Company Registration No. SC134963 (Scotland)
ISLE OF ARRAN DISTILLERS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
ISLE OF ARRAN DISTILLERS LIMITED
COMPANY INFORMATION
Directors
L Auchincloss
E Mitchell
M Peirce
R Tully
Secretary
M Cornwall
Company number
SC134963
Registered office
Lochranza
Isle Of Arran
Ayrshire
United Kingdom
KA27 8HJ
Auditor
Azets Audit Services
Titanium 1
King's Inch Place
Renfrew
Renfrewshire
United Kingdom
PA4 8WF
ISLE OF ARRAN DISTILLERS LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4
Directors' responsibilities statement
5
Independent auditor's report
6 - 8
Profit and loss account
9
Statement of comprehensive income
10
Balance sheet
11
Statement of changes in equity
12
Statement of cash flows
13
Notes to the financial statements
14 - 30
ISLE OF ARRAN DISTILLERS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
- 1 -
The
chairman presents his
strategic report for the year ended 31 December 2021.
Review of the Business
The profit for the year end 31 December 2021 before taxation was £4,625,696 (2020 - £2,472,957) with a post taxation profit of £3,271,902 (2020 - £1,907,530).
Despite the on-going challenges posed by covid-19, the company grew turnover in 2021 to £15,534,728 from £11,030,515 in 2020 and increased pre tax profitability by 87%.
Turnover (as set out in page 20) by brand & distillery sales, excluding visitor centre and mail order sales, for the year increased by 38% over 2020, from £9,782,768 to £13,496,544.
Brand sales were once again the principal driver of growth and increased by 52% over 2020 whilst sales of the Arran Single Malt portfolio grew by 54%. Demand has remained strong for the Arran Single Malt following the re-brand in 2019 and this was the case across our core range of products in all key markets. Volumes of the Arran 10 Years Old, our flagship bottling, increased by 73% over 2020 whilst we also experienced significant growth for the Arran Barrel Reserve and Bodega expressions.
In the post-Brexit landscape, the EU remained the largest region for Arran brand sales and France was once again our largest single market. Belgium and Denmark are two EU markets which continue to punch above their weight in terms of sales versus size whilst we also experienced robust growth in the Netherlands, Romania, and the Baltic region. Japan and China contributed to an impressive performance from the Asia-Pacific region where we have now also appointed new distributors for Thailand and Vietnam. In North America, Canada witnessed growth across all provinces, whilst in the USA considerable progress was made under our new importer and it is on track to becoming a key market for the brand.
Both Lochranza and Lagg Distillery Visitor Centres were able to open at reduced capacity from May 2021 onwards and remained trading throughout the rest of the year. Visitor numbers to the island were strong and as a result turnover from both centres increased by 102% to £1,423,379. Covid notwithstanding, we hope to return to a full year of regular trading in 2022.
Despite the partial re-opening of the Visitor Centres, mail order sales remained strong in 2021 and increased to £614,805 from £543,413 in 2020. As in 2020, the increase in mail order was again driven by online exclusives and the sale of limited-edition expressions.
Both Distillery sites were in production throughout 2021 and as a result the investment in distilled bulk whisky stocks increased by £1.7m to £16,810,266 from £15,108,095 in 2020 (see Balance Sheet on page 11). In addition, in 2021 the company invested £1.6m in new warehousing facilities at Lagg to support production at both sites; whilst £0.8m was invested in new wood to maintain product quality.
ISLE OF ARRAN DISTILLERS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 2 -
Principal risks and uncertainties
Risk management is a key priority for the company and is closely monitored through internal controls, policies and procedures which are under regular review and subject to Board approval.
The continuation of the covid-19 pandemic into 2021 presented an on-going set of unique challenges but the company managed the associated uncertainties through a strong trading performance, clear communication with all stakeholders in the company and utilising all available government support.
Covid-19 aside the principal risks facing the company are economic and political uncertainty, the sustainability of the supply chain and competition in the marketplace.
Financial Risks:
-
Currency – The company does not consider it efficient to hedge its exposure to foreign currency risk.
-
Liquidity – Headroom within a Barclays Bank PLC facility together with trading activities allows sufficient cash reserves for the short to medium term.
-
Credit Risk – The Company has no significant concentration of credit risk, with exposure spread over a number of customers.
-
Interest Rate Risk – The management team and board regularly review and assess this and will implement measures accordingly.
Key performance indicators
|
Year ended 31 December
2021
|
Year ended 31 December
2020
|
|
|
|
|
|
|
Turnover increase / decrease
|
|
|
|
|
|
|
|
|
|
|
|
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|
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All other key performance indicators are qualitative in nature and are assessed internally by the management team and the Board.
Future Developments
The primary focus of the company remains the production, marketing and selling of premium quality Single Malt Scotch Whisky. To ensure the on-going success of the Arran portfolio, the company will continue to lay down increasing volumes of whisky stocks at both production sites on the island as well as invest in additional warehousing and premium quality wood for maturation.
Brand sales remain the principal driver of turnover growth, with the Arran portfolio now available in over 50 markets around the globe. The rate of brand expansion will be tempered in the future by restrictions on aged stocks. We view the next few years as a period of managed growth.
The first Lagg Single Malt will be released to market in 2022. Initial reviews of Lagg have been extremely positive and we have every confidence it will develop over time into one of the great whiskies of the world.
We are in a period of global economic uncertainty, with political tensions, rising costs across the board and supply chain disruption. Despite these multi-faceted challenges, we are continuing to see demand growing for the Arran portfolio.
ISLE OF ARRAN DISTILLERS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 3 -
Other information and explanations
Brexit impact
The UK left the EU on 31
st
January 2020 and the rules governing the new relationship between the UK and EU took effect on 1
st
January 2021. After some initial disruption, as markets and freight operators adjusted to the new arrangements, our trade with the EU has continued post-Brexit without impact and it remains our largest trading region.
Environmental
The company will continue to explore solutions to reducing its carbon footprint as new and relevant ideas are presented and is fully supportive of the Environmental Strategy set out by the Scotch Whisky Association which aims to achieve net zero emissions by 2045.
The Directors wish to extend their thanks and gratitude to James MacTaggart, who resigned as a Director of the Company on 31
st
December 2021. James’ contribution to the consistent quality of our products is immeasurable. We thank him for his efforts over many years and wish him a long and happy retirement.
M Peirce
Director
6 September 2022
ISLE OF ARRAN DISTILLERS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
- 4 -
The directors present their annual report and financial statements for the year ended 31 December 2021.
Principal activities
The principal activity of the company continued to be that of production and supply of malt whisky.
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:
L Auchincloss
J MacTaggart
(Resigned 30 January 2022)
E Mitchell
M Peirce
R Tully
Auditor
The auditor, Azets Audit Services, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Strategic report
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of
financial instruments and risks.
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.
On behalf of the board
M Peirce
Director
6 September 2022
ISLE OF ARRAN DISTILLERS LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2021
- 5 -
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.
ISLE OF ARRAN DISTILLERS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF ISLE OF ARRAN DISTILLERS LIMITED
- 6 -
Opinion
We have audited the financial statements of Isle Of Arran Distillers Limited (the 'company') for the year ended 31 December 2021 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, 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 FRS 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 31 December 2021 and of its profit 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.
ISLE OF ARRAN DISTILLERS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ISLE OF ARRAN DISTILLERS LIMITED
- 7 -
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 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 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, 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'
r
esponsibilities
s
tatement, 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
.
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.
ISLE OF ARRAN DISTILLERS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ISLE OF ARRAN DISTILLERS LIMITED
- 8 -
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we 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. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
-
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
-
Reviewing minutes of meetings of those charged with governance;
-
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the company through enquiry and inspection;
-
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
-
Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. 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.
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.
Donald Boyd (Senior Statutory Auditor)
For and on behalf of Azets Audit Services
9 September 2022
Chartered Accountants
Statutory Auditor
Titanium 1
King's Inch Place
Renfrew
Renfrewshire
United Kingdom
PA4 8WF
ISLE OF ARRAN DISTILLERS LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2021
- 9 -
2021
2020
Notes
£
£
Turnover
3
15,534,728
11,030,515
Cost of sales
(6,889,659)
(5,274,518)
Gross profit
8,645,069
5,755,997
Administrative expenses
(3,902,365)
(3,057,957)
Other operating income
309,116
297,023
Operating profit
4
5,051,820
2,995,063
Interest receivable and similar income
7
60
755
Interest payable and similar expenses
8
(426,184)
(522,861)
Profit before taxation
4,625,696
2,472,957
Tax on profit
9
(1,353,794)
(565,427)
Profit for the financial year
3,271,902
1,907,530
The profit and loss account has been prepared on the basis that all operations are continuing operations.
ISLE OF ARRAN DISTILLERS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2021
- 10 -
2021
2020
£
£
Profit for the year
3,271,902
1,907,530
Other comprehensive income
-
-
Total comprehensive income for the year
3,271,902
1,907,530
ISLE OF ARRAN DISTILLERS LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2021
31 December 2021
- 11 -
2021
2020
Notes
£
£
£
£
Fixed assets
Intangible assets
10
11,198
6,954
Tangible assets
11
27,335,594
25,946,185
27,346,792
25,953,139
Current assets
Stocks
12
16,810,266
15,108,095
Debtors
13
3,447,685
2,698,547
Cash at bank and in hand
2,893,796
2,559,231
23,151,747
20,365,873
Creditors: amounts falling due within one year
14
(3,867,954)
(3,467,355)
Net current assets
19,283,793
16,898,518
Total assets less current liabilities
46,630,585
42,851,657
Creditors: amounts falling due after more than one year
15
(16,856,822)
(18,222,068)
Provisions for liabilities
Deferred tax liability
17
1,735,088
1,067,473
(1,735,088)
(1,067,473)
Deferred grants
18
(811,047)
(956,843)
Net assets
27,227,628
22,605,273
Capital and reserves
Called up share capital
20
7,000,265
6,662,652
Share premium account
21
8,125,820
7,112,980
Revaluation reserve
22
2,620,970
2,620,970
Profit and loss reserves
23
9,480,573
6,208,671
Total equity
27,227,628
22,605,273
The financial statements were approved by the board of directors and authorised for issue on 6 September 2022 and are signed on its behalf by:
E Mitchell
M Peirce
Director
Director
Company Registration No. SC134963
ISLE OF ARRAN DISTILLERS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2021
- 12 -
Share capital
Share premium account
Revaluation reserve
Profit and loss reserves
Total
Notes
£
£
£
£
£
Balance at 1 January 2020
6,482,355
6,572,090
2,620,970
4,301,141
19,976,556
Year ended 31 December 2020:
Profit and total comprehensive income for the year
-
-
-
1,907,530
1,907,530
Issue of share capital
20
180,297
540,890
-
-
721,187
Balance at 31 December 2020
6,662,652
7,112,980
2,620,970
6,208,671
22,605,273
Year ended 31 December 2021:
Profit and total comprehensive income for the year
-
-
-
3,271,902
3,271,902
Issue of share capital
20
337,613
1,012,840
-
-
1,350,453
Balance at 31 December 2021
7,000,265
8,125,820
2,620,970
9,480,573
27,227,628
ISLE OF ARRAN DISTILLERS LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2021
- 13 -
2021
2020
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
28
3,997,386
1,302,217
Interest paid
(426,184)
(522,861)
Income taxes paid
(579,557)
(73,616)
Net cash inflow from operating activities
2,991,645
705,740
Investing activities
Purchase of intangible assets
(7,200)
Purchase of tangible fixed assets
(2,635,920)
(1,110,111)
Proceeds on disposal of tangible fixed assets
773
Interest received
60
755
Net cash used in investing activities
(2,642,287)
(1,109,356)
Financing activities
Proceeds from issue of shares
1,350,453
721,187
Repayment of borrowings
(914,111)
(588,213)
Repayment of bank loans
(451,135)
270,692
Net cash (used in)/generated from financing activities
(14,793)
403,666
Net increase in cash and cash equivalents
334,565
50
Cash and cash equivalents at beginning of year
2,559,231
2,559,181
Cash and cash equivalents at end of year
2,893,796
2,559,231
ISLE OF ARRAN DISTILLERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
- 14 -
1
Accounting policies
Company information
Isle Of Arran Distillers Limited is a
private
company
limited by shares
incorporated in
Scotland
.
The registered office is
Lochranza, Isle Of Arran, Ayrshire, United Kingdom, KA27 8HJ.
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 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.
1.2
Going concern
At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
true
Although it is not
yet
possible to reliably
forecast the long term impact of the Covid pandemic
,
the directors regularly undertake a
comprehensive review of all business risks and monitor its cash flow requirements very closely
. A
t the date of signing, the
company
’s operations have
remained profitable and
continued to
generate cash
. The long term growth outlook has provided further assurance to the directors regarding its financial position.
The current and future financial position of the group, its cash flows and liquidity position have been reviewed by the directors. The directors are confident that the existing funding facilities will provide sufficient headroom to meet the forecast cash requirements having considered any additional
as a result of the risks noted above
. As such, the directors consider that it is appropriate to prepare the financial statements on the 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.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
Revenue from the sale of
cased goods is recognised when the goods are shipped. Revenue from the sale of bulk whisky is recognised when the stock is dispatched or when the ownership of stock is transferred to the purchaser. Revenue from the visitor centre is recognised at the point of sale.
ISLE OF ARRAN DISTILLERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 15 -
1.4
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of
a business
over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated
amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 10 years.
For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.
1.5
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:
Computer software
20% 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.
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:
Freehold property
2% straight line
Plant & machinery
5% straight line
Motor vehicles
20% straight line
Casks
5% straight line
Freehold land is not depreciated.
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
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
.
ISLE OF ARRAN DISTILLERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 16 -
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.
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.
1.8
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.
For whisky stock, cost is defined as production cost, which includes direct costs such as purchase price of goods and indirect costs such as overheads. Overheads are capitalised by reference to the utilisation rate of each distillery, measured by the volume of spirit distilled over the maximum capacity of the distillery.
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.
ISLE OF ARRAN DISTILLERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 17 -
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.
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.
ISLE OF ARRAN DISTILLERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 18 -
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
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. A
m
ounts 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.
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
s
ubsequently 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.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations
expire or are discharged or cancelled.
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.
ISLE OF ARRAN DISTILLERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 19 -
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.
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 as they fall due.
1.15
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 lease
s
asset are consumed.
1.16
Government grants
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.
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.
1.17
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.
ISLE OF ARRAN DISTILLERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 20 -
2
Judgements and key sources of estimation uncertainty
In the application of the company’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.
Key sources of estimation uncertainty
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.
Valuation of stock
The value of stock is measured by the production costs incurred during the period. Management use their judgement in identifying costs that are directly attributable in bringing inventories to their present location and condition. A degree of estimation is required in calculating the percentage of overhead costs applicable to inventory using capacity production reports.
3
Turnover and other revenue
Turnover derives from the operation of a whisky distiller and Visitor Centre on Arran and the selling and marketing of Scotch Whisky.
2021
2020
£
£
Turnover analysed by class of business
Brand & distillery
13,496,544
9,782,768
Visitor centre
1,423,379
704,334
Mail order
614,805
543,413
15,534,728
11,030,515
2021
2020
£
£
Other significant revenue
Interest income
60
755
Grants received
309,116
297,023
ISLE OF ARRAN DISTILLERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
3
Turnover and other revenue
(Continued)
- 21 -
2021
2020
£
£
Turnover analysed by geographical market
United Kingdom
4,139,054
1,564,316
EU
7,278,099
4,894,432
Americas
954,933
575,978
Asia, Middle East and Australasia
3,007,073
1,876,927
Others
155,569
2,118,862
15,534,728
11,030,515
Grant income noted above in the year relates to government support in relation to COVID19 which includes JRS, and the release of previously deferred grant income being amortised over the life of the tangible assets to which the support related.
4
Operating profit
2021
2020
Operating profit for the year is stated after charging/(crediting):
£
£
Government grants
(309,116)
(297,023)
Fees payable to the company's auditor for the audit of the company's financial statements
18,400
16,750
Depreciation of owned tangible fixed assets
1,161,137
1,107,174
Loss on disposal of tangible fixed assets
84,601
100,771
Amortisation of intangible assets
2,956
15,964
Operating lease charges
64,239
59,209
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2021
2020
Number
Number
Distillery
19
16
Visitor Centre
43
42
Office
14
15
Mail Order
1
-
Total
77
73
ISLE OF ARRAN DISTILLERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
5
Employees
(Continued)
- 22 -
Their aggregate remuneration comprised:
2021
2020
£
£
Wages and salaries
1,959,911
1,738,927
Social security costs
176,416
153,437
Pension costs
107,192
101,949
2,243,519
1,994,313
6
Directors' remuneration
2021
2020
£
£
Remuneration for qualifying services
183,413
177,604
Company pension contributions to defined contribution schemes
10,140
9,300
193,553
186,904
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2020 - 2).
7
Interest receivable and similar income
2021
2020
£
£
Interest income
Interest on bank deposits
41
368
Other interest income
19
387
Total income
60
755
Investment income includes the following:
Interest on financial assets not measured at fair value through profit or loss
41
368
8
Interest payable and similar expenses
2021
2020
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
426,184
522,788
Other finance costs:
Other interest
73
426,184
522,861
ISLE OF ARRAN DISTILLERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 23 -
9
Taxation
2021
2020
£
£
Current tax
UK corporation tax on profits for the current period
695,861
285,417
Adjustments in respect of prior periods
(9,682)
19,842
Total current tax
686,179
305,259
Deferred tax
Origination and reversal of timing differences
667,615
278,046
Adjustment in respect of prior periods
(17,878)
Total deferred tax
667,615
260,168
Total tax charge
1,353,794
565,427
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2021
2020
£
£
Profit before taxation
4,625,696
2,472,957
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2020: 19.00%)
878,882
469,862
Tax effect of expenses that are not deductible in determining taxable profit
106
Adjustments in respect of prior years
(9,682)
19,842
Deferred tax adjustments in respect of prior years
9,682
(17,878)
Fixed asset differences
58,490
622
Remeasurement of deferred tax for change in tax rates
416,422
92,873
Taxation charge for the year
1,353,794
565,427
ISLE OF ARRAN DISTILLERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 24 -
10
Intangible fixed assets
Goodwill
Computer software
Total
£
£
£
Cost
At 1 January 2021
60,289
161,011
221,300
Additions
7,200
7,200
At 31 December 2021
60,289
168,211
228,500
Amortisation and impairment
At 1 January 2021
60,289
154,057
214,346
Amortisation charged for the year
2,956
2,956
At 31 December 2021
60,289
157,013
217,302
Carrying amount
At 31 December 2021
11,198
11,198
At 31 December 2020
6,954
6,954
11
Tangible fixed assets
Freehold property
Plant & machinery
Motor vehicles
Casks
Total
£
£
£
£
£
Cost
At 1 January 2021
18,989,535
7,844,524
39,886
4,428,647
31,302,592
Additions
1,553,019
246,651
836,250
2,635,920
Disposals
(800)
(128,189)
(128,989)
At 31 December 2021
20,541,754
8,091,175
39,886
5,136,708
33,809,523
Depreciation and impairment
At 1 January 2021
1,312,879
2,894,217
39,886
1,109,425
5,356,407
Depreciation charged in the year
389,072
487,890
284,175
1,161,137
Eliminated in respect of disposals
(28)
(43,587)
(43,615)
At 31 December 2021
1,701,923
3,382,107
39,886
1,350,013
6,473,929
Carrying amount
At 31 December 2021
18,839,831
4,709,068
3,786,695
27,335,594
At 31 December 2020
17,676,656
4,950,307
3,319,222
25,946,185
ISLE OF ARRAN DISTILLERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 25 -
12
Stocks
2021
2020
£
£
Raw materials and consumables
15,480,811
14,015,801
Finished goods and goods for resale
1,329,455
1,092,294
16,810,266
15,108,095
13
Debtors
2021
2020
Amounts falling due within one year:
£
£
Trade debtors
3,098,489
2,421,619
Other debtors
269,366
255,915
Prepayments and accrued income
79,830
21,013
3,447,685
2,698,547
14
Creditors: amounts falling due within one year
2021
2020
Notes
£
£
Bank loans
16
750,000
750,000
Trade creditors
706,765
875,975
Corporation tax
392,039
285,417
Other taxation and social security
65,304
52,697
Accruals and deferred income
1,953,846
1,503,266
3,867,954
3,467,355
15
Creditors: amounts falling due after more than one year
2021
2020
Notes
£
£
Bank loans and overdrafts
16
16,326,662
16,777,797
Other borrowings
16
530,160
1,444,271
16,856,822
18,222,068
ISLE OF ARRAN DISTILLERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 26 -
16
Loans and overdrafts
2021
2020
£
£
Bank loans
17,076,662
17,527,797
Other loans
530,160
1,444,271
17,606,822
18,972,068
Payable within one year
750,000
750,000
Payable after one year
16,856,822
18,222,068
The bank loans and overdraft are secured by a standard bond and floating charge over the assets of the company, and by a first standard security over heritable property and a bonded warehouse at Lochranza, Isle of Arran.
Bank loans consist of term loans and a revolving credit facility. Term loans to the value of £1,687,500 are repayable in December 2024 and interest is payable at a rate of 3.6%. Term loans to the value of £1,500,000 are repayable in August 2028 and interest is payable at a date of 2.8%. A revolving credit facility to the value of £13,889,162 is held as due in more than on year and interest is payable at a rate of 1.6% over base rate.
Other loans relate to stock funding provided by various shareholders/directors and interest is charged over a period of 5 years. The loans converted and are now basic loans with no stock option. Interest is accrued at 5% per annum.
17
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2021
2020
Balances:
£
£
Fixed asset timing differences
1,756,078
1,094,576
Short term timing differences
(20,990)
(27,103)
1,735,088
1,067,473
ISLE OF ARRAN DISTILLERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
17
Deferred taxation
(Continued)
- 27 -
2021
Movements in the year:
£
Liability at 1 January 2021
1,067,473
Charge to profit or loss
667,615
Liability at 31 December 2021
1,735,088
The deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.
18
Deferred grants
2021
2020
£
£
Arising from government grants
811,047
956,843
Deferred grant income relates to support in relation to freehold property. Grants are being amortised in line with the life of the assets to which the support relates.
19
Retirement benefit schemes
2021
2020
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
107,192
101,949
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.
20
Share capital
2021
2020
2021
2020
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary A shares of 50p each
2,258,644
2,258,644
1,129,322
1,129,322
Ordinary B shares of 25p each
22,133,320
22,133,320
5,870,943
5,533,330
24,391,964
24,391,964
7,000,265
6,662,652
The Company has two classes of ordinary shares, where both classes have identical rights as regards to income and voting rights. On return of assets (on liquidation or otherwise) the surplus assets of the Company remaining after the payment of its liabilities shall be applied in paying to the holders of the "A" Ordinary Shares and the "B" Ordinary Shares a sum equivalent to the nominal value of each class of share.
ISLE OF ARRAN DISTILLERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 28 -
21
Share premium account
2021
2020
£
£
At the beginning of the year
7,112,980
6,572,090
Issue of new shares
1,012,840
540,890
At the end of the year
8,125,820
7,112,980
Share premium includes any premium received on issue of share capital. Any transaction costs associated with the issuing of shares is deducted from the share premium.
22
Revaluation reserve
2021
2020
£
£
At the beginning and end of the year
2,620,970
2,620,970
The balance held in this reserve is in regards to previously revalued freehold property, adopted as deemed cost on transition to FRS102.
23
Profit and loss reserves
2021
2020
£
£
At the beginning of the year
6,208,671
4,301,141
Profit for the year
3,271,902
1,907,530
At the end of the year
9,480,573
6,208,671
24
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:
2021
2020
£
£
Within one year
46,646
42,249
Between two and five years
8,842
385
55,488
42,634
ISLE OF ARRAN DISTILLERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 29 -
25
Capital commitments
Amounts contracted for but not provided in the financial statements:
2021
2020
£
£
Acquisition of tangible fixed assets
673,181
2,000,000
The Company had contractually committed to building 3 new warehouses at the Lagg distillery.
26
Related party transactions
Transactions with related parties
During the year the company entered into the following transactions with related parties:
Sales
2021
2020
£
£
Entities with control, joint control or significant influence over the company
20,310
63,683
Interest charges
2021
2020
£
£
Entities with control, joint control or significant influence over the company
75,350
82,864
2021
2020
Amounts due to related parties
£
£
Entities with control, joint control or significant influence over the company
490,150
1,444,271
27
Ultimate controlling party
The company is under the control of L Auchincloss by virtue of his controlling interest in the company.
ISLE OF ARRAN DISTILLERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 30 -
28
Cash generated from operations
2021
2020
£
£
Profit for the year after tax
3,271,902
1,907,530
Adjustments for:
Taxation charged
1,353,794
565,427
Finance costs
426,184
522,861
Investment income
(60)
(755)
Loss on disposal of tangible fixed assets
84,601
100,771
Amortisation and impairment of intangible assets
2,956
15,964
Depreciation and impairment of tangible fixed assets
1,161,137
1,107,174
(Decrease)/increase in deferred income
(145,796)
104,204
Movements in working capital:
Increase in stocks
(1,702,171)
(1,110,617)
Increase in debtors
(749,138)
(905,129)
Increase/(decrease) in creditors
293,977
(1,005,213)
Cash generated from operations
3,997,386
1,302,217
29
Analysis of changes in net debt
1 January 2021
Cash flows
31 December 2021
£
£
£
Cash at bank and in hand
2,559,231
334,565
2,893,796
Borrowings excluding overdrafts
(18,972,068)
1,365,246
(17,606,822)
(16,412,837)
1,699,811
(14,713,026)
2021-12-31
2021-01-01
false
CCH Software
CCH Accounts Production 2022.100
L Auchincloss
J MacTaggart
E Mitchell
M Peirce
R Tully
M Cornwall
SC134963
2021-01-01
2021-12-31
SC134963
bus:Director1
2021-01-01
2021-12-31
SC134963
bus:Director3
2021-01-01
2021-12-31
SC134963
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SC134963
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SC134963
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SC134963
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SC134963
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2020-12-31
SC134963
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SC134963
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2020-12-31
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2020-12-31
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2020-12-31
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