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Registered number: 14589919










BLACK SHEEP BREWING COMPANY LIMITED










ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 31 MARCH 2024

 
BLACK SHEEP BREWING COMPANY LIMITED
 
 
COMPANY INFORMATION


Directors
N Gostelow 
R Robinson 
J Theakston 
R Theakston 
M Welden 




Registered number
14589919



Registered office
14th Floor
33 Cavendish Square

London

W1G 0PW




Independent auditors
Sumer Auditco Limited
Chartered Accountant & Statutory Auditors

14th Floor

33 Cavendish Square

London

W1G 0PW





 
BLACK SHEEP BREWING COMPANY LIMITED
 

CONTENTS



Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditors' report
5 - 8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Notes to the financial statements
12 - 28

 
BLACK SHEEP BREWING COMPANY LIMITED
 
 
STRATEGIC REPORT
FOR THE PERIOD ENDED 31 MARCH 2024

Introduction
 
The directors present their strategic report, which is followed by the directors' report, together with audited financial statements for the period ended 31 March 2024.

Business review
 
This is first period of results for Black Sheep Brewing Company within the Keystone Brewing Group.  The company has benefited from investment in it brewing facilities in Masham (North Yorkshire), which will facilitate future growth. Equally, significant investment has been made in the Sales and Marketing teams providing a strong platform to enable the brand to be appropriately represented in the marketplace. 
The investment will allow strategic partnerships to be developed creating further growth opportunities. We will continue to invest in the right retail establishments growing the existing presence, creating further opportunities to show case the brand.

Principal risks and uncertainties
 
The business continues to sell alcoholic drinks predominantly to the UK market thus the main challenges and risks for the business are a prolonged further softening of demand alongside the increased rates for inflation and interest costs. To the extent that demand exists in the sector the business has a comprehensive spread of customers ensuring volume.

The Company’s operations expose it to a variety of financial risks including the effects of changes in interest rates on debt, credit risk and liquidity risk. The Company’s principal financial instruments comprise bank and shareholder loans, trade debtors and trade creditors that arise from its operations. The main risk arising from the Company’s financial instruments can be analysed as follows:
Interest risk

The Company's interest rate exposure arises mainly from its interest-bearing borrowings. The Company monitors the financial risk of interest rate movements on a regular basis and the impact rises would have on profitability.

Credit risk

All debtors are subject to credit verification procedures by the Company. Debtors are reviewed on a regular basis and provision is made for doubtful debts when necessary.

Liquidity risk

The Company actively manages its working capital requirement to ensure it has sufficient liquid resources to meet the operating needs of the business.
 
Page 1

 
BLACK SHEEP BREWING COMPANY LIMITED
 

STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 MARCH 2024


Financial key performance indicators
 
The Company consider the following KPIs to be the key performance indicators: 

Turnover and year and year on year growth will remain one of the main KPI’s for the group alongside maintaining a growing the gross margin. Whilst 40% gross margin was achieved in to the year ending 31st March 2024 the Company is aiming for gross margin above 40% moving forward.  The success of these metrics will be evidenced in the next years accounts with this being the first year of submission. Operationally the business focuses on stock holding, debtor days as well as yields from the brewing process.



2024
£
Turnover

11,135,694

Gross Profit

4,481,098

Gross Profit %

40

Operating (Loss)

(2,607,110)

Operating (Loss) %

(23)



This report was approved by the board on 31 March 2025 and signed on its behalf.



M Welden
Director
Page 2

 
BLACK SHEEP BREWING COMPANY LIMITED
 
 
 
DIRECTORS' REPORT
FOR THE PERIOD ENDED 31 MARCH 2024

The directors present their report and the financial statements for the period ended 31 March 2024.

Principal activity

The company was incorporated on 13 January 2023. The principal activity of the company for the year is that of manufacturing and wholesaler of alcohol and other drinks.

Directors

The directors who served during the period were:

N Gostelow (appointed 12 May 2023)
C Lyons (appointed 23 May 2023, resigned 14 November 2024)
R Robinson (appointed 12 May 2023)
J Theakston (appointed 23 May 2023)
R Theakston (appointed 23 May 2023)
M Welden (appointed 12 May 2023)
B Osborne (appointed 13 January 2023, resigned 12 May 2023)

Directors' responsibilities statement

The directors are responsible for preparing the Strategic report, the 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.

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


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

make judgments and accounting estimates that are reasonable and prudent;

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Results and dividends

The loss for the period, after taxation, amounted to £3,156,180.



Page 3

 
BLACK SHEEP BREWING COMPANY LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 MARCH 2024

Matters covered in the Strategic report

The directors have chosen to disclose information on the following, required by the Companies Act 2006, to be included in the Director's Report, within the Strategic Report;

information on financial risk management and policies;
information on suppliers, customers and other; and 
information regarding future developments of the business and post balance sheet events.

Disclosure of information to auditors

Each of the persons who are directors at the time when this Directors' report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the Company's auditors are unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

Auditors

The auditors.Sumer Auditco Limited will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board on 31 March 2025 and signed on its behalf.
 





M Welden
Director
Page 4

 
BLACK SHEEP BREWING COMPANY LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF BLACK SHEEP BREWING COMPANY LIMITED
 

Opinion


We have audited the financial statements of Black Sheep Brewing Company Limited (the 'Company') for the period ended 31 March 2024, which comprise the Statement of comprehensive income, the Balance sheet, the Statement of changes in equity and the related notes, including a summary of significant accounting policiesThe financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).


In our opinion the financial statements:


give a true and fair view of the state of the Company's affairs as at 31 March 2024 and of its loss for the period then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.


Basis for opinion


We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.


Conclusions relating to going concern


In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.


Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the 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.


Page 5

 
BLACK SHEEP BREWING COMPANY LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF BLACK SHEEP BREWING COMPANY LIMITED (CONTINUED)


Other information


The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' report thereon. The directors are responsible for the other information contained within the Annual ReportOur opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.


We have nothing to report in this regard.


Opinion on other matters prescribed by the Companies Act 2006
 

In our opinion, based on the work undertaken in the course of the audit:


the information given in the 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.


Matters on which we are required to report by exception
 

In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic report or the Directors' report.


We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:


adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.


Responsibilities of directors
 

As explained more fully in the Directors' responsibilities statement set out on page 3, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.


In preparing the financial statements, the directors are responsible for assessing the 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.


Page 6

 
BLACK SHEEP BREWING COMPANY LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF BLACK SHEEP BREWING COMPANY LIMITED (CONTINUED)


Auditors' responsibilities for the audit of the financial statements
 

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.


Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

In order to identify and assess the risks of material misstatements, including fraud and non-compliance with laws
and regulations that could be expected to have a material impact on the financial statements, we have
considered:
 
the results of our enquiries of management and those charged with governance of their assessment of the
risks of fraud and irregularities;
the nature of the company, including its management structure and control systems (including the
opportunity for management to override such controls);
management’s incentives and opportunities for fraudulent manipulation of the financial statements including
the company’s remuneration and bonus policies and performance targets; and
the industry and environment in which it operates.

We also considered UK tax and pension legislation and laws and regulations relating to employment and the
preparation and presentation of the financial statements such as the Companies Act 2006.
Based on this understanding we identified the following matters as being of significance to the entity:
 
Laws and regulations considered to have a direct effect on the financial statements including UK financial
reporting standards, Company Law, tax and pension legislation;
the timing of the recognition of commercial income;
compliance with legislation relating to health and safety and food safety;
management bias in selecting accounting policies and determining estimates;
inappropriate journal entries;
manipulation of specific performance measures to meet remuneration targets;
recoverability of debtors.
 
We communicated the outcomes of these discussions and enquiries, as well as consideration as to where and
how fraud may occur in the entity, to all engagement team members.

Audit procedures undertaken in response to the potential risks relating to irregularities (which include fraud and
non-compliance with laws and regulations) comprised:

enquiries of management and those charged with governance as to whether the entity complies with such
laws and regulations;
enquiries with the same concerning any actual or potential litigation or claims; 
discussion with the same regarding any known or suspected instances of non-compliance with laws and
regulation and fraud;
inspection of relevant legal correspondence;
Page 7

 
BLACK SHEEP BREWING COMPANY LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF BLACK SHEEP BREWING COMPANY LIMITED (CONTINUED)


assessment of matters reported to management and the result of the subsequent investigation;
obtaining an understanding of the relevant controls during the period;
obtaining an understanding of the policies and controls over the recognition of income and testing their
implementation during the year;
review documentation relating to compliance with the regulations;
challenging assumptions made by management in their specific accounting policies and estimates, in
particular relation to purchase accruals and depreciation;
identifying and testing journal entries, in particular any journal entries posted with unusual account
combinations or crediting revenue or cash;
accessing the recovery of debtors in the period since the balance sheet date and challenging assumptions
made by management regarding the recovery of balances which remain outstanding;
challenging key assumptions made by management;
reviewing the financial statements for compliance with the relevant disclosure requirements;
performing analytical procedures to identify any unusual or unexpected relationships or unexpected
movements in account balances which may be indicative of fraud;
reviewing correspondence with HMRC;
evaluating the underlying business reasons for any unusual transactions; and
considered the implementation of controls during the year.

No instances of material non-compliance were identified. However, the likelihood of detecting irregularities,
including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the entity’s
controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud
might be inherently more difficult to detect than irregularities that result from error. As explained above, there is
an unavoidable risk that material misstatements may not be detected, even though the audit has been planned
and performed in accordance with ISAs (UK).


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


Use of our report
 

This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.





James Hallett (ACA) (Senior statutory auditor)
for and on behalf of
Sumer Auditco Limited
Chartered Accountant
Statutory Auditors
14th Floor
33 Cavendish Square
London
W1G 0PW

31 March 2025
Page 8

 
BLACK SHEEP BREWING COMPANY LIMITED
 
 
STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 31 MARCH 2024

Period ended
31 March
2024
Note
£

  

Turnover
 4 
11,135,694

Cost of sales
  
(6,654,596)

Gross profit
  
4,481,098

Administrative expenses
  
(7,088,208)

Operating (loss)
 5 
(2,607,110)

Interest payable and similar expenses
 8 
(549,070)

(Loss) for the financial Period
  
(3,156,180)

There was no other comprehensive income for 2024.

The notes on pages 12 to 28 form part of these financial statements.
Page 9

 
BLACK SHEEP BREWING COMPANY LIMITED
REGISTERED NUMBER: 14589919

BALANCE SHEET
AS AT 31 MARCH 2024

2024
Note
£

Fixed assets
  

Intangible assets
 10 
(1,006,069)

Tangible assets
 11 
5,141,682

  
4,135,613

Current assets
  

Stocks
 12 
968,957

Debtors: amounts falling due within one year
 13 
2,794,224

Cash at bank and in hand
 14 
48,449

  
3,811,630

Creditors: amounts falling due within one year
 15 
(5,115,705)

Net current (liabilities)
  
 
 
(1,304,075)

Total assets less current liabilities
  
2,831,538

Creditors: amounts falling due after more than one year
 16 
(5,987,618)

  

Net (liabilities)
  
(3,156,080)


Capital and reserves
  

Called up share capital 
 18 
100

Profit and loss account
  
(3,156,180)

  
(3,156,080)


The financial statements were approved and authorised for issue by the board and were signed on its behalf on 31 March 2025.




M Welden
Director

The notes on pages 12 to 28 form part of these financial statements.
Page 10

 
BLACK SHEEP BREWING COMPANY LIMITED
 

STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 31 MARCH 2024


Called up share capital
Profit and loss account
Total equity

£
£
£


Comprehensive income for the period

Loss for the period
-
(3,156,180)
(3,156,180)

Shares issued during the period
100
-
100


At 31 March 2024
100
(3,156,180)
(3,156,080)

The notes on pages 12 to 28 form part of these financial statements.

Page 11

 
BLACK SHEEP BREWING COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2024

1.


General information

The company is a private company limited by shares and incorporated in England and Wales. The
address of its registered office is 14th Floor, 33 Cavendish Square, London, W1G 0PW and its trading address is Wellgarth House, Wellgarth Court, Crosshills, Masham, Ripon HG4 4EN.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

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

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

The following principal accounting policies have been applied:

 
2.2

Financial Reporting Standard 102 - reduced disclosure exemptions

The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
the requirements of Section 7 Statement of Cash Flows;
the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
the requirements of Section 33 Related Party Disclosures paragraph 33.7.

This information is included in the consolidated financial statements of Keystone Brewing Group Limited as at 31 March 2024 and these financial statements may be obtained from 14th Floor, 33 Cavendish Square, London, W1G 0PW .

Page 12

 
BLACK SHEEP BREWING COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2024

2.Accounting policies (continued)

 
2.3

Going concern

The Company is party to funding arrangements covering various entities within the Keystone Brewing Group. 
The Company has provided a cross-guarantee to this banking group and so is bound by the covenant requirements of the banking group as a whole. 
In assessing the going concern basis of preparation of the financial statements for the period ended 31 March 2024, the directors have taken into consideration detailed cash flow forecasts for the business within the wider banking group and the forecast compliance with bank covenants, which are set at a banking group level covering a period of at least 12 months from the date of approval of the financial statements. 
The forecasts for the banking group indicate that the group has sufficient liquidity to realise its assets and meet its liabilities as they fall due for a period of at least 12 months from the balance sheet date, and that the banking covenant (based on the consolidated EBITDA of the group) will be met for that period. The current trading performance of the group, provides comfort to the directors in their forecasts. 
As part of the assessment of the going concern principal, management have considered  the risks to the liquidity of the group. Except in the most extreme circumstance such as a prolonged period of reduced sales,  the group has means available to it to manage its cashflows, such that it has sufficient liquidity to meet its covenants, realise its assets and meet its liabilities as they fall due. 
Equally, based on discussions the directors have had with shareholders of the group and the recent commitment from the new investors, they are confident any short-term funding required would be made available. 
Based on the forecasts prepared and the downside scenarios modelled in the directors view the risk of default of bank facilities, and therefore inability to meet liabilities as they fall due, has not been considered a reasonably likely one and so the level of uncertainty is not considered material. Given the above and the current trading performance of the group, the directors are satisfied preparing the financial statements on a going concern basis is appropriate. 

 
2.4

Turnover

Turnover represents sales of goods, net of discounts and rebates, exclusive of Value Added Tax but inclusive of beer duty. Revenue is recognised when control and ownership of the product passes to the customer. Turnover is recognised at the point of delivery of goods for brewery customers and point of sale for retail customers
Turnover is recognised at fair value of the consideration received or receivable for sale of goods and services to external customers in the ordinary course of business. The fair value of consideration takes into account discounts and volume rebates.

 
2.5

Finance costs

Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

Page 13

 
BLACK SHEEP BREWING COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2024

2.Accounting policies (continued)

 
2.6

Borrowing costs

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

 
2.7

Pensions

Defined contribution pension plan

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

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance sheet. The assets of the plan are held separately from the Company in independently administered funds.

 
2.8

Taxation

Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income.


 
2.9

Intangible assets

Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight-line basis to the Statement of comprehensive income over its useful economic life.
Negative goodwill is recognised in the profit and loss in the periods in which non-monetary assets acquired, are recovered through use or sale. 

 The estimated useful lives range as follows:

Intellectual property
-
10
years

Page 14

 
BLACK SHEEP BREWING COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2024

2.Accounting policies (continued)

 
2.10

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

At each reporting date the Company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following basis:

Freehold property
-
2%
Plant and machinery
-
6%-12.5%
Fixtures and fittings
-
33%
Computer equipment
-
33%

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

 
2.11

Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include attributable overheads.

At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.

 
2.12

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

 
2.13

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. 

Page 15

 
BLACK SHEEP BREWING COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2024

2.Accounting policies (continued)

 
2.14

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

 
2.15

Financial instruments

The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” 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 trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, 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.

Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.

Financial liabilities

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

Basic financial liabilities, which include trade and other payables, bank loans and other loans are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.

Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.

Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.
 
Page 16

 
BLACK SHEEP BREWING COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2024

2.Accounting policies (continued)


2.15
Financial instruments (continued)


Derecognition of financial assets

Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Company transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Company will continue to recognise the value of the portion of the risks and rewards retained.

Derecognition of financial liabilities

Financial liabilities are derecognised when the Company's contractual obligations expire or are discharged or cancelled.


3.


Judgments in applying accounting policies and key sources of estimation uncertainty

The preparation of financial statements requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. Estimates and judgements are continually evaluated by the directors and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
The Company makes estimates and assumptions concerning the future. Actual results may differ from these estimates. 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.
Management are also required to exercise judgement in the process of applying the company's accounting policies. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations or future events that are believed to be reasonable under the circumstances.


4.


Turnover

The whole of the turnover is attributable to the company's principal activity.  
Materially, all of turnover arose within the United Kingdom.                                                

Page 17

 
BLACK SHEEP BREWING COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2024

5.


Operating (loss)

The operating (loss) is stated after charging:

Period ended
31 March
2024
£

Amortisation
26,667

Amortisation of negative goodwill
(914,714)

Depreciation
326,981

Audit remuneration
85,000

Operating lease rentals
77,232

Defined benefit contribution cost
174,347


6.


Employees

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


Period ended
31 March
2024
£

Wages and salaries
3,148,878

Social security costs
293,615

Cost of defined contribution scheme
174,347

3,616,840


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


     Period ended
       31 March
        2024
            No.






Directors
5



Brewery
76



Retail
57

138

Page 18

 
BLACK SHEEP BREWING COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2024

7.


Directors' remuneration

Period ended
31 March
2024
£

Directors' emoluments
412,641

Company contributions to defined contribution pension schemes
40,340

452,981


During the period retirement benefits were accruing to 3 directors in respect of defined contribution pension schemes.

The highest paid director received remuneration of £238,080.

The value of the Company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £14,800.

During the period, compensation for loss of office of £53,386 was paid to directors.


8.


Interest payable and similar expenses

Period ended
31 March
2024
£


Bank interest payable
116,684

Other loan interest payable
432,386

549,070


9.


Taxation


Period ended
31 March
2024
£



Total current tax
-
Page 19

 
BLACK SHEEP BREWING COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2024
 
9.Taxation (continued)


Factors affecting tax charge for the period

The tax assessed for the period is higher than the standard rate of corporation tax in the UK of 25%. The differences are explained below:

Period ended
31 March
2024
£


(Loss) on ordinary activities before tax
(3,156,180)


(Loss) on ordinary activities multiplied by standard rate of corporation tax in the UK of 25%
(789,045)

Effects of:


Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
86,407

Capital allowances for period in excess of depreciation
11,400

Short-term timing difference leading to an increase in taxation
4,709

Unrelieved tax losses carried forward
686,529

Total tax charge for the period
-


Factors that may affect future tax charges

The company has estimated tax losses of £4,310,449 available to carry forward against future profits. These losses in part are offset against the deferred tax liability, arising from accelerated capital allowances.  The balance of any losses available to offset against future trading profits are estimated at £3,449,441. No deferred tax asset has been recognised in respect of the losses arising due to the uncertainty as to when the asset will be recovered. 

Page 20

 
BLACK SHEEP BREWING COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2024

10.


Intangible assets



Intellectual property
Negative goodwill
Total

£
£
£



Cost


Additions acquired from acquisition of trade and assets
320,002
(2,214,118)
(1,894,116)



At 31 March 2024

320,002
(2,214,118)
(1,894,116)



Amortisation


Charge for the period on owned assets
26,667
(914,714)
(888,047)



At 31 March 2024

26,667
(914,714)
(888,047)



Net book value



At 31 March 2024
293,335
(1,299,404)
(1,006,069)





Page 21
 


 
BLACK SHEEP BREWING COMPANY LIMITED


 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2024


11.


Tangible fixed assets






Freehold property
Plant and machinery
Motor vehicles
Fixtures and fittings
Computer equipment
Total

£
£
£
£
£
£



Cost


Additions
121,444
974,523
-
16,158
25,444
1,137,569


Additions acquired from acquisition of trade and assets
3,097,855
699,483
42,022
398,491
93,243
4,331,094



At 31 March 2024

3,219,299
1,674,006
42,022
414,649
118,687
5,468,663



Depreciation


Charge for the period on owned assets
47,169
54,054
12,848
180,466
32,444
326,981



At 31 March 2024

47,169
54,054
12,848
180,466
32,444
326,981



Net book value



At 31 March 2024
3,172,130
1,619,952
29,174
234,183
86,243
5,141,682



Page 22
 
BLACK SHEEP BREWING COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2024

12.


Stocks

2024
£

Raw materials and consumables
568,116

Work in progress
53,739

Finished goods and goods for resale
347,102

968,957



13.


Debtors

2024
£


Trade debtors
1,792,990

Amounts owed by group undertakings
736,922

Other debtors
20,936

Prepayments and accrued income
243,376

2,794,224



14.


Cash and cash equivalents

2024
£

Cash at bank and in hand
48,449


Page 23

 
BLACK SHEEP BREWING COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2024

15.


Creditors: Amounts falling due within one year

2024
£

Bank loans
1,782,750

Trade creditors
975,351

Amounts owed to group undertakings
1,078,686

Other taxation and social security
267,043

Other creditors
385,525

Accruals and deferred income
626,350

5,115,705


At the balance sheet date, the bank loans were secured over the property and assets of the company by way of fixed and floating charges.


16.


Creditors: Amounts falling due after more than one year

2024
£

Bank loans
3,936,910

Other Loans
2,050,708

5,987,618


At the balance sheet date, the bank loans were secured over the property and assets of the company by way of fixed and floating charges.
At the balance sheet date, other loans represent amounts due to ultimate parent company shareholders which have a fixed and floating charge over the company’s assets. This debt is subordinated to the bank loans.

Page 24

 
BLACK SHEEP BREWING COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2024

17.


Loans


Analysis of the maturity of loans is given below:


2024
£

Amounts falling due within one year

Bank loans
1,782,750

Amounts falling due 1-2 years

Bank loans
1,003,360

Other loans
2,050,708


3,054,068

Amounts falling due 2-5 years

Bank loans
2,933,550


7,770,368


See notes 15 and 16 for details of security.


18.


Share capital

2024
£
Allotted, called up and fully paid


100 Ordinary shares shares of £1.00 each
100


During the year 100 Ordinary Shares were issued at par.
There is a single class of shares. There are no restrictions on distribution of dividends and the repayment of capital.

Page 25

 
BLACK SHEEP BREWING COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2024

19.
 

Business combinations



Acquisition of trade and assets of Black Sheep Brewery Plc and BSB Retail Limited

Recognised amounts of identifiable assets acquired and liabilities assumed

Book value
Fair value adjustments
Fair value
£
£
£

Fixed Assets

Tangible
2,828,000
1,503,094
4,331,094

Intangible
320,002
-
320,002

3,148,002
1,503,094
4,651,096

Current Assets

Stocks
273,208
687,517
960,725

Debtors
1,611,050
23,508
1,634,558

Cash at bank and in hand
6,208
-
6,208

Total Assets
5,038,468
2,214,119
7,252,587

Total Identifiable net assets
5,038,468
2,214,119
7,252,587


Negative goodwill
(2,214,118)

Total purchase consideration
5,038,469

Consideration

£


Cash
5,038,469

Total purchase consideration
5,038,469

Cash outflow on acquisition

£


Purchase consideration settled in cash, as above
5,038,469

Net cash outflow on acquisition
5,038,469

Page 26

 
BLACK SHEEP BREWING COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2024

20.


Contingent liabilities

At the balance sheet date the company had entered into group bank cross guarantees in respect of various loans and overdrafts. At the balance sheet date the total contingent liability attributable to this company amounted to £1,879,559.
There are also cross group guarantees in respect of shareholder loans which are subordinate to the bank debt. The total contingent liability attributable to this guarantee is £1,901,940.


21.


Pension commitments

The Company operates a defined contributions pension scheme. The assets of the scheme are held
separately from those of the Company in an independently administered fund. The pension cost charge
represents contributions payable by the Company to the fund and amounted to £174,347. Contributions
totalling £18,834 payable to the fund at the balance sheet date.


22.


Commitments under operating leases

At 31 March 2024 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

2024
£

Land and buildings


Not later than 1 year
48,500

Later than 1 year and not later than 5 years
194,000

Later than 5 years
202,245

444,745

2024

£

Motor Vehicles


Not later than 1 year
90,783

Later than 1 year and not later than 5 years
122,525

213,308


23.


Related party transactions

At the balance sheet date, included in creditors due after more than one year was an amount of
£2,050,708 due to shareholders of the group and entities in which the directors of the company have a
material interest.
Interest on the loans was charged at 12% per annum and the charge for the year was £350,708 and £155,863 remains unpaid at the balance sheet date.

Page 27

 
BLACK SHEEP BREWING COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2024

24.


Controlling party

The company’s immediate parent undertaking is Breal Capital (Black Sheep) Holdings Limited and the ultimate parent undertaking is Keystone Brewing Group Limited (formerly Breal Capital (Black Sheep) Limited) incorporated in England and Wales.
 
Page 28