Company Registration No. 05730318 (England and Wales)
Lay & Wheeler Limited
Annual report and financial statements
for the year ended 3 April 2023
Lay & Wheeler Limited
Company information
Directors
Erica Sugai
David Isherwood
Li Feng
(Appointed 31 August 2022)
Company number
05730318
Registered office
Unit 6 Blackacre Road
Great Blakenham
Ipswich
IP6 0FL
Independent auditor
Saffery LLP
71 Queen Victoria Street
London
EC4V 4BE
Lay & Wheeler Limited
Contents
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 8
Statement of comprehensive income
9
Statement of financial position
10
Statement of changes in equity
11
Statement of cash flows
12
Notes to the financial statements
13 - 28
Lay & Wheeler Limited
Strategic report
For the year ended 3 April 2023
1
The directors present the strategic report for the period ended 3 April 2023.
Fair review of the business
The Company is a specialist in en-primeur, in bond and fine wine sales. The financial reporting period represents the 53 weeks to 03 April 2023 and the prior financial period, 52 weeks to 28 March 2022.
The key financial and performance indicators during the period were as follows:
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Adjusted operating profit/(loss)* | | |
*The company secure wine orders, generally for fine wine, a substantial period before the wine is ready to ship as it continues to mature in barrel on winemaker’s premises. Whilst these transactions do not reach the statutory definition of a revenue (as title has not passed to the customer) the company uses the adjusted revenue and profit as key financial and performance indicator, to understand the financial impact with sales channels activity and cost.
For the period ended March 2023, the business reported adjusted revenue of £27.148m, on par with FY22.
Adjusted operating loss of £131k was in line with pre-year expectations, as the business pushed ahead with its 5-year operational investment plan, including the move to consolidate all of its wine storage and logistics operations in-house.
Principal risks and uncertainties
Directors and management are required to implement controls and processes to adequately mitigate risks, as well as maintaining business unit risk registers. These registers consider the impact and likelihood to assess the overall risk rating and prioritise mitigation actions.
The Directors confirm that they have carried out an assessment of the principal risks and uncertainties facing the Company, including those that would threaten its business model, future performance, solvency or liquidity. The board remains committed to ensuring that the key risks are managed on an ongoing basis and operate with an acceptable level.
The principal risks and uncertainties facing the business are:
Stock risk
The company holds substantial value of wine stocks. The Company mitigates the risk of carrying this stock through appropriate insurance coverage and ensuring adequate channels to market exist to recover all costs.
Regulation risk
Sale of alcohol is strictly controlled in all our markets through licencing and regulations. The Company promotes awareness and best practice within its business and uses third party legal advice where necessary. Regulatory developments are routinely monitored to ensure that potential changes are identified, assessed and appropriate legal action is taken.
Covid
The Company is exposed to the potential risk of trading within a global pandemic. The directors have mitigated risks by ensuring the business is structured to accommodate flexible working as government guidance dictates. The directors will continue to assess the potential impact of a pandemic and mitigate any risks to an appropriate level.
Lay & Wheeler Limited
Strategic report (continued)
For the year ended 3 April 2023
2
Approved and authorised by order of the board
David Isherwood
Director
28 March 2024
Lay & Wheeler Limited
Directors' report
For the year ended 3 April 2023
3
The directors present their annual report and financial statements for the year ended 3 April 2023.
Principal activities
The principal activity of the company continued to be that of en primeur, in bond and fine wine sales.
Results and dividends
The results for the year are set out on page 9.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Kathryn Keating
(Resigned 31 May 2023)
Erica Sugai
Erik Talvitie
(Resigned 31 August 2022)
David Isherwood
Li Feng
(Appointed 31 August 2022)
Auditor
Saffery LLP have expressed their willingness to continue in office.
Statement of directors' responsibilities
The directors are responsible for preparing the annual 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 United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law).
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:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the 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 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.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
Lay & Wheeler Limited
Directors' report (continued)
For the year ended 3 April 2023
4
Going concern
The directors believe that, after making enquiries of the ultimate parent undertaking, Coterie Limited, they have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. The Company has obtained a letter of support from the ultimate parent undertaking, Coterie Limited confirming that they will continue to provide, or arrange to provide, resources to enable them to continue that financial support for a period of at least 12 months from date of signing of these financial statements if required.
The Company has prepared cash flow forecasts covering a 12 month period from the date of approval of these financial statements. In preparing these forecasts, the Company has considered the principal areas of uncertainty within the forecasts and the underlying assumptions, in particular those relating to market risks, cost management and working capital management. The directors acknowledge there are potentially significant sensitivities to the cash flow forecast given the challenging trading conditions and factors outside of the company control. To mitigate any risk to revenue and cash flow, the directors will monitor costs and working capital requirements carefully, and re-consider forecasts, if necessary.
Accordingly, the financial statements have been prepared on a going concern basis.
Events after reporting date
On 18 August 2023, a new UK group was established where the new immediate parent undertaking is Coterie Holdings UK Limited, a company registered in England and Wales. Its registered address is Ground Floor, Eggerton House, 68 Baker Street, Weybridge, Surrey, England, KT13 8AL.
On this date, the logistics division formerly operating within Lay & Wheeler Limited was transferred to Coterie Vaults Limited, a related company by virtue of having the same ultimate controlling party.
On behalf of the board
David Isherwood
Director
28 March 2024
Lay & Wheeler Limited
Independent auditor's report
To the members of Lay & Wheeler Limited
5
Opinion
We have audited the financial statements of Lay & Wheeler Limited (the 'company') for the year ended 3 April 2023 which comprise the statement of comprehensive income, the statement of financial position, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including 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:
give a true and fair view of the state of the company's affairs as at 3 April 2023 and of its loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
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 Auditor's 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 UK, including the FRC’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
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 auditor's 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.
Lay & Wheeler Limited
Independent auditor's report (continued)
To the members of Lay & Wheeler Limited
6
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
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 strategic report or 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:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, 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.
Auditor's responsibilities for the audit of the financial statements
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 auditor's 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.
Lay & Wheeler Limited
Independent auditor's report (continued)
To the members of Lay & Wheeler Limited
7
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 specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud are detailed below.
Identifying and assessing risks related to irregularities:
We assessed the susceptibility of the company’s financial statements to material misstatement and how fraud might occur, including through discussions with the directors, discussions within our audit team planning meeting, updating our record of internal controls and ensuring these controls operated as intended. We evaluated possible incentives and opportunities for fraudulent manipulation of the financial statements. We identified laws and regulations that are of significance in the context of the company by discussions with directors and by updating our understanding of the sector in which the company operates.
Laws and regulations of direct significance in the context of the company include The Companies Act 2006 and UK Tax legislation.
Audit response to risks identified
We considered the extent of compliance with these laws and regulations as part of our audit procedures on the related financial statement items including a review of financial statement disclosures. We reviewed the company's records of breaches of laws and regulations, minutes of meetings and correspondence with relevant authorities to identify potential material misstatements arising. We discussed the company's policies and procedures for compliance with laws and regulations with members of management responsible for compliance.
During the planning meeting with the audit team, the engagement partner drew attention to the key areas which might involve non-compliance with laws and regulations or fraud. We enquired of management whether they were aware of any instances of non-compliance with laws and regulations or knowledge of any actual, suspected or alleged fraud. We addressed the risk of fraud through management override of controls by testing the appropriateness of journal entries and identifying any significant transactions that were unusual or outside the normal course of business. We assessed whether judgements made in making accounting estimates gave rise to a possible indication of management bias. At the completion stage of the audit, the engagement partner’s review included ensuring that the team had approached their work with appropriate professional scepticism and thus the capacity to identify non-compliance with laws and regulations and fraud.
There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
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 auditor's 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.
Lay & Wheeler Limited
Independent auditor's report (continued)
To the members of Lay & Wheeler Limited
8
Richard Collis
Senior Statutory Auditor
For and on behalf of Saffery LLP
29 March 2024
Chartered Accountants
Statutory Auditors
71 Queen Victoria Street
London
EC4V 4BE
Lay & Wheeler Limited
Statement of comprehensive income
For the year ended 3 April 2023
9
2023
2022
Notes
£000
£000
Turnover
3
27,573
23,439
Cost of sales
(23,465)
(19,036)
Gross profit
4,108
4,403
Distribution costs
(958)
(785)
Administrative expenses
(4,759)
(4,081)
Other operating income
3
1,445
Operating loss
4
(164)
(463)
Interest receivable and similar income
7
2
1
Interest payable and similar expenses
8
(72)
-
Loss before taxation
(234)
(462)
Tax on loss
9
96
45
Loss for the financial year
(138)
(417)
The income statement has been prepared on the basis that all operations are continuing operations.
Lay & Wheeler Limited
Statement of financial position
As at 3 April 2023
10
3 April 2023
28 March 2022
Notes
£000
£000
£000
£000
Fixed assets
Intangible assets
10
129
143
Tangible assets
11
84
49
213
192
Current assets
Stocks
13
4,439
3,434
Debtors falling due after more than one year
14
2,057
2,730
Debtors falling due within one year
14
21,056
16,680
Cash at bank and in hand
1,182
5,049
28,734
27,893
Creditors: amounts falling due within one year
15
(23,295)
(23,535)
Net current assets
5,439
4,358
Total assets less current liabilities
5,652
4,550
Creditors: amounts falling due after more than one year
16
(4,435)
(3,174)
Provisions for liabilities
Deferred tax liability
19
21
-
(21)
Net assets
1,217
1,355
Capital and reserves
Called up share capital
21
100
100
Profit and loss reserves
1,117
1,255
Total equity
1,217
1,355
The financial statements were approved by the board of directors and authorised for issue on 28 March 2024 and are signed on its behalf by:
David Isherwood
Director
Company Registration No. 05730318
Lay & Wheeler Limited
Statement of changes in equity
For the year ended 3 April 2023
11
Share capital
Profit and loss reserves
Total
£000
£000
£000
Balance at 31 March 2021
100
1,672
1,772
Year ended 28 March 2022:
Loss and total comprehensive income for the year
-
(417)
(417)
Balance at 28 March 2022
100
1,255
1,355
Year ended 3 April 2023:
Loss and total comprehensive income for the year
-
(138)
(138)
Balance at 3 April 2023
100
1,117
1,217
Lay & Wheeler Limited
Statement of cash flows
For the year ended 3 April 2023
12
2023
2022
Notes
£000
£000
£000
£000
Cash flows from operating activities
Cash (absorbed by)/generated from operations
27
(5,912)
1,546
Income taxes refunded
266
22
Net cash (outflow)/inflow from operating activities
(5,646)
1,568
Investing activities
Purchase of intangible assets
(75)
(33)
Purchase of tangible fixed assets
(65)
(50)
Proceeds on disposal of tangible fixed assets
9
Interest received
2
1
Net cash used in investing activities
(129)
(82)
Financing activities
Repayment of borrowings
1,928
Repayment of derivatives
(52)
-
Payment of finance leases obligations
32
-
Net cash generated from/(used in) financing activities
1,908
-
Net (decrease)/increase in cash and cash equivalents
(3,867)
1,486
Cash and cash equivalents at beginning of year
5,049
3,563
Cash and cash equivalents at end of year
1,182
5,049
Lay & Wheeler Limited
Notes to the financial statements
For the year ended 3 April 2023
13
1
Accounting policies
Company information
Lay & Wheeler Limited is a private company limited by shares incorporated in England and Wales under the Companies Act 2006 (registration number 05730318). The registered office is Unit 6 Blackacre Road, Great Blakenham, Ipswich, England, IP6 0FL.
At the balance sheet date, the Company was a wholly owned subsidiary of Coterie Limited, a company domiciled in the Cayman Islands.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
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 £000.
The financial statements have been prepared under the historical cost convention, modified to include certain financial instruments at fair value. The principal accounting policies adopted are set out below.
1.2
Going concern
The directors believe that, after making enquiries of the ultimate parent undertaking, Coterie Limited, they have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. The Company has obtained a letter of support from the ultimate parent undertaking, Coterie Limited confirming that they will continue to provide, or arrange to provide, resources to enable them to continue that financial support for a period of at least 12 months from date of signing of these financial statements if required. true
The Company has prepared cash flow forecasts covering a 12 month period from the date of approval of these financial statements. In preparing these forecasts, the Company has considered the principal areas of uncertainty within the forecasts and the underlying assumptions, in particular those relating to market risks, cost management and working capital management. The directors acknowledge there are potentially significant sensitivities to the cash flow forecast given the challenging trading conditions and factors outside of the company control. To mitigate any risk to revenue and cash flow, the directors will monitor costs and working capital requirements carefully, and re-consider forecasts, if necessary.
Accordingly, the financial statements have been prepared on a going concern basis.
1.3
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.
Sale of goods
The majority of the Company’s revenue is derived from selling goods with revenue recognised at a point in time when control of the goods has transferred to the customer. This is generally when the goods are delivered to the customer. However, for export sales, control might also be transferred when delivered either to the port of departure or port of arrival, depending on the specific terms of the contract with a customer. There is limited judgement needed in identifying the point control passes: once physical delivery of the products to the agreed location has occurred, the Company no longer has physical possession, usually will have a present right to payment (as a single payment on delivery) and retains none of the significant risks and rewards of the goods in question.
Lay & Wheeler Limited
Notes to the financial statements (continued)
For the year ended 3 April 2023
1
Accounting policies (continued)
14
Sale of services
Revenue from a contract to provide services is recognised by reference to the stage of completion of the contract. The stage of completion of the contract is determined as follows:
Storage services
The Company provides secured storage services for purchased wine for customers, with revenue recognised typically on an over time basis. The company will provide storage services for purchased products which are distinct from the purchase transaction and are therefore separately identifiable. For these storage services there is a fixed unit price per time period, with potential reductions for orders or quantity placed. There is therefore no judgement involved in allocating the contract price to each unit in the provision of storage services over time.
Commission on sale
The company provides brokerage services through the provision of a selling platform allowing past customers to sell their products through brokering. Revenue received is based on a percentage of the selling price obtained in the transaction and is recognised at a point in time. The point in time is based on the particular agreement but is generally on the earlier of delivery or final payment. As such, there is limited judgement needed in identifying the point that control passes and therefore the company can recognise the income.
1.4
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:
Software
20%-33% years straight line
1.5
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, 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:
Leasehold improvements
5% straight line (or more if the lease term is less than 20 years)
Fixtures and fittings
10% or 20% straight line basis
Motor vehicles
20% straight line basis
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.
Lay & Wheeler Limited
Notes to the financial statements (continued)
For the year ended 3 April 2023
1
Accounting policies (continued)
15
1.6
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.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.7
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks held for distribution at no or nominal consideration are measured at the lower of replacement cost and cost, adjusted where applicable for any loss of service potential.
Cost is determined on a first in, first out basis and includes expenditure incurred in acquiring the inventories, production or conversion costs and other costs in bringing them to their existing location and condition, less rebates and discounts,
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. Reversals of impairment losses are also recognised in profit or loss.
1.8
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
Lay & Wheeler Limited
Notes to the financial statements (continued)
For the year ended 3 April 2023
1
Accounting policies (continued)
16
1.9
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 statement of financial position 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, 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.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
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.
Lay & Wheeler Limited
Notes to the financial statements (continued)
For the year ended 3 April 2023
1
Accounting policies (continued)
17
Basic financial liabilities
The company recognises financial debt when the company becomes a party to the contractual provisions of the instruments. Financial liabilities are classified as either 'financial liabilities at fair value through profit or loss' or 'other financial liabilities'.
Other financial liabilities
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 finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.10
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.11
Derivatives
Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to fair value at each reporting end date. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.
A derivative with a positive fair value is recognised as a financial asset, whereas a derivative with a negative fair value is recognised as a financial liability.
1.12
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Lay & Wheeler Limited
Notes to the financial statements (continued)
For the year ended 3 April 2023
1
Accounting policies (continued)
18
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are 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. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Where items recognised in other comprehensive income or equity are chargeable to or deductible for tax purposes, the resulting current or deferred tax expense or income is presented in the same component of comprehensive income or equity as the transaction or other event that resulted in the tax expense or income. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.13
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
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.
1.14
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense when employees have rendered the service entitling them to the contributions. The Company contributes to the personal pension plans of certain staff. Any contributions unpaid at the balance sheet date are included as an accrual at that date. The Company has no further payment obligations once the contributions have been paid.
Lay & Wheeler Limited
Notes to the financial statements (continued)
For the year ended 3 April 2023
1
Accounting policies (continued)
19
1.15
Leases
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 statement of financial position 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 leases asset are consumed.
1.16
En Primeur & Wine Lying Abroad
En Primeur involves the sale and purchase of wine prior to bottling. Up to three years subsequent to the initial En Primeur offering the wine is released by the Chateau and is made available to the customer for delivery. Revenue and the corresponding gross profit is deferred until the wine is released and becomes available to the customer.
Payments to suppliers are treated as prepayments and receipts from customers treated as deferred income. In addition, an entry in the financial statement is made on initial agreement between the vineyard and the company for the purchase of En Primeur wine which is included in both debtors and creditors. Balances are recognised in debtors and creditors on the earliest of a purchase order being sent to the vineyard, an invoice being received by the company or payment being made. The cost is deferred until the wine is released, matching the recognition of the revenue.
2
Critical accounting judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are not required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The Directors consider there to be no key sources of estimates on uncertainty or critical accounting judgements that have a significant effect on the amounts recognised in the financial statements.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Stock valuation
Stock is valued at the lower of cost and net realisable value. Net realisable value includes, where necessary, provisions for slow moving and obsolete stocks. Calculation of these provisions requires judgements to be made, which include forecast consumer demand, the promotional, competitive and economic environment and inventory loss trends.
Lay & Wheeler Limited
Notes to the financial statements (continued)
For the year ended 3 April 2023
20
3
Turnover and other revenue
2023
2022
£000
£000
Turnover analysed by geographical market
UK
20,152
16,642
Rest of the world
7,421
6,797
27,573
23,439
2023
2022
£000
£000
Other revenue
Interest income
2
1
Management recharges from group undertakings
1,445
4
Operating loss
2023
2022
Operating loss for the year is stated after charging:
£000
£000
Exchange losses
127
76
Fees payable to the company's auditor for the audit of the company's financial statements
38
32
Depreciation of owned tangible fixed assets
21
6
Amortisation of intangible assets
78
79
Loss on disposal of intangible assets
11
-
Operating lease charges
281
191
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
56
42
Their aggregate remuneration comprised:
2023
2022
£000
£000
Wages and salaries
2,481
2,020
Social security costs
277
230
Pension costs
103
97
2,861
2,347
Lay & Wheeler Limited
Notes to the financial statements (continued)
For the year ended 3 April 2023
21
6
Directors' remuneration
2023
2022
£000
£000
Remuneration for qualifying services
340
338
Company pension contributions to defined contribution schemes
11
14
351
352
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£000
£000
Remuneration for qualifying services
208
191
Accrued pension at the end of the year
10
8
7
Interest receivable and similar income
2023
2022
£000
£000
Interest income
Other interest income
2
1
8
Interest payable and similar expenses
2023
2022
£000
£000
Other finance costs:
Finance costs for financial instruments measured at fair value through profit or loss
72
9
Taxation
2023
2022
£000
£000
Current tax
UK corporation tax on profits for the current period
(75)
Deferred tax
Origination and reversal of timing differences
(21)
(45)
Total tax credit
(96)
(45)
Lay & Wheeler Limited
Notes to the financial statements (continued)
For the year ended 3 April 2023
9
Taxation (continued)
22
The actual credit for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£000
£000
Loss before taxation
(234)
(462)
Expected tax credit based on the standard rate of corporation tax in the UK of 19.00% (2022: 19.00%)
(44)
(88)
Tax effect of expenses that are not deductible in determining taxable profit
6
23
Adjustments in respect of prior years
(4)
(62)
Remeasurement of deferred tax for changes in tax rates
(15)
(19)
Other permanent differences
(8)
2
Deferred tax adjustments in respect of prior years
54
Surrender of tax losses for R&D tax credit refund
(71)
Movement in deferred tax not recognised
(14)
99
Taxation credit for the year
(96)
(45)
10
Intangible fixed assets
Software
£000
Cost
At 29 March 2022
1,333
Additions
75
Disposals
(205)
At 3 April 2023
1,203
Amortisation and impairment
At 29 March 2022
1,190
Amortisation charged for the year
78
Disposals
(194)
At 3 April 2023
1,074
Carrying amount
At 3 April 2023
129
At 28 March 2022
143
Lay & Wheeler Limited
Notes to the financial statements (continued)
For the year ended 3 April 2023
23
11
Tangible fixed assets
Leasehold improvements
Fixtures and fittings
Motor vehicles
Total
£000
£000
£000
£000
Cost
At 29 March 2022
240
106
50
396
Additions
29
36
65
Disposals
(109)
(109)
At 3 April 2023
240
26
86
352
Depreciation and impairment
At 29 March 2022
240
104
3
347
Depreciation charged in the year
3
18
21
Eliminated in respect of disposals
(100)
(100)
At 3 April 2023
240
7
21
268
Carrying amount
At 3 April 2023
19
65
84
At 28 March 2022
2
47
49
Motor vehicles include amounts in respect of assets held on hire purchase with a net book value of £28,841 (2022: £nil). The depreciation charge for the year in relation to these amounted to £7,210 (2022: £nil).
12
Subsidiaries
The company previously held an investment in the entire ordinary share capital of Cellarage Services Limited whose registered office is Unit 6 Blackacre Road, Great Blakenham, Ipswich, IP6 0FL.
The value of the investment is considered to be nil as the subsidiary company is dormant.
On the 28 November 2022, the investment was disposed of to the ultimate controlling party of the company, Foster Chiang. As at the year end the company held no subsidiaries.
13
Stocks
2023
2022
£000
£000
Finished goods and goods for resale
4,439
3,434
Lay & Wheeler Limited
Notes to the financial statements (continued)
For the year ended 3 April 2023
24
14
Debtors
2023
2022
Amounts falling due within one year:
£000
£000
Trade debtors
1,584
1,865
Corporation tax recoverable
69
260
Amounts owed by group undertakings
3,980
430
Derivative financial instruments
52
-
Prepayments and accrued income
15,371
14,125
21,056
16,680
2023
2022
Amounts falling due after more than one year:
£000
£000
Prepayments and accrued income
2,057
2,730
Total debtors
23,113
19,410
15
Creditors: amounts falling due within one year
2023
2022
Notes
£000
£000
Obligations under finance leases
18
7
Trade creditors
9,578
9,949
Amounts owed to group undertakings
1,354
Taxation and social security
212
245
Other creditors
57
Accruals and deferred income
12,144
13,284
23,295
23,535
Included within amounts owed to group undertakings is a loan subject to interest of 0% and is repayable on demand.
As at the year end the company has outstanding fixed and floating charges held against their assets.
16
Creditors: amounts falling due after more than one year
2023
2022
Notes
£000
£000
Obligations under finance leases
18
25
Other borrowings
17
2,000
Deferred income
2,410
3,174
4,435
3,174
Lay & Wheeler Limited
Notes to the financial statements (continued)
For the year ended 3 April 2023
25
17
Loans and overdrafts
2023
2022
£000
£000
Other loans
2,000
Payable after one year
2,000
On 31 October 2022 the company entered into an unsecured facility agreement with a related party by virtue of having the same ultimate controlling party, of £2,000,000 at an interest rate of 6% per annum and payable by fixed term in 2025.
18
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£000
£000
Within one year
9
In two to five years
29
38
Less: future finance charges
(6)
32
Finance lease payments represent rentals payable by the company for motor vehicles. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 4 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
19
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2023
2022
Balances:
£000
£000
ACAs
-
22
Provisions
-
(1)
-
21
Lay & Wheeler Limited
Notes to the financial statements (continued)
For the year ended 3 April 2023
19
Deferred taxation (continued)
26
2023
Movements in the year:
£000
Liability at 29 March 2022
21
Credit to profit or loss
(21)
Liability at 3 April 2023
-
The deferred tax liability set out above relates to accelerated capital allowances.
20
Retirement benefit schemes
2023
2022
Defined contribution schemes
£000
£000
Charge to profit or loss in respect of defined contribution schemes
103
97
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
Contributions totaling £14,795 (2022: £13,273) were payable to the fund at the reporting date and are included in creditors.
21
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£000
£000
Issued and fully paid
Ordinary shares of £1 each
100,000
100,000
100
100
The Company's ordinary shares, which carry no right to fixed income, each carry the right to one vote at general meetings of the Company.
22
Derivatives
The Company entered into foreign exchange contracts in the year to buy specific amounts of foreign currency in the future at a predetermined exchange rate. Forward exchange contracts are entered into anticipating foreign currency receipts of payments for supplier orders. The Company does not use derivative financial instruments for speculative purposes.
These contracts have settlement dates between 31 July 2023 and 15 March 2024. The net amount of currency to be purchased and sold under these exchange contracts at 3 April 2023 was £3,480,454 (2022: £2,833,430).
The Directors have obtained a year end valuation of the foreign exchange contracts from the Company's bank which states a fair value of £51,580 in favour of the Company (2022: £57,175 in favour of the bank). The Company has recognised the foreign exchange amounts in the Statement of Financial Position in derivative financial instruments under debtors.
Lay & Wheeler Limited
Notes to the financial statements (continued)
For the year ended 3 April 2023
27
23
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2022
£000
£000
Within one year
80
65
Between two and five years
16
80
81
24
Events after the reporting date
On 18 August 2023, a new UK group was established where the new immediate parent undertaking is Coterie Holdings UK Limited, a company registered in England and Wales. Its registered address is Ground Floor, Eggerton House, 68 Baker Street, Weybridge, Surrey, England, KT13 8AL.
On this date, the logistics division formerly operating within Lay & Wheeler Limited was transferred to Coterie Vaults Limited, a related company by virtue of having the same ultimate controlling party.
25
Related party transactions
The Company has taken advantage of the exemption under FRS 102 paragraph 33 from disclosing transactions with companies wholly owned within the wider group.
On 18 May 2022, a related company by virtue of having the same ultimate controlling party entered into a facility agreement up to a maximum of £13,850,000 at an interest rate of 4.75%. The interest is subject to a guarantee by Lay & Wheeler Limited through mutual control up to a maximum of £1,000,000. The agreement includes a fixed charge over specific fixed assets of the company.
26
Ultimate controlling party
As at the year end the immediate parent undertaking is Coterie Limited, a company domiciled in the Cayman Islands. Its registered address is Vistra (Cayman) Limited, PO Box 31119, Grand Pavilion, Hibiscus Way, 802 West Bay Road, Grand Cayman, KY1-1205 Cayman Islands.
The ultimate controlling party is Foster Chiang.
Lay & Wheeler Limited
Notes to the financial statements (continued)
For the year ended 3 April 2023
28
27
Cash (absorbed by)/generated from operations
2023
2022
£000
£000
Loss for the year after tax
(138)
(417)
Adjustments for:
Taxation credited
(96)
(45)
Finance costs
72
Investment income
(2)
(1)
Loss on disposal of intangible assets
11
-
Amortisation and impairment of intangible assets
78
79
Depreciation and impairment of tangible fixed assets
21
6
Movements in working capital:
(Increase)/decrease in stocks
(1,005)
343
Increase in debtors
(3,842)
(4,032)
(Decrease)/increase in creditors
(247)
5,318
(Decrease)/increase in deferred income
(764)
295
Cash (absorbed by)/generated from operations
(5,912)
1,546
28
Analysis of changes in net funds/(debt)
29 March 2022
Cash flows
Market value movements
3 April 2023
£000
£000
£000
£000
Cash at bank and in hand
5,049
(3,867)
-
1,182
Borrowings excluding overdrafts
-
(1,928)
(72)
(2,000)
Obligations under finance leases
-
(32)
-
(32)
5,049
(5,827)
(72)
(850)
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