to make and to continue to support our market, we have built a strong and capable business to meet the ever-changing needs of our customers. I would like to thank our employees for their continued hard work and dedication to making this company such a growing success.
This report was approved by the board and signed on its behalf.
Page 2
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Bancroft Wines Limited
Directors' Report
For the Year Ended 30 September 2023
The directors present their report and the financial statements for the year ended 30 September 2023.
The principal activity of the company is the import, wholesale and retail of fine wine.
The directors who served during the year were:
Greenhouse gas emissions, energy consumption and energy efficiency action
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In 2022, the company appointed CarbonQuota to independently assess the accuracy, completeness, and consistency of energy use and carbon footprint calculations within the operations under its direct control. In carrying out carbon footprint calculations and preparing this document, CarbonQuota has followed the general principles of the Greenhouse Gas Protocol (Corporate Standard), with further guidance from the Greenhouse Gas Protocol (Corporate Value Chain Accounting and Reporting Standard).
Although this is not yet mandatory reporting for the company, the Directors recognise the importance of sustainable business practices and wish these to be instilled throughout the business.
The table below summarises the data for the Baseline Year, 1 July 2021 to 30 June 2022 and compares performance to the current year ending 30 June 2023. This period differs from the company’s financial year due to the timing of when the analysis was carried out.
We are pleased to report that the CO2e emissions associated with our direct operations have reduced year-on-year, as outlined in the table below.
Intensity ratios
Page 3
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Bancroft Wines Limited
Directors' Report (continued)
For the Year Ended 30 September 2023
Greenhouse gas emissions, energy consumption and energy efficiency action (continued)
The company is committed to reducing carbon footprint in real terms rather than reducing it by way of buying carbon offsets. Initiatives taken to date include switching to a 100% renewable energy tariff in 2023. The business is also in the process of moving to a new ‘state of the art’ warehouse facility within London City Bond, which will incorporate a number of energy saving devices and further help cut CO2 emissions through the use of electric forklifts.
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 director is aware, there is no relevant audit information of which the company's auditors are unaware, and
∙the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the company's auditors are aware of that information.
Post balance sheet events
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There are no post balance sheet events that require disclosure.
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.
Page 4
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Bancroft Wines Limited
Directors' Responsibilities Statement
For the Year Ended 30 September 2023
The directors are responsible for preparing the Strategic Report, the Directors' 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 for the company's financial statements and then apply them consistently;
∙make judgements and accounting estimates that are reasonable and prudent;
∙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 to 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.
The directors are responsible for the maintenance and integrity of the corporate and financial information included on the company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements and other information included in Directors' Reports may differ from legislation in other jurisdictions.
Page 5
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Bancroft Wines Limited
Independent Auditors' Report to the Members of Bancroft Wines Limited
We have audited the financial statements of Bancroft Wines Limited (the 'company') for the year ended 30 September 2023, which comprise the Statement of Comprehensive Income, the Balance Sheet, the Statement of Cash Flows and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 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 30 September 2023 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 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.
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 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. 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.
Page 6
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Bancroft Wines Limited
Independent Auditors' Report to the Members of Bancroft Wines Limited (continued)
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
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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
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As explained more fully in the Directors' Responsibilities Statement set out on page 5, 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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Bancroft Wines Limited
Independent Auditors' Report to the Members of Bancroft Wines Limited (continued)
Auditors' responsibilities for the audit of the financial statements
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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 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 and taxation 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 the valuation of stock. Audit procedures performed by the group engagement team and component auditors 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
• Checking and reperforming the reconciliation of key control accounts; 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 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.
Page 8
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Bancroft Wines Limited
Independent Auditors' Report to the Members of Bancroft Wines Limited (continued)
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.
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.
Peter Manser FCA DChA (Senior Statutory Auditor)
for and on behalf of
Kreston Reeves LLP
Statutory Auditor
Chartered Accountants
Canterbury
3 April 2024
Page 9
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Bancroft Wines Limited
Statement of Comprehensive Income
For the Year Ended 30 September 2023
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Interest payable and similar expenses
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There were no recognised gains and losses for 2023 or 2022 other than those included in the statement of comprehensive income.
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There was no other comprehensive income for 2023 (2022:£NIL).
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The notes on pages 13 to 26 form part of these financial statements.
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Page 10
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Bancroft Wines Limited
Registered number: 03829460
Balance Sheet
As at 30 September 2023
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Debtors due after more than 1 year
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Debtors due within 1 year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 13 to 26 form part of these financial statements.
Page 11
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Bancroft Wines Limited
Statement of Cash Flows
For the Year Ended 30 September 2023
Cash flows from operating activities
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Profit for the financial year
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Amortisation of intangible assets
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Depreciation of tangible assets
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Net cash generated from operating activities
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Cash flows from investing activities
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Purchase of tangible fixed assets
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Net cash from investing activities
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Cash flows from financing activities
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Movements on invoice discounting
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Net cash used in financing activities
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Net (decrease) in cash and cash equivalents
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Cash and cash equivalents at beginning of year
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Cash and cash equivalents at the end of year
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Cash and cash equivalents at the end of year comprise:
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Page 12
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Bancroft Wines Limited
Notes to the Financial Statements
For the Year Ended 30 September 2023
Bancroft Wines Limited is a limited liability company incorporated in England and Wales.
The company's registered office is 108 Metalbox Factory, 30 Great Guildford Street, London, SE1 0HS.
The company's registered number is 03829460.
2.Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Section 1A of Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The company's functional and presentational currency is Pound Sterling.
The company's financial statements are presented to the nearest pound.
The following principal accounting policies have been applied:
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:
Sale of goods
Revenue from the sale of goods is recognised once the sales have been made and the goods dispatched.
En primeur
Revenue in respect of sales made "en primeur" is recognised when the title passes to the customer upon delivery. The amounts received on account of En Primeur sales where delivery has not been made are shown in trade creditors and the amounts paid on account of related purchases are shown in trade debtors.
Private reserve transaction
Revenue in respect of purchases or sales on behalf of private clients for reserve accounts is recognised on a commission basis at rates agreed with clients.
Where the company has any commercial interest in private reserves which are sold to third parties, revenue is recognised on the full value of the sale and the cost to the company is recognised in cost of sales.
The use of the going concern basis of accounting is appropriate because there are no material uncertainties related to events or conditions that may cast significant doubt about the ability of the company to continue as a going concern. The directors have a reasonable expectation that the company will continue in operational existence for the foreseeable future.
Page 13
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Bancroft Wines Limited
Notes to the Financial Statements
For the Year Ended 30 September 2023
2.Accounting policies (continued)
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Exemption from preparing consolidated financial statements
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The company is exempt from the requirement to prepare consolidated financial statements as all of its subsidiaries are required to be excluded from consolidation by section 402 of the Companies Act 2006.
Goodwill
Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight line basis to the Statement of Income and Retained Earnings over its useful economic life, which is five years.
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
The company adds to the carrying amount of an item of fixed assets the cost of replacing part of such an item when that cost is incurred, if the replacement part is expected to provide incremental future benefits to the company. The carrying amount of the replaced part is derecognised. Repairs and maintenance are charged to profit or loss during the period in which they are incurred.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Investments in subsidiaries are measured at cost less accumulated impairment.
Page 14
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Bancroft Wines Limited
Notes to the Financial Statements
For the Year Ended 30 September 2023
2.Accounting policies (continued)
Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis.
The company does not recognise the purchase price of stocks held on consignment as the ownership of this stock is held by the supplier until the point of sale.
At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.
Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
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Cash and cash equivalents
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Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
The company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's Balance Sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Discounting is omitted where the effect of discounting is immaterial. The company's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.
Page 15
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Bancroft Wines Limited
Notes to the Financial Statements
For the Year Ended 30 September 2023
2.Accounting policies (continued)
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Financial instruments (continued)
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Other financial assets
Other financial assets, which includes investments in equity instruments which are not classified as subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the recognised transaction price. Such assets are subsequently measured at fair value with the changes in fair value being recognised in the profit or loss. Where other financial assets are not publicly traded, hence their fair value cannot be measured reliably, they are measured at cost less impairment.
Impairment of financial assets
Financial assets are assessed for indicators of impairment at each reporting date.
Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.
If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.
Financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instruments any contract that evidences a residual interest in the assets of the company after the deduction of all its liabilities.
Basic financial liabilities, which include trade and other payables, bank loans and other loans are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.
Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.
Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.
Page 16
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Bancroft Wines Limited
Notes to the Financial Statements
For the Year Ended 30 September 2023
2.Accounting policies (continued)
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Financial instruments (continued)
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Other financial instruments
Derivatives, including forward exchange contracts, futures contracts and interest rate swaps, are not classified as basic financial instruments. These are initially recognised at fair value on the date the derivative contract is entered into, with costs being charged to the profit or loss. They are subsequently measured at fair value with changes in the profit or loss.
Debt instruments that do not meet the conditions as set out in FRS 102 paragraph 11.9 are subsequently measured at fair value through the profit or loss. This recognition and measurement would also apply to financial instruments where the performance is evaluated on a fair value basis as with a documented risk management or investment strategy.
Derecognition of financial assets
Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the company transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the company will continue to recognise the value of the portion of the risks and rewards retained.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company's contractual obligations expire or are discharged or cancelled.
Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
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Foreign currency translation
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Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Statement of Income and Retained Earnings except when deferred in other comprehensive income as qualifying cash flow hedges.
Page 17
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Bancroft Wines Limited
Notes to the Financial Statements
For the Year Ended 30 September 2023
2.Accounting policies (continued)
Finance costs are charged to the Statement of Comprehensive Income over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
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Operating leases: the company as lessee
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Rentals paid under operating leases are charged to the Statement of Comprehensive Income on a straight-line basis over the lease term.
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Current and deferred taxation
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The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the company operates and generates income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
Defined contribution pension plan
The company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the company pays fixed contributions into a separate entity. Once the contributions have been paid the company has no further payment obligations.
The contributions are recognised as an expense in the profit and loss account when they fall due. Amounts not paid are shown in accruals as a liability in the balance sheet. The assets of the plan are held separately from the company in independently administered funds.
Page 18
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Bancroft Wines Limited
Notes to the Financial Statements
For the Year Ended 30 September 2023
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Judgements in applying accounting policies and key sources of estimation uncertainty
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The preparation of the financial statements requires the directors to make judgements, estimates and assumptions that can affect the amounts reported for assets and liabilities, and the results for the year. The nature of estimation is such though that actual outcomes could differ significantly from those estimates.
The following are the following judgements have the most significant impacts on amount recognised in the financial statements:
Consignment stock
The company enters into consignment stock agreements that are not reflected in the Balance sheet. The value of the stock on consignment at the year end is £1,087,093. The risk remains with the counterparty of the agreement and therefore the company is not responsible for the stock.
The following are the company's key sources of estimation uncertainty:
Taxation
Provision has been made in the financial statements for a deferred tax asset amounting to £286,000 (2022 - £286,000) at the reporting date (see note 13). This provision is based upon estimates of the availability of future taxable profits, the timing of the reversal of timing differences upon which the provision is based and the tax rates that will be in force at that time together with an assessment of the impact of future tax planning strategies.
The whole of the turnover is attributable to sale of goods.
Analysis of turnover by country of destination:
Page 19
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Bancroft Wines Limited
Notes to the Financial Statements
For the Year Ended 30 September 2023
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Staff costs, including directors' remuneration, were as follows:
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Cost of defined contribution scheme
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The average monthly number of employees, including the directors, during the year was as follows:
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Company contributions to defined contribution pension schemes
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The highest paid director received remuneration of £222,020 (2022 - £218,040).
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The value of the company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £NIL (2022 - £770).
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Interest payable and similar expenses
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Other loan interest payable
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Page 20
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Bancroft Wines Limited
Notes to the Financial Statements
For the Year Ended 30 September 2023
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The above goodwill was recognised following the transfer of trade and assets from a subsidiary undertaking in a previous period. This goodwill has been amortised over a period of five years.
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Page 21
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Bancroft Wines Limited
Notes to the Financial Statements
For the Year Ended 30 September 2023
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Charge for the year on owned assets
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Investments in Subsidiary Companies
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The following were subsidiary undertakings of the company:
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Mason & Mason Wines Limited
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Page 22
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Bancroft Wines Limited
Notes to the Financial Statements
For the Year Ended 30 September 2023
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Due after more than one year
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Prepayments and accrued income
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Prepayments and accrued income
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Derivative Financial instruments
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Creditors: Amounts falling due within one year
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Taxation and social security
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Proceeds of factored debts
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Accruals and deferred income
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The company's invoice discounting facility and other banking facility are secured by fixed and floating charges over the assets of the company registered to HSBC UK Bank plc and HSBC Invoice Finance (UK) Ltd.
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Page 23
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Bancroft Wines Limited
Notes to the Financial Statements
For the Year Ended 30 September 2023
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Financial assets measured at fair value through profit or loss
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The company enters into forward foreign currency contracts to mitigate the exchange rate risk for certain foreign currency trade creditors. At 30 September 2023, there were no outstanding contacts (September 2022: the outstanding contracts all mature with 3 months) of the year end. The company is committed to buy €Nil and pay fixed sterling amounts (2022: €1,000,000).
The forward currency contracts are measured at fair value, which is determined using valuation techniques that utilise observable inputs. The key inputs used in valuing the derivatives are the forward exchange rates for sterling against the Euro, US Dollar, Australian Dollar and New Zealand Dollar. The fair value of the forward-foreign currency contracts is included as a financial asset at £Nil (2022: financial asset £32,691).
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The deferred tax asset is made up as follows:
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Page 24
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Bancroft Wines Limited
Notes to the Financial Statements
For the Year Ended 30 September 2023
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Allotted, called up and fully paid
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1,100,000 (2022 - 1,100,000) Ordinary shares of £1.00 each
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Commitments under operating leases
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At 30 September 2023 the company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
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Transactions with directors
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In previous years, P C De Haan (director) loaned amounts to the company. No additional amounts were loaned to the company during the current year or prior year. No repayments were made during the current year (2022: £450,000). No interest has been charged on the loan. The balance due to the director was fully repaid at 30 September 2023 is (2022: £NIL).
All directors who have authority and responsibility for planning, directing and controlling activities of the company are considered key management personnel. Total remuneration in respect of these individuals is disclosed in note 6.
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Related party transactions
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Transaction with directors have been disclosed in note 17 and all other related party transactions conducted by the company during the year were done so under normal market conditions.
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Page 25
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Bancroft Wines Limited
Notes to the Financial Statements
For the Year Ended 30 September 2023
The ultimate controlling party is P C De Haan, the chairman of the company.
Page 26
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