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Registered number: 09587927










KBEVERAGE LTD










ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 30 NOVEMBER 2023

 
KBEVERAGE LTD
 

COMPANY INFORMATION


Directors
Mr Alok Yadav 
Mrs Kavita Yadav 




Registered number
09587927



Registered office
Office Suite
Starbucks Ernest Gage Avenue

New Costessey

Norwich

NR5 0TX




Independent auditors
Price Bailey LLP
Chartered Accountants & Statutory Auditors

Anglia House, 6 Central Avenue

St Andrews Business Park

Thorpe St Andrew

Norwich

Norfolk

NR7 0HR





 
KBEVERAGE LTD
 

CONTENTS



Page
Group Strategic Report
1 - 2
Directors' Report
3 - 4
Independent Auditors' Report
5 - 8
Consolidated Statement of Comprehensive Income
9
Consolidated Balance Sheet
10
Company Balance Sheet
11 - 12
Consolidated Statement of Changes in Equity
13
Company Statement of Changes in Equity
14
Consolidated Statement of Cash Flows
15
Consolidated Analysis of Net Debt
16
Notes to the Financial Statements
17 - 41


 
KBEVERAGE LTD
 

GROUP STRATEGIC REPORT
FOR THE PERIOD ENDED 30 NOVEMBER 2023

Introduction
 
The directors present their strategic report for the period 1 June 2022 to 30 November 2023.
The principal activity of the Group during the period was the operation of franchised Starbucks stores.
The aim of the Group is to provide products to customers to the brand standards, whilst continuing to invest in development to open further outlets.

Business review
 
During the period 1 June 2022 to 30 November, the Group opened 17 new stores. The sales for period amounted to £33,385,054 (year to 31 May 2022: £14,908,055). The directors are pleased with this performance, in light of the economic uncertainty in the period.
Through the expansion of the Group, employment levels have increased. The Group takes the safety and wellbeing of its employees very seriously, and various procedures are in place to ensure this. This includes the continued care and training for the Group’s disabled employees. All staff are made aware of the financial and economic factors affecting the performance of the Group.
In addition, Kbeverage Ltd purchase GK Coffee Group Limited in February 2023 for £7.5m, which has increased the number of stores operated within the Group by 9. The operations of 8 of the 9 stores were subsequently hived up into Kbeverage Ltd.
Throughout this challenging period, the directors have ensured the growth of the Group, whilst ensuring employees and customers are cared for. Suppliers have been traded with in accordance with agreed terms.
With the opening of new stores, the company continues to create employment opportunities for local communities, and implement more environmentally-friendly procedures and equipment to help protect our planet.

Principal risks and uncertainties
 
The UK is currently in a cost of living crisis. Consumers may reduce their spending due to slight increases in cost, but coffee is generally considered an inelastic product. 
Competition from other coffee shops is a threat. However, the franchisor is confident of its loyalty scheme to maintain customers, which works well worldwide. 
Should the Bank of England increase interest rates dramatically in the future, this may create a cashflow issue for the Group. However, the general consensus amongst economists is interest rates have peaked for the foreseeable future, and should gradually reduce over the next few years.

Page 1

 
KBEVERAGE LTD
 

GROUP STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 30 NOVEMBER 2023

Financial key performance indicators
 
The directors use many key performance indicators throughout the running of the Group. Financial KPI's incude: 
                                                     
   2023               2022
Total sales                                       £33,835,054   £14,908,055
Sales by store                                 £676,701         £451,759
Cost of sales % to sales                 48.7%              41.3%
Cost of labour % to sales               22.5%               21.1%
These KPI's assist in understanding how each store is performing, and ensuring the largest controllable costs (labour and cost of sales) are within budget.
Number of sales transactions        5,331,146        2,901,740
Average value of transaction         £6.35               £5.14
These KPI's help to understand customer trends and allow management to plan accordingly.

Other key performance indicators
 
Other KPI's include: customer service, health & safety compliance, store developments and compliance with brand standards. The non-financial KPI's are used to ensure brand standards are being met.


This report was approved by the board on 22 August 2024 and signed on its behalf.



Mr Alok Yadav
Director

Page 2

 
KBEVERAGE LTD
 

 
DIRECTORS' REPORT
FOR THE PERIOD ENDED 30 NOVEMBER 2023

The directors present their report and the financial statements for the period ended 30 November 2023.

Directors' responsibilities statement

The directors are responsible for preparing the Group Strategic Report, the Directors' Report and the consolidated 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 the Group and of the profit or loss of the Group for that period.

 In preparing these financial statements, the directors are required to:


select suitable accounting policies for the Group's financial statements and then apply them consistently;

make judgments 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 Group 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 the Group and to enable them to ensure that the financial statements comply with the Companies Act 2006They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Results and dividends

The profit for the period, after taxation, amounted to £1,528,437 (2022 - £2,138,857).

Dividends of £381,432 were declared during the period (2022 - £472,797).

Directors

The directors who served during the period were:

Mr Alok Yadav 
Mrs Kavita Yadav 

Future developments

The Group plans to continue to open additional outlets. It is aimed to open 12 new stores in the next 12 months. These will be funded partly by profits generated and additional finance.

Engagement with employees

Employees are a fundamental part of the performance of the Group, and communication is key to success. This takes place by regular formal or informal meetings, where suggestions are encouraged to improve the day to day running of the business, with all views respected. Staff are supplied with all necessary training.

Page 3

 
KBEVERAGE LTD
 

 
DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 30 NOVEMBER 2023

Disclosure of information to auditors

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 and the Group'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 and the Group's auditors are aware of that information.

Post balance sheet events

Details of the group's post balance sheet events are disclosed in note 35.

Auditors

The auditorsPrice Bailey LLPwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board on 22 August 2024 and signed on its behalf.
 





Mr Alok Yadav
Director

Page 4

 
KBEVERAGE LTD
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF KBEVERAGE LTD
 

Opinion


We have audited the financial statements of KBeverage Ltd (the 'parent Company') and its subsidiaries (the 'Group') for the period ended 30 November 2023, which comprise the Consolidated Statement of Comprehensive Income, the Consolidated Balance Sheet, the Company Balance Sheet, the Consolidated Statement of Cash Flows, the Consolidated Statement of Changes in Equity, the Company Statement of Changes in Equity and the related notes, including a summary of significant accounting policiesThe 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 Group's and of the parent Company's affairs as at 30 November 2023 and of the Group's profit for the period 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 Group 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


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 Group's or the parent 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.


Other matters
The financial statements of KBeverage Ltd for the year ended 31 May 2022 were not audited.


Page 5

 
KBEVERAGE LTD
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF KBEVERAGE LTD (CONTINUED)


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 ReportOur 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.


Opinion 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 Group Strategic Report and the Directors' Report for the financial period for which the financial statements are prepared is consistent with the financial statements; and
the Group 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 Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group 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 by the parent Company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent Company 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 set out 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 Group's and the parent 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 Group or the parent Company or to cease operations, or have no realistic alternative but to do so.


Page 6

 
KBEVERAGE LTD
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF KBEVERAGE LTD (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 Group 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. Fraud risks include, but are not limited to, the risk that those charged with governance could manipulate the financial statements to report desired results through posting journals, manipulating the point at which revenue is recorded on sales around the period-end, or through manipulation of estimates. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
• We reviewed systems and procedures to identify potential areas of management override risk. In particular, we carried out reviews of journal entries and other adjustments for appropriateness, and evaluated the business rationale of significant or unusual transactions;
• We critically assessed significant estimates inherent in the financial statements. This involved assessing estimates in light of our expectations which are formed on the basis of past experience and our knowledge of the Group and its industry;
• We held discussions with those charged with governance to enquire whether they are aware of any instances of non-compliance with laws and regulations;
•  We reviewed legal expenses to identify any instances of non-compliance with laws and regulations;
• We reviewed correspondence with relevant regulators, to understand if any instances of non-compliance with key laws and regulations have occurred;
•  We reviewed a sample of food hygiene ratings achieved across the stores to identify any non-compliance with relevant legislation;
• We undertook testing to confirm the existence of a sample of employees to ensure that no fictitious  employees are paid, and also checked that said employees were being paid in accordance with their contracts of employment;
• We reviewed bank details of employees included on payroll, to ensure no duplicate accounts were being  paid into;
•  We reviewed a sample of expenditure and ensured appropriate authorisation had taken place in line with the Group's policy.
•  We obtained confirmation directly from the Company's bank, to confirm the accounts and balances held in their name at the balance sheet date.
 
We performed the procedures set out above after gaining an understanding of the legal and regulatory framework applicable to the Group and the industry in which it operates, and after considering the risk of acts by the Group contrary to applicable laws and regulations including fraud. We obtained this understanding from discussions with those charged with governance, who did not make the engagement team aware of any non-compliance with laws and regulations or instances of fraud throughout the year or since the year end.
We also enquired with those charged with governance as to how they ensure the Group complies with the applicable legal & regulatory framework. The Group is subject to annual audits carried out by Starbucks ©, the findings of which are reported to key management. Furthermore the Group employs an internal auditor to perform regular checks across its range of stores to identify instances of non-compliance. Copies of Starbucks’ working practices are kept permanently at each store, and form part of the training programme undertaken by all employees. The Group also obtained advice from overseas employment specialists to ensure their employees are compliant with Right to Work legislation.
In performing the above procedures we focused on laws and regulations that could give rise to a material misstatement in the financial statements, including, but not limited to, the Food Safety Act 1990, Health & Safety at Work Act 1974, The Town and Country Planning (Use Classes) Order 1987, Employment Rights Act 1996, Companies Act 2006 and UK tax legislation. As a franchisee, the Group is also governed by Starbucks © regulations.
 
Page 7

 
KBEVERAGE LTD
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF KBEVERAGE LTD (CONTINUED)



Following detailed team briefings, the Responsible Individual has assessed that the audit engagement team collectively has the appropriate competence and capability to identify or recognise non-compliance with applicable laws and regulation. Nonetheless, 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.


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 Auditors' Report.


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 2006Our 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.





Aaron Widdows ACA FCCA (Senior Statutory Auditor)
  
for and on behalf of
Price Bailey LLP
 
Chartered Accountants
Statutory Auditors
  
Anglia House, 6 Central Avenue
St Andrews Business Park
Thorpe St Andrew
Norwich
Norfolk
NR7 0HR

22 August 2024
Page 8

 
KBEVERAGE LTD
 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 30 NOVEMBER 2023

As restated
2023
2022
Note
£
£

  

Turnover
 4 
33,835,054
14,908,055

Cost of sales
  
(16,486,943)
(6,151,911)

Gross profit
  
17,348,111
8,756,144

Administrative expenses
  
(14,926,708)
(6,113,608)

Other operating income
 5 
136,757
81,794

Operating profit
 6 
2,558,160
2,724,330

Interest receivable and similar income
  
11,778
16,613

Interest payable and similar expenses
 10 
(801,893)
(82,845)

Profit before taxation
  
1,768,045
2,658,098

Tax on profit
 11 
(239,608)
(519,241)

Profit for the financial period
  
1,528,437
2,138,857

Profit for the period attributable to:
  

Owners of the parent Company
  
1,528,437
2,138,857

  
1,528,437
2,138,857

There were no recognised gains and losses for 2023 or 2022 other than those included in the consolidated statement of comprehensive income.

There was no other comprehensive income for 2023 (2022:£NIL).

The notes on pages 17 to 41 form part of these financial statements.

Page 9

 
KBEVERAGE LTD
REGISTERED NUMBER: 09587927

CONSOLIDATED BALANCE SHEET
AS AT 30 NOVEMBER 2023

30 November
As restated
31 May
2023
2022
Note
£
£

Fixed assets
  

Intangible assets
 12 
7,726,862
85,213

Tangible assets
 13 
9,440,620
6,054,038

  
17,167,482
6,139,251

Current assets
  

Stocks
 15 
275,506
142,926

Debtors: amounts falling due within one year
 16 
4,309,004
2,392,927

Cash at bank and in hand
  
1,003,358
1,916,836

  
5,587,868
4,452,689

Creditors: amounts falling due within one year
 17 
(6,583,526)
(3,001,802)

Net current (liabilities)/assets
  
 
 
(995,658)
 
 
1,450,887

Total assets less current liabilities
  
16,171,824
7,590,138

Creditors: amounts falling due after more than one year
 18 
(9,705,523)
(3,265,018)

Provisions for liabilities
  

Deferred taxation
 22 
(708,914)
(369,488)

Other provisions
 23 
(1,364,250)
(709,500)

  
 
 
(2,073,164)
 
 
(1,078,988)

Net assets
  
4,393,137
3,246,132


Capital and reserves
  

Called up share capital 
 24 
100
100

Profit and loss account
 25 
4,393,037
3,246,032

  
4,393,137
3,246,132


The financial statements were approved and authorised for issue by the board and were signed on its behalf on 22 August 2024.


Mr Alok Yadav
Director

The notes on pages 17 to 41 form part of these financial statements.

Page 10

 
KBEVERAGE LTD
REGISTERED NUMBER: 09587927

COMPANY BALANCE SHEET
AS AT 30 NOVEMBER 2023

30 November
As restated
31 May
2023
2022
Note
£
£

Fixed assets
  

Intangible assets
 12 
7,726,862
85,213

Tangible assets
 13 
9,336,852
6,054,038

Investments
 14 
60,486
-

  
17,124,200
6,139,251

Current assets
  

Stocks
 15 
275,506
142,926

Debtors: amounts falling due within one year
 16 
4,306,170
2,392,927

Cash at bank and in hand
  
982,951
1,916,836

  
5,564,627
4,452,689

Creditors: amounts falling due within one year
 17 
(6,949,271)
(3,001,802)

Net current (liabilities)/assets
  
 
 
(1,384,644)
 
 
1,450,887

Total assets less current liabilities
  
15,739,556
7,590,138

  

Creditors: amounts falling due after more than one year
 18 
(9,705,523)
(3,265,018)

Provisions for liabilities
  

Deferred taxation
 22 
(708,914)
(369,488)

Other provisions
 23 
(1,364,250)
(709,500)

  
 
 
(2,073,164)
 
 
(1,078,988)

Net assets
  
3,960,869
3,246,132

Page 11

 
KBEVERAGE LTD
REGISTERED NUMBER: 09587927

COMPANY BALANCE SHEET (CONTINUED)
AS AT 30 NOVEMBER 2023

30 November
As restated
31 May
2023
2022
Note
£
£


Capital and reserves
  

Called up share capital 
 24 
100
100

Profit and loss account brought forward
  
3,246,032
1,579,972

Profit for the period
  
1,096,169
2,138,857

Dividends paid

  

(381,432)
(472,797)

Profit and loss account carried forward
 25 
3,960,769
3,246,032

  
3,960,869
3,246,132


The financial statements were approved and authorised for issue by the board and were signed on its behalf on 22 August 2024.


Mr Alok Yadav
Director

The notes on pages 17 to 41 form part of these financial statements.

Page 12

 
KBEVERAGE LTD
 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 30 NOVEMBER 2023


Called up share capital
Profit and loss account
Total equity

£
£
£


At 1 June 2021 (as restated)
100
1,579,972
1,580,072


Comprehensive income for the year

Profit for the year (as restated)
-
2,138,857
2,138,857


Contributions by and distributions to owners

Dividends: Equity capital
-
(472,797)
(472,797)



At 1 June 2022 (as restated)
100
3,246,032
3,246,132


Comprehensive income for the period

Profit for the period
-
1,528,437
1,528,437


Contributions by and distributions to owners

Dividends: Equity capital
-
(381,432)
(381,432)


At 30 November 2023
100
4,393,037
4,393,137


The notes on pages 17 to 41 form part of these financial statements.

Page 13

 
KBEVERAGE LTD
 

COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 30 NOVEMBER 2023


Called up share capital
Profit and loss account
Total equity

£
£
£


At 1 June 2021 (as restated)
100
1,579,972
1,580,072


Comprehensive income for the year

Profit for the year (as restated)
-
2,138,857
2,138,857


Contributions by and distributions to owners

Dividends: Equity capital
-
(472,797)
(472,797)



At 1 June 2022 (as restated)
100
3,246,032
3,246,132


Comprehensive income for the year

Profit for the period
-
1,096,169
1,096,169


Contributions by and distributions to owners

Dividends: Equity capital
-
(381,432)
(381,432)


At 30 November 2023
100
3,960,769
3,960,869


The notes on pages 17 to 41 form part of these financial statements.

Page 14

 
KBEVERAGE LTD
 

CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED 30 NOVEMBER 2023

30 November
 As restated 31 May
2023
2022
£
£

Cash flows from operating activities

Profit for the financial period
2,558,160
2,724,330

Adjustments for:

Amortisation of intangible assets
341,111
82,881

Depreciation of tangible assets
3,309,127
1,538,295

Loss on disposal of tangible assets
16,067
-

Interest paid
(801,893)
(82,845)

(Increase) in stocks
(132,580)
(85,019)

(Increase) in debtors
(1,816,521)
(731,063)

Increase in creditors
2,530,469
525,180

Increase in provisions
654,750
709,500

Corporation tax (paid)
(500,172)
(278,998)

Net cash generated from operating activities

6,158,518
4,402,261


Cash flows from investing activities

Purchase of tangible & intangible fixed assets
(7,182,108)
(4,542,555)

Purchase of unlisted and other investments
(7,512,428)
-

Interest received
11,778
16,613

Net cash from investing activities

(14,682,758)
(4,525,942)

Cash flows from financing activities

New secured loans
8,800,000
2,225,000

Repayment of loans
(900,450)
(126,497)

New finance leases
1,088,622
2,722,316

Repayment of finance leases
(995,978)
(2,469,362)

Dividends paid
(381,432)
(472,797)

Net cash used in financing activities
7,610,762
1,878,660

Net (decrease)/increase in cash and cash equivalents
(913,478)
1,754,979

Cash and cash equivalents at beginning of period
1,916,836
161,857

Cash and cash equivalents at the end of period
1,003,358
1,916,836


Cash at bank and in hand
1,003,358
1,916,836


The notes on pages 17 to 41 form part of these financial statements.

Page 15

 
KBEVERAGE LTD
 

CONSOLIDATED ANALYSIS OF NET DEBT
FOR THE PERIOD ENDED 30 NOVEMBER 2023






At 1 June 2022
Cash flows
Acquisition of subsidiaries
New hire purchase and finance leases
At 30 November 2023
£

£

£

£

£

Cash at bank and in hand

1,916,836

6,327,405

(7,240,883)

-

1,003,358

Debt due after 1 year

(1,782,639)

(6,389,757)

-

-

(8,172,396)

Debt due within 1 year

(2,498,074)

(4,305,648)

-

-

(6,803,722)

Finance leases

(2,148,794)

995,978

-

(1,088,622)

(2,241,438)


(4,512,671)
(3,372,022)
(7,240,883)
(1,088,622)
(16,214,198)

The notes on pages 17 to 41 form part of these financial statements.

Page 16

 
KBEVERAGE LTD
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 NOVEMBER 2023

1.


General information

KBeverage Ltd is a private company limited by shares and incorporated in England & Wales. The address of the registered office is Office Suite, Sarbucks Ernest Gage Avenue, New Costessey, Norwich, NR5 0TX. The company has no single place of business due to the nature of its principle activity.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £1.
The financial statements cover the period from 1 June 2022 to 30 November 2023. The prior period covered 365 days and hence the comparatives figures are not entirely comparable. The Directors have taken the decision to extent the period to allow for a smooth transition following a business combination.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgment in applying the Group's accounting policies (see note 3).

The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements.

The following principal accounting policies have been applied:

 
2.2

Basis of consolidation

The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance Sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Statement of Comprehensive Income from the date on which control is obtained. They are deconsolidated from the date control ceases.

 
2.3

Going concern

The Directors believe that the financial statements should be prepared on the going concern basis on the grounds that current and future sources of funding or support will be more than adequate for the Group's needs. The Directors also consider such future plans to be feasible.
Projections, including cash flow forecasts, have been prepared using historical data and based on market expectations. The directors believe the company will be able to operate in the foreseeable future and continue its strategic business plan.
The Directors have considered a period of 12 months from the date of approval of the financial statements. The Directors believe that no further disclosures relating to the Group's ability to continue as a going concern are required in the financial statements.

Page 17

 
KBEVERAGE LTD
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 NOVEMBER 2023

2.Accounting policies (continued)

 
2.4

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group 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 when all of the following conditions are satisfied:
the Group has transferred the significant risks and rewards of ownership to the buyer;
the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
the amount of revenue can be measured reliably;
it is probable that the Group will receive the consideration due under the transaction; and
the costs incurred or to be incurred in respect of the transaction can be measured reliably.

The above conditions are met at the point of when goods are sold.

 
2.5

Operating leases: the Group as lessor

Rental income from operating leases is credited to profit or loss on a straight-line basis over the lease term.

 
2.6

Operating leases: the Group as lessee

Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.

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.

 
2.7

Leased assets: the Group as lessee

Assets obtained under hire purchase contracts and finance leases are capitalised as tangible fixed assets. Assets acquired by finance lease are depreciated over the shorter of the lease term and their useful lives. Assets acquired by hire purchase are depreciated over their useful lives. Finance leases are those where substantially all of the benefits and risks of ownership are assumed by the company. Obligations under such agreements are included in creditors net of the finance charge allocated to future periods. The finance element of the rental payment is charged to profit or loss so as to produce a constant periodic rate of charge on the net obligation outstanding in each period.

Page 18

 
KBEVERAGE LTD
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 NOVEMBER 2023

2.Accounting policies (continued)

 
2.8

Government grants

Government grants are recognised in the profit and loss account in an appropriate manner that matches them with the expenditure towards which they are intended to contribute.
Grants for immediate financial support or to cover costs already incurred are recognised immediately in the profit and loss account. Grants towards general activities of the entity over a specific period are recognised in the profit and loss account over that period.
Grants towards fixed assets are recognised over the expected useful lives of the related assets and are treated as deferred income and released to the profit and loss account over the useful life of the asset concerned.
All grants in the profit and loss account are recognised when all conditions for receipt have been complied with.

 
2.9

Borrowing costs

All borrowing costs are recognised in profit or loss in the period in which they are incurred.

 
2.10

Pensions

Defined contribution pension plan

The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations.

The contributions are recognised as an expense in profit or loss 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 Group in independently administered funds.

Page 19

 
KBEVERAGE LTD
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 NOVEMBER 2023

2.Accounting policies (continued)

 
2.11

Current and deferred taxation

The tax expense for the period 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 corporation 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 and the Group operate and generate 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.

 
2.12

Intangible assets

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 the Group's share 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 Consolidated Statement of Comprehensive Income over its useful economic life.

Other intangible assets

Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.

 The estimated useful lives range as follows:

Goodwill
-
10
years
Franchise fees
-
10
years

Page 20

 
KBEVERAGE LTD
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 NOVEMBER 2023

2.Accounting policies (continued)

 
2.13

Tangible fixed assets

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.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives.

Depreciation is provided on the following basis:

Motor vehicles
-
25%
straight line.
Fixtures and fittings
-
15%
straight line.
Computer equipment
-
15%
straight line.
Dilapidation costs
-
over the lease term.

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.

 
2.14

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

 
2.15

Stocks

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.

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.

 
2.16

Debtors

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.

 
2.17

Creditors

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.

Page 21

 
KBEVERAGE LTD
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 NOVEMBER 2023

2.Accounting policies (continued)

 
2.18

Provisions for liabilities

Provisions are recognised when an event has taken place that gives rise to a legal or constructive obligation, a transfer of economic benefits is probable and a reliable estimate can be made.
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
 
Increases in provisions are capitalised as they meet the criteria to be recognised as property, plant and equipment under Section 17 of FRS 102.

  
2.19

Financial instruments

The Group only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.
Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Consolidated Statement of Comprehensive Income.
Financial assets and liabilities are offset and the net amount reported in the Balance Sheet when there is an 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.

 
2.20

Dividends

Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when approved by the shareholders. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.


3.


Judgments in applying accounting policies and key sources of estimation uncertainty

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported for assets and liabilities as at the balance sheet date, and the amounts reported for income and expenditure during the year. However, the nature of estimation means that actual outcomes could differ from those estimates. No judgements (apart from those involving estimates) have been made when preparing the financial statements. 
The key assumptions concerning the future and other key sources of estimating uncertainty at the reporting date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year include:
Depreciation & amortisation
Management have estimated the useful economic life (UEL) of fixed assets and have in turn calculated a depreciation & amortisation charge based on the UEL. Depreciation charged in the year amounted to £3,309,127 (2022: £1,538,295). Amortisation charged in the year amounted to £341,111 (2022: £82,881).
Dilapidation provisions
The Group leases a number of properties, and the Directors assess the likelihood and expected future liability for restoring the property to its original condition at each balance sheet date. The Directors use specialists to assist in making this estimate. The carrying value of capitalised dilapidation provisions is £1,090,430 (2022: £552,090). The carrying value of the provision itself is £1,364,250 (2022: £709,500).

Page 22

 
KBEVERAGE LTD
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 NOVEMBER 2023

4.


Turnover

An analysis of turnover by class of business is as follows:


2023
2022
£
£

Sales of goods
33,835,054
14,908,055

33,835,054
14,908,055


All turnover arose within the United Kingdom.


5.


Other operating income

2023
2022
£
£

Net rents receivable
75,964
-

Government grants receivable
-
81,794

Insurance claims receivable
20,793
-

Sundry income
40,000
-

136,757
81,794



6.


Operating profit

The operating profit is stated after charging:

As restated
2023
2022
£
£

Depreciation
3,309,127
1,538,295

Amortisation
341,111
82,881

Operating lease rentals
3,379,348
1,446,078

Cost of defined contribution pension scheme
88,173
33,510


7.


Auditors' remuneration

During the period, the Group obtained the following services from the Company's auditors:


2023
2022
£
£

Fees payable to the Company's auditors for the audit of the consolidated and parent Company's financial statements
27,950
-

Assistance with preparation of the consolidated financial statements
2,250
-

Assistance with preparation of the corporation tax return
1,750
-

Other services
15,194
-

Page 23

 
KBEVERAGE LTD
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 NOVEMBER 2023

8.


Employees

Staff costs, including directors' remuneration, were as follows:


Group
30 November
Group
31 May
Company
30 November
Company
31 May
2023
2022
2023
2022
£
£
£
£


Wages and salaries
7,193,943
2,970,883
6,771,041
2,970,883

Social security costs
344,228
147,358
344,228
147,358

Cost of defined contribution scheme
88,173
33,510
78,519
33,510

7,626,344
3,151,751
7,193,788
3,151,751


The average monthly number of employees, including the directors, during the period was as follows:



Group
Group
Company
Company
        2023
        2022
        2023
        2022
            No.
            No.
            No.
            No.









Directors
2
2
2
2



Admin & Management
9
9
9
9



Development
1
1
1
1



Store Staff
539
273
448
273

551
285
460
285


9.


Directors' remuneration

2023
2022
£
£

Directors' emoluments
60,040
19,552

Group contributions to defined contribution pension schemes
378
-

60,418
19,552


During the period retirement benefits were accruing to 2 directors (2022 - none) in respect of defined contribution pension schemes.

The directors are considered to be the only key management personnel of the Group.

Page 24

 
KBEVERAGE LTD
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 NOVEMBER 2023

10.


Interest payable and similar expenses

2023
2022
£
£


Bank interest payable
3,197
31,431

Bank loan interest payable
655,428
51,414

Finance leases and hire purchase contracts
143,268
-

801,893
82,845


11.


Taxation


2023
2022
£
£

Corporation tax


Current tax on profits for the year
-
500,434

Adjustments in respect of previous periods
(99,818)
-


Total current tax
(99,818)
500,434

Deferred tax


Origination and reversal of timing differences
339,426
18,807

Total deferred tax
339,426
18,807


Tax on profit
239,608
519,241
Page 25

 
KBEVERAGE LTD
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 NOVEMBER 2023
 
11.Taxation (continued)


Factors affecting tax charge for the period/year

The tax assessed for the period/year is lower than (2022 - higher than) the standard rate of corporation tax in the UK of 25% (2022 - 19%). The differences are explained below:

2023
2022
£
£


Profit on ordinary activities before tax
1,768,045
2,658,098


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2022 - 19%)
442,011
505,039

Effects of:


Expenses not deductible for tax purposes
1,668
-

Adjustments to tax charge in respect of prior periods
(99,818)
-

Book profit on chargeable assets
4,017
-

Changes in provisions leading to an increase (decrease) in the tax charge
1,503
-

Other differences leading to an increase (decrease) in the tax charge
(109,773)
14,202

Total tax charge for the period/year
239,608
519,241


Factors that may affect future tax charges

There were no factors that may affect future tax charges.

Page 26

 
KBEVERAGE LTD
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 NOVEMBER 2023

12.


Intangible assets

Group and Company







Franchise fees
Goodwill
Total

£
£
£



Cost


At 1 June 2022
426,903
-
426,903


Additions
398,000
-
398,000


Brought forward on acquisition of subsidiaries
426,626
-
426,626


Transfer on hive up of subsidiary
-
7,451,942
7,451,942



At 30 November 2023

1,251,529
7,451,942
8,703,471



Amortisation


At 1 June 2022
341,690
-
341,690


Charge for the period on owned assets
61,663
279,448
341,111


Brought forward on acquisition of subsidiaries
293,808
-
293,808



At 30 November 2023

697,161
279,448
976,609



Net book value



At 30 November 2023
554,368
7,172,494
7,726,862



At 31 May 2022
85,213
-
85,213



Page 27

 


 
KBEVERAGE LTD


 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 NOVEMBER 2023


13.


Tangible fixed assets


Group










Assets under construction
Motor vehicles
Fixtures and fittings
Computer equipment
Dilapidation costs
Total

£
£
£
£
£
£



Cost or valuation


At 1 June 2022
-
-
9,202,944
2,957
709,500
9,915,401


Additions
326,429
57,817
4,553,648
2,034
654,750
5,594,678


Brought forward on acquisition of subsidiary
-
9,038
2,731,835
-
-
2,740,873


Disposals
-
-
(1,905,612)
-
-
(1,905,612)



At 30 November 2023

326,429
66,855
14,582,815
4,991
1,364,250
16,345,340



Depreciation


At 1 June 2022
-
-
3,703,509
444
157,410
3,861,363


Charge for the period on owned assets
-
21,681
2,462,864
1,123
116,410
2,602,078


Charge for the period on financed assets
-
-
707,049
-
-
707,049


Disposals
-
-
(1,889,546)
-
-
(1,889,546)


Brought forward on acquisition of subsidiary
-
5,966
1,617,810
-
-
1,623,776



At 30 November 2023

-
27,647
6,601,686
1,567
273,820
6,904,720
Page 28

 


 
KBEVERAGE LTD


 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 NOVEMBER 2023

           13.Tangible fixed assets (continued)




Net book value



At 30 November 2023
326,429
39,208
7,981,129
3,424
1,090,430
9,440,620



At 31 May 2022
-
-
5,499,435
2,513
552,090
6,054,038

The net book value of assets held under hire purchase contracts (Group and Company) is £3,362,435 (2022: £2,757,239).
Page 29

 


 
KBEVERAGE LTD


 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 NOVEMBER 2023


Company











Assets under construction
Motor vehicles
Fixtures and fittings
Computer equipment
Dilapidation costs
Total

£
£
£
£
£
£

Cost or valuation


At 1 June 2022 (as restated)
-
-
9,202,944
2,957
709,500
9,915,401


Additions
326,429
57,817
4,442,037
2,034
654,750
5,483,067


Transfers intra group
-
9,038
2,721,333
-
-
2,730,371


Disposals
-
-
(1,905,612)
-
-
(1,905,612)



At 30 November 2023

326,429
66,855
14,460,702
4,991
1,364,250
16,223,227



Depreciation


At 1 June 2022 (as restated)
-
-
3,703,509
444
157,410
3,861,363


Charge for the period on owned assets
-
21,681
2,297,762
1,123
116,410
2,436,976


Charge for the period on financed assets
-
-
707,049
-
-
707,049


Transfers intra group
-
5,966
1,764,567
-
-
1,770,533


Disposals
-
-
(1,889,546)
-
-
(1,889,546)



At 30 November 2023

-
27,647
6,583,341
1,567
273,820
6,886,375
Page 30

 


 
KBEVERAGE LTD


 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 NOVEMBER 2023

           13.Tangible fixed assets (continued)




Net book value



At 30 November 2023
326,429
39,208
7,877,361
3,424
1,090,430
9,336,852



At 31 May 2022 (as restated)
-
-
5,499,435
2,513
552,090
6,054,038






Page 31

 
KBEVERAGE LTD
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 NOVEMBER 2023

14.


Fixed asset investments

Company








Investments in subsidiary companies

£



Cost or valuation


Additions
7,512,428


Transfer on hive up of subsidiary
(7,451,942)



At 30 November 2023
60,486





Subsidiary undertaking


The following was a subsidiary undertaking of the Company:

Name

Registered office

Class of shares

Holding

GK Coffee Group Limited
Colton Grange, High House Farm Lane, Colton, Norwich, NR9 5DG.
Ordinary
100%

The aggregate of the share capital and reserves as at 30 November 2023 and the profit or loss for the period ended on that date for the subsidiary undertaking were as follows:

Name
Aggregate of share capital and reserves
Profit/(Loss)

GK Coffee Group Limited
492,754
432,268


15.


Stocks

Group
30 November
Group
31 May
Company
30 November
Company
31 May
2023
2022
2023
2022
£
£
£
£

Finished goods and goods for resale
275,506
142,926
275,506
142,926

275,506
142,926
275,506
142,926


The difference between purchase price or production cost of stocks and their replacement cost is not material.

There were no impairment losses recognised in profit and loss (2022: £nil).

Page 32

 
KBEVERAGE LTD
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 NOVEMBER 2023

16.


Debtors

Group
30 November
Group
31 May
Company
30 November
Company
31 May
2023
2022
2023
2022
£
£
£
£


Amounts owed by related parties
3,559,148
2,191,042
3,559,148
2,191,042

Other debtors
425,487
118,718
422,653
118,718

Prepayments and accrued income
324,369
83,167
324,369
83,167

4,309,004
2,392,927
4,306,170
2,392,927



17.


Creditors: Amounts falling due within one year

Group

30 November
Group
As restated
31 May
Company

30 November
Company
As restated
31 May
2023
2022
2023
2022
£
£
£
£

Bank loans
1,525,657
315,864
1,525,657
315,864

Trade creditors
2,552,235
526,715
2,552,235
526,715

Amounts owed to group undertakings
-
-
365,745
-

Corporation tax
-
500,434
-
500,434

Other taxation and social security
156,376
161,297
156,376
161,297

Obligations under finance lease and hire purchase contracts
708,311
666,415
708,311
666,415

Other creditors
10,000
-
10,000
-

Accruals and deferred income
1,630,947
831,077
1,630,947
831,077

6,583,526
3,001,802
6,949,271
3,001,802


Page 33

 
KBEVERAGE LTD
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 NOVEMBER 2023

18.


Creditors: Amounts falling due after more than one year

Group
30 November
Group
31 May
Company
30 November
Company
31 May
2023
2022
2023
2022
£
£
£
£

Bank loans
8,172,396
1,782,639
8,172,396
1,782,639

Obligations under finance leases and hire purchase contracts
1,533,127
1,482,379
1,533,127
1,482,379

9,705,523
3,265,018
9,705,523
3,265,018


The hire purchase contracts are secured on the relevant assets. Repayments are made on a monthly basis. Interest is charged over the life of the loan, using the sum of digits method.
Bank and other loans are secured via Debenture, including: Fixed Charge over all present freehold and leasehold property; First Fixed Charge over book and other debts, chattels, goodwill and uncalled capital, both present and future; and First Floating Charge over all assets and undertaking both present and future dated 06 January 2016. There is also a Group set-off held.
Repayments are made on a monthly basis. Interest is charged monthly at rates between 2.25% and 2.98%, in excess of the Bank of England base rate.


19.


Loans


Analysis of the maturity of loans is given below:


Group
30 November
Group
31 May
Company
30 November
Company
31 May
2023
2022
2023
2022
£
£
£
£

Amounts falling due within one year

Bank loans
1,525,657
315,864
1,525,657
315,864

Amounts falling due 1-2 years

Bank loans
1,275,657
1,782,639
1,275,657
1,782,639

Amounts falling due 2-5 years

Bank loans
6,896,739
-
6,896,739
-


9,698,053
2,098,503
9,698,053
2,098,503


Page 34

 
KBEVERAGE LTD
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 NOVEMBER 2023

20.


Hire purchase and finance leases


Minimum lease payments under hire purchase fall due as follows:

Group
30 November
Group
31 May
Company
30 November
Company
31 May
2023
2022
2023
2022
£
£
£
£

Within one year
708,311
666,415
708,311
666,415

Between 1-5 years
584,435
1,482,379
584,435
1,482,379

Over 5 years
948,692
-
948,692
-

2,241,438
2,148,794
2,241,438
2,148,794


21.


Financial instruments

Group

30 November
Group
31 May
Company

30 November
Company
31 May
2023
2022
2023
2022
£
£
£
£

Financial assets

Financial assets measured at fair value through profit or loss
5,143,536
4,369,522
5,140,702
4,369,522


Financial liabilities

Financial liabilities measured at fair value through profit or loss
16,132,673
5,605,089
16,498,418
5,605,089


Financial assets measured at amortised cost comprise cash at bank and in hand, trade and other debtors, and stock.


Financial liabilities measured at amortised cost comprise bank and other loans, trade and other creditors, and obligations under finance leases.

Page 35

 
KBEVERAGE LTD
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 NOVEMBER 2023

22.


Deferred taxation


Group



2023


£






At beginning of year
(369,488)


Charged to profit or loss
(339,426)



At end of year
(708,914)

Group
30 November
Group
31 May
Company
30 November
Company
31 May
2023
2022
2023
2022
£
£
£
£

Accelerated capital allowances
(985,608)
(369,488)
(985,608)
(369,488)

Tax losses carried forward
276,694
-
276,694
-


23.


Provisions


Group and Company



Dilapidation provision

£





At 1 June 2022 (as restated)
709,500


Amounts capitalised during the period
654,750



At 30 November 2023
1,364,250


24.


Share capital

30 November
31 May
2023
2022
£
£
Allotted, called up and fully paid



100 (2022 - 100) Ordinary shares of £1.00 each
100
100

The ordinary shares have attached to them full voting, dividend and capital distribution rights (including on winding up). They do not confer any rights of redemption.


Page 36

 
KBEVERAGE LTD
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 NOVEMBER 2023

25.


Reserves

Profit and loss account

Profit and loss account represents cumulative profits or losses, net of dividends paid.


26.
 

Business combinations

The company acquired 100% of the ordinary shares of GK Coffee Group Limited on 19 February 2023. The acquisition method of accounting is used.

Acquisition of GK Coffee Group Limited

Recognised amounts of identifiable assets acquired and liabilities assumed

Book value
Fair value adjustments
Fair value
£
£
£

Fixed Assets

Tangible
132,818
-
132,818

Intangible
1,117,097
-
1,117,097

1,249,915
-
1,249,915

Current Assets

Stocks
44,443
-
44,443

Debtors
965,429
-
965,429

Cash at bank and in hand
271,545
-
271,545

Total Assets
2,531,332
-
2,531,332

Creditors

Due within one year
(2,311,474)
-
(2,311,474)

Deferred taxation
(159,372)
-
(159,372)

Total Identifiable net assets
60,486
-
60,486


Goodwill
7,451,942

Total purchase consideration
7,512,428

Consideration

£


Cash
7,400,064

Directly attributable costs
112,364

Total purchase consideration
7,512,428

Page 37

 
KBEVERAGE LTD
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 NOVEMBER 2023

26.Business combinations (continued)

Cash outflow on acquisition

£


Purchase consideration settled in cash, as above
7,400,064

Directly attributable costs
112,364

7,512,428

Less: Cash and cash equivalents acquired
(271,545)

Net cash outflow on acquisition
7,240,883

The goodwill arising on acquisition is attributable to the trade and assets hived up post-acquisition. The useful life of goodwill is estimated to be 10 years.

The results of GK Coffee Group Limited since acquisition are as follows:

Current period since acquisition
£

Turnover
2,140,122

Profit for the period since acquisition
432,268


27.


Prior year adjustment

The Directors have identified two prior year adjustments affecting the financial statements for the accounting period ended 31 May 2022. 
Firstly, a provision has been made for the expected future costs of restoring leased property to its original condition. The restatement relates to the leases in place as at 31 May 2022, and affects the following financial statement areas:
Increase in provisions                            £709,500
Increase in tangible fixed assets            £552,090
Increase in depreciation charged           £157,410
Secondly, rent-free incentives relating to the leased property had previously been recognised up-front, and are now spread systematically over the lease term. The affected financial statement areas are:
Decrease in profit & loss reserve            £401,456
Increase in accruals                               £525,358
Increase in rent expense                        £123,902


28.


Contingent liabilities

There is an Unlimited Multilateral Guarantee dated 21 February 2023 given by Kbeverage Ltd, GK Coffee Group Limited (the subsidiary), and Kdevelopment Ltd (a company related by virtue of common Directorship). Due to the nature of the Guarantee, it is impracticable to estimate the financial effect or uncertainties relating to the amount of timing of any possible outflow.

Page 38

 
KBEVERAGE LTD
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 NOVEMBER 2023

29.


Capital commitments




At 30 November 2023 the Group and Company had capital commitments as follows:


Group
30 November
Group
31 May
Company
30 November
Company
31 May
2023
2022
2023
2022
£
£
£
£

Store construction costs
814,814
-
814,814
-


30.


Pension commitments

The Group operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Group, in an independently administered fund. The pension cost charge represents contributions payable by the Group to the fund and amounted to £88,173 (2022: £33,510). Contributions totalling £6,012 (2022: £3,069) were payable to the fund at the balance sheet date and are included in creditors.

Page 39

 
KBEVERAGE LTD
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 NOVEMBER 2023

31.


Commitments under operating leases

At 30 November 2023 the Group and the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:


Group
30 November
Group
31 May
Company
30 November
Company
31 May
2023
2022
2023
2022
£
£
£
£

Not later than 1 year
2,761,913
1,700,913
2,691,913
1,630,913

Later than 1 year and not later than 5 years
9,725,270
6,219,295
9,591,104
6,105,129

Later than 5 years
12,433,999
10,111,323
12,433,999
10,111,323

24,921,182
18,031,531
24,717,016
17,847,365

Lease payments recognised as an expense in the year totalled £3,379,348 (2022 restated: £1,446,078).
At the period-end, the Group had entered into an Agreement For Lease (AFL) for a further 6 stores for a combined rent of £530,000 per annum. This is excluded from the above disclosure as the full lease details had not been confirmed by the period-end.

Rent receivable under operating leases
At 30 November 2023 the Group and the Company had future minimum lease receipts due under non-cancellable operating leases for each of the following periods:


Group
30 November
Company
30 November
2023
2023
£
£

Not later than 1 year
26,500
26,500

Later than 1 year and not later than 5 years
106,000
106,000

Later than 5 years
249,225
249,225

381,725
381,725

The Group charges rent on facilities for electric vehicle charging points. Rent is charged annually, and reflects the minimum amount due before any profit-share.
At 31 May 2022 the Group and the Company had £nil future minimum lease receipts due under non-cancellable operating leases

Page 40

 
KBEVERAGE LTD
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 NOVEMBER 2023

32.


Transactions with directors

During the period, amounts were advanced to the Directors totalling £418,463 (2022: £nil), and repayments were made totalling £428,463 (2022: £nil). The balance due to the Directors at the period-end is £10,000 (2022: £nil) and is included in other creditors.
A historic balance due to a former Director was written off during the period following an effective waiver of the loan as a result of the business combination. The write off totalled £92,764.
No interest is charged on the Directors' loan accounts.


33.


Related party transactions

Loans totalling £2,134,001 (2022: £1,211,052) were issued during the period, to companies related by virtue of common directorship. Repayments were made during the period totalling £40,000 (2022: £nil). Expenses totalling £12,360 (2022: £nil) were also paid by the Group on behalf of the related companies. Amounts due at the period-end totalled £3,559,148 (2022: £1,465,148) and are included in debtors.
Loans totalling £270,000 (2022: £610,050) were issued during the period, to a company related by virtue of a close family interest. Repayments were made during the period totalling £880,050 (2022: £nil). Amounts due at the period-end totalled £nil (2022: £631,750) and are included in debtors.
Rent and insurance costs totalling £292,068 (2022: £nil)  were charged to the Group during the period, by a company related by virtue of common directorship. There were no amounts due at the period-end (2022: £nil).


34.


Post balance sheet events

Since 30 November 2023, the following events have taken place:
The group has opened two new stores.
The group has entered into additional hire purchase agreements. The total finance received is £2,392,191 and will be repaid in instalments over 5 years.
The group has entered into an Agreement For Lease (AFL) for a further 2 stores for a combined rent of £194,000 per annum.


35.


Controlling party

There is no ultimate controlling party.


Page 41