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REGISTERED NUMBER: 08500762 (England and Wales)















Strategic Report, Report of the Director and

Audited Financial Statements for the Year Ended 31 December 2022

for

ROUST UK LTD

ROUST UK LTD (REGISTERED NUMBER: 08500762)






Contents of the Financial Statements
for the Year Ended 31 December 2022




Page

Company Information 1

Strategic Report 2

Report of the Director 5

Report of the Independent Auditors 7

Statement of Income and Retained Earnings 10

Statement of Financial Position 11

Statement of Cash Flows 12

Notes to the Statement of Cash Flows 13

Notes to the Financial Statements 14


ROUST UK LTD

Company Information
for the Year Ended 31 December 2022







DIRECTOR: Ms E Fruin



REGISTERED OFFICE: Chancery House
53-64 Chancery lane
London
WC2A 1QS



REGISTERED NUMBER: 08500762 (England and Wales)



SENIOR STATUTORY AUDITOR: Mrs Anugrah Sharma



INDEPENDENT AUDITORS: A & N (Haslemere) Limited - Statutory Auditors
Aruna House
2 Kings Road
Haslemere
Surrey
GU27 2QA

ROUST UK LTD (REGISTERED NUMBER: 08500762)

Strategic Report
for the Year Ended 31 December 2022

The director presents her strategic report for the year ended 31 December 2022.

The financial statements for the company are prepared in accordance with UK- Adapted International Accounting Standards.

PRINCIPAL ACTIVITIES
The company's principal activities continued to be that of the wholesale supply of spirits and distribution in the UK market.

RESULTS AND DIVIDEND
The loss for the year after taxation amounted to £1,720,903 (2021 year: Loss of £15,114) No ordinary dividends are paid for the year ended 31 December 2022.

REVIEW OF BUSINESS
The company is a wholly owned subsidiary within Roust Corporation which is incorporated in United States.

UK business is currently facing many uncertainties due to geopolitical events, specifically the Russian invasion of Ukraine, and these events affected an environment where we operate.

The year end results show a loss after taxation for the year of £1.7m (2021: Loss of £15k) and net sales revenue of £11,073k. The company has net liabilities of £1,830k (2021: net liability £109k). In 2022 year, the financial performance of the company was impacted by a significant drop in sales due to delisting of Russian Standard Vodka products which were present in UK market for more than 12 years since the date of this report. Additionally the company inherited the remaining stock of Russian Standard Vodka from our UK former distributor, William Grant & Sons UK. We kept this unsold stock in warehouses while looking for overseas customers which resulted in higher storage costs than in previous years.

By coincidence, Roust completed the sale of CEDC, a Group entity, to Maspex in Poland in February 2022. The consequences of this were that Roust UK Ltd, after the end of June 2022, no longer had access to products from Poland which could be sold to generate turnover.

The 2022 and 2021 years are not comparable. In 2022 we focused on selling our remaining stock to international markets with a low margin to manage this force majeure situation.

PRINCIPAL RISKS AND UNCERTAINTIES
The key business risks affecting the company are set out below:

Geopolitics
In early 2022, products originated in Russia disappeared from sale in the UK amid the ongoing conflict in Ukraine. It significantly affected our business in 2022 year as all key grocers delisted Russian Standard Vodka brand which was distributed in the UK by several UK distributors since 2011 year and by Roust UK since 2021 year. This has represented the principal risk to our business model.

Competition risk
The company is exposed to competition risk where persistent and aggressive activities could affect customer behaviour, prices, promotional activities, our sales and margin. The company will monitor our competitors' activities and market prices, take steps to safeguard our competitive position and focus on delivering a better product, value and services.

Regulation Risks
Sale of alcohol is strictly controlled through licencing and regulations. The company regularly monitors
developments, ensures that changes are assessed and required actions are taken, and uses third party advice where necessary.

The government can amend duty structure for alcohol products and introduce new reliefs or new Duty
increases which can lead to changes in excise duty rates. It can affect individuals and businesses
involved in the manufacture, distribution, holding, sale and consumption of alcoholic products.


ROUST UK LTD (REGISTERED NUMBER: 08500762)

Strategic Report
for the Year Ended 31 December 2022

SECTION 172(1) STATEMENT
The Director is fully aware of the duty under section 172 (1) of the Companies Act 2006 to act in the way which they consider, in good faith, would be most likely to promote the success of the Company for the benefit of its members as a whole.

FUTURE DEVELOPMENT
We have leveraged the crisis by focusing on the business transformation despite all of the challenges since Q2 2022. Our first priority in 2022 and 2023 has been to find overseas customers and deplete the remaining stocks of product that were already in the market when internal UK trading ceased. Our second priority has been to focus on developing a new brand which will be produced in Europe and to bring this new brand to the UK in 2024 year. We have developed a new concept of vodka produced in Italy, designed new bottles, labels and packaging. All dry and raw goods will be sourced in Europe. Not any profit will go to Russia. We will run a social media marketing campaign to reach to a larger audience, invest to promotions and in store visibility to build awareness and equity of our new brand, and make customers and consumers familiar with our products.

The company will develop a new organisation structure in 2024 to support the operations of our business. We plan to hire additional 4 people in 2024 to join our sales, marketing and finance team, and increase the number of employees in subsequent years to support an increase in sales. We already moved our office in November 2023 year to create extra space for additional employees from 2024

KEY PERFORMANCE INDICATORS
Our sales turnover amounted £11,073k in 2022 (2021: Sales Turnover is £54,034k) which represents 79% drop in sales because Russian Standard Vodka was delisted in UK Grocers.

Gross profit was £1,332k in 2022 (2021 Gross Profit: £5,922k) which represents 77% drop compared to 2021 year. We paid less excise duty per sold 9L case in 2022 as we exported the remaining stock to international markets.

Distribution costs were £2,180k in 2022 (2021 Distribution costs: £1,214k). The storage cost increased significantly by 80% in 2022 because we had to keep unsold stock in warehouses until we found overseas customers and additionally inherited the remaining stock of Russian Standard Vodka from our UK former distributor, William Grant & Sons UK ltd.

Administrative expenses were £1,447k in 2022 (2021 Administrative expenses: £4,708k) which represents 69% savings in admin expenses. In 2021 year, the company had a one-off cost to launch direct sales of Russian Standard Vodka. In 2022, we reduced our admin expenses by significantly reducing the number of employees which led to reduction of other related staff costs. Additionally, we moved temporarily to a small office in 2022 to mitigate financial risks.

As a result the company had operating loss £2,299k in 2022 (2021 Operating Profit: £161k) mainly because of geopolitical risks. We will mitigate these risks by launching a new European produced vodka brand in 2024

The company holds the relevant licences and alcohol permissions to trade and meets HMRC requirements,. Section 172 Statement and statement of engagement

The Director focuses on successful results for business set up in the UK and its future development of new business opportunities taking into account the interests of stakeholders, compliance with regulatory requirements and the impact of the company's activities on local communities, the environment, and the group's reputation.

The likely consequences of any decision in the long term:
The Director recognises the importance of the company's decisions in a long
term and their effect on a wider range of stakeholders. The company will have the framework for decision-making and responsibilities related to:
1. Determining strategic directions
2. Communicating clear targets and KPls for departments
3. Identifying and managing risks and opportunities
4. Making policies


ROUST UK LTD (REGISTERED NUMBER: 08500762)

Strategic Report
for the Year Ended 31 December 2022

THE INTEREST OF THE COMPANY’S EMPLOYEES:
Roust UK Ltd employed 10 people in average in 2022 year. The interests of the UK Directors are to promote the success of the company in the long term and to service the principal customers who are mainly retail and impulse sector customers.

The company will employ additional sales, marketing, design and finance specialists from 2024 to meet business requirements and launch our new brand in the UK.
The need to foster the company's business relationships with suppliers, customers and others

The Director seeks to build and develop strong and mutually beneficial relationships with the Company's suppliers, customers, consumers and others. The Company has engaged with logistic companies, HMRC, marketing agencies, legal and advisory firms, suppliers, customers and consumers in a number of ways including surveys and meetings, and has built partnerships.

THE IMPACT OF THE COMPANY’S OPERATIONS ON THE COMMUNITY AND THE ENVIRONMENT
Roust UK is committed to managing the social, environmental, and economic impacts of its operations. The company integrates compliance and sustainability into our business strategy to protect the wider community and environment.

- We promote moderate consumption and responsible drinking.
- Our premium brands have the high-quality ingredients including clean water, grains, grass, and fruits in flavoured products.
- We conduct business using ethical principles and we are committed to supporting ways to reduce
wastage and promote recycling.

The desirability of the company maintaining a reputation for high standards of business conduct.

The company believes it is crucial to maintain a reputation for high standards of business conduct and ensure integrity and transparency in all of our actions and behaviours.

ON BEHALF OF THE BOARD:





Ms E Fruin - Director


23 December 2023

ROUST UK LTD (REGISTERED NUMBER: 08500762)

Report of the Director
for the Year Ended 31 December 2022

The director presents her report with the financial statements of the company for the year ended 31 December 2022.

DIVIDENDS
No dividends will be distributed for the year ended 31 December 2022.

DIRECTOR
The director of the Company who served during the audited year was J R N Ashworth who held this position from 4th of June 2020 up until his resignation on 6th of April 2023.

Ms Elina Fruin was appointed the Director on the 5th of April 2023

FINANCIAL INSTRUMENTS
Financial instruments are classified and accounted for, according to the substance of the contractual arrangement, as either financial assets or financial liabilities.

GOING CONCERN
The Director has prepared the financial statements on the going concern basis as she does not intend to liquidate the Company or to cease its operations. The Director has reasonable expectations that the company's financial position and business activities have resources to continue its operations for the foreseeable future.

The company will continue as a going concern in the long term as we still have capacities and sales strategies and will continue our business for at least one year from the date of approval of the financial statements (the going concern period). The parent company has provided a letter of support for a period of 15 months from the date of signing these accounts. The Director is satisfied that the Roust Corporation has the ability to provide a financial support if needed.

In order to maintain Roust UK as a going concern, there are two main pillars of the operational requirement:

1. Depletion of remaining stocks until the end of 2023 year
Our plan to sell the remaining stock of RSV from the second half of 2022 to mid-2023 year was affected by receiving additional RSV stock from our former distributor in the UK. We bought back RSV stock for £0.8m from William Grant & Sons UK ltd. and therefore we anticipate that Roust UK will continue into the end of 2023 selling all remaining accumulated stock.

2. Reverting to trading operations in 2024
Roust uses its experience in creating a product with a unique taste and a recognisable brand with a great story. We will introduce a new premium vodka product produced in Italy to the UK market and sell it directly to customers in 2024 year. Roust Corporation have developed the product concept, liquid formula bottles, labels, etc. and are about to start production and sales in 2024. The company has realistic metrics and plans for liquid production, market testing, legal support, storage, logistics and a product launch. We will ensure that our products meet UK regulations, labelling requirements, and pay any applicable duties and taxes.

Roust will handle distribution and control over the sales and marketing process to potentially improve margins in future.


ROUST UK LTD (REGISTERED NUMBER: 08500762)

Report of the Director
for the Year Ended 31 December 2022

DIRECTOR'S RESPONSIBILITIES STATEMENT
The director is responsible for preparing the Strategic Report, the Report of the Director and the financial statements in accordance with applicable law and regulations.

Company law requires the director to prepare financial statements for each financial year. Under that law the director has elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the director must not approve the financial statements unless she is 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 director is required to:

- select suitable accounting policies 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 director is 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 her to ensure that the financial statements comply with the Companies Act 2006. She is 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.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS
So far as the director is aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and she has taken all the steps that she ought to have taken as a director in order to make herself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

AUDITORS
The auditors, A & N (Haslemere) Limited - Statutory Auditors, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:





Ms E Fruin - Director


23 December 2023

Report of the Independent Auditors to the Members of
Roust Uk Ltd

Opinion
We have audited the financial statements of Roust Uk Ltd (the 'company') for the year ended 31 December 2022 which comprise the Statement of Income and Retained Earnings, Statement of Financial Position, Statement of Cash Flows and Notes to the Statement of Cash Flows, Notes to the Financial Statements, 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 31 December 2022 and of its loss 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.

Basis for opinion
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 UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern
In auditing the financial statements, we have concluded that the director's 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 director with respect to going concern are described in the relevant sections of this report.

Other information
The director is responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Director, but does not include the financial statements and our Report of the Auditors thereon.

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.

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 this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
- the information given in the Strategic Report and the Report of the Director for the financial year for which the financial statements are prepared is consistent with the financial statements; and
- the Strategic Report and the Report of the Director have been prepared in accordance with applicable legal requirements.

Report of the Independent Auditors to the Members of
Roust Uk Ltd


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 Report of the Director.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
- adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
- the financial statements are not in agreement with the accounting records and returns; or
- certain disclosures of director's remuneration specified by law are not made; or
- we have not received all the information and explanations we require for our audit.

Responsibilities of director
As explained more fully in the Director's Responsibilities Statement set out on page six, the director is 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 director determines 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 director is 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 director either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.

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 a Report of the Auditors 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.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

1. 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. To address the risk of fraud through management bias and override of controls, we carried
out:
- analytical procedures to identify unusual or unexpected fluctuations
- tested journal entries
- assessed whether judgements and assumptions made in accounting estimates were indicative of potential bias
- and generally investigated the rationale behind significant or unusual transactions.

2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control.

3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.

4. 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. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

Report of the Independent Auditors to the Members of
Roust Uk Ltd


Use of our report
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors 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.




Mrs Anugrah Sharma (Senior Statutory Auditor)
for and on behalf of A & N (Haslemere) Limited - Statutory Auditors
Aruna House
2 Kings Road
Haslemere
Surrey
GU27 2QA

23 December 2023

ROUST UK LTD (REGISTERED NUMBER: 08500762)

Statement of Income and
Retained Earnings
for the Year Ended 31 December 2022

31.12.22 31.12.21
Notes £    £    £    £   

TURNOVER 11,073,011 54,033,680

Cost of sales 9,740,988 48,112,174
GROSS PROFIT 1,332,023 5,921,506

Distribution costs 2,179,557 1,213,539
Administrative expenses 1,447,224 4,708,236
3,626,781 5,921,775
(2,294,758 ) (269 )

Other operating income (2,828 ) 161,630
OPERATING (LOSS)/PROFIT 3 (2,297,586 ) 161,361

Interest receivable and similar income 17,015 65,982
(2,280,571 ) 227,343

Interest payable and similar expenses 4 18,332 242,457
LOSS BEFORE TAXATION (2,298,903 ) (15,114 )

Tax on loss 5 (578,000 ) -
LOSS FOR THE FINANCIAL YEAR (1,720,903 ) (15,114 )

Retained earnings at beginning of year (110,135 ) (95,021 )

RETAINED EARNINGS AT END OF
YEAR

(1,831,038

)

(110,135

)

ROUST UK LTD (REGISTERED NUMBER: 08500762)

Statement of Financial Position
31 December 2022

31.12.22 31.12.21
Notes £    £    £    £   
FIXED ASSETS
Tangible assets 6 5,094 8,680

CURRENT ASSETS
Stocks 7 4,843,565 5,182,157
Debtors 8 2,225,674 5,798,008
Cash at bank 143,574 3,665,941
7,212,813 14,646,106
CREDITORS
Amounts falling due within one year 9 4,482,659 10,198,635
NET CURRENT ASSETS 2,730,154 4,447,471
TOTAL ASSETS LESS CURRENT
LIABILITIES

2,735,248

4,456,151

CREDITORS
Amounts falling due after more than one
year

10

4,565,286

4,565,286
NET LIABILITIES (1,830,038 ) (109,135 )

CAPITAL AND RESERVES
Called up share capital 12 1,000 1,000
Retained earnings 13 (1,831,038 ) (110,135 )
SHAREHOLDERS' FUNDS (1,830,038 ) (109,135 )

The financial statements were approved by the director and authorised for issue on 23 December 2023 and were signed by:





Ms E Fruin - Director


ROUST UK LTD (REGISTERED NUMBER: 08500762)

Statement of Cash Flows
for the Year Ended 31 December 2022

31.12.22 31.12.21
Notes £    £   
Cash flows from operating activities
Cash generated from operations 1 (3,521,050 ) 1,346,157
Interest paid (18,514 ) (241,946 )
Finance costs paid 182 (511 )
Tax paid - (101,099 )
Net cash from operating activities (3,539,382 ) 1,002,601

Cash flows from investing activities
Purchase of tangible fixed assets - (10,758 )
Interest received 17,015 65,982
Net cash from investing activities 17,015 55,224

Cash flows from financing activities
New loans in year - 1,608,116
Net cash from financing activities - 1,608,116

(Decrease)/increase in cash and cash equivalents (3,522,367 ) 2,665,941
Cash and cash equivalents at beginning of
year

2

3,665,941

1,000,000

Cash and cash equivalents at end of year 2 143,574 3,665,941

ROUST UK LTD (REGISTERED NUMBER: 08500762)

Notes to the Statement of Cash Flows
for the Year Ended 31 December 2022

1. RECONCILIATION OF LOSS BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS
31.12.22 31.12.21
£    £   
Loss before taxation (2,298,903 ) (15,114 )
Depreciation charges 3,586 2,078
Finance costs 18,332 242,457
Finance income (17,015 ) (65,982 )
(2,294,000 ) 163,439
Decrease/(increase) in stocks 338,592 (3,240,540 )
Decrease/(increase) in trade and other debtors 4,150,334 (5,450,492 )
(Decrease)/increase in trade and other creditors (5,715,976 ) 9,873,750
Cash generated from operations (3,521,050 ) 1,346,157

2. CASH AND CASH EQUIVALENTS

The amounts disclosed on the Statement of Cash Flows in respect of cash and cash equivalents are in respect of these Statement of Financial Position amounts:

Year ended 31 December 2022
31.12.22 1.1.22
£    £   
Cash and cash equivalents 143,574 3,665,941
Year ended 31 December 2021
31.12.21 1.1.21
£    £   
Cash and cash equivalents 3,665,941 1,000,000


3. ANALYSIS OF CHANGES IN NET DEBT

At 1.1.22 Cash flow At 31.12.22
£    £    £   
Net cash
Cash at bank 3,665,941 (3,522,367 ) 143,574
3,665,941 (3,522,367 ) 143,574
Debt
Debts falling due after 1 year (4,565,286 ) - (4,565,286 )
(4,565,286 ) - (4,565,286 )
Total (899,345 ) (3,522,367 ) (4,421,712 )

ROUST UK LTD (REGISTERED NUMBER: 08500762)

Notes to the Financial Statements
for the Year Ended 31 December 2022

1. ACCOUNTING POLICIES

Basis of preparing the financial statements
These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Turnover
Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

Tangible fixed assets
Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.
Computer equipment - 33.3% on cost

Depreciation is provided at 20% on reducing balance basis to write off each asset over its estimated useful life.

Stocks
Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.

Financial instruments
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 and loss) are added to or deducted from the fair value of the financial assets and financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets and financial liabilities at the fair value through profit and loss are recognised immediately in profit and loss.

Taxation
Taxation for the year comprises current and deferred tax. Tax is recognised in the Statement of Comprehensive Income, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the statement of financial position date.

Deferred tax
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the statement of financial position date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

ROUST UK LTD (REGISTERED NUMBER: 08500762)

Notes to the Financial Statements - continued
for the Year Ended 31 December 2022

1. ACCOUNTING POLICIES - continued

Foreign currencies
Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the statement of financial position date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.

Pension costs and other post-retirement benefits
The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate.

2. EMPLOYEES AND DIRECTORS
31.12.22 31.12.21
£    £   
Wages and salaries 523,050 1,929,382
Other pension costs 19,920 31,047
542,970 1,960,429

The average number of employees during the year was as follows:
31.12.22 31.12.21

10 19

No remuneration was paid to the director this year.

3. OPERATING (LOSS)/PROFIT

The operating loss (2021 - operating profit) is stated after charging:

31.12.22 31.12.21
£    £   
Depreciation - owned assets 3,586 2,078
Auditors' remuneration 17,000 17,000

4. INTEREST PAYABLE AND SIMILAR EXPENSES
31.12.22 31.12.21
£    £   
Factoring costs 12,526 182,471
Interest costs Inter company 5,988 59,475
Exchange rate loss/(gain) (182 ) 511
18,332 242,457

5. TAXATION

Analysis of the tax credit
The tax credit on the loss for the year was as follows:
31.12.22 31.12.21
£    £   
Deferred tax (578,000 ) -
Tax on loss (578,000 ) -

ROUST UK LTD (REGISTERED NUMBER: 08500762)

Notes to the Financial Statements - continued
for the Year Ended 31 December 2022

6. TANGIBLE FIXED ASSETS
Computer
equipment
£   
COST
At 1 January 2022
and 31 December 2022 10,758
DEPRECIATION
At 1 January 2022 2,078
Charge for year 3,586
At 31 December 2022 5,664
NET BOOK VALUE
At 31 December 2022 5,094
At 31 December 2021 8,680

7. STOCKS
31.12.22 31.12.21
£    £   
Stocks 4,843,565 5,182,157

8. DEBTORS
31.12.22 31.12.21
£    £   
Amounts falling due within one year:
Trade debtors 1,322,052 5,385,735
Other debtors 221,765 182,394
Tax 95,035 95,035
Prepayments 8,822 33,825
1,647,674 5,696,989

Amounts falling due after more than one year:
Other debtors - 101,019
Deferred tax 578,000 -
578,000 101,019

Aggregate amounts 2,225,674 5,798,008

The deferred tax asset relates to expected corporation tax relief on the losses reported in the financial statements. The losses have arisen due to the UK sanctions imposed on Russia as a result of the Russia - Ukraine conflict, resulting in a de listing of the product in the UK.

The Group have now developed a new premium vodka being produced in Italy and will be launched in June 2024.

In order to support the deferred tax asset on losses, modelling was undertaken to review the length of the recovery period which estimates forecasts for full recovery by 2026.
The modelling was based on management estimated forecasts for projected sales volumes and expected costs over the next 3 years.

ROUST UK LTD (REGISTERED NUMBER: 08500762)

Notes to the Financial Statements - continued
for the Year Ended 31 December 2022

9. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
31.12.22 31.12.21
£    £   
Trade creditors 2,541,276 5,618,487
Social security and other taxes 21,033 56,121
VAT 108,004 1,734,130
Other creditors 1,468,836 1,084,162
Accrued expenses 343,510 1,705,735
4,482,659 10,198,635

10. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE
YEAR
31.12.22 31.12.21
£    £   
Bank loans (see note 11) 4,565,286 4,565,286

11. LOANS

Roust UK factored invoices in 2021 of value £4.6m from Russian Standard Bank. In respect of this indebtedness towards Russian Standard Bank, Roust UK Ltd management confirms that considering the current UK/Russia sanctions regime and also lack of banking instruments available to transfer funds from the UK to Russia and Bank Russian Standard specifically, we will not be making any debt repayments to Bank Russian Standard. We would expect therefore, that after three years, in keeping with Russian legislation, Bank Russian Standard will be in a position to write off this debt

12. CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:
Number: Class: Nominal 31.12.22 31.12.21
value: £    £   
1,000 Ordinary 1 1,000 1,000

13. RESERVES
Retained
earnings
£   

At 1 January 2022 (110,135 )
Deficit for the year (1,720,903 )
At 31 December 2022 (1,831,038 )

14. RELATED PARTY DISCLOSURES

Transactions included within other receivables from a fellow subsidiary is £8,260 (2021: £181,585l).

Transactions due to group undertakings amount to £2,541,276 (2021: £5,618,487) due to a fellow subsidiary.

During the year £0 (2021: £119,873) within other payables were paid to a related entity.

15. ULTIMATE CONTROLLING PARTY

The parent is Roust Corporation, a company incorporated in USA. The company's ultimate controlling party is Mr. Roustam Tariko through his majority shareholding in the Company's parent undertaking.