Company registration number 08399920 (England and Wales)
ARRAN AROMATICS LIMITED
UNAUDITED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023
PAGES FOR FILING WITH REGISTRAR
ARRAN AROMATICS LIMITED
CONTENTS
Page
Balance sheet
1 - 2
Notes to the financial statements
3 - 9
ARRAN AROMATICS LIMITED
BALANCE SHEET
AS AT
28 FEBRUARY 2023
28 February 2023
- 1 -
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
3
8,836
9,873
Tangible assets
4
151,292
80,436
160,128
90,309
Current assets
Stocks
881,017
861,928
Debtors
5
436,440
297,748
Cash at bank and in hand
304,546
783,307
1,622,003
1,942,983
Creditors: amounts falling due within one year
Creditors
6
418,905
734,650
Shareholders loan
7
3,189,537
3,232,006
3,608,442
3,966,656
Net current liabilities
(1,986,439)
(2,023,673)
Net liabilities
(1,826,311)
(1,933,364)
Capital and reserves
Called up share capital
1
1
Profit and loss reserves
(1,826,312)
(1,933,365)
Total equity
(1,826,311)
(1,933,364)
The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.true
For the financial year ended 28 February 2023 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.
The directors acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.
The members have not required the company to obtain an audit of its financial statements for the year in question in accordance with section 476.
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.
ARRAN AROMATICS LIMITED
BALANCE SHEET (CONTINUED)
AS AT
28 FEBRUARY 2023
28 February 2023
- 2 -
The financial statements were approved by the board of directors and authorised for issue on 22 May 2023 and are signed on its behalf by:
Mr K E Meechan
Director
Company Registration No. 08399920
ARRAN AROMATICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 3 -
1
Accounting policies
Company information
Arran Aromatics Limited is a private company limited by shares incorporated in England and Wales. The registered office is 12 King Street, Leeds, United Kingdom, LS1 2HL.
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 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
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 £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
1.2
Going concern
Endless LLP has continued to support the company through loans from Endless Fund IV (A) LP and Endless IV (B) LP, which are entities managed by Endless LLP. It is the current intention of Endless Fund (A) LP and Endless Fund IV (B) LP to continue to make these facilities available to the company for the foreseeable future and in any event for at least 12 months from the date of this report.
However any request for additional investment in the company by Endless funds will be subject to Endless' normal investment approval process at that time.
The directors have reviewed the current and forecast future financial position of the company, its cash flows and liquidity position. As such, the directors consider that it is appropriate to prepare the financial statements on the going concern basis.
1.3
Turnover
Turnover represents net invoiced sale of goods, excluding value added tax.
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.
1.4
Intangible fixed assets - goodwill
Negative goodwill is recognised where the fair value of the acquired assets is greater than the consideration, and is shown separately on the balance sheet. It is credited to the profit and loss account over a period in which the non-monetary assets are realised either through amortisation or sale.
1.5
Intangible fixed assets other than goodwill
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:
Trade marks and IP
10% straight line
1.6
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.
ARRAN AROMATICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
1
Accounting policies
(Continued)
- 4 -
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:
Plant and equipment
20% straight line
Fixtures and fittings
20% straight line
Computers
33% straight line
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.
1.7
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.
1.8
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 cost and replacement cost, adjusted where applicable for any loss of service potential.
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.
1.9
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.
1.10
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including 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.
ARRAN AROMATICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
1
Accounting policies
(Continued)
- 5 -
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, 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 payments 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.
1.11
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.
1.12
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 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 company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
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. 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 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.
ARRAN AROMATICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
1
Accounting policies
(Continued)
- 6 -
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.
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
Leases
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.
1.15
Government grants
Government grants relating to turnover are recognised as income over the periods when the related costs are incurred. Grants relating to an asset are recognised in income systematically over the asset's expected useful life. If part of such a grant is deferred it is recognised as deferred income rather than being deducted from the asset's carrying amount.
1.16
Foreign exchange
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.
2
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Total
59
62
ARRAN AROMATICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 7 -
3
Intangible fixed assets
Goodwill
Trade marks and IP
Total
£
£
£
Cost
At 1 March 2022 and 28 February 2023
(1,219,632)
10,372
(1,209,260)
Amortisation and impairment
At 1 March 2022
(1,219,632)
499
(1,219,133)
Amortisation charged for the year
1,037
1,037
At 28 February 2023
(1,219,632)
1,536
(1,218,096)
Carrying amount
At 28 February 2023
8,836
8,836
At 28 February 2022
9,873
9,873
4
Tangible fixed assets
Plant and machinery etc
£
Cost
At 1 March 2022
340,883
Additions
101,576
At 28 February 2023
442,459
Depreciation and impairment
At 1 March 2022
260,447
Depreciation charged in the year
30,720
At 28 February 2023
291,167
Carrying amount
At 28 February 2023
151,292
At 28 February 2022
80,436
ARRAN AROMATICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 8 -
5
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
334,808
199,118
Other debtors
3,000
Prepayments and accrued income
101,632
95,630
436,440
297,748
6
Other creditors falling due within one year
2023
2022
£
£
Trade creditors
245,115
119,385
Other creditors
115,511
417,351
Accruals and deferred income
58,279
197,914
418,905
734,650
7
Shareholders loan
Endless Fund IV (A) LP and Endless Fund IV (B) LP have provided funding of £3,189,537 (2022 - £3,232,006) via Endless LLP (as security agent and trustee). It is the current intention of Endless Fund IV A LP and Endless Fund IV B LP to continue to make these facilities available to the company for the foreseeable future and in any event for at least 12 months from the date of this report.
8
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, payable over the next 5 years as follows:
2023
2022
£
£
453,447
239,167
9
Related party transactions
Transactions with related parties
During the year the company incurred fees totalling £155,200 (2022 - £155,200) from Endless Fund IV (A) LP and Endless Fund IV (B) LP in relation to monitoring fees, loan interest and other expenses.
At 28 February 2023 the company owed Endless Fund IV (A) LP and Endless Fund IV (B) LP £764,544 (2022 - £807,013) in respect of fees charged, and £2,424,993 (2022 - £2,424,993) in respect of loan balances.
ARRAN AROMATICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 9 -
10
Parent company
The company's immediate parent is Arran (Scotland) Limited, a company registered in Scotland. Its registered address is Home Farm House, Brodick, Isle Of Arran, Scotland, KA27 8DD.
The ultimate controlling party is Endless LLP, a company registered in England and Wales.