Company registration number 09822843 (England and Wales)
DENBIES WINE ESTATE LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
DENBIES WINE ESTATE LIMITED
COMPANY INFORMATION
Directors
Mr C A White
Mr R S Potton
Secretary
Mr R S Potton
Company number
09822843
Registered office
London Road
Dorking
Surrey
RH5 6AA
Auditor
Sumer Audit
5 Peveril Court
6-8 London Road
Crawley
West Sussex
RH10 8JE
DENBIES WINE ESTATE LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4
Directors' responsibilities statement
5
Independent auditor's report
6 - 8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Notes to the financial statements
12 - 22
DENBIES WINE ESTATE LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The directors present the strategic report for the year ended 31 December 2023.
Results and performance
The directors are pleased with the business performance and results for the year. Turnover and other operating income has increased throughout the business helped by a larger harvest, expansion of the existing operation, and further returns on long term capital investment. A healthy profit has been maintained against a headwind of higher inflation and increased interest rates.
The investment in the year on additional PV panels has doubled the amount of solar energy produced therefore assisting energy costs and reducing our carbon footprint.
The business maintains a healthy cash balance for operational and future investment opportunities and continues the upward trend in net asset value.
Business environment
We are experiencing the anticipated income levels in line with our 2024 forecast.
The growing season has started well, and we have avoided the spring frosts and therefore have the potential for a high level of fruitfulness.
We have a strong wine sales and contract wine making order book, and an encouraging number of hospitality related future bookings.
The expanded vineyard hotel continues to perform well. Planning permission has been granted to increase occupancy with additional bedrooms. The hotel vineyard restaurant is being expanded to extend our hospitality offering which will include an English wine bar and greater cover capacity.
Customer awareness and demand for sustainable business practices has never been greater. We are proud to have achieved net carbon Zero UKCCC certification in the production of our wine, the first UK wine producer to do so. We have also become a B Corp accredited business, being an early adopter of this global movement to meet high standards of social and environmental performance, transparency and accountability.
We have provided existing onsite partners with additional infrastructure to support them with their expansion plans. A joint planning application has been granted to expand the Surrey Hill Physiotherapy which includes doubling the number of consultancy rooms, a gymnasium and administration office.
We have just completed the expansion of our onsite bonded warehouse facilities to accommodate a further 200,000 bottles of wine to support growth in our own and contract wine making activity.
Strategy
Optimisation of existing operations and facilities remain our key focus to ensure that maximum returns and full potential are achieved. Further opportunities within our already diversified business activities will be pursued to expand our target market, maximise wine sales and minimise financial risk. We will continue to invest capital as required to grow income and increase the value of the business. With all new capital projects, a best practice in environmental consideration together with financial return is adopted.
DENBIES WINE ESTATE LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Principal risks and uncertainties
Market risk
Whilst competition continues to grow we continue to invest in our team of employees, invest in technology, and invest capital into areas that have opportunity to grow and diversify the business further.
Liquidity risk
The company manages its cash and borrowing requirements centrally in order to maximise interest income and minimise interest expense, whilst ensuring the company has sufficient liquid resources to meet the operating needs of the business.
Interest rate risk
The company is exposed to interest rate risk on its variable rate and loan.
Foreign currency risk
The company's principal foreign currency exposures arise from purchases from European suppliers.
Credit risk
Investments of cash surpluses and borrowings are made through banks and companies which must fulfil credit rating criteria approved by the directors. Trade debtors are monitored on an ongoing basis and provision is made for doubtful debts where necessary.
Technology risk
The company is subject to risks relating to its ability to implement and maintain effective systems to process a high volume of transactions with customers. A failure to manage technology infrastructure and systems affect company performance. The company engages third party professionals to assist and advise with all aspects of technology including hardware, software and storage.
Key performance indicators
The company monitors progress across a range of financial targets. The main key performance indicators are:
2023 2022
£ £
Cash at bank 1,140,927 1,357,345
Total equity 5,355,588 4,768,622
Current ratio 5.75 5.34
Working capital 6,846,948 6,594,905
Non financial key performance indicators:
2023 2022
MWh MWh
PV power generation 72.8 29.1
2023
Tonnes CO2e
Net carbon sequestration -96
Vineyard & winery
Future developments
The business will continue to maximise organic growth in all departments, and review all options for future opportunities and investment to expand current operations.
DENBIES WINE ESTATE LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
Mr C A White
Director
28 August 2024
DENBIES WINE ESTATE LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
The directors present their annual report and financial statements for the year ended 31 December 2023.
Principal activities
The principal activity of the company continued to be the growing of grapes, and the production and the sale of wine. The company also provides tourism, retail and hospitality services.
Results and dividends
The results for the year are set out on page 9.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr C A White
Mr R S Potton
Auditor
The auditor, Sumer Audit, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Strategic report
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of financial instruments and the associated risks and future developments.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
On behalf of the board
Mr C A White
Director
28 August 2024
DENBIES WINE ESTATE LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 5 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
DENBIES WINE ESTATE LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF DENBIES WINE ESTATE LIMITED
- 6 -
Opinion
We have audited the financial statements of Denbies Wine Estate Limited (the 'company') for the year ended 31 December 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including 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 2023 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
DENBIES WINE ESTATE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF DENBIES WINE ESTATE LIMITED
- 7 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, our procedures included the following:
Obtaining an understanding of the legal and regulatory framework that the company operates in, focusing on those laws and regulations that had a direct effect on the financial statements and operations;
Obtaining an understanding of the company’s policies and procedures on fraud risks, including knowledge of any actual, suspected or alleged fraud
Discussing among the engagement team how and where fraud might occur in the financial statements and any potential indicators of fraud through our knowledge and understanding of the company and our sector-specific experience.
As a result of these procedures, we considered the opportunities and incentives that may exist within the company for fraud. We are also required to perform specific procedures to respond to the risk of management override. As a result of performing the above, we identified the following areas as those most likely to have an impact on the financial statements: health & safety, employment law and compliance with the UK Companies Act.
DENBIES WINE ESTATE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF DENBIES WINE ESTATE LIMITED
- 8 -
In addition to the above, our procedures to respond to risks identified included the following:
Making enquiries of management about any known or suspected instances of non-compliance with laws and regulations and fraud;
Assessment of matters recorded on the company’s health & safety incident register;
Challenging assumptions and judgements made by management in their significant accounting estimates, in particular in relation to stock valuations and depreciation; and
Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness.
Due to the inherent limitations of an audit, there is an unavoidable risk that some material misstatements in the financial statements may not be detected, even though the audit is properly planned and performed in accordance with the ISAs (UK). For instance, the further removed non-compliance is from the events and transactions reflected in the financial statements, the less likely the auditor is to become aware of it or to recognise the non-compliance.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Tony Summers BA FCA (Senior Statutory Auditor)
For and on behalf of Sumer Audit
28 August 2024
Chartered Accountants
Statutory Auditor
Crawley
Sumer Audit is the trading name of Sumer Auditco Limited
DENBIES WINE ESTATE LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
2023
2022
Notes
£
£
Turnover
3
8,132,008
7,496,599
Cost of sales
(2,633,241)
(2,176,105)
Gross profit
5,498,767
5,320,494
Distribution costs
(71,568)
(70,627)
Administrative expenses
(4,740,599)
(4,106,878)
Other operating income
235,446
124,530
Operating profit
4
922,046
1,267,519
Interest receivable and similar income
8
32,596
2,206
Interest payable and similar expenses
9
(182,831)
(92,344)
Profit before taxation
771,811
1,177,381
Tax on profit
10
(184,845)
(222,702)
Profit for the financial year
586,966
954,679
The profit and loss account has been prepared on the basis that all operations are continuing operations.
DENBIES WINE ESTATE LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
11
599,650
437,254
Current assets
Stocks
12
2,112,919
2,094,749
Debtors
13
5,035,851
4,663,904
Cash at bank and in hand
1,140,927
1,357,345
8,289,697
8,115,998
Creditors: amounts falling due within one year
14
(1,442,749)
(1,521,093)
Net current assets
6,846,948
6,594,905
Total assets less current liabilities
7,446,598
7,032,159
Creditors: amounts falling due after more than one year
15
(1,947,610)
(2,157,837)
Provisions for liabilities
Deferred tax liability
18
143,400
105,700
(143,400)
(105,700)
Net assets
5,355,588
4,768,622
Capital and reserves
Called up share capital
20
500
500
Share premium account
1,352,940
1,352,940
Profit and loss reserves
4,002,148
3,415,182
Total equity
5,355,588
4,768,622
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved by the board of directors and authorised for issue on 28 August 2024 and are signed on its behalf by:
Mr R S Potton
Director
Company registration number 09822843 (England and Wales)
DENBIES WINE ESTATE LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
Share capital
Share premium account
Profit and loss reserves
Total
£
£
£
£
Balance at 1 January 2022
500
1,352,940
2,460,503
3,813,943
Year ended 31 December 2022:
Profit and total comprehensive income
-
-
954,679
954,679
Balance at 31 December 2022
500
1,352,940
3,415,182
4,768,622
Year ended 31 December 2023:
Profit and total comprehensive income
-
-
586,966
586,966
Balance at 31 December 2023
500
1,352,940
4,002,148
5,355,588
DENBIES WINE ESTATE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
1
Accounting policies
Company information
Denbies Wine Estate Limited is a private company limited by shares incorporated in England and Wales. The registered office is London Road, Dorking, Surrey, RH5 6AA.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in Sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £1.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues'.
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Denbies Holdings Limited. These consolidated financial statements are available from its registered office, Denbies Wine Estate, London Road, Dorking, Surrey, United Kingdom, RH5 6AA.
1.2
Going concern
At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. The directors have considered relevant information, including the company’s principal risks and uncertaintiestrue, the annual budget, forecasted future cash flows and the impact of subsequent events in making their assessment. Based on these assessments and having regard to the resources available to the entity, the directors have concluded that there is no material uncertainty and that they can continue to adopt the going concern basis in preparing the annual report and financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
1.4
Tangible fixed assets
Tangible fixed assets are measured at cost, net of depreciation and any impairment losses.
DENBIES WINE ESTATE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Leasehold improvements
Evenly over the term of the lease
Plant and equipment
10% - 25% per annum on a straight line basis
Fixtures and fittings
20% per annum on a straight line basis
Vines
5% per annum on a straight line basis
Assets under the course of construction are only depreciated when brought into use.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.5
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
1.6
Cash at bank and in hand
Cash and cash equivalents are basic financial assets and include deposits held at call with banks.
1.7
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans and loans from fellow group companies are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
1.8
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.9
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
DENBIES WINE ESTATE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
1.10
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
1.11
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.12
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
1.13
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
1.14
Foreign exchange
Transactions in currencies other than pounds Sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
DENBIES WINE ESTATE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
2
Judgements and key sources of estimation uncertainty
(Continued)
- 15 -
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Stock valuation
The directors have estimated the valuation of stock by considering all costs involved in bringing the product to a saleable condition.
Depreciation
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their estimated useful lives, on the bases set out in note 1.4.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2023
2022
£
£
Turnover analysed by class of business
Agriculture and production
1,960,834
1,666,154
Hospitality and leisure
6,160,345
5,815,197
Other
10,829
15,248
8,132,008
7,496,599
2023
2022
£
£
Other significant revenue
Interest income
32,596
2,206
Grants received
51,392
64,449
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
8,132,008
7,496,599
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses
335
881
Government grants
(51,392)
(64,449)
Depreciation of owned tangible fixed assets
92,201
81,082
(Profit)/loss on disposal of tangible fixed assets
(1,116)
3,686
Operating lease charges
-
4,130
DENBIES WINE ESTATE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 16 -
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
8,250
8,250
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Admin
15
16
Hospitality and leisure
145
152
Agriculture and production
24
19
Total
184
187
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
2,698,800
2,375,424
Social security costs
240,385
177,793
Pension costs
68,907
55,431
3,008,092
2,608,648
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
244,542
135,250
Company pension contributions to defined contribution schemes
2,108
1,317
246,650
136,567
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2022 - 1).
DENBIES WINE ESTATE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
7
Directors' remuneration
(Continued)
- 17 -
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
137,875
-
Company pension contributions to defined contribution schemes
461
-
8
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
32,596
2,206
9
Interest payable and similar expenses
2023
2022
£
£
Interest on bank overdrafts and loans
156,791
87,668
Interest on finance leases and hire purchase contracts
16,932
4,676
Other interest
9,108
182,831
92,344
10
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
148,000
220,000
Adjustments in respect of prior periods
(355)
3,802
Total current tax
147,645
223,802
Deferred tax
Origination and reversal of timing differences
37,200
(1,100)
Total tax charge
184,845
222,702
DENBIES WINE ESTATE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
10
Taxation
(Continued)
- 18 -
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Profit before taxation
771,811
1,177,381
Expected tax charge based on the standard rate of corporation tax in the UK of 23.50% (2022: 19.00%)
181,376
223,702
Tax effect of expenses that are not deductible in determining taxable profit
271
73
Adjustments in respect of prior years
(355)
3,802
Effect of AIA super deduction
(166)
(4,470)
Difference between current and deferred tax rate
2,203
(107)
Other
1,516
(298)
Taxation charge for the year
184,845
222,702
11
Tangible fixed assets
Leasehold improvements
Plant and equipment
Fixtures and fittings
Vines
Total
£
£
£
£
£
Cost
At 1 January 2023
240,086
742,243
58,108
101,873
1,142,310
Additions
274,706
274,706
Disposals
(43,275)
(43,275)
At 31 December 2023
240,086
973,674
58,108
101,873
1,373,741
Depreciation and impairment
At 1 January 2023
240,086
372,610
56,703
35,657
705,056
Depreciation charged in the year
85,702
1,405
5,094
92,201
Eliminated in respect of disposals
(23,166)
(23,166)
At 31 December 2023
240,086
435,146
58,108
40,751
774,091
Carrying amount
At 31 December 2023
538,528
61,122
599,650
At 31 December 2022
369,633
1,405
66,216
437,254
DENBIES WINE ESTATE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
12
Stocks
2023
2022
£
£
Raw materials and consumables
114,999
189,395
Work in progress
621,894
761,917
Finished goods and goods for resale
1,376,026
1,143,437
2,112,919
2,094,749
13
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
655,333
337,045
Amounts owed by group undertakings
4,240,016
4,185,516
Other debtors
63,020
41,101
Prepayments and accrued income
74,882
98,142
5,033,251
4,661,804
Deferred tax asset (note 18)
2,600
2,100
5,035,851
4,663,904
14
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans
16
250,348
193,500
Obligations under finance leases
17
10,453
Trade creditors
349,567
306,257
Corporation tax
38,178
220,000
Other taxation and social security
311,599
309,155
Other creditors
358,110
336,335
Accruals and deferred income
124,494
155,846
1,442,749
1,521,093
Amounts due under bank loans are secured against the company's assets.
15
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Bank loans and overdrafts
16
1,926,703
2,157,837
Obligations under finance leases
17
20,907
1,947,610
2,157,837
DENBIES WINE ESTATE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
15
Creditors: amounts falling due after more than one year
(Continued)
- 20 -
Amounts due under bank loans are secured against the company's assets.
16
Loans and overdrafts
2023
2022
£
£
Bank loans
2,177,051
2,351,337
Payable within one year
250,348
193,500
Payable after one year
1,926,703
2,157,837
The bank loans are secured by fixed and floating charges over all assets and undertakings of the company, including all present and future freehold and leasehold property, book and other debts, chattels, goodwill and uncalled capital, both present and future.
Interest is charged at 2.3-2.4% per annum above base rate.
Freehold land and buildings were transferred to the parent, Denbies Holdings Limited, in a prior year and an unlimited multilateral guarantee was given by Denbies Holdings Limited in respect of the loans on these assets.
17
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
10,453
In two to five years
20,907
31,360
Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
DENBIES WINE ESTATE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
18
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
Assets
Assets
2023
2022
2023
2022
Balances:
£
£
£
£
Accelerated capital allowances
143,400
105,700
-
-
Retirement benefit obligations
-
-
2,600
2,100
143,400
105,700
2,600
2,100
2023
Movements in the year:
£
Liability at 1 January 2023
103,600
Charge to profit or loss
37,200
Liability at 31 December 2023
140,800
The directors have considered the deferred tax liabilities noted above and concluded that it is not possible to state the estimated liabilities which will reverse in the next 12 months. This is due to the level of reversal being dependant on events which are not yet known.
19
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
68,907
55,431
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
20
Share capital
2023
2022
£
£
Ordinary share capital
Issued and fully paid
500 Ordinary shares of £1 each
500
500
The shares have attached to them full voting, dividend and capital distribution rights.
21
Financial commitments, guarantees and contingent liabilities
The company has a debenture including Fixed Charge over all present freehold and leasehold property; First Fixed Charge over book and other debts, chattels, goodwill and uncalled capital, both present and future; and First Floating Charge over all assets and undertaking both present and future dated 17 December 2015.
DENBIES WINE ESTATE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
22
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2022
£
£
Within one year
32,748
21,103
Between two and five years
40,545
48,063
73,293
69,166
23
Ultimate controlling party
The immediate parent company is Denbies Holdings Limited, a company registered in England. The registered office is Denbies Wine Estate, London Road, Dorking, Surrey, RH5 6AA.
The financial statements of the company are consolidated in the financial statements of Denbies Holdings Limited. These consolidated financial statements are available from its registered office, Denbies Wine Estate, London Road, Dorking, Surrey, United Kingdom, RH5 6AA.
24
Related party transactions
As at the balance sheet date, the company was owed £3,180 (2022 - £nil) from the St Kilda Trust and £810 (2022 - £nil) from The Denbies Trust, of which the directors are trustees.
Share-based Payment Transactions
Share options in the parent company, Denbies Holdings Limited, were issued in the year to directors. No charge to the Company's income statement has been recognised in respect of these options. Further details can be found in the parent Company's financial statements.
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