Company Registration No. SC150332 (Scotland)
HEATHER ALE LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2024
HEATHER ALE LIMITED
COMPANY INFORMATION
Directors
Scott Williams
Bruce Williams
Christopher Williams
Secretary
Scott Williams
Company number
SC150332
Registered office
Eglinton Store
Kelliebank
Alloa
Clackmannanshire
United Kingdom
FK10 1NT
Auditor
Johnston Carmichael LLP
227 West George Street
Glasgow
United Kingdom
G2 2ND
HEATHER ALE LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2
Directors' responsibilities statement
3
Independent auditor's report
4 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Statement of cash flows
11
Notes to the financial statements
12 - 26
HEATHER ALE LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 APRIL 2024
- 1 -

The directors present the strategic report for the year ended 30 April 2024.

Fair review of the business

The year proved to be as predicted with record turnover rising to £12.96m. Cost increases due to economic uncertainty continue to hit margins; however, we performed well against this background. We are expecting turnover to reduce significantly over the coming period as we transition from the reduction in a significant contract. This reduction should not impact on the profitability of the company.

The following key performance indicators are taken from the financial statements:

Financial Year            To April 24        To April 23

Turnover             £12,961,074        £11,854,928

Operating profit         £62,318     £98,075                

Net Assets            £3,082,995        £3,014,909

Principal risks and uncertainties

In managing our business, the principal risks we are exposed to are rising commodity and utility prices, and credit risks based on the health of the global economy. These risks have been constant and will remain constant for the foreseeable future. The business continues to manage and mitigate these cost increases through proactively seeking to work more effectively and efficiently internally, as well as with its supplier, employees, and customers.

Culture

As always, the company’s four core values of Quality, Teamwork, Passion, and Honesty remain central to our continued advancement, and engagement with colleagues, suppliers, and customers. We will continue this process to ensure products are of the highest quality, and fairest price.

Future developments

The company will have commissioned our second production line by Jan 25, which will drive efficiency savings in Q4 of 24/25. We will also enter a round of compulsory redundancies in Q3 24/25 to align costs for the reduction of the contract income. We have increased our focus on promoting the brand with the hope of obtaining national listings within the multiple outlets.

 

On behalf of the board

Scott Williams
Director
11 March 2025
HEATHER ALE LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 APRIL 2024
- 2 -

The directors present their annual report and financial statements for the year ended 30 April 2024.

Principal activities

The principal activity of the company continued to be that of production, supply and retail of craft drinks.

Results and dividends

The results for the year are set out on page 8.

No ordinary dividends were paid.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

Scott Williams
Bruce Williams
Christopher Williams
Future developments

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 future developments and engagement with employees, suppliers, customers and others.

Auditor

The auditor, Johnston Carmichael LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

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.

On behalf of the board
Scott Williams
Director
11 March 2025
HEATHER ALE LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 30 APRIL 2024
- 3 -

The directors are responsible for preparing the strategic report, directors' report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with 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 the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

 

 

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.

HEATHER ALE LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF HEATHER ALE LIMITED
- 4 -
Opinion

We have audited the financial statements of Heather Ale Limited (the 'company') for the year ended 30 April 2024 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows 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:

 

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 Auditor 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.

Other information

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:

 

HEATHER ALE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF HEATHER ALE LIMITED
- 5 -
Matters on which we are required to report by exception

In the light of our 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 and 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:

 

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 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.

 

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: http://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Extent to which the audit was considered capable of detecting irregularities, including fraud

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.

 

We assessed whether the engagement team collectively had the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations by considering their experience, past performance and support available.

All engagement team members were briefed on relevant identified laws and regulations and potential fraud risks at the planning stage of the audit. Engagement team members were reminded to remain alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

We obtained an understanding of the legal and regulatory frameworks that are applicable to company and the sector in which it operates, focusing on those provisions that had a direct effect on the determination of material amounts and disclosures in the financial statements. The most relevant frameworks we identified include:

HEATHER ALE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF HEATHER ALE LIMITED
- 6 -

Extent to which the audit was considered capable of detecting irregularities, including fraud (continued)

We gained an understanding of how the company is complying with these laws and regulations by making enquiries of management and those charged with governance. We corroborated these enquiries through our review of submitted returns and relevant correspondence with regulatory bodies.

We assessed the susceptibility of the financial statements to material misstatement, including how fraud might occur, by meeting with management and those charged with governance to understand where it was considered there was susceptibility to fraud. This evaluation also considered how management and those charged with governance were remunerated and whether this provided an incentive for fraudulent activity. We considered the overall control environment and how management and those charged with governance oversee the implementation and operation of controls. We identified a heightened fraud risk in relation to:

In addition to the above, the following procedures were performed to provide reasonable assurance that the financial statements were free of material fraud or error:

 

Our audit procedures were designed to respond to the risk of material misstatements in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve intentional concealment, forgery, collusion, omission or misrepresentation. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it.

HEATHER ALE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF HEATHER ALE LIMITED
- 7 -

Use of our report

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

Allyson Banford (Senior Statutory Auditor)
For and on behalf of Johnston Carmichael LLP
11 March 2025
Chartered Accountants
Statutory Auditor
227 West George Street
Glasgow
United Kingdom
G2 2ND
HEATHER ALE LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 APRIL 2024
- 8 -
2024
2023
Notes
£
£
Turnover
3
12,961,074
11,854,928
Cost of sales
(9,063,626)
(8,173,312)
Gross profit
3,897,448
3,681,616
Administrative expenses
(3,836,649)
(3,735,365)
Other operating income
1,519
151,824
Operating profit
4
62,318
98,075
Interest payable and similar expenses
7
(111,416)
(111,077)
Loss before taxation
(49,098)
(13,002)
Tax on loss
8
4,684
26,546
(Loss)/profit for the financial year
(44,414)
13,544
Other comprehensive income
Revaluation of tangible fixed assets
150,000
224,852
Tax relating to other comprehensive income
(37,500)
(56,213)
Total comprehensive income/(expense) for the year
68,086
182,183

The statement of comprehensive income has been prepared on the basis that all operations are continuing operations.

HEATHER ALE LIMITED
BALANCE SHEET
AS AT
30 APRIL 2024
30 April 2024
- 9 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
9
4,450,245
4,468,218
Investments
10
302,078
302,078
4,752,323
4,770,296
Current assets
Stocks
12
2,130,814
2,264,498
Debtors
13
2,780,821
2,690,856
Cash at bank and in hand
44,471
145,868
4,956,106
5,101,222
Creditors: amounts falling due within one year
14
(5,466,880)
(5,376,294)
Net current liabilities
(510,774)
(275,072)
Total assets less current liabilities
4,241,549
4,495,224
Creditors: amounts falling due after more than one year
15
(830,083)
(1,184,660)
Provisions for liabilities
Deferred tax liability
18
328,471
295,655
(328,471)
(295,655)
Net assets
3,082,995
3,014,909
Capital and reserves
Called up share capital
20
2,000
2,000
Revaluation reserve
21
281,139
168,639
Profit and loss reserves
21
2,799,856
2,844,270
Total equity
3,082,995
3,014,909
The financial statements were approved by the board of directors and authorised for issue on 11 March 2025 and are signed on its behalf by:
Scott Williams
Director
Company Registration No. SC150332
HEATHER ALE LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 APRIL 2024
- 10 -
Share capital
Revaluation reserve
Profit and loss reserves
Total
£
£
£
£
Balance at 1 May 2022
2,000
-
0
2,830,726
2,832,726
Year ended 30 April 2023:
Profit for the year
-
-
13,544
13,544
Other comprehensive income:
Revaluation of tangible fixed assets
-
224,852
-
224,852
Tax relating to other comprehensive income
-
(56,213)
-
0
(56,213)
Total comprehensive income for the year
-
0
168,639
13,544
182,183
Balance at 30 April 2023
2,000
168,639
2,844,270
3,014,909
Year ended 30 April 2024:
Loss for the year
-
-
(44,414)
(44,414)
Other comprehensive income:
Revaluation of tangible fixed assets
-
150,000
-
150,000
Tax relating to other comprehensive income
-
(37,500)
-
0
(37,500)
Total comprehensive income for the year
-
0
112,500
(44,414)
68,086
Balance at 30 April 2024
2,000
281,139
2,799,856
3,082,995
HEATHER ALE LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 APRIL 2024
- 11 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash (absorbed by)/generated from operations
26
(47,792)
1,049,170
Interest paid
(111,416)
(111,077)
Income taxes (paid)/refunded
-
0
21,648
Net cash (outflow)/inflow from operating activities
(159,208)
959,741
Investing activities
Purchase of tangible fixed assets
(270,853)
(284,969)
Proceeds on disposal of tangible fixed assets
20,000
-
0
Net cash used in investing activities
(250,853)
(284,969)
Financing activities
Proceeds from other borrowings
653,000
-
0
Repayment of other borrowings
(16,596)
(10,404)
Repayment of bank loans
(238,608)
(263,958)
Payment of finance leases obligations
(89,132)
(328,793)
Net cash generated from/(used in) financing activities
308,664
(603,155)
Net (decrease)/increase in cash and cash equivalents
(101,397)
71,617
Cash and cash equivalents at beginning of year
145,868
74,251
Cash and cash equivalents at end of year
44,471
145,868
HEATHER ALE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2024
- 12 -
1
Accounting policies
Company information

Heather Ale Limited is a private company limited by shares incorporated in Scotland. The registered office is Eglinton Store, Kelliebank, Alloa, Clackmannanshire, United Kingdom, FK10 1NT.

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 £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

1.2
Going concern

The directors believe that it is appropriate to adopt the going concern basis of accounting in preparing the financial statements.true

The directors have prepared cashflow projections which show that the company has adequate resources to continue in operational existence for the foreseeable future. Having reviewed the cash flow forecasts, the directors consider the company has sufficient facilities available with which to meet its financial obligations as they fall due for a period not less than twelve months from the date of approval of these financial statements. These cashflow forecasts also take into consideration the loss of a large customer contract from April 2025.

Whilst the company breached the financial covenants attached to one of our loan agreements at 30 April 2024, our bank have continued to support us and we received a formal waiver of this covenant. Additionally, we have consolidated two of our bank loans post year-end, which included revised financial covenants which we are forecasting to pass.

Accordingly, the going concern basis has been adopted in the preparation of these financial statements.

1.3
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods 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.

Revenue from the sale of beer is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer, the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Revenue from contracted canning and bottling is recognised at the completion of canning and bottling services when production quantities can be measured reliably.

HEATHER ALE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
1
Accounting policies
(Continued)
- 13 -
1.4
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

 

Properties whose fair value can be measured reliably are held under the revaluation model and are carried at a revalued amount, being their fair value at the date of valuation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. The fair value of the land and buildings is usually considered to be their market value.

 

Revaluation gains and losses are recognised in other comprehensive income and accumulated in equity, except to the extent that a revaluation gain reverses a revaluation loss previously recognised in profit or loss or a revaluation loss exceeds the accumulated revaluation gains recognised in equity; such gains and losses are recognised in profit or loss.

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:

Freehold buildings
2% straight line
Assets under construction
No charge
Plant and equipment
15% reducing balance
Fixtures and fittings
15% reducing balance
Computers
20% - 33% reducing balance
Motor vehicles
25% reducing balance

Freehold land is not depreciated.

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 the profit and loss account.

Properties whose fair value can be measured reliably are held under the revaluation model and are carried at a revalued amount, being their fair value at the date of valuation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. The fair value of the land and buildings is usually considered to be their market value.

 

Revaluation gains and losses are recognised in other comprehensive income and accumulated in equity, except to the extent that a revaluation gain reverses a revaluation loss previously recognised in the profit and loss account or a revaluation loss exceeds the accumulated revaluation gains recognised in equity; such gains and loss are recognised in the profit and loss account.

1.5
Fixed asset investments

Interests in associates are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in the profit and loss account.

An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.

HEATHER ALE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
1
Accounting policies
(Continued)
- 14 -
1.6
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in the profit and loss account.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in the profit and loss account.

1.7
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.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in the profit and loss account. Reversals of impairment losses are also recognised in the profit and loss account.

1.8
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.9
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.

 

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

HEATHER ALE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
1
Accounting policies
(Continued)
- 15 -
Impairment of financial assets

Financial assets are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in the profit and loss account.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in the profit and loss account.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities, including creditors and bank loans, 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.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.10
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.

1.11
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 company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

HEATHER ALE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
1
Accounting policies
(Continued)
- 16 -
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.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.12
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.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.13
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.14
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.

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.

HEATHER ALE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
2
Judgements and key sources of estimation uncertainty
(Continued)
- 17 -
Key sources of estimation uncertainty

The estimates and assumptions which have a heightened risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Valuation of Freehold Land and Building (2024: £1,400k (2023: £1,250k))

The fair value of property is formally measured at appropriate intervals by suitably qualified individuals in accordance with RICS Appraisal and Valuation Standards, and informally assessed by the directors in the intervening years. Management consideration includes current market conditions and state of repair. The fair value of a property is deemed to be the estimated amount for which a property should exchange, on the date of valuation, in an arm's length transaction. Refer to Note 9 for further detail.

Valuation of stock (2024: £2,131k (2023: £2,264k))

Inventory is valued on a standard cost basis incorporating a proportion of fixed and variable overheads. There is an element of estimation involved in the costing of inventory due to potential for variability in the actual cost of production compared to the standard cost of production. Testing is carried out periodically to ensure that the cost of inventory is not in excess of its net realisable value.

3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by class of business
Sale of beer
10,362,465
9,528,825
Contracted canning and bottling
2,598,609
2,326,103
12,961,074
11,854,928

 

2024
2023
£
£
Turnover analysed by geographical market
UK
12,731,331
11,617,483
Non-UK
229,743
237,445
12,961,074
11,854,928
4
Operating profit
2024
2023
Operating profit for the year is stated after charging:
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
21,450
20,450
Depreciation of owned tangible fixed assets
291,844
322,468
Depreciation of tangible fixed assets held under finance leases
126,368
120,701
Loss on disposal of tangible fixed assets
614
-
HEATHER ALE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 18 -
5
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2024
2023
Number
Number
Production
50
50
Management
16
22
Directors
3
3
Total
69
75

Their aggregate remuneration comprised:

2024
2023
£
£
Wages and salaries
1,823,802
1,916,289
Social security costs
171,875
178,850
Pension costs
37,229
38,767
2,032,906
2,133,906
6
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
68,126
81,419
Company pension contributions to defined contribution schemes
1,444
1,877
69,570
83,296

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2023 - 3).

7
Interest payable and similar expenses
2024
2023
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
95,697
81,307
Other finance costs:
Interest on finance leases and hire purchase contracts
15,719
29,770
111,416
111,077
HEATHER ALE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 19 -
8
Taxation
2024
2023
£
£
Current tax
Adjustments in respect of prior periods
-
0
(21,648)
Deferred tax
Origination and reversal of timing differences
(4,684)
(7,599)
Adjustment in respect of prior periods
-
0
2,701
Total deferred tax
(4,684)
(4,898)
Total tax credit
(4,684)
(26,546)

The actual credit for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:

2024
2023
£
£
Loss before taxation
(49,098)
(13,002)
Expected tax credit based on the standard rate of corporation tax in the UK of 25.00% (2023: 19.49%)
(12,275)
(2,534)
Tax effect of expenses that are not deductible in determining taxable profit
1,115
824
Adjustments in respect of prior years
-
0
(21,648)
Depreciation on assets not qualifying for tax allowances
6,422
(4,214)
Deferred tax adjustments in respect of prior years
-
0
2,700
Remeasurement of deferred tax for changes in tax rates
-
0
(1,674)
Movement in deferred tax not recognised
54
-
0
Taxation credit for the year
(4,684)
(26,546)

In addition to the amount credited to the profit and loss account, the following amounts relating to tax have been recognised directly in other comprehensive income:

2024
2023
£
£
Deferred tax arising on:
Revaluation of property
37,500
56,213

 

HEATHER ALE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 20 -
9
Tangible fixed assets
Freehold buildings
Assets under construction
Plant and equipment
Fixtures and fittings
Computers
Motor vehicles
Total
£
£
£
£
£
£
£
Cost or valuation
At 1 May 2023
1,250,000
641,358
5,680,303
921,701
137,006
190,615
8,820,983
Additions
-
0
39,388
196,863
-
0
5,766
28,836
270,853
Disposals
-
0
-
0
(39,490)
-
0
-
0
-
0
(39,490)
Revaluation
150,000
-
0
-
0
-
0
-
0
-
0
150,000
At 30 April 2024
1,400,000
680,746
5,837,676
921,701
142,772
219,451
9,202,346
Depreciation and impairment
At 1 May 2023
-
0
-
0
3,453,812
667,984
81,264
149,705
4,352,765
Depreciation charged in the year
-
0
-
0
351,309
38,057
12,011
16,835
418,212
Eliminated in respect of disposals
-
0
-
0
(18,876)
-
0
-
0
-
0
(18,876)
At 30 April 2024
-
0
-
0
3,786,245
706,041
93,275
166,540
4,752,101
Carrying amount
At 30 April 2024
1,400,000
680,746
2,051,431
215,660
49,497
52,911
4,450,245
At 30 April 2023
1,250,000
641,358
2,226,491
253,717
55,742
40,910
4,468,218
HEATHER ALE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 21 -

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

2024
2023
£
£
Plant and equipment
608,052
657,923
Motor vehicles
41,735
12,863
649,787
670,786

The fair value of the property is based on valuations carried out by an independent valuer at February 2024. The fair value of the property has been arrived at on the basis of a valuation carried out by Shepherd Chartered Surveyors, who are not connected with the company. Shepherd Chartered Surveyors hold a recognised, relevant qualification and are sufficiently experienced with regard to the location and class of property.

The following assets are carried at valuation. If the assets were measured using the cost model, the carrying amounts would be as follows:

Freehold land and buildings
2024
2023
£
£
Cost
1,025,148
1,025,148
10
Fixed asset investments
2024
2023
£
£
Unlisted investments
302,078
302,078
11
Associates

Details of the company's associates at 30 April 2024 are as follows:

Name of undertaking
Registered office
Nature of business
Class of
% Held
shares held
Direct
Drygate Brewing Company Ltd
See below
Manufacture of beer
Ordinary
40.00

The registered address of Drygate Brewing Company Ltd is 85 Drygate, Glasgow, United Kindgom, G4 0UT.

HEATHER ALE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 22 -
12
Stocks
2024
2023
£
£
Raw materials and consumables
907,327
1,120,649
Work in progress
300,671
288,828
Finished goods and goods for resale
922,816
855,021
2,130,814
2,264,498

 

13
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
2,775,822
2,687,333
Corporation tax recoverable
3,523
3,523
Other debtors
1,476
-
0
2,780,821
2,690,856

At the year-end, the value of trade debt subject to an invoice finance agreement was £2,084,326 (2023: £1,788,412).

 

Trade debtors above are stated net of a bad debt provision for £180 (2023: £69,022).

14
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Bank loans and invoice finance
16
2,498,282
1,440,054
Obligations under finance leases
17
100,222
161,073
Other borrowings
16
592,618
309,214
Trade creditors
1,007,080
624,614
Taxation and social security
411,538
434,621
Other creditors
8,262
15,062
Accruals and deferred income
848,878
2,391,656
5,466,880
5,376,294

Obligations under finance leases are secured on the assets to which they relate.

At the reporting date, there had been a breach of the financial covenants attached to one of the entity's term loan agreements with the bank. The carrying amount of the term loan at the year end is £801k and has been presented as current as a result of the breach. Following the reporting date, the bank have waived the covenant breach. Additionally, the company have also consolidated two of their existing bank loan agreements and have entered into a new loan agreement at February 2025. This new loan agreement has revised financial covenants attached which the directors have considered as part of their going concern assessment, and are forecasting to pass.

HEATHER ALE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 23 -
15
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Bank loans
16
416,663
1,095,959
Obligations under finance leases
17
60,420
88,701
Other borrowings
16
353,000
-
0
830,083
1,184,660

Obligations under finance leases are secured on the assets to which they relate.

Amounts included above which fall due after five years are as follows:
Payable by instalments
118,189
175,963
16
Loans and overdrafts
2024
2023
£
£
Bank loans and invoice finance
2,914,945
2,536,013
Other borrowings
945,618
309,214
3,860,563
2,845,227
Payable within one year
3,090,900
1,749,268
Payable after one year
769,663
1,095,959

Bank loans are secured by a floating charge over the company's assets. One bank loan is due for repayment by January 2030 and incurs interest charges of 2.5% per annum, plus base rate, while the other is due for repayment by April 2027 and incurs interest charges of 4.0% per annum, plus base rate.

 

Freehold land and buildings with a carrying amount of £1,400,000 (2023 - £1,250,000) have been pledged to secure bank borrowings of the company. The company is not allowed to pledge these assets as security for other borrowings or to sell them to another entity.

17
Finance lease obligations
2024
2023
Future minimum lease payments due under finance leases:
£
£
Within one year
100,222
161,073
In two to five years
60,420
88,701
160,642
249,774

Finance lease payments represent rentals payable by the company for certain items of plant and machinery. The average remaining lease term is 1.6 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

HEATHER ALE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 24 -
18
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

Liabilities
Liabilities
2024
2023
Balances:
£
£
Accelerated capital allowances
338,307
355,242
Short term timing differences
(297)
(59)
Losses and other deductions
(103,252)
(115,741)
Capital gains
93,713
56,213
328,471
295,655
2024
Movements in the year:
£
Liability at 1 May 2023
295,655
Effect of change in tax rate - profit or loss
(4,684)
Effect of change in tax rate - other comprehensive income
37,500
Liability at 30 April 2024
328,471

 

19
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
37,229
38,767

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
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
2,000
2,000
2,000
2,000
21
Reserves

Profit and loss reserves represent accumulated profits for the year and prior periods, less dividends paid.

The revaluation reserve records the revaluation of assets in excess of historic cost and the related deferred tax impact.

HEATHER ALE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 25 -
22
Events after the reporting date

At February 2025, the company consolidated their existing loan facilities. This involved the repayment of two of their existing bank loans, and they entered into a new term loan agreement for the value of £980k. The loan is subject to interest of 2.5% per annum plus base rate, and the agreement is for a period of 10 years. This has not had a significant impact on the level of debt held by the company.

23
Related party transactions
Remuneration of key management personnel

The remuneration of key management personnel is as follows.

2024
2023
£
£
Aggregate compensation
186,003
208,684
Transactions with related parties

During the year the company entered into the following transactions with related parties:

Sales
Purchases
2024
2023
2024
2023
£
£
£
£
Entities under common control
657,269
596,607
329,151
323,866
Other related parties
-
0
86,981
-
-

The following amounts were outstanding at the reporting end date:

2024
2023
Amounts due to related parties
£
£
Entities under common control
487,232
316,524

The following amounts were outstanding at the reporting end date:

2024
2023
Amounts due from related parties
£
£
Entities under common control
430,652
555,701
Other related parties
-
9,561
HEATHER ALE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 26 -
24
Directors' transactions
Description
% Rate
Opening balance
Amounts advanced
Amounts repaid
Closing balance
£
£
£
£
Loan from director
-
26,299
100,000
(15,000)
111,299
Loan from director
-
-
200,000
-
200,000
26,299
300,000
(15,000)
311,299
25
Ultimate controlling party

The ultimate controlling party is Scott Williams.

26
Cash (absorbed by)/generated from operations
2024
2023
£
£
(Loss)/profit for the year after tax
(44,414)
13,544
Adjustments for:
Taxation credited
(4,684)
(26,546)
Finance costs
111,416
111,077
Loss on disposal of tangible fixed assets
614
-
Depreciation and impairment of tangible fixed assets
418,212
443,169
Movements in working capital:
Decrease/(increase) in stocks
133,684
(812,163)
Increase in debtors
(86,442)
(115,989)
(Decrease)/increase in creditors
(576,178)
1,436,078
Cash (absorbed by)/generated from operations
(47,792)
1,049,170
27
Analysis of changes in net debt
1 May 2023
Cash flows
Other non-cash changes
30 April 2024
£
£
£
£
Cash at bank and in hand
145,868
(101,397)
-
44,471
Borrowings excluding overdrafts
(2,845,227)
(397,796)
(617,540)
(3,860,563)
Obligations under finance leases
(249,774)
89,132
-
(160,642)
(2,949,133)
(410,061)
(617,540)
(3,976,734)
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