The directors present the strategic report for the period ended 31 March 2024.
Coterie Holdings UK Limited was incorporated on 15 May 2023 and this is the first year that consolidated group accounts have been produced. Group turnover in the period totalled £103.4m driven by the addition of Hallgarten & Novum Wines which was acquired in December 2023.
The group is financed by a £14.5m loan with HSBC and from loans with other related parties totalling £35.7m.
The group plans to grow through organic growth, acquisitions and collaboration between different businesses within the group to cater for all our customer needs.
Financial Performance
Group revenues for the year ended 31 March 2024 were £103.4m and Adjusted EBITDA was (£4.2m). Adjusted EBITDA is a key performance indicator of the group which the directors monitor on a monthly basis along with other KPIs below.
| Period ended 31 March 2024 |
Revenue | £103.4m |
Gross profit margin | 18.4% |
Adjusted EBITDA | (£4.2m) |
Business Unit Review
The group comprises several wine related businesses covering private client sales, national distribution, wine storage, and lending against wine collections. The financial year covered a challenging period for the wine industry with the wine market showing a significant decline in pricing, and demand slowing particularly in the private client space.
Our private client business Lay & Wheeler faced strong headwinds and saw a sales decline of 7.9% on prior year. Conversely, our national distributor Hallgarten and Novum Wines delivered a strong performance. Revenue for the 15 months to 31 March 2024 was £74.3m compared to £60.9m in the year ended 31 December 2022, delivering operating profit of £2.0m versus £2.3m in the prior year, the decline driven by a change to the accounting period meaning that the most recent financial year included January to March in both 2023 and 2024, with this period of the year historically being loss-making.
Coterie Vaults opened its first purpose-built wine warehouse during the year, with the facility starting to be filled with the migration of Lay & Wheeler’s stock and client stock. Coterie Amphorae Company Limited, trading as Jera, continued to grow its loan book with a mix of private client collectors and commercial clients taking out loans with their wine stock used as collateral.
Summary
This period saw the group develop strong foundations with the opening of a bespoke wine storage warehouse along with the market launch of Jera, our wine lending platform. The acquisition of Hallgarten and Novum Wines was a key strategic move for the group with very encouraging early performance. Lay & Wheeler had a challenging year due to market conditions in the private client wine market.
The Board have conducted a risk review and identified the following principal risks:
Economic Risk
The group has a diverse customer base ranging from private individuals to large hospitality clients and multiple grocers. This diversification has provided some buffer against the economic headwinds that the UK has faced over recent times with an inflationary environment and interest rate hikes having negative impacts. We believe that the group is well balanced to be able to withstand these economic challenges.
Liquidity Risk
The group may face difficulty in managing working capital. The group monitors cash flows regularly and its main lender is with its parent company, with one 3rd party commercial mortgage facility with its bank. The group has a strong relationship with its bank and following a year of significant investment is expecting to improve its working capital position over time. The group’s parent company will remain supportive for the foreseeable future.
Credit Risk
A significant proportion of the group’s business is selling wines to hotels, bars and restaurants. Such businesses carry a high level of credit risk and the company has credit insurance to ensure the group is protected from significant bad debt and operates an effective credit screening and cash collection process.
Foreign Exchange Risk
Almost all products sold are purchased in a foreign currency which can impact the group’s profitability depending on movements in exchange rates. The group follows a policy seeking to protect the underlying profitability through entering into foreign exchange instruments to cover existing liabilities and a proportion of anticipated needs.
Interest Rate Risk
The group’s cost of debt may fluctuate with interest rates. The group is not currently exposed to fluctuating interest rates and does not believe any hedging is required at this time.
Regulation Risk
The sale of alcohol is strictly controlled through licensing and regulations. The group promotes awareness and best practice within its businesses and uses third party legal advice where necessary. Regulatory developments are routinely monitored to ensure potential changes are identified.
Counterfeit Wines
The group buys and stores wines for private clients, and supply wines to customers in hospitality and multiple grocers. To ensure that the provenance of the wines in our warehouse can be trusted we have invested in a state of the art authentication process where we perform physical condition checks on the wines as they arrive into our facility.
Environmental Risk
Fine wine production is subject to climate and seasonal pressures outside of the group’s control which impacts yields, pricing and demand. The business carefully monitors these environmental pressures during the growing season and works to ensure that the business is prepared for adverse impacts.
On behalf of the board
The directors present their annual report and financial statements for the period ended 31 March 2024.
The results for the period are set out on page 11.
In Hallgarten Wines Limited ordinary dividends were paid amounting to £2,700,000. The directors do not recommend payment of a further dividend
The directors who held office during the period and up to the date of signature of the financial statements were as follows:
Riches & Company were appointed as auditor to the group and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
As the group has not consumed more than 40,000 kWh of energy in this reporting period, it qualifies as a low energy user under these regulations and is not required to report on its emissions, energy consumption or energy efficiency activities.
The group has followed the 2019 HM Government Environmental Reporting Guidelines. The group has also used the GHG Reporting Protocol – Corporate Standard and have used the 2020 UK Government’s Conversion Factors for Company Reporting.
The two subsidiaries that are included in the note are Hallgarten Wines Limited and Coterie Vaults Limited.
Following the director's review, we have determined that our most significant emissions arise from purchased electricity at our premises within Scope 2 and distribution emissions and business mileage withing Scope 1 and Scope 3 activities. The group has used the 2024 UK Government Conversion Factors for Company Reporting and applied these factors to the measured quantities of energy.
Distribution of finished goods is carried out directly by the group and also contracted out to third parties. Energy consumption has been calculated in reference to average milage.
Business mileage is miles used over the full year, multiplied using the Total Kg CO2e conversion rate for an average vehicle taken from the GHG conversion factors on GOV.UK website.
Purchased electricity have been taken from invoices and multiplied using the Total Kg CO2e conversion rate taken from the GHG conversion factors on GOV.UK website.
Hallgarten Wines Limited has now changed their financial year and as a result the current reporting period covers 15 months (1 January 2023 to 31 March 2024). Due to Hallgarten being acquired using a locked box mechanism with the locked dated being 31 December 2022, we deem it acceptable to include the full 15 months in the 2024 figures.
Merger accounting was used to consolidate the results of Coterie Vaults Limited as this was a group reconstruction. Therefore, included in the 2024 group energy figures are Coterie Vaults Limited’s figures for the financial year to 1 April 2024.
The chosen intensity measurement ratio is total gross emissions in metric tonnes CO2e per £1m of revenue.
During the reporting year, Hallgarten have implemented several initiatives in an effort to further reduce its carbon emissions and footprint. These include:
Increase of the Electric Vehicle leasing scheme participants within the organisation.
Move to sustainable sources of electricity servicing the company offices.
Changes to the way wines are imported to reduce the number of sea journeys
During the reporting year, Coterie Vaults has implanted a sustainable source of electricity ( Photovoltaic Panels) to further reduce its carbon emissions and footprint. The amount of CO2 saved using these is 25.20 KWh. 23% of the total energy used since implementation in Oct 23 was using Solar panels.
We have audited the financial statements of Coterie Holdings UK Limited (the 'parent company') and its subsidiaries (the 'group') for the period ended 31 March 2024 which comprise the group profit and loss account, the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows, the company 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).
Basis for opinion
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
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 period 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.
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 specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud are detailed below.
The key procedures we undertook to detect irregularities including fraud during the course of the audit included:
· Identifying and testing journal entries and the overall accounting records, in particular those that were significant and unusual.
· Reviewing the financial statement disclosures and determining whether accounting policies have been appropriately applied.
· Reviewing and challenging the assumptions and judgements used by management in their significant accounting estimates, in particular in relation to depreciation and impairment of fixed assets.
· Assessing the extent of compliance, or lack of, with the relevant laws and regulations.
· Testing key revenue lines, in particular cut-off, for evidence of management bias.
· Obtaining third-party confirmation of material bank balances.
· Reviewing other documentation for irregularities including fraud.
There are inherent limitations in the audit procedures described above 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. Also, 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 deliberate concealment by, for example,
forgery or intentional misrepresentations, or through collusion
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.
Additionally, the auditor's responsibilities are to obtain sufficient appropriate audit evidence regarding the financial
information of the entities or business activities within the group to express an opinion on the group financial
statements. The auditor is responsible for the direction, supervision and performance of the group audit, and the
auditor remains solely responsible for the auditor's opinion.
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.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes.
Coterie Holdings UK Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Ground Floor, Egerton House, 68 Baker Street, Weybridge, Surrey, England, KT13 8AL.
The group consists of Coterie Holdings UK Limited and all of its subsidiaries.
This is the first set of accounts since incorporation on 15 May 2023 made up to 31 March 2024.
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.
These group and company financial statements for the period ended 31 March 2024 are the first financial statements of Coterie Holdings UK Limited and the group prepared in accordance with FRS 102, The Financial Reporting Standard applicable in the UK and Republic of Ireland.
The consolidated group financial statements consist of the financial statements of the parent company Coterie Holdings UK Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.
Coterie Amphorae Company Limited, Coterie Holdings UK Limited and Hallgartern Wines Limited financial statements are made up to 31 March 2024. Coterie Vaults Limited, Coterie Vaults Holding Limited and Lay & Wheeler Limited financial statements are made up to 1 April 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
Entities in which the group holds an interest and which are jointly controlled by the group and one or more other venturers under a contractual arrangement are treated as joint ventures. Entities other than subsidiary undertakings or joint ventures, in which the group has a participating interest and over whose operating and financial policies the group exercises a significant influence, are treated as associates.
Investments in joint ventures and associates are carried in the group balance sheet at cost plus post-acquisition changes in the group’s share of the net assets of the entity, less any impairment in value. The carrying values of investments in joint ventures and associates include acquired goodwill.
If the group’s share of losses in a joint venture or associate equals or exceeds its investment in the joint venture or associate, the group does not recognise further losses unless it has incurred obligations to do so or has made payments on behalf of the joint venture or associate.
Unrealised gains arising from transactions with joint ventures and associates are eliminated to the extent of the group’s interest in the entity.
At the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
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.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), 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.
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 recognised in the profit and loss account.
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
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 group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Investments in associates are initially recognised at the transaction price (including transaction costs) and are subsequently adjusted to reflect the group’s share of the profit or loss, other comprehensive income and equity of the associate using the equity method. Any difference between the cost of acquisition and the share of the fair value of the net identifiable assets of the associate on acquisition is recognised as goodwill. Any unamortised balance of goodwill is included in the carrying value of the investment in associates.
Losses in excess of the carrying amount of an investment in an associate are recorded as a provision only when the company has incurred legal or constructive obligations or has made payments on behalf of the associate.
In the parent company financial statements, investments in associates are accounted for at cost less impairment.
Entities in which the group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.
At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible 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.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
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 profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
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 profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
The group 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 group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and 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, 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.
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Financial assets, other than those held at fair value through profit and loss, 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 profit or loss.
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 profit or loss.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group 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.
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 group after deducting all of its liabilities.
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, 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.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
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.
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group 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 group.
The tax expense represents the sum of the tax currently payable and deferred 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.
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 if, and only if, there is 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.
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.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
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 leased asset are consumed.
In the application of the group’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.
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Stock valuation
Stock is valued at the lower of cost and net realisable value. Net realisable value includes, where necessary, provisions for slow moving and obsolete stocks. Calculation of these provisions requires judgements to be made, which include forecast consumer demand, the promotional, competitive and economic environment and inventory loss trends.
En Primeur & wine lying abroad
En Primeur involves the sale and purchase of wine prior to bottling. Up to three years subsequent to the initial En Primeur offering the wine is released by the Chateau and is made available to the customer for delivery. Revenue and the corresponding gross profit is deferred until the wine is released and becomes available to the customer.
Payments to suppliers are treated as prepayments and receipts from customers treated as deferred income. In addition, an entry in the financial statement is made on initial agreement between the vineyard and the company for the purchase of En Primeur wine which is included in both debtors and creditors. Balances are recognized in debtors and creditors on the earliest of a purchase order being sent to the vineyard, an invoice being received by the company or payment being made. The cost is deferred until the wine is released, matching the recognition of the revenue.
Recoverability of intercompany balances
Due to current macro economic factors impacting business performance of other members of the group, there is uncertainty surrounding the recoverability of intercompany balances. Management regularly assess balances due between group entities and whether these are recoverable. Where it is considered that the future cash flows of these debts are less than the carrying amount in the individual company financial statements, appropriate provisions are made against these balances to reflect the recoverability of the asset
Valuation of investment property
During the year the investment property was valued by Allsop LLP Chartered Surveyors, using the direct comparison method of valuation. This method of valuation uses an open market value basis by reference to market evidence of transaction prices for similar properties. As a result market value is subject to judgement and estimation based on a number of factors such as property size and location.
Going Concern
In assessing going concern the directors prepare a cash flow forecast covering a 12 month period from the date of approval of the financial statements. In preparing these forecasts, the Company has considered the principal areas of uncertainty within the forecasts and the underlying assumptions, in particular those relating to market risks, cost management and working capital management. There are potentially significant sensitivities to this cash flow forecast given challenging trading conditions and factors outside the company control.
The non audit services include consolidating the group figures and drafting the group financial statements.
The average monthly number of persons (including directors) employed by the group and company during the period was:
Their aggregate remuneration comprised:
The actual charge for the period can be reconciled to the expected credit for the period based on the profit or loss and the standard rate of tax as follows:
Included in freehold land and buildings are assets currently under construction of £433,047 which are not being depreciated. There were assets under construction brough forward of £19,976,718, additions during the period of £1,661,911, of which £21,205,582 has already been transferred to freehold land and buildings.
The freehold land and buildings is comprised of a warehouse at Unit 6 Blackacre Road, Great Blakenham, Ipswich. This property is owned by Coterie Vaults Holding Limited and is rented, in its entirety, to Coterie Vaults Limited who use it for the purposes of their trade. In the accounts of Coterie Vaults Holdings Limited this property is classified as an investment property. However, within these consolidated accounts, in accordance with FRS102 paragraph 16.4, the property has been reclassified as property, plant and equipment measured at fair value using the revaluation model.
The fair value of the investment property has been arrived at on the basis of a valuation carried out at 29 September 2023 by Allsop LLP Chartered Surveyors, who are not connected with the company. The valuation was made on an open market value basis by reference to market evidence of transaction prices for similar properties. This valuation has resulted in a £6,143,112 revaluation which is included in revaluation reserves.
Details of the company's subsidiaries at 31 March 2024 are as follows:
Included in other debtors are interest bearing and interest-free loans to related parties and third parties totalling £5,750,000. These loans have been fully repaid since the year end.
Included in other creditors are interest bearing and interest-free loans to related parties and third parties totalling £9,353,724. These loans are disclosed in detail in the related party note 31.
As at the year end the company has outstanding fixed and floating charges held against their assets. These are disclosed in detail in the contingent liabilities note 28.
On 18 May 2022, Coterie Vaults Holdings Ltd entered into a facility agreement up to a maximum of £13,850,000 with HSBC at an interest rate of 4.75% and repayable by October 2023. The interest is subject to a guarantee by a related party through mutual control up to a maximum of £1,000,000. The agreement includes a fixed charge over specific fixed assets of the company. This was refinanced in the year in December 2023 where the company entered into a facility agreement up to a maximum of £14,500,000 at an interest rate of 7.5% and is repayable by December 2028.
On 29 March 2024 Coterie Amphorae Company Limited entered into a loan agreement with Jubilee Glory Investments Limited, domiciled in the British Virgin Islands. The loan amount was £10,000,000 with the interest rate of SONIA plus 2% and is due for repayment on 30 April 2027.
Coterie Holdings UK Limited have entered into 3 loan agreements with Coterie Ltd. This is the parent undertaking, domiciled in the Cayman Islands., On 31 August 2023 the first loan amount was £2,500,000 with the interest of 7% per annum and the repayment due on 31 December 2025. On 12 December 2023 the second loan amount was £17,523,000 with the interest of 7% per annum and the repayment due on 31 December 2028. On 1 March 2024 the third loan amount was £5,000,000 with the interest of 7% per annum and the repayment is due on 30 August 2024. All loans are unsecured and will be settled in cash.
Finance lease payments represent rentals payable by Lay & Wheeler Limited and Coterie Vaults Holding Limited for certain items of plant and machinery and motor vehicles.
Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of
the assets. The average lease term is 5 years. All leases are on a fixed repayment basis and no arrangements
have been entered into for contingent rental payments.
Provision is made by a subsidiary company for estimated dilapidations, including reinstatement costs, where there is an obligation to restore leased premises to their original condition upon vacating them under the terms of the lease.
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The
following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Deferred income is included in the financial statements as follows:
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
On 19 December 2023 the group acquired 100 percent of the issued capital of Hallgarten Wines Limited.
HSBC UK Bank Plc has security over of all of Coterie Holdings UK Limited’s assets under a debenture dated 6 December 2023. The security for the payment of the debt is leal mortgage over all freehold and leasehold land that they own, a first fixed charge over all present and future right, title and interest and a floating charge over all present and future assets except as effectively mortgage. Unlimited Multilateral Guarantee dated 06 December 2023 given by Coterie Vaults Holdings Limited, Coterie Vaults Limited, Coterie Holdings UK Limited, Lay & Wheeler Limited
A deed was created on 18 August 2023 between Fortwell Capital Limited as the Security Agent and Coterie Holdings UK Limited, Coterie Amphorae Company Limited and Coterie Limited as the Assignors. As continuing security for the payment of the Secured Liabilities, each Assignor with full title guarantee assigns the Security Agent all of its present and future rights and interest in:
any Subordination Loan Agreed,
the Subordinated Debt; and
other security of any nature now or in the future held by any Assignor in respect of any Subordinated Loan Agreement and Subordinated Debt and all money now or at any time in the future due or owing to any Assignor under or in connection with them.
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
Subsequent to the period end, the directors of Hallgarten Wines Limited declared a dividend of £770,000 be paid to the ordinary shareholders. The amount was paid in full in April 2024.
On 13 May 2024 Coterie Amphorae Company Limited entered into a loan agreement with Coterie Holdings UK Limited. The loan amount was £10,000,000 with the interest rate of SONIA plus 2% and is due for repayment on 30 April 2027.
Subsequent to the period end Coterie Holdings UK Limited acquired Global Wine Solutions for an initial consideration of £2,000,000.
On 1 November 2022, Coterie Amphorae Company Limited issued a loan to fellow subsidiary Lay and Wheeler Limited, incorporated in the United Kingdom. The loan amount was £2,000,000 with an interest rate of 10% per annum, and is due for repayment on On 1 November 2025. The amounts outstanding are unsecured and will be settled in cash. During the period, interest receivable amounted to £118,610. The balance outstanding at year end amounted to £795,507.
On 17 April 2023, Coterie Amphorae Company Limited issued a loan to fellow subsidiary Coterie Vaults Holdings Limited, incorporated in the United Kingdom. The loan amount was £2,219,430 with an interest rate of 7% per annum, and is due for repayment on 17 April 2026. The amounts outstanding are unsecured and will be settled in cash. During the period, interest receivable amounted to £102,168. The balance outstanding at year end amounted to £1,799,445
On 15 October 2022, Coterie Amphorae Company Limited entered into a loan agreement with Coterie Limited, incorporated in the Cayman Islands. The loan amount was £3,000,000 with the interest rate of 3% per annum and is due for repayment on 31 October 2025. The amounts outstanding are unsecured and will be settled in cash. During the period, interest payable amounted to £85,397.The balance outstanding at year end amounted to £1,035,425.
On 29 March 2024, Coterie Amphorae Company Limited entered into a loan agreement with Jubilee Glory Investments Limited, domiciled in the British Virgin Islands. The loan amount was £10,000,000 with the interest rate of SONIA plus 2% and is due for repayment on 30 April 2027. The amounts outstanding are unsecured and will be settled in cash. During the period, interest payable amounted to £548,473. The balance outstanding at year end amounted to £9,247,396.
On 4 July 2022 Lay & Wheeler Limited entered into a loan agreement with Coterie Limited for the amount of £1,103,734. Following the groups reconstruction, the loan was novated on 31 October 2024 and it has been transferred from Coterie Limited to Coterie Holdings UK Limited, increasing the loan amount to £1,353,734. This is an interest free loan and it is due for repayment on 31 October 2026. This loan is not secured by collateral.
On 9 May 2023 Coterie Vaults Holdings Limited entered into a loan agreement with Coterie Limited for the amount of £8,000,000. Following the groups reconstruction, the loan was novated on 31 October 2024 and it has been transferred from Coterie Limited to Coterie Holdings UK Limited, with the loan amount remaining £8,000,000. The interest rate is 7% per annum and the loan is due for repayment on 31 October 2026. This loan is not secured by collateral.