The directors present the strategic report for the 26 week period ended 26 March 2021.
The period under review is the 26 weeks ending 26 th March 2021. The previous period represented 78 weeks to 25 th September 2020 which was extended by the Board due to the Covid-19 pandemic.
The 26 weeks to March 2021 continued to be significantly impacted by the Covid-19 pandemic with the second national lockdown and tiered restrictions occurring in the period. Although 37% lower than the same period in the previous (pre-pandemic) year, turnover did grow 11% on the previous 6 months trading.
Revenue from the Foodservice channel started to recover (up 6% vs the 26 weeks to September 2020) but remained behind the same period last year as large portions of the sector remained closed for parts of the 26 week period. Retail was 2% ahead of the previous 26 weeks and 12% lower than the same period last year with our Retail customers less effected by the pandemic.
With turnover depressed in the period the Company continued to manage its discretionary costs carefully, including utilising the government furlough scheme, and was able to maintain a good level of liquidity.
In the 26 weeks post the period of the review, and with UK restrictions largely lifted, the Company turnover has recovered strongly. Against the 26 weeks ending 26 th March 2021 our Food service sector is up 107% and our Retail sector is up 103%. Against the pre-pandemic period, being the 26 weeks to March 2020, turnover is up 28% driven by increased brand awareness as well as commercial gains in major customers.
The group continues to be cash generative and cash is available to fund all day-to-day activities.
Loss of any large customer or downward trend in a particular product range is a risk to business performance. The group continued to increase its customer base during the period and reduce its customer concentration levels, which coupled with strong account management mitigates customer risk.
Commodities such as juices and plastics represent a large proportion of the group's input costs, movement in cost of these raw materials represents a risk to the group's trading performance. The group contracts ahead on its key commodities to reduce its exposure.
There is some direct foreign currency risk within the group, with approximately 50% of raw materials purchased using foreign currencies. Currency contracts representing approximately 60% of requirements are in place on a rolling 6 month basis.
The Company has credit risk in the form of its trade debtors. Along with strong credit management the Company mitigates any loss from customers defaulting with credit insurance.
Other risks are monitored through regular review of key performance metrics such as customer service and customer complaint levels, food safety and quality measures, plant efficiency, staff engagement and staff turnover.
On 22 nd October 2021, Langholm Capital 2008 LLP completed the sale of 100% of the share capital in the group parent company, JB Drinks Holdings Limited, to Verdane, a speciality growth equity investment firm. Verdane will support the Company utilising their two decades of experience investing and building consumer companies to maximise the potential of the Company.
On behalf of the board
The directors present their annual report and financial statements for the 26 week period ended 26 March 2021.
The results for the 26 week period are set out on page 10.
No ordinary dividends were paid. The directors do not recommend payment of a further dividend.
No preference dividends were paid. The directors do not recommend payment of a final dividend.
The directors who held office during the 26 week period and up to the date of signature of the financial statements were as follows:
Moore Kingston Smith LLP were appointed as auditor to the group and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
We have audited the financial statements of JB Drinks Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the 26 week period ended 26 March 2021 which comprise the Group Statement of Comprehensive Income, the Group Balance Sheet, the Company Balance Sheet, the Group Statement of Changes in Equity, the Company Statement of Changes in Equity, the Group Statement of Cash Flows and notes to the financial statements, 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 FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
Basis for opinion
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 group 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 group's and parent 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.
Other information
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.
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' r eport for the financial 26 week period 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.
In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identifie d material misstatements in the strategic report and the directors' r eport .
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
As explained more fully in the directors' r esponsibilities s tatement set out on page 4 , 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 parent 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 group or the parent company or to cease operations, or have no realistic alternative but to do so.
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 .
As part of an audit in accordance with ISAs (UK) we exercise professional judgement and maintain professional scepticism throughout the audit. We also:
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.
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 purposes of expressing an opinion on the effectiveness of the group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
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 group’s or the parent 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 auditor’s 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 auditor’s report. However, future events or conditions may cause the group or the parent company to cease to continue as a going concern.
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.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
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.
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 .
The objectives of our audit in respect of fraud, are; to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses to those assessed risks; and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the company.
Our approach was as follows:
We obtained an understanding of the legal and regulatory requirements applicable to the company and considered that the most significant are the Companies Act 2006, UK financial reporting standards as issued by the Financial Reporting Council, and UK taxation legislation.
We obtained an understanding of how the company complies with these requirements by discussions with management and those charged with governance.
We assessed the risk of material misstatement of the financial statements, including the risk of material misstatement due to fraud and how it might occur, by holding discussions with management and those charged with governance.
We inquired of management and those charged with governance as to any known instances of non-compliance or suspected non-compliance with laws and regulations.
Based on this understanding, we designed specific appropriate audit procedures to identify instances of non-compliance with laws and regulations. This included making enquiries of management and those charged with governance and obtaining additional corroborative evidence as required.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. 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.
Use of our 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 for no purpose other than to draw to the attention of the company’s members those matters we are required to include in an auditor's report addressed to them . To the fullest extent permitted by law, we do not accept or assume responsibility to any party 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.
As permitted by s408 Companies Act 2006, the c ompany has not presented its own profit and loss account and related notes. The c ompany’s loss for the year was £103,773 (2020 - £199,545 loss).
JB Drinks Holdings Limited is a private company limited by shares incorporated in England and Wales . The registered office is Douglas House, Mounts Road, Wednesbury, West Midlands, United Kingdom, WS10 0BU.
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 a mounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The consolidated group financial statements consist of the financial statements of the parent company JB Drinks Holdings Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates .
All financial statements are made up to 26 March 2021 . Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the g roup.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Notwithstanding net liabilities of £16,808,857 at 26 March 2021 (at 25 September 2020: £14,198,388) and a loss of £2,610,469 in the 26 week period ended 26 March 2021 (78 week period ended 25 September 2020: £5,433,031) the financial statements have been prepared on a going concern basis, which the directors consider to be appropriate for the following reasons.
On 22 October 2021 JB Drinks Holdings was acquired by Verdane Capital Advisors AS. See note 23 for the full details. Post completion of the sale the group is financed by a new loan to JB Drinks Limited from Aurora Bidco 1 Limited for £10.1m which is repayable from September 2023 on the lender's demand.
The directors have prepared group cash flow forecasts from the date of approval of these financial statements through to March 2023 which indicate that, taking account of reasonably possible downsides , including a further lockdown in early 2022, the group will have sufficient funds through its working capital management to meet its liabilities as they fall due for a period of at least 12 months from date of approval of these financial statements, including repayment of the residual "B" loan notes (see details in note 23) as they fall due in April 2022.
Consequently, the directors are confident that the group will have sufficient funds to continue to meet its liabilities as they fall due for at least 12 months from the date of approval of the financial statements and therefore have prepared the financial statements on a going concern basis.
The financial statements presented here cover a period of six months. The previous reported financial statements for this entity covered a period of eighteen months. The company elected to extend the previous period as a result of the COVID-19 pandemic and has chosen to shorten the current period in order to return to its previous financial year end. It should therefore be noted that the comparative amounts presented in the financial statements and their related notes are not entirely comparable.
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
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 recognised in the profit and loss account .
Equity in vest ments are measured at fair value through profit or loss , except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably , which are recognised at cost less impairment until a reliable measure of fair value becomes available.
I n the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Investments in associates are initially recognised at the transaction price (including transaction costs) and are subsequently adjusted to reflect the g roup’s share of the profit or loss, other comprehensive income and equity of the associate using the equity method. Any difference between the cost of acquisition and the share of the fair value of the net identifiable assets of the associate on acquisition is recognised as goodwill. Any unamortised balance of goodwill is included in the carrying value of the investment in associates.
Losses in excess of the carrying amount of an investment in an associate are recorded as a provision only when the company has incurred legal or constructive obligations or has made payments on behalf of the associate.
In the parent c ompany financial statements, investments in associates are accounted for at cost less impairment.
Entities in which the group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities .
At each reporting period end date, the group 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.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
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.
The group 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 group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and 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, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest m ethod 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, 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.
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.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group 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.
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 group after deducting all of its liabilities.
Basic financial liabilities, including creditors , bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future paymen ts discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
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 th r ough 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.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group 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 group.
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account 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 group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
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. Deferred tax is charged or credited in the profit and loss account , except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is 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.
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.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Government grants are recognised at the fair value of the asset receive d or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met . Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable . A grant received before the recognition criteria are satisfied is recognised as a liability.
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
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 where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
The key judgments involved in assessing the carrying value of goodwill and intangible assets include estimation of future cash flows and profitability of the business and the selection of a suitable discount rate.
The key judgments involved in assessing the carrying value of investments held by the parent company, JB Drinks Holdings Limited, include estimation of future cash flows and profitability of the business and the selection of a suitable discount rate to assess value in use.
There is only one class of business being the manufacture and sale of soft drinks.
The average monthly number of persons (including directors) employed by the group and company during the 26 week period was:
Their aggregate remuneration comprised:
The parent company employs two directors but the payroll cost for one director is borne by Purity Soft Drinks Limited, an indirect subsidiary of the parent company.
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2020 - 1).
The actual (credit)/charge for the 26 week period can be reconciled to the expected credit for the 26 week period based on the profit or loss and the standard rate of tax as follows:
Details of the company's subsidiaries at 26 March 2021 are as follows:
Directly attributable fee and other finance costs in respect of other loans of £97,283 (2020: £182,560) have been deducted to arrive at the outstanding borrowings.
Held within other loans are the following loan notes:
Subordinated redeemable unsecured loan notes of £25,568,816 (2020: £24,045,355) ("A" loan notes) held by Langholm Capital Nominees Limited and Langholm Capital CIP Nominees Limited, which were due to be repaid at the end of the term agreement in April 2022. After the period end these loan notes were either capitalised or repaid to the loan note holders as part of the sale of the group. These loan notes carried an interest rate of 15% which was being accrued to date of repayment. During the prior period £6,668,437 of interest was waived against an issuance of shares of JB Drinks Limited due to which a share premium of £6,668,435 was recognised.
Subordinated redeemable unsecured loan notes of £580,572 (2020: £398,678) ("B" loan notes), held by Langholm Capital Nominees Limited, Langholm Capital CIP Nominees Limited, Rooney Anand and David Bell, which were also due to be repaid in April 2022. After the period end these loan notes were capitalised in full with an issuance of shares in JB Drinks Limited. These loan notes carried an interest rate of between 5% and 15% which was accrued for to the date of capitalisation. During the prior period one loan note was early settled and a gain of £871,638 was recorded as a gain in the profit and loss.
Redeemable unsecured loan notes of £1,626,000 (2020: £1,626,000) ("vendor loan notes") were due to be repaid at the end of the term agreement in April 2022. After the period end these loan notes and accrued interest were fully repaid to loan note holders as part of the sale of the group. These loan notes carried an interest rate of 7% which was accrued for to date of repayment.
See note 24 for details of loan repayments following the sale of JB Drinks Holdings Limited to Verdane Capital Advisers AS.
The provision relates to ongoing legal matters. Further disclosure has not been provided as the directors consider this to be prejudicial to the legal matters.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
Subsequent to the period end the following loan notes were released in exchange for 100,500 £1 ordinary shares in JB Drinks Holdings Limited:
£20,274,961 of " A " loan notes held by Langholm Capital Nominees Limited and Langholm Capital CIP Nominees Limited ;
£247,770 of " B " loan notes held by Langholm Capital Nominees Limited, Langholm Capital CIP Nominees Limited and Management .
On 22 October 2021 JB Drinks Holdings Limited was acquired by Verdane Capital Advisors AS (Aurora Holdco Limited being the new ultimate parent to JB Drinks Holdings Limited ). Upon any ‘exit’ the remaining loan notes are due for repayment. As such the following loans were repaid on the 22 October 2021:
Vendor loan notes of £2,706,822 ;
" A " Loan notes of £7,436,088 ;
Of the remaining “B” loan notes (£513,404) the holders have waived their right to redemption until expiry on 26th April 2022 .
The repayment of the loan notes was financed by a new loan in JB Drinks Limited from Aurora Bidco 1 Limited for £10,142,910. This is repayable in September 2023 on lender's demand and bears interest at 2.84%.
Rooney Anand is a director of JB Drinks Holdings Limited and was director of WM Morrison Supermarket PLC during the period , a company registered in England. During the period, the company made sales of £184,512 (2020: £240,868) to WM Morrison Supermarket PLC. At 26 March 2021, £12,165 (2020: £19,693) was owed by WM Morrison Supermarket PLC.
Sarah Baldwin is a director of The British Soft Drinks Association Limited, both companies are registered in England. During the period, the company made purchases of £ 2,993 (2020: £8,997) from The British Soft Drinks Association Limited. At 26 March 2021, £Nil (2020: £Nil) was owed to The British Soft Drinks Association Limited.
Langholm Capital 2008 LLP was the majority shareholder of the company during the period . During the period, the group paid Langholm Capital 2008 LLP for consultancy services and to reimburse certain expenses amounting to £17,978 (2020: £22,877). At 26 March 2021, £nil was outstanding (2020: £nil) to Langholm Capital 2008 LLP.
The directors consider the ultimate controlling party to be Aurora Holdco Limited by virtue of their majority shareholding of the company. During the period the ultimate controlling party was Langholm Capital 2008 LLP until the sale of the group in October 2021.