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Registered number:
02200398
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LUSCOMBE DRINKS LIMITED
FINANCIAL STATEMENTS
INFORMATION FOR FILING WITH THE REGISTRAR
FOR THE PERIOD ENDED 30 JUNE 2019
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LUSCOMBE DRINKS LIMITED
REGISTERED NUMBER:
02200398
STATEMENT OF FINANCIAL POSITION
AS AT
30 JUNE 2019
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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The
financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime and in accordance with the provisions of FRS 102 Section 1A - small entities.
The financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The Company has opted not to file the statement of comprehensive income in accordance with provisions applicable to companies subject to the small companies' regime.
The financial statements were approved and authorised for issue by the board and were signed on its behalf by
:
The notes on pages 2 to 11 form part of these financial statements.
Page 1
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LUSCOMBE DRINKS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 JUNE 2019
Luscombe Drinks Limited is a private company limited by shares, with the registered address Dean Court, Lower Dean, Buckfastleigh, England, TQ11 0LT. The company number is 02200398 and the principal activity is the production of soft drinks, mineral waters and other bottled waters. Luscombe Drinks Limited is incorporated in England and Wales.
2.
Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Section 1A of
Financial Reporting Standard 102, the Financial Reporting Standard applicable in
the UK and the Republic of Ireland and the Companies Act 2006
.
The period is a 6 month period ending on 30 June 2019. The prior year is a 12 month period ending 31 December 2018.
The nature of the Company's activity means that activity is greater in the period from 1 January to 30 June. As such, the directors consider 30 June to represent a more appropriate date to report the Company's statement of financial position
The following principal accounting policies have been applied:
The directors have considered the outbreak of COVID-19 in early 2020 and what impact it will have on the ongoing operations of the business.
Although the Company's sales channel includes a number of significant retail customers, the closure of the hospitality sector has had a material impact on revenue in the year ending 30 June 2020.
The directors have taken action to address this shortfall by reducing production and entering into the Government's job retention scheme. As detailed in note 19, following the year end the Company has also secured a coronavirus business loan to provide additional working capital.
The directors believe that these actions are sufficient to ensure the Company is able to continue to operate for the foreseeable future and as such that it is appropriate for the financial statements to be drawn up on a going concern basis.
The directors’ assumptions and outlook assumes that COVID-19 causes no material unanticipated changes to the business model. The financial statements do not reflect the adjustments that would be necessary should the ability of the Company to trade be jeopardised due to an ongoing reduction in demand for its products. As such there is a material uncertainty related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern.
Page 2
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LUSCOMBE DRINKS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 JUNE 2019
2.
Accounting policies (continued)
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Foreign currency translation
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Functional and presentation currency
The Company's functional and presentational currency is GBP and the financial statements are rounded to the nearest £1.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Statement of comprehensive income
except when deferred in other comprehensive income as qualifying cash flow hedges.
Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Statement of comprehensive income within 'finance income or costs'. All other foreign exchange gains and losses are presented in the Statement of comprehensive income within 'other operating income'.
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:
Sale of goods
Revenue from the sale of goods is recognised when all of the following conditions are satisfied:
∙
the Company has transferred the significant risks and rewards of ownership to the buyer;
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the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
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the amount of revenue can be measured reliably;
∙
it is probable that the Company will receive the consideration due under the transaction; and
∙
the costs incurred or to be incurred in respect of the transaction can be measured reliably.
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Operating leases: the Company as lessee
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Rentals paid under operating leases are charged to the Statement of comprehensive income on a straight line basis over the lease term.
Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.
Page 3
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LUSCOMBE DRINKS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 JUNE 2019
2.
Accounting policies (continued)
Interest income is recognised in the Statement of comprehensive income using the effective interest method.
Finance costs are charged to the Statement of comprehensive income 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.
All borrowing costs are recognised in the Statement of comprehensive income in the period in which they are incurred.
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 the Statement of comprehensive income when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of financial position. The assets of the plan are held separately from the Company in independently administered funds.
Tax is recognised in the Statement of comprehensive income, 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 reporting date in the countries where the Company operates and generates income.
Exceptional items are transactions that fall within the ordinary activities of the Company but are presented separately due to their size or incidence.
Page 4
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LUSCOMBE DRINKS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 JUNE 2019
2.
Accounting policies (continued)
Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
The estimated useful lives range as follows:
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.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the following methods.
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 the Statement of comprehensive income.
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 standard cost basisbasis. Work in progress and finished goods include labour and attributable overheads.
At each reporting 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.
The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in non-puttable ordinary shares.
Page 5
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LUSCOMBE DRINKS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 JUNE 2019
2.
Accounting policies (continued)
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.
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Cash and cash equivalents
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Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
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.
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The average monthly number of employees, including directors, during the period was 48
(2018:
55
)
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Page 6
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LUSCOMBE DRINKS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 JUNE 2019
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Charge for the period on owned assets
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Included within the net book value of tangible fixed assets is £691,984 (2018: £15,469) in respect of assets held under hire purchase agreements. Depreciation for the year on these assets was £24,926 (2018: £4,446).
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Raw materials and consumables
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Finished goods and goods for resale
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Page 7
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LUSCOMBE DRINKS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 JUNE 2019
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Amounts owed by joint ventures and associated undertakings
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Prepayments and accrued income
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Cash and cash equivalents
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Creditors: AMOUNTS FALLING DUE WITHIN ONE YEAR
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Amounts owed to other participating interests
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Other taxation and social security
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Obligations under finance lease and hire purchase contracts
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Invoice discounting facility
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Accruals and deferred income
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A fixed charge is in place over property, buildings, fixtures, plant and machinery, motor vehicles, computer equipment, non-vesting invoices, other invoices required to be paid into nominated accounts and cash, credit balances on any nominated accounts, goodwill, intellectual property, securities, group loans, insurance rights and uncalled capital. A floating charge exists over property, assets and rights not under a fixed charge.
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Page 8
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LUSCOMBE DRINKS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 JUNE 2019
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Creditors: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR
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Net obligations under finance leases and hire purchase contracts
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Hire purchase and finance leases
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Minimum lease payments under hire purchase fall due as follows:
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Hire purchase liabilities are secured against the assets to which they relate.
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Page 9
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LUSCOMBE DRINKS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 JUNE 2019
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ALLOTTED, CALLED UP AND FULLY PAID
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45
(2018:
45
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Class A
shares of £
0.10
each
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33
(2018:
33
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Class B
shares of £
0.10
each
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12
(2018:
12
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Class C
shares of £
0.10
each
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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 £15,889 (2018: £16,035). Contributions totalling £6,149 (2018: £Nil) were payable to the fund at the reporting date and are included in creditors.
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Commitments under operating leases
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At 30 June 2019 the Company had future minimum lease payments under non-cancellable operating leases as follows:
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Later than 1 year and not later than 5 years
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Page 10
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LUSCOMBE DRINKS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 JUNE 2019
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Related party transactions
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During the period the Company made the following related party transactions:
Kineta Drinks Limited
During the period, two of the directors, G L David and J M Spreadbury were also directors of Kineta Drinks Limited. They resigned their positions on 1 March 2019. During the period, Luscombe Drinks Limited received income from sales to Kineta Drinks Limited of £32,273 (2018: £9,207). During the period, the Company wrote off debts from Kineta Drinks Limited of £92,750 (2018: £Nil).
Lion and Unicorn Limited
Two of the directors, G L David and V David are also directors of Lion and Unicorn Limited. Luscombe Drinks Limited received income from sales to Lion and Unicorn Limited of £13 (2018: £Nil). At the period end, Lion and Unicorn Limited owed Luscombe Drinks Limited £876 (2018: £500).
SCOPS Drinks Limited
G L David is also a director of SCOPS Drinks Limited and was for the entire period. During the period, Luscombe Drinks received income from recharges to SCOPS Drinks Limited of £Nil (2018: £875). At the period end, SCOPS Drinks Limited owed Luscombe Drinks Limited £Nil (2018: £88).
Transactions with Directors
During the period a director maintained a loan account with the Company. The amount owed to the director at the period end by Luscombe Drinks Limited was £331,545 (2018: £186,260).
During the period Luscombe Drinks Limited received income from sales to a director of £183 (2018: £Nil).
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Post balance sheet events
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In May 2020, the Company successfully applied for a coronavirus business loan of £800,000.
The Company is controlled by G L David, a director of the Company, owning 50% of the share capital
The auditors' report on the financial statements for the period ended 30 June 2019 was unqualified.
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In their report, the auditors emphasised the following matter without qualifying their report:
Material uncertainty related to going concern
We draw attention to note 2.2 in the financial statements, which refers to the significant challenges and uncertainties caused by the current Coronavirus (COVID-19) pandemic. As stated in note 2.2, these events or conditions, along with the other matters as set forth in note 2.2, indicate that a material uncertainty exists that may cast significant doubt on the Company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.
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The audit report was signed on
30 June 2020
by
Fleur Lewis FCA
(Senior statutory auditor) on behalf of
Bishop Fleming LLP
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Page 11
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