Burnbrae Distillery Company Ltd - Accounts to registrar (filleted) - small 23.2.5

REGISTERED NUMBER: SC504514 (Scotland)

BURNBRAE DISTILLERY COMPANY LTD

UNAUDITED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2022

Page

Company Information

1

Balance Sheet

2

to

3

Notes to the Financial Statements

4

to

9

Chartered Accountants' Report

10

DIRECTORS:

S J Ball

C S Barclay

M B J Lulham

G McSherry

REGISTERED OFFICE:

3 Peel Park Place

College Milton Industrial Estate (South)

East Kilbride

Lanarkshire

G74 5LW

REGISTERED NUMBER:

SC504514 (Scotland)

ACCOUNTANTS:

Milne Craig

Chartered Accountants

Abercorn House

79 Renfrew Road

Paisley

Renfrewshire

PA3 4DA

FIXED ASSETS

Tangible assets

4

2,343,947

1,936,047

Investments

5

2

2

2,343,949

1,936,049

CURRENT ASSETS

Debtors

6

28,122

26,402

Cash at bank

34,265

31,725

62,387

58,127

CREDITORS

Amounts falling due within one year

7

481,011

799,486

NET CURRENT LIABILITIES

(418,624

)

(741,359

)

TOTAL ASSETS LESS CURRENT LIABILITIES

1,925,325

1,194,690

CREDITORS

Amounts falling due after more than one year

8

3,750,163

2,642,268

NET LIABILITIES

(1,824,838

)

(1,447,578

)

CAPITAL AND RESERVES

Called up share capital

60,000

60,000

Retained earnings

(1,884,838

)

(1,507,578

)

SHAREHOLDERS' FUNDS

(1,824,838

)

(1,447,578

)

The company is entitled to exemption from audit under Section 477 of the Companies Act 2006 for the year ended 31 December 2022.

The members have not required the company to obtain an audit of its financial statements for the year ended 31 December 2022 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 Statement of Income and Retained Earnings has not been delivered.

The financial statements were approved by the Board of Directors and authorised for issue on 25 September 2023 and were signed on its behalf by:

G McSherry - Director

1.	STATUTORY INFORMATION

Burnbrae Distillery Company Ltd is a private company, limited by shares, registered in Scotland. The company's registered number is SC504514 and registered office address is 3 Peel Park Place, College Milton Industrial Estate (South), East Kilbride, Lanarkshire, G74 5LW.

The company is in advanced construction stages and anticipates commencement to trade during the next financial year.

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 financial statements are prepared in sterling, which is the functional currency of the Company. Monetary amounts in these financial statements are rounded to the nearest £.

Going concern

At the time of approving the financial statements, the directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future The net liabilities figure of £1,824,760 is due to Loans from participating interests totalling £3,546,500 which are not due for repayment until after 2024, by which point it is expected that the distillery will be fully operational and trading. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

Critical accounting judgements and key sources of estimation uncertainty

In preparing these financial statements, the directors have made the following judgements:

Tangible fixed assets are depreciated over their useful lives taking into account residual values, where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors. In re-assessing asset lives, factors such as technological innovation, product life cycles and maintenance programmes are taken into account. Residual value assessments consider issues such as future market conditions, the remaining life of the asset and projected disposal values.

Assets are considered for indications of impairment. If required an impairment review will be carried out and a decision made on possible impairment. Factors taken into consideration in reaching such a decision include the economic viability and expected future financial performance of the asset and where it is a component of a larger cash-generating unit, the viability and expected future performance of that unit.

Bad debts are provided for where objective evidence of the need for a provision exists.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off the cost less estimated residual value of each asset over its estimated useful life or, if held under a finance lease, over the lease term, whichever is the shorter.

Improvements to property

-

4% on cost

Plant and machinery

-

at varying rates on cost

Investments in subsidiaries

Investments in subsidiary undertakings are recognised at cost.

Financial instruments

The Company has elected to apply the provisions of Section 11 'Basic Financial Instruments' and Section 12 ' Other Financial Instruments Issues' of FRS 102 to all of its financial instruments. Financial instruments are recognised in the Company's balance sheet when the Company becomes party to the contractual provisions of the instrument. Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transactions 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.

Taxation

Current tax is recognised for the amount of income tax payable in respect of the taxable profit for the current or past reporting periods using the tax rates and laws that have been enacted or substantively enacted by the reporting date.

Deferred tax is recognised in respect of all timing differences at the reporting date, except as otherwise indicated.

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

If and when all conditions for retaining tax allowances for the cost of a fixed asset have been met, the deferred tax is reversed.

Deferred tax is calculated using the tax rates and laws that have been enacted or substantively enacted by the reporting date that are expected to apply to the reversal of the timing difference.

With the exception of changes arising on the initial recognition of a business combination, the tax expense (income) is presented either in profit or loss, other comprehensive income or equity depending on the transaction that resulted in the tax expense (income).

Deferred tax liabilities are presented within provisions for liabilities and deferred tax assets within debtors.

Deferred tax assets and deferred tax liabilities are offset only if the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities simultaneously.

Leases

Assets held under finance leases, hire purchase contracts and other similar arrangements, which confer rights and obligations similar to those attached to owned assets, are capitalised as tangible fixed assets at the fair value of the leased asset (or, if lower, the present value of the minimum lease payments as determined at the inception of the lease) and are depreciated over the shorter of the lease terms and their useful lives. The capital elements of future lease obligations are recorded as liabilities, while the interest elements are charged to the profit and loss account over the period of the leases to produce a constant periodic rate of interest on the remaining balance of the liability.

Rentals under operating leases are charged on a straight-line basis over the lease term, even if the payments are not made on such a basis. Benefits received and receivable as an incentive to sign an operating lease are similarly spread on a straight-line basis over the lease term.

Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks and other short-term liquid investments with original maturities of three months or less.

Impairment of assets

Assets, other than those measured at fair value, are assessed for indicators of impairment at each balance sheet date. If there is objective evidence of impairment, an impairment loss is recognised in profit or loss as described below.

Non-financial assets

An asset is impaired where there is objective evidence that, as a result of one or more events that occurred after initial recognition, the estimated recoverable value of the asset has been reduced. The recoverable amount of an asset is the higher of its fair value less costs to sell and its value in use.

Where indicators exist for a decrease in impairment loss, the prior impairment loss is tested to determine reversal. An impairment loss is reversed on an individual impaired asset to the extent that the revised recoverable value does not lead to a revised carrying amount higher than the carrying value had no impairment been recognised.

Financial assets

For financial assets carried at amortised cost, the amount of impairment is the difference between the asset's carrying amount and the present value of estimated future cash flows, discounted at the financial asset's original effective interest rate.

For financial assets carried at cost less impairment, the impairment loss is the difference between the asset's carrying amount and the best estimate of the amount that would be received for the asset if it were to be sold at the reporting date.

Where indicators exist for a decrease in impairment loss, and the decrease can be related objectively to an event occurring after the impairment was recognised, the prior impairment loss is tested to determine reversal.

An impairment loss is reversed on an individual impaired financial asset to the extent that the revised recoverable value does not lead to a revised carrying amount higher than the carrying value had no impairment been recognised.

3.	EMPLOYEES AND DIRECTORS

The average number of employees during the year was NIL (2021 - NIL).

4.	TANGIBLE FIXED ASSETS

Improvements

to

Plant and

property

machinery

Totals

£

£

£

COST

At 1 January 2022

909,908

1,609,322

2,519,230

Additions

466,053

103,218

569,271

At 31 December 2022

1,375,961

1,712,540

3,088,501

DEPRECIATION

At 1 January 2022

90,146

493,037

583,183

Charge for year

45,711

115,660

161,371

At 31 December 2022

135,857

608,697

744,554

NET BOOK VALUE

At 31 December 2022

1,240,104

1,103,843

2,343,947

At 31 December 2021

819,762

1,116,285

1,936,047

The net book value of tangible fixed assets includes £ 961,083 (2021 - £ 1,076,095 ) in respect of assets held under hire purchase contracts.

5.	FIXED ASSET INVESTMENTS

Shares in

group

undertakings

£

COST

At 1 January 2022

and 31 December 2022

2

NET BOOK VALUE

At 31 December 2022

2

At 31 December 2021

2

6.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

31/12/22

31/12/21

£

£

Other debtors

2,385

2,385

VAT

25,687

23,964

Prepayments

50

53

28,122

26,402

7.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

31/12/22

31/12/21

£

£

Other loans (see note 9)

-

200,000

Hire purchase contracts

332,980

316,979

Trade creditors

1,293

34

Amounts owed to participating interests

36,809

122,079

Accrued expenses

109,929

160,394

481,011

799,486

8.

CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

31/12/22

31/12/21

£

£

Other loans (see note 9)

3,550,000

2,150,000

Hire purchase contracts

200,163

492,268

3,750,163

2,642,268

9.

LOANS

An analysis of the maturity of loans is given below:

31/12/22

31/12/21

£

£

Amounts falling due within one year or on demand:

Other loans

-

200,000

Amounts falling due between one and two years:

Other loans

-

350,000

Amounts falling due between two and five years:

Other loans - 2-5 years

3,550,000

1,800,000

Loans repayable within one year attract interest at 7% per annum and loans repayable between one to two years attract interest at 10% per annum. All other loans attract interest at 6%.

10.	SECURED DEBTS

The following secured debts are included within creditors:

31/12/22

31/12/21

£

£

Hire purchase contracts

533,143

809,247

Hire purchase creditor is secured over the assets on which the hire purchase has been provided.

J G Distillers Limited has taken out Hire Purchase Agreements on behalf of Burnbrae Disitillery Company Limited, with a year end creditor balance of £533,143 (2021 - £809,247). The lender is aware of the intention to novate the agreements across to Burnbrae Distillery Company Limited once it has started trading, and as such the assets and the Hire Purchase liability have been recognised in Burnbrae Distillery Company Limited's financial statements.

11.	RELATED PARTY DISCLOSURES

Included in creditors at 31 December 2022 is an amount of £36,809 (2021 - £122,079) due to J G Distillers Limited. Included in Other Loans at 31 December 2022 is an amount of £2,950,000 (2021 - £1,750,000) which represents a bond from J G Distillers Limited.

As detailed in note 12, the J G Distillers Limited has taken out Hire Purchase agreements on behalf of Burnbrae Distillery Company Limited, the assets and liabilities associated with these agreements have been recognised in the financial statements of Burnbrae Distillery Company Limited.

This company is related through common control of the directors.

12.	ULTIMATE CONTROLLING PARTY

The company is controlled the shareholders by virtue of their individual shareholdings.

The following reproduces the text of the report prepared for the directors in respect of the company's annual unaudited financial statements. In accordance with the Companies Act 2006, the company is only required to file a Balance Sheet. Readers are cautioned that the Income Statement and certain other primary statements and the Report of the Directors are not required to be filed with the Registrar of Companies.

In order to assist you to fulfil your duties under the Companies Act 2006, we have prepared for your approval the financial statements of Burnbrae Distillery Company Ltd for the year ended 31 December 2022 which comprise the Statement of Income and Retained Earnings, Balance Sheet and the related notes from the company's accounting records and from information and explanations you have given us.

As a practising member firm of ICAS, we are subject to its ethical and other professional requirements which are detailed at http://www.icas.com/accountspreparationguidance.

This report is made solely to the Board of Directors of Burnbrae Distillery Company Ltd, as a body, in accordance with our terms of engagement. Our work has been undertaken solely to prepare for your approval the financial statements of Burnbrae Distillery Company Ltd and state those matters that we have agreed to state to the Board of Directors of Burnbrae Distillery Company Ltd, as a body, in this report in accordance with the requirements of ICAS as detailed at http://www.icas.com/accountspreparationguidance. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and its Board of Directors, as a body, for our work or for this report.

It is your duty to ensure that Burnbrae Distillery Company Ltd has kept adequate accounting records and to prepare statutory financial statements that give a true and fair view of the assets, liabilities, financial position and loss of Burnbrae Distillery Company Ltd. You consider that Burnbrae Distillery Company Ltd is exempt from the statutory audit requirement for the year.

We have not been instructed to carry out an audit or a review of the financial statements of Burnbrae Distillery Company Ltd. For this reason, we have not verified the accuracy or completeness of the accounting records or information and explanations you have given to us and we do not, therefore, express any opinion on the statutory financial statements.

Milne Craig

Chartered Accountants

Abercorn House

79 Renfrew Road

Paisley

Renfrewshire

PA3 4DA

25 September 2023