Registered number:
03829460
Bancroft Wines Limited
Directors' Report and Financial Statements
For the year ended
30 September 2021
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Bancroft Wines Limited
Company Information
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D Carrington
(appointed
1 June 2021
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Unit 328/9 Metalbox Factory
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Statutory Auditor
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Chartered Accountants
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Bancroft Wines Limited
Contents
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Directors' Responsibilities Statement
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Independent Auditors' Report
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Statement of Comprehensive Income
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Statement of Changes in Equity
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Notes to the Financial Statements
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Bancroft Wines Limited
Directors' Report
For the Year Ended 30 September 2021
The directors present their report and the financial statements for the year ended 30 September 2021.
The principal activity of the company is the import, wholesale and retail of fine wine.
The financial year ending September 2021 continued to be a difficult period for all businesses, especially those supplying the hospitality sector, due to the COVID-19 pandemic and Brexit. However, despite the hospitality trade being closed in November 2020, and then from January 2021 until July 2021 when the hospitality trade reopened properly overall it has been a strong and profitable year for the business. The first half of the year the business continued to pivot and adapt to the pandemic situation and increased sales in those sectors that remained open whilst using the Government schemes that were available, during the second half of the year we continued the revenue growth shown in previous financial years along with continued customer acquisition, both geographically and by sector.
In the previous financial year, Bancroft announced a partnership agreement with Berry Bros & Rudd as they restructured their wholesale arm, Field, Morris & Verdin. As part of that agreement but also Bancroft’s growing reputation the company has added over sixty high profile producers to the portfolio leading to significant growth of customer numbers, revenue and margin in the second half of the year. The company continues to pursue a long-term growth strategy and our core focus for the business has remained unchanged;
1. Focus on the quality and diversity of our producers whilst recruiting complimentary agencies that complete the portfolio.
2. Focus on our current customer base, Bancroft is well known for great customer service and we need to remain core suppliers to those loyal customers.
3. Focus on customer recruitment whilst diversifying geographically and by sector.
4. Focus on growth of our fine wine and private client sales
The hard work and transformation of the business has also been recognised by the trade, in June 2021 the company was awarded the IWC Medium Wine Agent of the Year. Bancroft Wines was also shortlisted for the IWSC Business Award for Wine Distributor of the Year and the Drinks Business On-trade Supplier of the Year.
The company continues to focus and make progress on the operational side with focus on the cost base and organisational design as well as opportunities within the sector, the business is exploring several opportunities and hopes that more announcements will be made in 2022.
Whilst there is certainly going to be continued pressure on the trade due to the pandemic and political situation within the UK, the significant steps the business has taken to continue the growth in the new financial year. In this financial year we have achieved our return to profitable growth and continue on this path despite the impact of the pandemic, this success in an extremely challenging period is testament to the continued support and commitment of the staff. This is underlined by the continued support by the Shareholder, Peter De Haan.
The directors who served during the year were:
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D Carrington
(appointed
1 June 2021
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Page 1
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Bancroft Wines Limited
Directors' Report (continued)
For the Year Ended 30 September 2021
Disclosure of information to auditors
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Each of the persons who are
directors at the time when this Directors' Report is approved has confirmed that:
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so far as the director is aware, there is no relevant audit information of which the company's auditors are unaware, and
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the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the company's auditors are aware of that information.
Post balance sheet events
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There were no post balance sheet events that require disclosure.
The auditors, Kreston Reeves LLP, will be proposed for reappointment in accordance with
section 485 of the Companies Act 2006.
In preparing this report, the directors have taken advantage of the small companies exemptions provided by section 415A of the Companies Act 2006.
This report was approved by the board on
21 December 2021
and signed on its behalf.
Page 2
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Bancroft Wines Limited
Directors' Responsibilities Statement
For the year ended 30 September 2021
The directors are responsible for preparing the Directors' Report and the
financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year
. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period.
In preparing these financial statements, the directors are required to:
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select suitable accounting policies for the company's financial statements and then apply them consistently;
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make judgements and accounting estimates that are reasonable and prudent;
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prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The directors are responsible for the maintenance and integrity of the corporate and financial information included on the company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements
and other information included in Directors' Reports may differ from legislation in other jurisdictions.
Page 3
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Bancroft Wines Limited
Independent Auditors' Report to the Members of Bancroft Wines Limited
We have audited the financial statements of Bancroft Wines Limited (the 'company') for the year ended 30 September 2021, which comprise the Statement of Comprehensive Income, the Balance Sheet, the Statement of Changes in Equity
and the related notes, including a summary of significant accounting 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).
In our opinion the financial statements:
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give a true and fair view of the state of the company's affairs as at 30 September 2021 and of its profit for the year then ended;
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have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
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have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
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In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
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.
Page 4
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Bancroft Wines Limited
Independent Auditors' Report to the Members of Bancroft Wines Limited (continued)
Opinion on other matters prescribed by the Companies Act 2006
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In our opinion, based on the work undertaken in the course of the audit:
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the information given in the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
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the Directors' Report has been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
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In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Directors' Report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
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adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
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the financial statements are not in agreement with the accounting records and returns; or
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certain disclosures of directors
' remuneration specified by law are not made; or
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we have not received all the information and explanations we require for our audit; or
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the directors were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemptions in preparing the Directors' Report and from the requirement to prepare a Strategic Report.
Responsibilities of directors
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As explained more fully in the Directors' Responsibilities Statement set out on page 3, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Page 5
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Bancroft Wines Limited
Independent Auditors' Report to the Members of Bancroft Wines Limited (continued)
Auditors' responsibilities for the audit of the financial statements
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Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
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:
Capability of the audit in detecting irregularities, includin
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fraud
Based on our understanding of the company and industry, and through discussion with the directors and other management (as required by auditing standards), we identified that the principal risks of non-compliance with laws and regulations related to health and safety, anti-bribery and employment law. We considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006 and taxation legislation. We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries to increase revenue or reduce expenditure, management bias in accounting estimates and judgemental areas of the financial statements such as the valuation of stock. Audit procedures performed by the group engagement team and component auditors included:
• Discussions with management and assessment of known or suspected instances of non-compliance with laws and regulations (including health and safety) and fraud; and
• Assessment of identified fraud risk factors; and
• Checking and reperforming the reconciliation of key control accounts; and
• Confirmation of related parties with management, and review of transactions throughout the period to identify any previously undisclosed transactions with related parties outside the normal course of business; and
• Performing analytical procedures with automated data analytics tools to identify any unusual or unexpected relationships, including related party transactions, that may indicate risks of material misstatement due to fraud; and
• Reading minutes of meetings of those charged with governance and reviewing correspondence with relevant tax and regulatory authorities; and
• Review of significant and unusual transactions and evaluation of the underlying financial rationale supporting the transactions; and
• Identifying and testing journal entries, in particular any manual entries made at the year end for financial statement preparation.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance.
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Bancroft Wines Limited
Independent Auditors' Report to the Members of Bancroft Wines Limited (continued)
As part of an audit in accordance with ISAs (UK), we exercise professional judgement and maintain professional scepticism throughout the audit. We also:
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Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
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Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion of the effectiveness of the company's internal control.
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Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
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Conclude on the appropriateness of the directors
' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our Auditors' Report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our Auditors' Report. However, future events or conditions may cause the company to cease to continue as a going concern.
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Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
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.
Peter Manser FCA DChA
(Senior Statutory Auditor)
for and on behalf of
Kreston Reeves LLP
Statutory Auditor
Chartered Accountants
Canterbury
22 December 2021
Page 7
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Bancroft Wines Limited
Statement of Comprehensive Income
For the Year Ended 30 September 2021
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Exceptional administrative expenses
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There were no recognised gains and losses for 2021 or 2020 other than those included in the statement of comprehensive income.
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There was no other comprehensive income for 2021 (2020:£
NIL).
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The notes on pages 11 to 23 form part of these financial statements.
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Page 8
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Bancroft Wines Limited
Registered number:
03829460
Balance Sheet
As at
30 September 2021
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Debtors due after more than 1 year
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Debtors due within 1 year
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Creditors: amounts falling due within 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 were approved and authorised for issue by the board and were signed on its behalf on
21 December 2021
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The notes on pages 11 to 23 form part of these financial statements.
Page 9
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Bancroft Wines Limited
Statement of Changes in Equity
For the Year Ended
30 September 2021
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The notes on pages 11 to 23 form part of these financial statements.
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Statement of Changes in Equity
For the Year Ended
30 September 2020
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The notes on pages 11 to 23 form part of these financial statements.
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Page 10
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Bancroft Wines Limited
Notes to the Financial Statements
For the Year Ended 30 September 2021
Bancroft Wines Limited is a limited liability company incorporated in England and Wales.
The company's registered office is Unit 328/9 Metalbox Factory, Great Guildford Street, London, SE1 0HS.
The company's registered number is 03829460.
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 company's functional and presentational currency is Pound Sterling.
The company's financial statements are presented to the nearest pound
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The following principal accounting policies have been applied:
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 once the sales have been made and the goods dispatched.
En primeur
Revenue in respect of sales made "en primeur" is recognised when the title passes to the customer upon delivery. The amounts received on account of En Primeur sales where delivery has not been made are shown in trade creditors and the amounts paid on account of related purchases are shown in trade debtors.
Private reserve transaction
Revenue in respect of purchases or sales on behalf of private clients for reserve accounts is recognised on a commission basis at rates agreed with clients.
Where the company has any commercial interest in private reserves which are sold to third parties, revenue is recognised on the full value of the sale and the cost to the company is recognised in cost of sales.
Page 11
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Bancroft Wines Limited
Notes to the Financial Statements
For the Year Ended 30 September 2021
2.
Accounting policies (continued)
The use of the going concern basis of accounting is appropriate because there are no material uncertainties related to events or conditions that may cast significant doubt about the ability of the company to continue as a going concern. While the impact of the Covid-19 virus has been assessed by the directors, so far as reasonably possible, due to its unprecedented impact on the wider economy, it is difficult to evaluate with any certainty the potential outcomes on the company's trade, its customers and suppliers. However, taking into consideration the UK Government's response, the company's planning and confirmation from the shareholder of the company that he will continue to support the company's growth plans, the directors have a reasonable expectation that the company will continue in operational existence for the foreseeable future.
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Exemption from preparing consolidated financial statements
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The
company
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Group
headed by it, qualify as small as set out in
section 383 of the Companies Act 2006
and the parent and
Group
are considered eligible for the exemption to prepare consolidated accounts.
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 its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight line basis to the Statement of Income and Retained Earnings over its useful economic life, which is five years.
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.
The company adds to the carrying amount of an item of fixed assets the cost of replacing part of such an item when that cost is incurred, if the replacement part is expected to provide incremental future benefits to the company. The carrying amount of the replaced part is derecognised. Repairs and maintenance are charged to profit or loss during the period in which they are incurred.
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 the statement of Comprehensive Income.
Page 12
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Bancroft Wines Limited
Notes to the Financial Statements
For the Year Ended 30 September 2021
2.
Accounting policies (continued)
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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.
Investments in subsidiaries are measured at cost less accumulated impairment.
Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis.
The company does not recognise the purchase price of stocks held on consignment as the ownership of this stock is held by the supplier until the point of sale.
At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.
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.
Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan.
Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Statement of Comprehensive Income.
For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.
Page 13
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Bancroft Wines Limited
Notes to the Financial Statements
For the Year Ended 30 September 2021
2.
Accounting policies (continued)
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Financial instruments (continued)
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For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the company would receive for the asset if it were to be sold at the balance sheet date.
Financial assets and liabilities are offset and the net amount reported in the Balance Sheet when there is an 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.
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or income as appropriate. The company does not currently apply hedge accounting for interest rate and foreign exchange derivatives.
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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Foreign currency translation
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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 Income and Retained Earnings except when deferred in other comprehensive income as qualifying cash flow hedges.
Grants are accounted under the accruals model as permitted by FRS 102. Grants relating to expenditure on tangible fixed assets are credited to profit or loss at the same rate as the depreciation on the assets to which the grant relates. The deferred element of grants is included in creditors as deferred income.
Grants of a revenue nature are recognised in the Statement of Comprehensive Income in the same period as the related expenditure.
Page 14
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Bancroft Wines Limited
Notes to the Financial Statements
For the Year Ended 30 September 2021
2.
Accounting policies (continued)
Where share options are awarded to employees, the fair value of the options at the date of grant is charged to profit or loss over the vesting period. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each Balance Sheet date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options that eventually vest. Market vesting conditions are factored into the fair value of the options granted. The cumulative expense is not adjusted for failure to achieve a market vesting condition.
The fair value of the award also takes into account non-vesting conditions. These are either factors beyond the control of either party (such as a target based on an index) or factors which are within the control of one or other of the parties (such as the company keeping the scheme open or the employee maintaining any contributions required by the scheme).
Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to profit or loss over the remaining vesting period.
Where equity instruments are granted to persons other than employees, profit or loss is charged with fair value of goods and services received.
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 profit and loss account when they fall due. Amounts not paid are shown in accruals as a liability in the balance sheet. The assets of the plan are held separately from the company in independently administered funds.
Page 15
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Bancroft Wines Limited
Notes to the Financial Statements
For the Year Ended 30 September 2021
2.
Accounting policies (continued)
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Current and deferred taxation
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The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the company operates and generates income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the Balance Sheet date, except that:
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The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
∙
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
Exceptional items are transactions that fall within the ordinary activities of the company but are presented separately due to their size or incidence.
Page 16
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Bancroft Wines Limited
Notes to the Financial Statements
For the Year Ended 30 September 2021
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Judgements in applying accounting policies and key sources of estimation uncertainty
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The preparation of the financial statements requires the directors to make judgements, estimates and assumptions that can affect the amounts reported for assets and liabilities, and the results for the year. The nature of estimation is such though that actual outcomes could differ significantly from those estimates.
The following are the company's key sources of estimation uncertainty:
Going concern
In the judgement of the directors it is appropriate to prepare the financial statements in accordance with the going concern basis of accounting. See note 2.3 for further details.
Fair value measurement of financial instruments
When the fair value of financial assets and liabilities cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques. The inputs to these techniques are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. The judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions relating to these factors could affect the reported fair value of financial instruments. See note 10 for further details.
Taxation
Provision has been made in the financial statements for a deferred tax asset amounting to £286,000 (2020 - £286,000) at the reporting date (see note 14). This provision is based upon estimates of the availability of future taxable profits, the timing of the reversal of timing differences upon which the provision is based and the tax rates that will be in force at that time together with an assessment of the impact of future tax planning strategies.
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The average monthly number of employees, including directors, during the year was
32
(2020 -
22
)
.
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Director's loan account write off
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Page 17
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Bancroft Wines Limited
Notes to the Financial Statements
For the Year Ended 30 September 2021
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Charge for the year on owned assets
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The above goodwill was recognised following the transfer of trade and assets from a subsidiary undertaking in a previous period. This goodwill is being amortised over a period of five years.
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Page 18
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Bancroft Wines Limited
Notes to the Financial Statements
For the Year Ended 30 September 2021
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Charge for the year on owned assets
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Investments in Subsidiary
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Page 19
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Bancroft Wines Limited
Notes to the Financial Statements
For the Year Ended 30 September 2021
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Due after more than one year
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Prepayments and accrued income
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Prepayments and accrued income
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Derivative financial instruments
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Creditors: Amounts falling due within one year
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Taxation and social security
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Proceeds of factored debts
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Accruals and deferred income
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Derivative financial instruments
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The company's invoice discounting facility is secured by a fixed and floating charge over the assets of the company registered to Barclays Bank plc.
Included in other creditors is a directors loan account (see note 16) which totals £450,000 (2020: £450,000) that is secured by a fixed and floating charge over the assets of the company.
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Page 20
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Bancroft Wines Limited
Notes to the Financial Statements
For the Year Ended 30 September 2021
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Financial assets measured at fair value through profit or loss
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Financial liabilities measured at fair value through profit or loss
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The company enters into forward foreign currency contracts to mitigate the exchange rate risk for certain foreign currency trade creditors. At 30 September 2021, the outstanding contracts all mature with 3 months (September 2020: 3 months). of the year end. The company is committed to buy €1,200,000 and AUD100,000 and pay fixed sterling amounts (2020: US$200,000, €700,000, AUD45,000 and NZD25,000).
The forward currency contracts are measured at fair value, which is determined using valuation techniques that utilise observable inputs. The key inputs used in valuing the derivatives are the forward exchange rates for sterling against the Euro, US Dollar, Australian Dollar and New Zealand Dollar. The fair value of the forward-foreign currency contracts is included as a financial liability at £5,043 (2020: financial asset £5,925
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The deferred tax asset is made up as follows:
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Unutilised trading losses
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Page 21
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Bancroft Wines Limited
Notes to the Financial Statements
For the Year Ended 30 September 2021
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Allotted, called up and fully paid
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1,100,000
(2020 -
1,100,000
)
Ordinary
shares of £
1.00
each
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The company operates an Enterprise Management Incentive (EMI) share options scheme for employees who receive part of their remuneration in the form of share-based payments transactions.
The fair value at the date of grant was determined independently and was considered to be equal to the nominal value of the company's shares.
The directors have assessed the vesting criteria for these options and at this time none of the options issued are expected to be exercised within their term. As a result, no adjustments have been made to the financial statements in respect of these share options.
At the balance sheet date the company had issued options to subscribe for a total of 10,447 ordinary shares in the company at a price of £5.31. The options are exercisable on certain predefined events and carry no performance condition.
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Outstanding at the beginning of the year
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Commitments under operating leases
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At 30 September 2021 the company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
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Later than 1 year and not later than 5 years
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Page 22
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Bancroft Wines Limited
Notes to the Financial Statements
For the Year Ended 30 September 2021
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Transactions with directors
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During the year, P C De Haan (director) loaned the company a total of £Nil (2020: £180,000). No repayments made during the year (2020: Repayments made totalling £Nil) and the director waived £Nil (2020: £1000,000) of the amounts loaned. No interest has been charged on the loan. The balance due to the director at 30 September 2021 is £450,000 (2020: £450,000).
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Related party transactions
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Transaction with directors have been disclosed in note 16 and all other related party transactions conducted by the company during the year were done so under normal market conditions.
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The ultimate controlling party is P C De Haan, the chairman of the company.
Page 23
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