REGISTERED NUMBER: SC445020 (Scotland)

Unaudited Financial Statements for the Year Ended 31 March 2025

for

The Borders Distillery Company Limited

Page

Company Information

1

Statement of Financial Position

2

Statement of Changes in Equity

4

Notes to the Financial Statements

5

DIRECTORS:

Mr M F Beamish

Mr L J Fordyce

Mr R J Kouyoumdjian

Mr H Hungin

SECRETARY:

Ms G Carlow

REGISTERED OFFICE:

The Borders Distillery

Hawick

Roxburghshire

TD9 7AQ

REGISTERED NUMBER:

SC445020 (Scotland)

ACCOUNTANTS:

EQ Accountants Limited

47-49 The Square

Kelso

Roxburghshire

TD5 7HW

FIXED ASSETS

Intangible assets

4

8,218

18,201

Property, plant and equipment

5

10,632,292

10,561,884

10,640,510

10,580,085

CURRENT ASSETS

Inventories

11,805,922

8,752,101

Debtors

6

110,100

713,663

Cash at bank and in hand

1,290,352

660,412

13,206,374

10,126,176

CREDITORS

Amounts falling due within one year

7

372,648

1,044,049

NET CURRENT ASSETS

12,833,726

9,082,127

TOTAL ASSETS LESS CURRENT LIABILITIES

23,474,236

19,662,212

CREDITORS

Amounts falling due after more than one year

8

22,388,416

22,338,948

NET ASSETS/(LIABILITIES)

1,085,820

(2,676,736

)

CAPITAL AND RESERVES

Called up share capital

10

24,595

7,035

Share premium

19,641,378

15,388,478

Other reserves

-

1,626,713

Retained earnings

(18,580,153

)

(19,698,962

)

SHAREHOLDERS' FUNDS

1,085,820

(2,676,736

)

The company is entitled to exemption from audit under Section 477 of the Companies Act 2006 for the year ended 31 March 2025.

The members have not required the company to obtain an audit of its financial statements for the year ended 31 March 2025 in accordance with Section 476 of the Companies Act 2006.

The directors acknowledge their responsibilities for:

(a)	ensuring that the company keeps accounting records which comply with Sections 386 and 387 of the Companies Act 2006 and

(b)

preparing financial statements which give a true and fair view of the state of affairs of the company as at the end of each financial year and of its profit or loss for each financial year in accordance with the requirements of Sections 394 and 395 and which otherwise comply with the requirements of the Companies Act 2006 relating to financial statements, so far as applicable to the company.

The financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.

In accordance with Section 444 of the Companies Act 2006, the Income Statement has not been delivered.

The financial statements were approved by the Board of Directors and authorised for issue on 8 September 2025 and were signed on its behalf by:

Mr L J Fordyce - Director

Called up

share

Retained

Share

Other

Total

capital

earnings

premium

reserves

equity

£

£

£

£

£

Balance at 1 April 2023

6,747

(16,464,327

)

15,368,578

1,989,175

900,173

Changes in equity

Issue of share capital

288

-

19,900

-

20,188

Total comprehensive income

-

(3,600,594

)

-

-

(3,600,594

)

Other movements

-

359,667

-

(359,667

)

-

Share option

-

6,292

-

(2,795

)

3,497

Balance at 31 March 2024

7,035

(19,698,962

)

15,388,478

1,626,713

(2,676,736

)

Changes in equity

Issue of share capital

17,560

-

4,252,900

-

4,270,460

Total comprehensive income

-

(4,464,236

)

-

-

(4,464,236

)

Other movements

-

5,564,123

-

(1,607,791

)

3,956,332

Share option

-

18,922

-

(18,922

)

-

Balance at 31 March 2025

24,595

(18,580,153

)

19,641,378

-

1,085,820

1.	STATUTORY INFORMATION

The Borders Distillery Company Limited is a private company, limited by shares , registered in Scotland. The company's registered number and registered office address can be found on the Company Information page.

The presentation currency of the financial statements is the Pound Sterling (£).

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" including the provisions of Section 1A "Small Entities" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business , and is shown net of VAT and other sales related taxes . The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

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.

Intangible fixed assets other than goodwill

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Trademarks

10 years straight line

Patents and website costs

3 years straight line

Tangible fixed assets

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

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Land and buildings

30 years straight line

Plant and machinery

Between 3 and 30 years

Casks

16 years straight line

Computer equipment

33% straight line

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

Assets under construction are recognised at cost and are not depreciated until they are in use.

Impairment of fixed assets

At each reporting period end date, the company 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.

Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises all costs incurred in bringing each product to its present location and condition. Raw materials are held on an average cost basis. Work in progress and finished goods include costs of direct materials and attributable overheads based on a normal level of activity.

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

Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

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

Basic financial assets

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

Derecognition of financial assets

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

Classification of financial liabilities

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

Basic financial liabilities

Basic financial liabilities, including creditors , 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.

Derecognition of financial liabilities

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

Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs.

Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the statement of financial position date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the statement of financial position date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Foreign currencies

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the statement of financial position date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.

Hire purchase and leasing commitments

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 lease s asset are consumed.

Employee benefits, pension costs and other post-retirement benefits

Cost of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognized as part of the cost of stock or fixed assets.

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.

Share-based payments

Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted using the Black Scholes model. The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest. A corresponding adjustment is made to equity.

When the terms and conditions of equity-settled share-based payments at the time they were granted are subsequently modified, the fair value of the share-based payment under the original terms and conditions and under the modified terms and conditions are both determined at the date of the modification. Any excess of the modified fair value over the original fair value is recognised over the remaining vesting period in addition to the grant date fair value of the original share-based payment. The share-based payment expense is not adjusted if the modified fair value is less than the original fair value.

Cancellations or settlements (including those resulting from employee redundancies) are treated as an acceleration of vesting and the amount that would have been recognised over the remaining vesting period is recognised immediately.

Going concern

In assessing whether the financial statements should continue to be prepared on a going concern basis, the directors have considered a period of twelve months from the date of approval of these financial statements and have reviewed cash flow projections. The directors consider the entity to have sufficient liquid assets and the required funding to meet its obligations for a period of at least 12 months from the date of signing these financial statements.

Inventory financing facility

The Borders Distillery Limited (the Company) entered into an inventory financing facility with Ferovinum on 20th February 2024. The total financing available under the facility is £35m over 3 years. Under the facility, Ferovinum undertakes a market-based valuation of cask inventory against which the Company may raise finance. Each cask or grouping of casks financed is covered by a single trade, with the maturity specific to that contract note. The Company retains flexibility to repurchase stock at any time should the cask be required. Security is granted through transfer of title to the inventory, however it remains under the Company's control and the Company retains exposure to the risks and rewards of ownership. At the point of redemption, which comprises repayment of principal and interest, the title to the goods is returned to the Company.

Interest under the Ferovinum facility is paid at a margin over the prevailing Bank of England base rate. Costs incurred that are directly attributable to the facility are recognised using the effective interest method.

3.	EMPLOYEES AND DIRECTORS

The average number of employees during the year was 21 (2024 - 19 ) .

4.	INTANGIBLE FIXED ASSETS

Patents

and

licences

£

COST

At 1 April 2024

130,913

Additions

1,879

At 31 March 2025

132,792

AMORTISATION

At 1 April 2024

112,712

Amortisation for year

11,862

At 31 March 2025

124,574

NET BOOK VALUE

At 31 March 2025

8,218

At 31 March 2024

18,201

5.	PROPERTY, PLANT AND EQUIPMENT

Assets

Freehold

under

Plant and

property

construction

machinery

£

£

£

COST

At 1 April 2024

6,727,832

-

3,962,841

Additions

-

9,183

5,426

At 31 March 2025

6,727,832

9,183

3,968,267

DEPRECIATION

At 1 April 2024

940,323

-

2,015,464

Charge for year

208,244

-

277,156

At 31 March 2025

1,148,567

-

2,292,620

NET BOOK VALUE

At 31 March 2025

5,579,265

9,183

1,675,647

At 31 March 2024

5,787,509

-

1,947,377

Computer

Casks

equipment

Totals

£

£

£

COST

At 1 April 2024

3,175,699

53,267

13,919,639

Additions

779,592

3,529

797,730

At 31 March 2025

3,955,291

56,796

14,717,369

DEPRECIATION

At 1 April 2024

356,519

45,449

3,357,755

Charge for year

237,236

4,686

727,322

At 31 March 2025

593,755

50,135

4,085,077

NET BOOK VALUE

At 31 March 2025

3,361,536

6,661

10,632,292

At 31 March 2024

2,819,180

7,818

10,561,884

6.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

31/3/25

31/3/24

£

£

Trade debtors

8,118

505,427

Other debtors

48,733

55,147

VAT

23,964

86,222

Prepayments

29,285

66,867

110,100

713,663

7.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

31/3/25

31/3/24

£

£

Trade creditors

247,230

884,187

Social security and other taxes

15,770

13,364

Other creditors

12,016

32,658

Accruals and deferred income

97,632

113,840

372,648

1,044,049

8.

CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

31/3/25

31/3/24

£

£

Other loans - 2-5 years

21,574,582

18,059,363

Preference shares

6

-

Accruals and deferred income

813,828

4,279,585

22,388,416

22,338,948

31/3/25

31/3/24

£

£

Amounts falling due in more than five years:

Repayable otherwise than by instalments

Preference shares

6

-

Preference shares

As part of the refinancing negotiations , the company issued 5,564,154 non-redeemable, non-cumulative preference shares with an annual dividend at a fixed rate of 5% to be subscribed for by former loan stock holders for a subscription price equal to the aggregate nominal value of £5.56.

The conditions in respect of the issue of shares included the waiver of accrued loan stock interest of £5,564,154.

Inventory Financing

As set out in Note 2, on 20th February 2024, The Borders Distillery Ltd entered into a facility with Ferovinum under which the Company may raise finance based on a percentage of the current market valued secured against cask spirit. The total available facility is £35m with utilisation as at 31st March 2024 of £17.2 m. The facility carries interest on cash advanced based on a percentage margin over the Bank of England base rate, settled on settlement of the principal. The total outstanding balance is secured against cask inventory with a book value (cost) of £6.3m. The Company has issued a floating charge in favour of the lender.

9.	SECURED DEBTS

The following secured debts are included within creditors:

31/3/25

31/3/24

£

£

Other loans

21,574,582

18,059,363

Ferovinum Ltd has a floating charge covering all the property or undertaking of the company.

10.	CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:

Number:

Class:

Nominal

31/3/25

31/3/24

value:

£

£

24,594,872

Ordinary

0.1p

24,595

7,035

Shares were issued during the year as follows:

Cash at par

459,649 Ordinary shares of 0.1p for £ 460

Cash at premium

17,100,000 Ordinary shares of 0.1p for £ 4,270,000

During the year, the company raised £4.25m by the issue of 17m ordinary £0.001 shares at a subscription price of £0.25 each. The share issue was in two tranches and all funds were received in the year.

11.	RELATED PARTY DISCLOSURES

In the year the company purchased services from a company controlled by one of the directors who served during the year. This amounted to £45,437 (2024: £51,298).

12.	ULTIMATE CONTROLLING PARTY

The directors have determined that there is no immediate or ultimate controlling party.

13.	SHARE-BASED PAYMENT TRANSACTIONS

The 100,000 share options have been fully exercised in the year. There are no outstanding share options at the year end.