Registered number:
FOR THE PERIOD ENDED 31 MARCH 2024
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KEYSTONE BREWING GROUP LIMITED
COMPANY INFORMATION
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KEYSTONE BREWING GROUP LIMITED
CONTENTS
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KEYSTONE BREWING GROUP LIMITED
GROUP STRATEGIC REPORT
FOR THE PERIOD ENDED 31 MARCH 2024
The directors present their strategic report, which is followed by the directors' report, together with audited financial statements for the year ended 31 March 2024.
The first year of trading under the Keystone brand has seen four breweries with incredible reputations in their locality as well nationally come together. This has enabled a diverse range of brands to be presented to new and existing customers. There are significant production facilities in Masham (North Yorkshire) and Alcester (Warwickshire) which have seen investment to facilitate the continued growth of the Group. The Group has invested heavily in Sales and Marketing providing a strong platform to enable the brands to be appropriately represented in the market place.
The investment will also allow strategic partnerships to be developed creating further growth opportunities for the Group. We will continue to invest in the right retail establishments growing the existing presence in London, Birmingham, York and Masham creating further opportunities to show case the Group brands.
The business continues to sell alcoholic drinks predominantly to the UK market leaving the macro environment being the main risk to both the breweries and the retail establishments within the Group. Whilst utility costs and raw materials have stabilised over the last twelve months they still maintain a significant risk to the operating margin of the Group.
The Group’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 Group’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 group’s financial instruments can be analysed as follows:
Interest risk
The Group's interest rate exposure arises mainly from its interest-bearing borrowings. The Group 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 Group. Debtors are reviewed on a regular basis and provision is made for doubtful debts when necessary.
Liquidity risk
The Group actively manages its working capital requirement to ensure it has sufficient liquid resources to meet the operating needs of the business.
The Group 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 39% gross margin was achieved in to the year ending 31st March 2024 the Group 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.
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KEYSTONE BREWING GROUP LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 MARCH 2024
This report was approved by the board on 31 March 2025 and signed on its behalf.
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KEYSTONE BREWING GROUP 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.
The directors who served during the period were:
The directors are responsible for preparing the Group Strategic Report, the Directors' Report and the consolidated financial statements in accordance with applicable law and regulations.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Group's financial statements and then apply them consistently;
∙make judgments and accounting estimates that are reasonable and prudent;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and the Group and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The loss for the period, after taxation and minority interests, amounted to £3,870,695.
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.
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KEYSTONE BREWING GROUP LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 MARCH 2024
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
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KEYSTONE BREWING GROUP LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF KEYSTONE BREWING GROUP LIMITED
We have audited the financial statements of KEYSTONE BREWING GROUP LIMITED (the 'parent Company') and its subsidiaries (the 'Group') for the period ended 31 March 2024, which comprise the Consolidated Statement of Comprehensive Income, the Consolidated Balance Sheet, the Company Balance Sheet, the Consolidated Statement of Cash Flows, the Consolidated Statement of Changes in Equity, the Company Statement of Changes in Equity and the related notes, including a summary of significant accounting 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).
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group's or the parent Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
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KEYSTONE BREWING GROUP LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF KEYSTONE BREWING GROUP LIMITED (CONTINUED)
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 Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Group Strategic Report and the Directors' Report for the financial period for which the financial statements are prepared is consistent with the financial statements; and
∙the Group Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Directors' Report.
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KEYSTONE BREWING GROUP LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF KEYSTONE BREWING GROUP LIMITED (CONTINUED)
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Group financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. 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 GDPR, health and food safety, environmental legislation;
∙management bias in selecting accounting policies and determining estimates;
∙inappropriate journal entries; and
∙recoverability of debtors.
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KEYSTONE BREWING GROUP LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF KEYSTONE BREWING GROUP LIMITED (CONTINUED)
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;
∙assessment of matters reported to management and the result of the subsequent investigation;
∙obtaining an understanding of the relevant controls and testing their operation during the period;
∙obtaining an understanding of the policies and controls over the recognition of income and testing their implementation during the year;
∙challenging assumptions made by management in their specific accounting policies and estimates;
∙identifying and testing journal entries, in particular any journal entries posted with unusual account combinations or crediting revenue or cash;
∙assessing 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;
∙reviewing intercompany accounts;
∙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.
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KEYSTONE BREWING GROUP LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF KEYSTONE BREWING GROUP LIMITED (CONTINUED)
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 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.
for and on behalf of
Chartered Accountant
Statutory Auditors
14th Floor
33 Cavendish Square
W1G 0PW
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KEYSTONE BREWING GROUP LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 31 MARCH 2024
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KEYSTONE BREWING GROUP LIMITED
REGISTERED NUMBER: 14865887
CONSOLIDATED BALANCE SHEET
AS AT 31 MARCH 2024
The financial statements were approved and authorised for issue by the board and were signed on its behalf on 31 March 2025.
The notes on pages 17 to 38 form part of these financial statements.
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KEYSTONE BREWING GROUP LIMITED
REGISTERED NUMBER: 14865887
COMPANY BALANCE SHEET
AS AT 31 MARCH 2024
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not prepared its own Statement of Comprehensive Income in these financial statements. The profit after tax of the parent company was £
The financial statements were approved and authorised for issue by the board and were signed on its behalf on
The notes on pages 17 to 38 form part of these financial statements.
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KEYSTONE BREWING GROUP LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 31 MARCH 2024
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KEYSTONE BREWING GROUP LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 31 MARCH 2024
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KEYSTONE BREWING GROUP LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED 31 MARCH 2024
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KEYSTONE BREWING GROUP LIMITED
CONSOLIDATED ANALYSIS OF NET DEBT
FOR THE PERIOD ENDED 31 MARCH 2024
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KEYSTONE BREWING GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2024
The company is a private company limited by shares and is incorporated in England and Wales. The registered office address 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
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgment in applying the Group's accounting policies (see note 3).
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements.
Parent company disclosure exemptions
In preparing the separate financial statements of the parent company, advantage has been taken of the following disclosure exemptions available in FRS 102:
∙Only one reconciliation of the number of shares outstanding at the beginning and the end of the year has been presented as the reconciliation for the group and the parent company would be identical;
∙No Statement of Cash Flows has been presented for the parent company;
∙Disclosures in respect of the parent company's financial instruments have not been presented as equivalent disclosures have been provided in respect of the group as a whole; and
∙No disclosures have been given for the aggregate remuneration of the key management personnel of the parent company as their remuneration is included in the totals for the group as a whole.
The following principal accounting policies have been applied:
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KEYSTONE BREWING GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2024
2.Accounting policies (continued)
The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance Sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Statement of Comprehensive Income from the date on which control is obtained. They are deconsolidated from the date control ceases.
The Group is party to funding arrangements covering various entities within Keystone Brewing Group Limited. The entities within the group have 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, 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 cash flow, 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 that the directors have had with shareholders of the group and their recent commitments, 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.
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KEYSTONE BREWING GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2024
2.Accounting policies (continued)
Turnover is recognised at the 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 trade discounts and volume rebates.
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KEYSTONE BREWING GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2024
2.Accounting policies (continued)
Goodwill
Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of the Group's share of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight-line basis to the Consolidated Statement of Comprehensive Income over its useful economic life of ten years. Negative goodwill is recognised in the profit and loss in the periods in which non-monetary assets acquired, are recovered through use or sale.
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:
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.
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KEYSTONE BREWING GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2024
2.Accounting policies (continued)
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KEYSTONE BREWING GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2024
2.Accounting policies (continued)
The Group 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 Group's Balance Sheet when the Group becomes party to the contractual provisions of the instrument.
Basic financial assets
Basic financial assets, which include trade and other debtors, cash and bank balances, are initially measured at their transaction price (adjusted for transaction costs except in the initial measurement of financial assets that are subsequently measured at fair value through profit and loss) 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 Group's cash and cash equivalents, trade and most other debtors due with the operating 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 instrument is any contract that evidences a residual interest in the assets of the Group after the deduction of all its liabilities.
Basic financial liabilities, which include trade and other creditors, bank loans, other loans and loans due to fellow group companies are initially measured at their transaction price (adjusting for transaction costs except in the initial measurement of financial liabilities that are subsequently measured at fair value through profit and loss). 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 creditors are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade creditors are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade creditors 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.
Derecognition of financial assets
Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Group 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 Group will continue to recognise the value of the portion of the risks and rewards retained.
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KEYSTONE BREWING GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2024
2.Accounting policies (continued)
Derecognition of financial liabilities
Financial liabilities are derecognised when the Group's contractual obligations expire or are discharged or cancelled.
The Group and 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.
Turnover is generated by the principal activity of the group which is the manufacturing and wholesale of beer.
Analysis of turnover by country of destination:
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KEYSTONE BREWING GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2024
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KEYSTONE BREWING GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2024
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KEYSTONE BREWING GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2024
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KEYSTONE BREWING GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2024
10.Taxation (continued)
The group has estimated tax losses of £3,769,748 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 £3,337,578. 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.
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