Amber Beverage UK Limited Company accounts

AMBER BEVERAGE UK LIMITED - Company Information

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COMPANY REGISTRATION NUMBER: 03705002

Amber Beverage UK Limited

formerly Cellar Trends Limited

Financial Statements

31 December 2020

Amber Beverage UK Limited

formerly Cellar Trends Limited

Financial Statements

Year ended 31 December 2020

Contents	Page

Officers and professional advisers	1

Strategic report	2

Directors' report	5

Independent auditor's report to the members	7

Statement of comprehensive income	11

Statement of financial position	12

Statement of changes in equity	13

Statement of cash flows	14

Notes to the financial statements	15

Amber Beverage UK Limited

formerly Cellar Trends Limited

Officers and Professional Advisers

The board of directors	Mr M F Watts (Resigned 20 February 2020)
	Mr G F Watts (Resigned 20 February 2020)
	Mr S P Ferreira (Resigned 8 December 2020)
	Ms J Stuge (Appointed 8 December 2020)
	Mr S E I Thomas (Served from 21 February 2020 to 1 April 2021)
	Mr D B Cunningham (Appointed 1 April 2021)

Mr D B Cunningham (Appointed 1 April 2021)

Registered office	B100
	Beverley Road
	East Midlands Airport
	Castle Donington
	Derby
	DE74 2SA

Auditor	Johnson Murkett & Hurst
	Chartered Accountants & statutory auditor
	Rawdon House
	Rawdon Terrace
	Ashby de la Zouch
	Leicestershire
	LE65 2GN

Amber Beverage UK Limited

formerly Cellar Trends Limited

Strategic Report

Year ended 31 December 2020

Principal activities and business review

The principal activity of the company is "Bringing Drinks Brands to Life" in the UK market. The results show a pre-tax loss of £2,843,405 on a turnover of £39,699,661, before the exceptional loan write off (note 10 to the financial statements). The Directors consider pre-tax profit and turnover to be the key performance indicators for the company. After finalising the acquisition of Cellar Trends Limited by Amber Beverage Group (further - "ABG" or "Group" or "Shareholder") in June 2019 and beginning the work on integration thereafter, the main goal for 2020 was to fully embed Group's systems and processes, as well as streamline the company's operations to provide the same value-added services to its customers in a more efficient manner. In large part, this work was finished during 2020, culminating in the rebranding and name change of the business in early 2021 from Cellar Trends Limited to Amber Beverage UK Limited (further - "AB UK"), thereby finalising the integration of the company into ABG.In addition, preparation for Brexit was also planned and successfully carried out throughout the year, resulting in minimal disruptions to operations during the transition period. The global SARS-CoV-2 pandemic had a material impact on AB UK and the beverage industry as a whole. Normally, the first quarter of the year is the quietest period for the business, with most sales being generated from April onwards, which was the time when the effects of the pandemic were becoming more prominent in the UK. The On Trade segment of the market, a significant contributor to both the traded volumes and the company's bottom line, remained fully or partially shut throughout most of the year. In the previous years, On Trade had about 30-40% share (volume terms) of AB UK's annual volumes; in 2020 this share was at 13%, or 60% down year on year (volume terms). While the Off Trade segment recovered some of the lost business, it was mostly through the lower margin beer and wine categories; channel as a whole was up 40% (volume terms) year on year for the business - strong, but not sufficient to recoup the bottom line losses incurred in the On Trade. Additionally, the pandemic accelerated the growth of the previously underdeveloped Ecommerce channel, which finished the year at +40% vs 2019 (volume terms). Shopper behaviour was very varied and changed depending on the state of the nation at the time - from the run on the supermarkets in the early lockdowns, to a very cautious holiday period at the end of the year. There were some winners in AB UK portfolio in 2020, namely, still wine-a key category for the company-grew 55% overall, predominantly because of the Retail segment seeing such increased sales versus a normal year. Vodka remained the largest category within Spirits; however, it showed a decline during 2020, as a significant share of volumes is usually sold through the On Trade channel. One of the most negatively impacted categories was beer, as it not only saw a 25% drop in volumes versus 2019, but also faced shorter expiry dates than other products in a market where reopening of On Trade outlets was uncertain. Thus, there is little surprise that the stronger performing brands were ones that are mostly distributed through Retail and Online channels: Faustino (+56% vs 2019), Luc Belaire (+35% vs 2019), Bumbu Rum (+64% vs 2019) and Asbach (+51% vs 2019). Business operations were also materially affected by the SARS-CoV-2 pandemic, but the organisation was able to respond in a swift and efficient manner. AB UK had operated partially remotely for a considerable number of years before the pandemic began, so a temporary move to fully remote operations, while challenging in the beginning, proved to be successful and effective in the medium term. AB UK utilised the Coronavirus Job Retention Scheme, as well as other types of SARS-CoV-2 support that the company was eligible for, to ensure the continuation of operations throughout 2020. Both the pandemic impact on company's sales and the necessary Brexit preparations put significant pressure on the cash flow, which was mitigated both by internal Group resources, and by utilising deferred payment schemes where the business was eligible. Balance sheet and cash flow remain positive.

Future developments

The company's sole focus remains the return to profitability. While SARS-CoV-2 pandemic was a major hit to the company's development plans for 2020, it also allowed to speed up certain restructuring initiatives that are expected to yield cost savings in the subsequent years. A major beer brand joined the product portfolio in early second quarter of 2021-a Portuguese brand Super Bock-not only adding material volumes to company's sales, but also strengthening the product portfolio in the World Beer category. AB UK remains committed to step changing the performance of its core brands. Stolichnaya portfolio has a strong brand plan and is set to return to growth in 2021. The company's largest brand in terms of volume-Faustino-has a solid promotional plan in place and is expected to continue its incredible 2020 run after a few slower years. Management also recognises that certain categories remain underrepresented in the company's portfolio and is focused on said category development through addition of strong, high-margin brands that will allow AB UK to return to profitability. The company remains sensitive to foreign exchange rates, as approximately 70% of the products sold by AB UK in the UK market are brought in from abroad. Close management of foreign exchange rate risk continues. While the long term effects and impact on the economic climate of both Brexit and SARS-CoV-2 pandemic remain unclear, as do the potential implications and difficulties that might arise in case of the various future scenarios, the directors' focus is on mitigating the currently known risks. The work on internal process and systems improvement will carry on and it is expected that these will continue to yield more clarity and transparency in spending reporting and analysis, in turn improving operational efficiency and profitability. ABG remains fully supportive of the company, as referenced in note 27 to the financial statements, and stands behind the management team in its efforts to dominate the UK drinks business, providing strategic, financial and operational support where necessary.

Financial risk management objectives and policies

The company has established objectives and policies for managing financial risks, to enable them to achieve growth into new brands and market sectors whilst still operating within a prudent risk management framework. These objectives and policies are regularly reviewed by the management team. Currency, price, interest rate and liquidity risks are managed centrally within parameters set by the company Directors. Where appropriate, financial instruments are used to manage the financial risks faced by the company. Currency risk Through its trading with international entities, the company has operational exposure in both euros and US dollars. Euro balance sheet translation exposure is hedged by maintaining foreign currency bank accounts. Price risk The company operates in a competitive market. Price risk, particularly in the wine, beer and pouring vodka sectors, is offset in part by regularly sourcing new brands to add to the portfolio and concentrating on existing brand equity development. The company acts as sole UK distributor for several products, and this combined with the in-house promotional campaigns ensures that margin erosion is minimised. Interest rate risk The company finances its operations through a mixture of retained profits, and Shareholder financing, thus minimising the interest rate risk. Liquidity risk Budgets and forecasts identifying the liquidity requirements of the company have been produced. The directors are fully aware of the economic environment in which the company operates and are taking measures to ensure that liquidity risks are minimised. Sales ledger debtors are insured and these are regularly reviewed by the directors.

Section 172(1) Statement The revised UK Corporate Governance Code applies to accounting periods commencing on or after 1 January 2019. The Companies (Miscellaneous Reporting) Regulations 2018 require Directors to explain how they considered the interests of key stakeholders and the broader matters set out in Section 172(1) a) to f) of the Companies act 2006, when performing their duty to promote the success of the Company. This statement focuses on matters of strategic importance to the company and the level of information disclosed is consistent with the size and complexity of its business. The Directors understand the business and the environment in which it operates, and the decisions taken, as summarised above, are designed to ensure the company's profitability in the long term. The Directors recognise the contribution made by the company's employees, which is fundamental to the company's success. This success is dependent on attracting, retaining and motivating employees, and ensuring that we remain a responsible employer. A strong, mutually beneficial relationship with suppliers, customer, etc. is also fundamental to the Directors' strategy. It is also recognised that the company is mindful to continue to minimise the impact of the business on the community and environment, whilst, at all times, acting fairly and maintaining high standards of business conduct.

This report was approved by the board of directors on 23 September 2021 and signed on behalf of the board by:

Mr D B Cunningham Director

Registered office:

B100

Beverley Road

East Midlands Airport

Castle Donington

Derby

DE74 2SA

Amber Beverage UK Limited

formerly Cellar Trends Limited

Directors' Report

Year ended 31 December 2020

The directors present their report and the financial statements of the company for the year ended 31 December 2020 .

Principal activities

The principal activity of the company was “Bringing Drinks Brands to Life” in the UK market.

Directors

The directors who served the company during the year were as follows:

Ms J Stuge	(Appointed 8 December 2020)
Mr S E I Thomas	(Appointed 21 February 2020)
Mr M F Watts	(Resigned 20 February 2020)
Mr G F Watts	(Resigned 20 February 2020)
Mr S P Ferreira	(Resigned 8 December 2020)

Mr S E I Thomas resigned as Director on 1 April 2021. Mr D B Cunningham was appointed as Director on 1 April 2021.

Dividends

Particulars of recommended dividends are detailed in note 13 to the financial statements.

Greenhouse gas emissions and energy consumption

Information not included

During the accounting period, the company terminated its lease of the business premises at Stonehouse Farm, and replacement Midlands premises were leased with effect from June 2020, at East Midlands Airport. The terms of both of these leases and the lease of its London office were inclusive of service charges including electricity etc. As a result of this, the substantial restructuring of the company car fleet, and the effects of staff working remotely for a significant portion of the year due to COVID restrictions, the company considers that it is not practical for the company to obtain accurate Streamlined Energy and Carbon Reporting information for this period.

Disclosure of information in the strategic report

Full details of the Financial Risk Management Objectives and Policies and Future Developments required by schedule 7 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 are disclosed within the Strategic Report.

Directors' responsibilities statement

The directors are responsible for preparing the strategic report, directors' report and the financial statements in accordance with applicable law and regulations. Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with 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 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 judgments and accounting estimates that are reasonable and prudent; - state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; - 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. Auditor

Each of the persons who is a director at the date of approval of this report confirms that:

- so far as they are aware, there is no relevant audit information of which the company's auditor is unaware; and - they have taken all steps that they ought to have taken as a director to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information.

This report was approved by the board of directors on 23 September 2021 and signed on behalf of the board by:

Mr D B Cunningham Director

Registered office:

B100

Beverley Road

East Midlands Airport

Castle Donington

Derby

DE74 2SA

Amber Beverage UK Limited

formerly Cellar Trends Limited

Independent Auditor's Report to the Members of Amber Beverage UK Limited

Year ended 31 December 2020

Opinion

We have audited the financial statements of Amber Beverage UK Limited (the 'company') for the year ended 31 December 2020 which comprise the statement of comprehensive income, statement of financial position, statement of changes in equity, statement of cash flows and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including 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 2020 and of its loss for the year then ended; - have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; - have been prepared in accordance with the requirements of the Companies Act 2006.

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 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.

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. 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. In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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 the audit:

- the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

- the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion: - adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or - the financial statements are not in agreement with the accounting records and returns; or - certain disclosures of directors' remuneration specified by law are not made; or - we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. 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: - We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements through discussion with the Officers and other management, as required by auditing standards. - We had regard to laws and regulations in areas that directly affect the financial statements including financial reporting and taxation legislation. We considered the extent of compliance with those laws and regulations as part of our procedures on the related financial statements. - With the exception of any known or possible non-compliance, and as required by auditing standards, our work in respect of these was limited to enquiry of the Officers. - We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit. - We addressed the risk of fraud through management override of controls, by testing the appropriateness of journal entries and other adjustments, assessing whether the judgements made in making accounting estimates are indicative of a potential bias, and evaluating any significant transactions that are unusual or outside the normal course of business. As part of an audit in accordance with ISAs (UK), we exercise professional judgment 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 purpose of expressing an opinion on the effectiveness of the 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 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 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. 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.

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 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.

Philip Nash FCA

(Senior Statutory Auditor)

For and on behalf of

Johnson Murkett & Hurst

Chartered Accountants & statutory auditor

Rawdon House

Rawdon Terrace

Ashby de la Zouch

Leicestershire

LE65 2GN

27 September 2021

Amber Beverage UK Limited

formerly Cellar Trends Limited

Statement of Comprehensive Income

Year ended 31 December 2020

		2020	2019
Note		£	£
Turnover	4	39,699,661	39,501,119

Cost of sales	33,913,891	32,416,536
	-------------	-------------
Gross profit	5,785,770	7,084,583

Administrative expenses		8,897,630	8,788,449
Other operating income		412,254	122,076
		------------	------------
Operating loss	5	( 2,699,606)	( 1,581,790)

Other interest receivable and similar income	9	–	4
Exceptional item - re intra group loan	10	14,481,351	–
Interest payable and similar expenses	11	143,799	74,880
		-------------	------------
Loss before taxation		( 17,324,756)	( 1,656,666)

Tax on loss	12	–	–
		-------------	------------
Loss for the financial year and total comprehensive income		( 17,324,756)	( 1,656,666)
		-------------	------------

All the activities of the company are from continuing operations.

Amber Beverage UK Limited

formerly Cellar Trends Limited

Statement of Financial Position

31 December 2020

	2020		2019
Note	£	£	£

Fixed assets

Intangible assets	14	90,765	99,967
Tangible assets	15	39,748	108,987
		---------	---------
		130,513	208,954

Current assets

Stock	16	4,836,152	5,419,790
Debtors	17	11,261,956	14,915,265
Cash at bank and in hand		2,145,288	1,458,647
		-------------	-------------
		18,243,396	21,793,702

Creditors: amounts falling due within one year	18	13,908,566		16,849,488
		-------------		-------------
Net current assets			4,334,830	4,944,214
			------------	------------
Total assets less current liabilities			4,465,343	5,153,168

Creditors: amounts falling due after more than one year	19	3,655,580	–
		------------	------------
Net assets		809,763	5,153,168
		------------	------------

Capital and reserves

Called up share capital	21	5,101	5,100
Share premium account	22	14,481,350	–
Retained earnings/accumulated losses	22	( 13,676,688)	5,148,068
		-------------	------------
Shareholders funds		809,763	5,153,168
		-------------	------------

These financial statements were approved by the board of directors and authorised for issue on 23 September 2021 , and are signed on behalf of the board by:

Mr D B Cunningham Director

Company registration number: 03705002

Amber Beverage UK Limited

formerly Cellar Trends Limited

Statement of Changes in Equity

Year ended 31 December 2020

		Called up share capital	Share premium account	Retained earnings/accumulated losses	Total
		£	£	£	£
At 1 January 2019		5,100	–	6,804,734	6,809,834

Loss for the year				( 1,656,666)	( 1,656,666)
		-------	----	------------	------------
Total comprehensive income for the year		–	–	( 1,656,666)	( 1,656,666)

At 31 December 2019		5,100	–	5,148,068	5,153,168

Loss for the year				( 17,324,756)	( 17,324,756)
		-------	----	-------------	-------------
Total comprehensive income for the year		–	–	( 17,324,756)	( 17,324,756)

Issue of shares		1	14,481,350	–	14,481,351
Dividends paid and payable	13	–	–	( 1,500,000)	( 1,500,000)
		----	-------------	------------	-------------
Total investments by and distributions to owners		1	14,481,350	( 1,500,000)	12,981,351

		-------	-------------	-------------	-------------
At 31 December 2020		5,101	14,481,350	( 13,676,688)	809,763
		-------	-------------	-------------	-------------

Amber Beverage UK Limited

formerly Cellar Trends Limited

Statement of Cash Flows

Year ended 31 December 2020

	2020	2019
	£	£

Cash flows from operating activities

Loss for the financial year	( 17,324,756)	( 1,656,666)

Adjustments for:
Depreciation of tangible assets	61,528	98,796
Amortisation of intangible assets	22,567	1,975
Exceptional item - re intra group loan	14,481,351	–
Other interest receivable and similar income	–	( 4)
Interest payable and similar expenses	143,799	74,880
Gains on disposal of tangible assets	( 30,787)	( 54,799)
Accrued income	( 595,375)	( 138,226)

Changes in:
Stock	583,638	( 71,290)
Trade and other debtors	3,653,309	( 1,712,915)
Trade and other creditors	628,999	( 280,140)
	-------------	------------
Cash generated from operations	1,624,273	( 3,738,389)

Interest paid	( 143,799)	( 74,880)
Interest received	–	4
	------------	------------
Net cash from/(used in) operating activities	1,480,474	( 3,813,265)
	------------	------------

Cash flows from investing activities

Purchase of tangible assets	( 3,102)	( 72,895)
Proceeds from sale of tangible assets	41,600	90,208
Purchase of intangible assets	( 13,365)	( 100,273)
Purchase of futures contracts, forward contracts, option contracts and swap contracts	–	( 14,729)
	------------	------------
Net cash from/(used in) investing activities	25,133	( 97,689)
	------------	------------

Cash flows from financing activities

Proceeds from loans from group undertakings	( 818,966)	4,474,546
	------------	------------
Net cash (used in)/from financing activities	( 818,966)	4,474,546
	------------	------------

Net increase in cash and cash equivalents	686,641	563,592
Cash and cash equivalents at beginning of year	1,458,647	895,055
	------------	------------
Cash and cash equivalents at end of year	2,145,288	1,458,647
	------------	------------

Amber Beverage UK Limited

formerly Cellar Trends Limited

Notes to the Financial Statements

Year ended 31 December 2020

1. General information

The company is a private company limited by shares, registered in England and Wales. During the accounting period, the address of the registered office was Rawdon House, Rawdon Terrace, Ashby de la Zouch, Leicestershire, LE65 2GN and the company's trading address was Stonehouse Farm, Ashby Road, Woodville, Swadlincote, Derbyshire, DE11 7BP. However, from July 2020, the company's trading address is B100, Beverley Road, East Midlands Airport, Castle Donington, Derby DE74 2SA, which, since 14 December 2020, is now also the company's registered office. The company, which was formerly known as Cellar Trends Limited, changed its name to Amber Beverage Group UK Limited on 26 April 2021.

2. Statement of compliance

These financial statements have been prepared in compliance with FRS 102, 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland'.

3. Accounting policies

Basis of preparation

The financial statements have been prepared on the historical cost basis, as modified by the revaluation of certain financial assets and liabilities measured at fair value through profit or loss. The financial statements are prepared in sterling, which is the functional currency of the entity.

Exceptional items

Exceptional items are disclosed separately in the financial statements in order to provide further understanding of the financial performance of the entity. They are material items of income or expense that have been shown separately because of their nature or amount.

Judgements and key sources of estimation uncertainty

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances .

Revenue recognition

Turnover is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods supplied and services rendered, stated net of discounts and of Value Added Tax. Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have transferred to the buyer.

Foreign currencies

Foreign currency transactions are initially recorded in the functional currency, by applying the spot exchange rate as at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the exchange rate ruling at the reporting date, with any gains or losses being taken to the profit and loss account.

Operating leases

Lease payments are recognised as an expense over the lease term on a straight-line basis. The aggregate benefit of lease incentives is recognised as a reduction to expense over the lease term, on a straight-line basis.

Intangible assets

Intangible assets are initially recorded at cost, and are subsequently stated at cost less any accumulated amortisation and impairment losses.

Amortisation

Licences and system costs 20% per annum straight line from month of purchase

	Patents and trademarks	-	Three years stright line from 31 August 2019

If there is an indication that there has been a significant change in amortisation rate, useful life or residual value of an intangible asset, the amortisation is revised prospectively to reflect the new estimates.

Tangible assets

Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and impairment losses.

Depreciation

Depreciation is calculated so as to write off the cost or valuation of an asset, less its residual value, over the useful economic life of that asset as follows:

Office equipment	-	3 years straight line from month of purchase
Motor vehicles	-	3 years straight line from month of purchase
Computer equipment	-	3 years straight line from month of purchase

Impairment of fixed assets

A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date. For the purposes of impairment testing, when it is not possible to estimate the recoverable amount of an individual asset, an estimate is made of the recoverable amount of the cash-generating unit to which the asset belongs. The cash-generating unit is the smallest identifiable group of assets that includes the asset and generates cash inflows that largely independent of the cash inflows from other assets or groups of assets.

Stocks

Stocks are measured at the lower of cost and estimated selling price, after making due allowance for obsolete and slow moving items. Cost includes all costs of purchase and other costs incurred in bringing the stock to its present location and condition.

Financial instruments

Financial instruments are classified and accounted for, according to the substance of the contractual arrangement, as financial assets, financial liabilities or equity instruments. An equity instrument is a contract that evidences a residual interest of the assets of the company after deducting all of its liabilities.

Defined contribution plans

The company operates a defined contribution pension scheme for employees. Annual Contributions are recognised as an expense in the period in which the related service is provided. Prepaid contributions are recognised as an asset to the extent that the prepayment will lead to a reduction in future payments or a cash refund.

4. Turnover

Turnover arises from:

	2020	2019
	£	£
Sale of goods	39,699,661	39,501,119
	-------------	-------------

The turnover is attributable to the one principal activity of the company. An analysis of turnover by the geographical markets that substantially differ from each other is given below:

	2020	2019
	£	£
United Kingdom	39,352,229	39,443,053
Overseas	347,432	58,066
	-------------	-------------
	39,699,661	39,501,119
	-------------	-------------

5. Operating profit

Operating profit or loss is stated after charging/crediting:

	2020	2019
	£	£
Amortisation of intangible assets	22,567	1,975
Depreciation of tangible assets	61,528	98,796
Gains on disposal of tangible assets	( 30,787)	( 54,799)
Impairment of trade debtors	198	81,729
Foreign exchange differences	542,514	( 48,888)
	---------	--------

6. Auditor's remuneration

	2020	2019
	£	£
Fees payable for the audit of the financial statements	28,000	32,000
	--------	--------

Fees payable to the company's auditor and its associates for other services:

Taxation advisory services	1,425	1,600
	--------	--------

7. Staff costs

The average number of persons employed by the company during the year, including the directors, amounted to:

	2020	2019
	No.	No.
Administrative staff	20	22
Management staff	3	5
Number of sales staff	31	30
Number of marketing staff	12	17
	----	----
	66	74
	----	----

The aggregate payroll costs incurred during the year, relating to the above, were:

	2020	2019
	£	£
Wages and salaries	3,228,584	3,231,984
Social security costs	344,240	347,258
Other pension costs	144,066	235,379
	------------	------------
	3,716,890	3,814,621
	------------	------------

8. Directors' remuneration

The directors' aggregate remuneration in respect of qualifying services was:

	2020	2019
	£	£
Remuneration	307,421	291,517
Company contributions to defined contribution pension plans	24,500	19,200
	---------	---------
	331,921	310,717
	---------	---------

The number of directors who accrued benefits under company pension plans was as follows:

	2020	2019
	No.	No.
Defined contribution plans	2	2
	----	----

Remuneration of the highest paid director in respect of qualifying services:

	2020	2019
	£	£
Aggregate remuneration	153,030	172,988
	---------	---------

9. Other interest receivable and similar income

	2020	2019
	£	£
Interest on cash and cash equivalents	–	4
	----	----

10. Exceptional item - re intra group loan

During the year, the ownership of the company within the Amber Beverage Group was restructured. As part of that process a loan in favour of Amber Beverage Group Holding S.à.r.l. was assigned to the company and an ordinary share issued to Amber Beverage Group Holding S.à.r.l. at a premium. A further part of the overall restructuring entailed a decision to liquidate an interim holding company from which the loan referred to above was due. Consequently, the loan of £14,481,350.91 became irrecoverable and is written off in these financial statements as an exceptional item.

11. Interest payable and similar expenses

	2020	2019
	£	£
Interest due to group undertakings	143,799	17,966
Other interest payable and similar charges	–	56,914
	---------	--------
	143,799	74,880
	---------	--------

12. Tax on loss

Reconciliation of tax income

The tax assessed on the loss on ordinary activities for the year is higher than (2019: higher than) the standard rate of corporation tax in the UK of 19 % (2019: 19 %).

	2020	2019
	£	£
Loss on ordinary activities before taxation	( 17,324,756)	( 1,656,666)
	-------------	------------
Loss on ordinary activities by rate of tax	( 3,291,703)	( 319,656)
Effect of expenses not deductible for tax purposes	2,754,830	47,351
Effect of capital allowances and depreciation	( 3,693)	( 31,947)
Utilisation of tax losses	540,566	304,252
	-------------	------------
Tax on loss	–	–
	-------------	------------

13. Dividends

	2020	2019
	£	£
Dividends proposed before the year end and recognised as a liability	1,500,000	–
	------------	----

14. Intangible assets

	Patents, trademarks and licences
	£
Cost
At 1 January 2020	102,276
Additions	13,365
	---------
At 31 December 2020	115,641
	---------
Amortisation
At 1 January 2020	2,309
Charge for the year	22,567
	---------
At 31 December 2020	24,876
	---------
Carrying amount
At 31 December 2020	90,765
	---------
At 31 December 2019	99,967
	---------

15. Tangible assets

	Office equipment	Motor vehicles	Computer equipment	Total
	£	£	£	£
Cost
At 1 January 2020	28,957	324,650	334,172	687,779
Additions	–	–	3,102	3,102
Disposals	–	( 86,290)	–	( 86,290)
	--------	---------	---------	---------
At 31 December 2020	28,957	238,360	337,274	604,591
	--------	---------	---------	---------
Depreciation
At 1 January 2020	20,758	262,027	296,007	578,792
Charge for the year	3,524	37,140	20,864	61,528
Disposals	–	( 75,477)	–	( 75,477)
	--------	---------	---------	---------
At 31 December 2020	24,282	223,690	316,871	564,843
	--------	---------	---------	---------
Carrying amount
At 31 December 2020	4,675	14,670	20,403	39,748
	--------	---------	---------	---------
At 31 December 2019	8,199	62,623	38,165	108,987
	--------	---------	---------	---------

16. Stock

	2020	2019
	£	£
Goods for resale	4,834,322	5,388,690
Non-resale stock	1,830	31,100
	------------	------------
	4,836,152	5,419,790
	------------	------------

17. Debtors

	2020	2019
	£	£
Trade debtors	10,590,764	12,258,369
Amounts owed by group undertakings - Loans and financing	–	153,433
Prepayments and accrued income	669,938	937,818
Other debtors	1,254	1,565,645
	-------------	-------------
	11,261,956	14,915,265
	-------------	-------------

Trade debtors includes amounts due by group undertakings arising from the sale of goods and services, as detailed in note 25, of £318,983 (2019 £191,845).

18. Creditors: amounts falling due within one year

	2020	2019
	£	£
Trade creditors	9,129,198	8,962,321
Amounts owed to group undertakings - Loans and financing	–	4,474,546
Accruals and deferred income	1,708,631	2,304,006
Social security and other taxes	1,570,737	1,108,615
Dividends payable	1,500,000	–
	-------------	-------------
	13,908,566	16,849,488
	-------------	-------------

Trade creditors includes amounts due to group undertakings arising from the purchase of goods and services, as detailed in note 25, of £1,143,459 (2019 £845,815).

19. Creditors: amounts falling due after more than one year

	2020	2019
	£	£
Amounts owed to group undertakings - Loans and financing	3,655,580	–
	------------	----

20. Employee benefits

Defined contribution plans

The amount recognised in profit or loss as an expense in relation to defined contribution plans was £ 144,066 (2019: £ 235,379 ).

21. Called up share capital

Issued, called up and fully paid

	2020		2019
	No.	£	No.	£
Ordinary shares of £ 1 each	5,101	5,101	5,100	5,100
	-------	-------	-------	-------

There is a single class of Ordinary shares. There is no restriction on the distribution of dividends and repayment of capital . As mentioned in Note 10, above, one ordinary £1 share was issued during the year for consideration of £14,481,351

22. Reserves

Retained earnings - This reserve records retained earnings and accumulated losses.

23. Analysis of changes in net debt

	At 1 Jan 2020	Cash flows	At 31 Dec 2020
	£	£	£
Cash at bank and in hand	1,458,647	686,641	2,145,288
Debt due within one year	(4,474,546)	4,474,546	–
Debt due after one year	–	(3,655,580)	(3,655,580)
	------------	------------	------------
	( 3,015,899)	1,505,607	( 1,510,292)
	------------	------------	------------

24. Operating leases

The total future minimum lease payments under non-cancellable operating leases are as follows:

	2020	2019
	£	£
Not later than 1 year	239,430	173,910
Later than 1 year and not later than 5 years	173,765	94,210
	---------	---------
	413,195	268,120
	---------	---------

These commitments relates to rent of the company's Midlands and London premises, including services.

Amber Beverage UK Limited

formerly Cellar Trends Limited

Notes to the Financial Statements (continued)

Year ended 31 December 2020

25. Related party transactions

The company was a wholly owned subsidiary of Cellar Trends Holdings Limited until 17 December 2020.As detailed in note 26, below, from that date, the company became a wholly owned subsidiary of Amber Beverage Group Holding S.à.r.l. The following trading transactions, between related parties (group companies), arose during the period:


		£
	Sales of goods and services to group companies	2,187,079

	Purchases of goods and services from group companies	2,996,397

	Amounts owed by these related parties at 31 December 2020	318,983

	Amounts owed to these related parties at 31 December 2020	1,143,459

In addition, the following trading expenses, which were provided by other related parties, were incurred during the period:


		£
	Interest on finance from group company	143,694
	Total	143,694

The amount owed to the group company, Amber Beverage Group Holding S.à.r.l. at 31 December 2020 was £3,655,580. A loan of £150,493 to the immediate parent company, was repaid in full, during the year.

26. Controlling party

The company was, until 17 December 2020, a wholly owned subsidiary of Cellar Trends Holdings Limited, B100, Castle Donington, Derby DE74 2SA, which was, itself, under the control of Amber Beverage Group UK Limited, Hays Galleria, 1 Hays Lane, London, SE1 2RD. Following this reorganisation, the company is now a wholly owned subsidiary of Amber Beverage Group Holding S.à.r.l. of 44 Rue de la Vallée, L-2661, Luxembourg. The majority shareholder of the group of which the company is a part, is S.P.I. Group Holding Limited of 6 Maximou Michailidi, Maximos Plaza Tower 3, 3106, Limassol, Cyprus; The sole shareholder in that company is Mr Yuri Schefler.

27. Going concern

Notwithstanding a series of annual losses that have continued into the year ended 31 December 2020, the financial statements have been prepared on a going concern basis which the Directors consider to be appropriate.

The company is part of the Amber Beverage Group (the Group) and is an important part of the Group's market development plans. The Directors of the parent company prepared profit forecasts, including forecasts for the constituent companies, as part of their strategic plans, covering the five years to 31 December 2025. The forecasts relating to Amber Beverage UK Limited indicate a gradual return to profitability.

Furthermore, the company is funded to a significant extent by the Group and the Group has confirmed that such support will continue to be provided for at least twelve months from the date that these financial statements are approved.

The Directors of the company have assessed the conclusions reached by the Directors of the parent company and, having considered the assumptions made, the Directors agree their conclusion.

Consequent to the above, the Directors are confident that the company will have sufficient funds to continue to meet its liabilities as they fall due for at least twelve months from the date of approval of these financial statements and, therefore, these financial statements have been prepared on a going concern basis.