0000891554-01-505869.txt : 20011026
0000891554-01-505869.hdr.sgml : 20011026
ACCESSION NUMBER: 0000891554-01-505869
CONFORMED SUBMISSION TYPE: 8-K/A
PUBLIC DOCUMENT COUNT: 1
CONFORMED PERIOD OF REPORT: 20010813
ITEM INFORMATION: Acquisition or disposition of assets
ITEM INFORMATION: Financial statements and exhibits
FILED AS OF DATE: 20011022
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: MENDOCINO BREWING CO INC
CENTRAL INDEX KEY: 0000919134
STANDARD INDUSTRIAL CLASSIFICATION: MALT BEVERAGES [2082]
IRS NUMBER: 680318293
STATE OF INCORPORATION: CA
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: 8-K/A
SEC ACT: 1934 Act
SEC FILE NUMBER: 001-13636
FILM NUMBER: 1763498
BUSINESS ADDRESS:
STREET 1: 13351 S HWY 101
CITY: HOPLAND
STATE: CA
ZIP: 95449
BUSINESS PHONE: 7077441015
MAIL ADDRESS:
STREET 1: 13351 S HWY 101
CITY: HOPLAND
STATE: CA
ZIP: 95449
8-K/A
1
d27150_8k-a.txt
8-K/A
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
CURRENT REPORT ON FORM 8-K/A No.1
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): August 13, 2001
Commission File No. 0-22524
MENDOCINO BREWING COMPANY, INC.
(Exact name of small business issuer as specified in its charter)
California
(State or other jurisdiction of incorporation or organization)
68-0318293
(IRS Employer Identification Number)
13351 South Highway 101,
Hopland, California
(Address of principal executive offices)
95449
(Zip Code)
Registrant's telephone number, including area code: (707) 744-1015
Item 2. Acquisition or Disposition of Assets
Financial Statements
This Current Report amends the Current Report filed by Mendocino Brewing
Company, Inc. (the "Company") on August 24, 2001, to add the unaudited
individual financial statements of United Breweries International (UK) Limited
("UBI"), the combined pro forma financial statements for the Company and UBI,
and the Report of the Directors of UBI for the six month periods which ended
June 30, 2001. In all other respects, the Current Report filed August 24, 2001,
remains unchanged.
Item 7. Exhibits
Exhibit
No. Description
------- -----------
4 Mendocino Brewing Company, Inc. and United Breweries International
(UK) Limited Pro Forma Condensed Consolidated Balance Sheet and Income
Statement for the six months ended June 30, 2000 and 2001
5 United Breweries International (UK) Limited Balance Sheet, Statement
of Income and Stockholder's Equity, and Statement of Cash Flows and
conversion into United States Dollars for the six months ended June
30, 2000 and 2001
6 United Breweries International (UK) Limited Consolidated Reports and
Financial Statements, Period 1st January to 30th June 2001
1
SIGNATURES
Pursuant to the requirements on the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
MENDOCINO BREWING COMPANY, INC.
(Registrant)
Date: October 19, 2001 By: /s/ N. Mahadevan
--------------------------------
N. Mahadevan, Secretary and
Chief Financial Officer
2
EXHIBIT INDEX
Exhibit Description Page
Number Number
4 Mendocino Brewing Company, Inc. and United Breweries 4
International (UK) Limited Pro Forma Condensed Consolidated
Balance Sheet and Income Statement for the six months ended
June 30, 2000 and 2001
5 United Breweries International (UK) Limited Balance Sheet, 9
Statement of Income and Stockholder's Equity, and Statement
of Cash Flows and conversion into United States Dollars for
the six months ended June 30, 2000 and 2001
6 United Breweries International (UK) Limited Consolidated 15
Reports and Financial Statements, Period 1st January to 30th
June 2001
-----------
3
Exhibit 4
The unaudited pro forma condensed consolidated financial statements of Mendocino
Brewing Company, Inc. (the "Company") as of June 30, 2001 and 2000 (the "Pro
Forma Statements") were prepared using U.S. Generally Accepted Accounting
Principles (U.S. GAAP) and reflect the financial position of the Company after
giving effect to the acquisition of all of the outstanding stock of United
Breweries International, Ltd. ("UBI") and assume the acquisition took place on
January 1, 1999. The Pro Forma Statements also reflect the sale of 5,500,000
shares of the Company's common stock in exchange for the common stock of UBI at
a purchase price of $ .8125 per share (the last reported sale price of common
stock on the day immediately prior to November 3, 2000, the day the agreement
was executed.) The purchase is recorded as if it were a pooling transaction due
to the related party nature of the transaction.
The Pro Forma Statements have been prepared by the Company based upon
assumptions deemed proper by it. The Pro Forma Statements presented herein are
shown for illustrative purposes only and are not necessarily indicative of the
future financial position or future results of operations of the Company, or of
the financial position or results of operations of the Company that would have
actually occurred had the transaction been in effect as of the date or for the
periods presented.
The Pro Forma Statements should be read in conjunction with the Company's
historical financial statements and related notes.
4
Pro Forma Balance Sheet June 30, 2001
Pro forma Adjustment
-------------------------------
Mendocino United Breweries Pro forma
Brewing Co, Inc. International, Ltd. Consolidated
ASSETS 6/30/2001 6/30/2001 (a) Adjustments 6/30/2001
--------------- ------------------ ----------- ------------
CURRENT ASSETS
Cash $ -- $ 35,100 $ -- $ 35,100
Accounts receivable 1,660,200 3,781,700 -- 5,441,900
Inventories 1,206,700 37,400 -- 1,244,100
Prepaid expenses 283,800 -- 283,800
Deferred income taxes 48,100 -- -- 48,100
------------ ----------- ----------- ------------
Total current assets 3,198,800 3,854,200 -- 7,053,000
------------ ----------- ----------- ------------
PROPERTY AND EQUIPMENT 13,735,400 809,700 -- 14,545,100
------------ ----------- ----------- ------------
OTHER ASSETS
Intangibles 103,900 29,300 -- 133,200
Other assets 731,600 -- (558,100)(b) 173,500
Deferred taxes and other assets 2,844,000 -- -- 2,844,000
------------ ----------- ----------- ------------
3,679,500 29,300 (558,100) 3,150,700
------------ ----------- ----------- ------------
Total assets $ 20,613,700 $ 4,693,200 $ (558,100) $ 24,748,800
============ =========== =========== ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Disbursements in excess of deposits $ 119,400 $ 1,364,400 $ -- $ 1,483,800
Accounts payable 2,819,900 1,954,400 -- 4,774,300
Accrued liabilities 85,600 93,100 -- 178,700
Accrued wages and related expense 176,800 -- -- 176,800
Income taxes payable 3,800 240,300 -- 244,100
Current maturities of longterm debt and leases 765,900 -- -- 765,900
------------ ----------- ----------- ------------
Total current liabilities 3,971,400 3,652,200 -- 7,623,600
LONG-TERM DEBT AND CAPITAL LEASES,
less current maturities 5,819,800 -- -- 5,819,800
LINE OF CREDIT 1,608,100 -- -- 1,608,100
------------ ----------- ----------- ------------
Total liabilities 11,399,300 3,652,200 -- 15,051,500
------------ ----------- ----------- ------------
STOCKHOLDERS' EQUITY
Preferred stock 227,600 -- 227,600
Common stock 13,875,900 140,800 -- 14,016,700
Accumulated deficit (4,889,100) 900,200 (558,100)(b) (4,547,000)
------------ ----------- ----------- ------------
Total stockholders' equity 9,214,400 1,041,000 (558,100) 9,697,300
------------ ----------- ----------- ------------
Total liabilities and stockholders' equity $ 20,613,700 $ 4,693,200 $ (558,100) $ 24,748,800
============ =========== =========== ============
(a) To include the assets and liabilities of United Breweries International,
Ltd., as of June 30, 2001.
(b) To reflect the write-off of the capitalized acquisition costs.
5
Pro Forma Income Statement June 30, 2001
Pro forma Adjustment
--------------------------------
Mendocino United Breweries Pro forma
Brewing Co, Inc. International, Ltd. Consolidated
6/30/2001 6/30/2001 (a) Adjustments 6/30/2001
--------------- ------------------ ----------- ------------
NET SALES $ 5,365,800 $ 5,904,700 $ -- $ 11,270,500
COST OF GOODS SOLD 3,531,100 3,886,000 -- 7,417,100
----------- ----------- ------------ ------------
GROSS PROFIT 1,834,700 2,018,700 -- 3,853,400
OPERATING EXPENSES
Selling and marketing 1,223,400 1,218,200 -- 2,441,600
General and administrative 809,900 552,000 -- 1,361,900
----------- ----------- ------------ ------------
2,033,300 1,770,200 -- 3,803,500
----------- ----------- ------------ ------------
INCOME (LOSS) FROM OPERATIONS (198,600) 248,500 -- 49,900
OTHER INCOME (EXPENSE)
Interest expense (443,900) (36,300) -- (480,200)
Other income (expense) 9,700 -- (558,100)(b) (548,400)
----------- ----------- ------------ ------------
(434,200) (36,300) (558,100) (1,028,600)
----------- ----------- ------------ ------------
INCOME (LOSS) BEFORE INCOME TAXES (632,800) 212,200 (558,100) (978,700)
PROVISION (BENEFIT) FROM INCOME TAXES (76,000) 75,400 -- (600)
----------- ----------- ------------ ------------
NET INCOME (LOSS) $ (556,800) $ 136,800 $ (558,100) $ (978,100)
=========== =========== ============ ============
BASIC INCOME (LOSS) PER COMMON SHARE $ (0.10) $ (0.09)
============ ============
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING 5,580,498 5,500,000 (c) 11,080,498
=========== ============ ============
(a) To include the profits and losses of United Breweries International, Ltd.
(b) To write-off the capitalized acquisition costs.
(c) To reflect the shares issued for the purchase of the stock of United
Breweries International, Ltd. Shares assumed issued at January 1, 1999
6
Pro Forma Balance Sheet June 30, 2000
Pro forma Adjustment
-------------------------------
Mendocino United Breweries Pro forma
Brewing Co, Inc. International, Ltd. Consolidated
ASSETS 6/30/2000 6/30/2000 (a) Adjustments 6/30/2000
--------------- ------------------ ----------- ------------
CURRENT ASSETS
Cash $ 106,900 $ 156,400 $ -- $ 263,300
Accounts receivable 1,240,500 3,282,400 -- 4,522,900
Inventories 992,900 119,100 -- 1,112,000
Prepaid expenses 168,800 -- 168,800
Deferred income taxes 43,100 -- -- 43,100
------------ ----------- ----------- ------------
Total current assets 2,552,200 3,557,900 -- 6,110,100
------------ ----------- ----------- ------------
PROPERTY AND EQUIPMENT 14,355,500 904,300 -- 15,259,800
------------ ----------- ----------- ------------
OTHER ASSETS
Intangibles -- 36,300 -- 36,300
Other assets 311,600 -- (192,100)(b) 119,500
Deferred taxes and other assets 2,440,300 -- -- 2,440,300
------------ ----------- ----------- ------------
2,751,900 36,300 (192,100) 2,596,100
------------ ----------- ----------- ------------
Total assets $ 19,659,600 $ 4,498,500 $ (192,100) $ 23,966,000
============ =========== =========== ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Line of credit $ 1,268,100 $ 1,095,500 $ -- $ 2,363,600
Accounts payable 1,910,200 2,173,000 4,083,200
Accrued liabilities 319,300 270,500 -- 589,800
Accrued wages and related expense 176,800 -- -- 176,800
Income taxes payable -- 216,200 216,200
Current maturities of longterm debt and leases 925,400 -- -- 925,400
------------ ----------- ----------- ------------
Total current liabilities 4,599,800 3,755,200 -- 8,355,000
LONG-TERM DEBT AND CAPITAL LEASES,
less current maturities 5,221,800 -- -- 5,221,800
------------ ----------- ----------- ------------
Total liabilities 9,821,600 3,755,200 -- 13,576,800
------------ ----------- ----------- ------------
STOCKHOLDERS' EQUITY
Preferred stock 227,600 227,600
Common stock 13,834,900 151,300 -- 13,986,200
Accumulated deficit (4,224,500) 592,000 (192,100)(b) (3,824,600)
------------ ----------- ----------- ------------
Total stockholders' equity 9,838,000 743,300 (192,100) 10,389,200
------------ ----------- ----------- ------------
Total liabilities and stockholders' equity $ 19,659,600 $ 4,498,500 $ (192,100) $ 23,966,000
============ =========== =========== ============
(a) To include the assets and liabilities of United Breweries International,
Ltd., as of June 30, 2000.
(b) To write-off capitalized acquisition costs.
7
Pro Forma Income Statement June 30, 2000
Pro forma Adjustment
--------------------------------
Mendocino United Breweries Pro forma
Brewing Co, Inc. International, Ltd. Consolidated
6/30/2000 6/30/2000 (a) Adjustments 6/30/2000
--------------- ------------------ ----------- ------------
NET SALES $ 4,458,100 $ 6,000,200 $ -- $ 10,458,300
COST OF GOODS SOLD 2,865,700 3,883,300 -- 6,749,000
----------- ----------- ------------ ------------
GROSS PROFIT 1,592,400 2,116,900 -- 3,709,300
OPERATING EXPENSES
Selling and marketing 912,100 1,274,200 2,186,300
General and administrative 682,100 465,900 -- 1,148,000
----------- ----------- ------------ ------------
1,594,200 1,740,100 -- 3,334,300
----------- ----------- ------------ ------------
INCOME (LOSS) FROM OPERATIONS (1,800) 376,800 -- 375,000
OTHER INCOME (EXPENSE)
Interest expense (458,400) (50,200) -- (508,600)
Other income (expense) 43,000 (49,500) (192,100)(b) (198,600)
----------- ----------- ------------ ------------
(415,400) (99,700) (192,100) (707,200)
----------- ----------- ------------ ------------
INCOME (LOSS) BEFORE INCOME TAXES (417,200) 277,100 (192,100) (332,200)
PROVISION (BENEFIT) FROM INCOME TAXES 2,200 91,000 -- 93,200
----------- ----------- ------------ ------------
NET INCOME (LOSS) $ (419,400) $ 186,100 $ (192,100) $ (425,400)
=========== =========== ============ ============
BASIC INCOME (LOSS) PER COMMON SHARE $ (0.08) $ (0.04)
=========== ============
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING 5,530,117 5,500,000 (c) 11,030,117
=========== ============ ============
(a) To include the profits and losses of United Breweries International, Ltd.
(b) To write-off capitalized acquisition costs
(c) To reflect the shares issued for the purchase of the stock of United
Breweries International, Ltd. Shares assumed issued at January 1, 1999
8
Exhibit 5
United Breweries International, Ltd. (UBI)
Balance Sheet
June 30, 2001
(GBP(pound)) (US$)
2001 Exchange 2001
UBI Rate Consolidated
----------- -------- ------------
Cash 24,948 1.408 $ 35,119
Accounts Receivable 2,686,422 1.408 3,781,676
Inventory 26,570 1.408 37,403
---------- -----------
Current assets 2,737,940 3,854,198
Fixed assets 575,176 1.408 809,675
Goodwill 20,801 1.408 29,282
---------- -----------
Total assets 3,333,917 $ 4,693,155
========== ===========
Current liabilities
Bank overdraft 969,224 1.408 1,364,377
Accounts payable 1,388,355 1.408 1,954,387
Income tax payable 170,680 1.408 240,266
Accruals 66,160 1.408 93,133
---------- -----------
Total liabilities 2,594,419 3,652,164
Equity
Common stock 100,000 1.408 140,770
Currency translation 1.408 (2,979)
Prior year retained earnings 544,322 1.408 766,242
Current years earnings 95,176 1.439 136,958
---------- -----------
Total equity and liabilities (pound)3,333,917 $ 4,693,155
================ ===========
9
United Breweries International, Ltd. (UBI)
Statement of Income
For the Six Months Ended June 30, 2001
(GBP(pound)) (US$)
2001 Exchange 2001
UBI Rate Consolidated
----------- -------- ------------
Sales 4,103,366 1.439 $ 5,904,744
Cost of goods sold 2,700,495 1.439 3,886,012
---------- -----------
Gross profit 1,402,871 2,018,731
Selling costs 846,531 1.439 1,218,158
General and Administrative 383,590 1.439 551,986
---------- -----------
Net income from operations 172,750 248,587
Interest expense (25,196) 1.439 (36,257)
---------- -----------
Net income before tax 147,554 212,330
Provision for income tax 52,378 1.439 75,372
---------- -----------
Net income (pound)95,176 $ 136,958
------------- -----------
10
United Breweries International, Ltd. (UBI)
Statement of Cash Flows
For the Six Months Ended June 30, 2001
(GBP(pound)) Exchange (US$)
2001 UBI Rate 2001 UBI
------------ -------- ---------
Cash flows from operating activities
Net income 95,176 1.439 $ 136,958
Adjustments to reconcile net income
to net cash from operating activities
Depreciation 92,504 1.439 133,113
Amortization 1,600 1.439 2,302
Litigation costs -- 1.439 --
Changes in:
Accounts receivable 121,663 1.439 175,073
Inventory 42,483 1.439 61,133
Accounts payable and accruals (364,207) 1.439 (524,094)
------------- ---------
Net cash from operating activities (10,781) (15,514)
------------- ---------
Cash flows from investing activities
Purchase of property, plant and
equipment (89,324) 1.439 (128,537)
------------- ---------
Cash flows from financing activities
Decrease in bank overdraft (14,220) 1.439 (20,463)
------------- ---------
Translation adjustment -- (8,652)
------------- ---------
Net increase (decrease) in cash (114,325) (173,166)
Cash beginning of year 139,274 1.496 208,284
------------- ---------
Cash end of year (pound)24,949 $ 35,119
============= =========
11
United Breweries International, Ltd. (UBI)
Balance Sheet
June 30, 2000
(GBP(pound)) (US$)
2000 Exchange 2000
UBI Rate Consolidated
---------- -------- ------------
Cash 103,356 1.513 $ 156,378
Accounts Receivable 2,419,443 1.513 3,660,617
Allowance for doubtful accounts (250,000) 1.513 (378,250)
Inventory 78,764 1.513 119,170
---------- -----------
Current assets 2,351,563 3,557,915
Fixed assets 597,689 1.513 904,303
Goodwill 24,001 1.513 36,314
---------- -----------
Total assets 2,973,253 $ 4,498,532
========== ===========
Current liabilities
Bank overdraft 724,049 1.513 1,095,486
Accounts payable 1,436,244 1.513 2,173,037
Income tax payable 142,901 1.513 216,209
Accruals 178,759 1.513 270,462
---------- -----------
Total liabilities 2,481,953 3,755,195
Equity
Common stock 100,000 1.513 151,300
Currency translation -- 1.513 (6,416)
Prior year retained earnings 272,479 1.513 412,261
Current years earnings 118,821 1.567 186,193
---------- -----------
Total equity and liabilities (pound)2,973,253 $ 4,498,532
================ ===========
12
United Breweries International, Ltd. (UBI)
Statement of Income
For the Six Months Ended June 30, 2000
(GBP(pound)) (US$)
2000 Exchange 2000
UBI Rate Consolidated
---------- -------- ------------
Sales 3,829,076 1.567 $ 6,000,162
Cost of goods sold 2,478,177 1.567 3,883,303
---------- -----------
Gross profit 1,350,899 2,116,859
Selling costs 813,128 1.567 1,274,172
General and Administrative 297,303 1.567 465,874
---------- -----------
Net income from operations 240,468 376,813
Provision for litigation (31,584) 1.567 (49,492)
Interest expense (32,012) 1.567 (50,163)
---------- -----------
Net income before tax 176,872 277,158
Provision for income tax 58,051 1.567 90,966
---------- -----------
Net income (pound)118,821 $ 186,193
============== ===========
13
United Breweries International, Ltd. (UBI)
Statement of Cash Flows
For the Six Months Ended June 30, 2000
(GBP (pound)) Exchange (US$)
2000 UBI Rate 2000 UBI
-------------- -------- ---------
Cash flows from operating activities
Net income (pound)118,821 1.567 $ 186,193
Adjustments to reconcile net income
to net cash from operating activities
Depreciation 107,337 1.567 168,197
Profit on disposal of assets (2,185) 1.567 (3,424)
Amortization 1,600 1.567 2,507
Litigation costs (31,584) 1.567 (49,492)
Changes in:
Accounts receivable 552,792 1.567 866,225
Inventory (15,690) 1.567 (24,586)
Income taxes payable (426) 1.567 (668)
Accounts payable and accruals (121,162) 1.567 (189,861)
------------- ---------
Net cash from operating activities 609,503 955,091
------------- ---------
Cash flows from investing activities
Purchase of property, plant and equipment (109,733) 1.567 (171,952)
------------- ---------
Cash flows from financing activities
Increase in bank overdraft (430,259) 1.567 (674,216)
------------- ---------
Translation adjustment -- (7,205)
------------- ---------
Net increase (decrease) in cash 69,511 101,719
Cash beginning of year 33,845 1.615 54,660
------------- ---------
Cash end of year (pound)103,356 $ 156,378
============= =========
14
EXHIBIT 6
UNITED BREWERIES INTERNATIONAL (UK) LIMITED
CONSOLIDATED REPORTS AND FINANCIAL STATEMENTS
PERIOD 1ST JANUARY 2001 TO 30TH JUNE 2001
FOR GROUP REPORTING PURPOSES ONLY
15
UNITED BREWERIES INTERNATIONAL (UK) LIMITED
Officers and Professional Advisers
Directors: M. K. Nambiar (resigned 13th August 2001)
V. S. Kumar (resigned 13th August 2001)
G. M. K. Lodhi
J. Merchant (appointed 13th August 2001)
V. Mallya (appointed 13th August 2001)
Secretary: G. M. K. Lodhi
Auditors: Messrs. Hawsons,
Chartered Accountants,
Jubilee House,
Billing Brook Road,
Weston Favell,
Northampton,
NN3 8NW
16
UNITED BREWERIES INTERNATIONAL (UK) LIMITED
INDEX
Page no.
Report of the Directors 18
Statement of Directors' responsibilities 19
Accountants' Report 20
Consolidated Profit and Loss Account 21
Consolidated Balance Sheet 22
Company Balance Sheet 23
Consolidated Cash Flow Statement 24
Notes to the Financial Statements 25 - 34
Detailed Consolidated Profit and Loss Account 35
17
UNITED BREWERIES INTERNATIONAL (UK) LIMITED
REPORT OF THE DIRECTORS
The directors submit their report and the financial statements of the Group for
the six-month period ended 30th June 2001.
PRINCIPAL ACTIVITIES AND BUSINESS REVIEW
The principal activities of the Group during the period continued to be that of
marketing and distribution of beer and wines and commission agents for the sale
of beverages.
The results for the period and the financial position at the period end were
considered to be satisfactory by the directors who expect continued growth in
the forseeable future.
RESULTS AND DIVIDENDS
The results for the period are set out on page 21.
The directors do not recommend the payment of a dividend.
FIXED ASSETS
Details relating to fixed assets are shown in the notes to the financial
statements.
DIRECTORS AND INTERESTS IN SHARES
The directors who served during the period and their beneficial interests in the
shares of the company were as stated below:
Ordinary shares of(pound)1 each
30th June 30th June
2001 2000
M. K. Nambiar (resigned 13th August 2001) - -
V. S. Kumar (resigned 13th August 2001) - -
G. M. K. Lodhi - -
J. Merchant (appointed 13th August 2001) - -
V. Mallya (appointed 13th August 2001) - -
- -
On behalf of the Board.
/s/ Gul Lodhi
G. M. K. Lodhi
Director / Secretary Date: September 5, 2001
Registered Office:
75 Westow Hill,
Crystal Palace,
London,
SE19 1TX
18
UNITED BREWERIES INTERNATIONAL (UK) LIMITED
STATEMENT OF DIRECTORS' RESPONSIBILITIES
Company law requires the directors to prepare financial statements for each
financial period which give a true and fair view of the state of affairs of the
company and the group and of the profit or loss for that period. In preparing
those financial statements, the directors are required to:-
(1) Select suitable accounting policies and then apply them consistently.
(2) Make judgements and estimates that are reasonable and prudent.
(3) State whether applicable accounting standards have been followed, subject
to any material departures disclosed and explained in the financial
statements.
(4) Prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the group will continue in business.
The directors are responsible for keeping proper accounting records which
disclose with reasonable accuracy at any time the financial position of the
group and to enable them to ensure that the financial statements comply with the
Companies Act 1985. They are also responsible for safeguarding the assets of the
group and hence for taking reasonable steps for the prevention and detection of
fraud and other irregularities.
19
UNITED BREWERIES INTERNATIONAL (UK) LIMITED
ACCOUNTANTS' REPORT TO THE DIRECTORS
As described on page 19 the group's directors are responsible for the
preparation of the financial statements for the period ended 30th June 2001 set
out on pages 21 to 36. In accordance with your instructions, we have compiled
these unaudited financial statements in order to assist you to fulfil the
group's external reporting requirements to the Securities and Exchange
Commission in the United States of America, from the accounting records,
information and explanations supplied to us.
Hawsons Chartered Accountants Jubilee House
Reporting Accountants Billing Brook Road
Weston Favell
Northampton
United Kingdom
NN3 8NW
20
UNITED BREWERIES INTERNATIONAL (UK) LIMITED
CONSOLIDATED PROFIT AND LOSS ACCOUNT - PERIOD ENDED 30TH JUNE 2001
Six months to 30th June Six months to 30th June
2001 2001 2000 2000
Notes (pound) (pound) (pound) (pound)
Turnover: 2 4,103,366 3,829,076
Cost of sales 2,700,495 2,478,177
---------- ----------
Gross Profit 1,402,871 1,350,899
Distribution and selling costs 846,531 813,128
Administrative expenses 383,590 297,303
-------- --------
1,230,121 1,110,431
---------- ----------
Operating profit 172,750 240,468
Exceptional items:
Costs relating to litigation 4 -- 31,584
---------- ----------
Profit on ordinary activities before interest 172,750 208,884
Interest payable 5 25,196 32,012
---------- ----------
Profit on ordinary activities before taxation 147,554 176,872
Tax on profit on ordinary activities 6 52,378 58,051
---------- ----------
Profit on ordinary activities after taxation 95,176 118,821
---------- ----------
Retained profit transferred to reserves 17 95,176 118,821
========== ==========
The group has no recognized gains and losses other than those included in the
profits above, and therefore no separate statement of total recognized gains and
losses has been presented.
The notes on pages 25 to 34 form part of these financial statements.
21
UNITED BREWERIES INTERNATIONAL (UK) LIMITED
CONSOLIDATED BALANCE SHEET - 30TH JUNE 2001
30th June 30th June
2001 2000
Note (pound) (pound) (pound) (pound)
Fixed assets
Intangible Fixed Assets 8 20,801 24,001
Tangible Fixed Assets 9 575,176 597,689
------- --------
595,977 621,690
Current assets
Stocks 11 26,570 78,764
Debtors 12 2,686,422 2,169,443
Cash at bank and in hand 24,948 103,356
----------- -----------
2,737,940 2,351,563
Creditors - amounts falling due within one year 13 (2,594,419) (2,481,953)
----------- -----------
Net current assets/(liabilities) 143,521 (130,390)
------- --------
Total assets less current liabilities 739,498 491,300
======= ========
Capital and Reserves
Called up share capital 16 100,000 100,000
Profit and loss account 17 639,498 391,300
------- -------
Equity Shareholders' funds 18 739,498 491,300
======= ========
The financial statements were approved by the board of directors on _______,
2001 and were signed on its behalf by:
/s/ Gul Lodhi
G. M. K. Lodhi Director
The notes on pages 25 to 34 form part of these financial statements.
22
UNITED BREWERIES INTERNATIONAL (UK) LIMITED
BALANCE SHEET - 30TH JUNE 2001
30th June 30th June
2001 2000
Note (pound) (pound) (pound) (pound)
Fixed Assets
Investments 10 299,119 299,119
Current Assets
Debtors 12 42,032 5,434
Cash at bank and in hand 16,450 10,951
--------- ---------
58,482 16,385
Creditors: amounts falling due within one year 13 (225,353) (182,361)
--------- ---------
Net Current Liabilities (166,871) (165,976)
--------- --------
Total assets less current liabilities 132,248 133,143
========= ========
Capital and Reserves
Called up share capital 16 100,000 100,000
Profit and loss account 32,248 33,143
--------- --------
Equity Shareholders' funds 132,248 133,143
========= ========
The financial statements were approved by the board of directors on
_______________ , 2001 and were signed on its behalf by:
/s/ Gul Lodhi
G. M. K. Lodhi Director
The notes on pages 25 to 34 form part of these financial statements.
23
UNITED BREWERIES INTERNATIONAL LIMITED
CONSOLIDATED CASH FLOW STATEMENT
FOR THE PERIOD ENDED 30TH JUNE 2001
Six months Six months
to 30th June to 30th June
2001 2000
(pound) (pound)
Net cash inflow from operating activities (Note 24a) 66,793 731,576
Returns on investments and servicing of finance
Interest paid (25,196) (32,012)
------- --------
Net cash outflow from returns on investments and servicing of finance (25,196) (32,012)
Taxation (41,953) (426)
Capital expenditure and financial investment
Payments to acquire tangible assets (89,324) (112,983)
Sale of tangible fixed assets -- 3,250
------- --------
Net cash outflow for capital expenditure (89,324) (109,733)
------- --------
Net (decrease)/increase in cash in the period (89,680) 589,405
======= ========
The notes on pages 25 to 34 form part of these financial statements.
24
UNITED BREWERIES INTERNATIONAL (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
1. ACCOUNTING POLICIES
Basis of accounting:
The financial statements are prepared under the historical cost convention
and in accordance with Generally Accepted Accounting Principles (GAAP)
applicable in the United Kingdom (UK). All figures are derived from the
company's unaudited management accounts for the six month periods ended
30th June 2000 and 2001.
Reconciliation to US accounting principles - summary of differences between
UK and US GAAP:
No reconciliation between US GAAP and UK GAAP has been presented. In the
opinion of the directors, for the period ended 30th June 2001, and for the
period ended 30th June 2000 there are no significant differences in the
group's net income and net equity on preparing the financial statements
under either UK GAAP or US GAAP.
Comparative figures:
Comparative figures have been prepared for the six months to 30th June 2000
from unaudited management accounts. Balance sheet and cash flow notes
showing movements in the period have been prepared to support the profit
and loss account movements. Accordingly, certain comparatives use 1st
January, 2001 as the appropriate starting point. Where this is the case, no
full comparatives for 30th June 2000 have been prepared.
Basis of consolidation:
The consolidated accounts comprise the accounts of the parent undertaking
and its subsidiary undertakings for the period ended 30th June 2001.
Goodwill and intangible fixed assets:
Goodwill represents purchased goodwill on the acquisition of UBSN Limited,
a wholly owned subsidiary. It is valued at the amount by which the cost of
UBSN Limited as a whole exceeded the aggregate fair values of its
identifiable assets and liabilities at the date of acquisition. The
goodwill is being amortized on a straight-line basis over ten years. This
is the period over which UBSN Limited holds its brewing license to carry
out its principal activity.
Depreciation of tangible fixed assets:
Depreciation is provided on all fixed assets at rates calculated to write
off the costs of each asset evenly over its expected useful life as
follows:-
- Plant and equipment 6 to 7 years
- Motor vehicles 2 to 5 years
Foreign currency:
Transactions denominated in foreign currencies are translated at the
exchange rate on the transaction date. Balances denominated in foreign
currencies are translated at the exchange rate on the balance sheet date.
25
UNITED BREWERIES INTERNATIONAL (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS continued
Turnover:
Turnover represents the amounts receivable by the group for goods sold,
services supplied and commissions receivable and is stated net of value
added tax.
Stocks:
Stocks are valued on a first-in, first-out basis at the lower of cost and
net realizable value.
Taxation:
Corporation tax is provided on taxable profits at current rates. Deferred
taxation is provided at appropriate rates on all timing differences using
the liability method only to the extent that, in the opinion of the
directors, there is a reasonable probability that a liability or asset will
crystallize in the forseeable future.
Pensions:
The pension costs charged in the financial statements represent the
contributions payable by the group during the period.
26
UNITED BREWERIES INTERNATIONAL (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS continued
2. TURNOVER
The total turnover comprises sales and commissions excluding value added
tax.
The geographic analysis of turnover is as follows: Six months Six months
to to
2001 2000
(pound) (pound)
United Kingdom 3,552,519 3,294,876
Export 550,847 534,200
--------- ---------
4,103,366 3,829,076
========= =========
3. OPERATING PROFIT
2001 2000
(pound) (pound)
Operating profit has been arrived at after charging/(crediting):-
Amortisation of intangible fixed assets 1,600 1,600
Depreciation of tangible fixed assets 92,504 105,152
Auditors' remuneration - as auditors 7,850 7,500
- for non audit services 4,650 4,200
(Profit) on disposal of tangible fixed assets -- (2,185)
Exchange differences (4,797) 6,389
======= ========
As permitted by Section 230 of the Companies Act 1985, the profit and loss
account of the parent undertaking is not presented as part of these
financial statements. The consolidated profit for the financial period
includes a profit of (pound)1,052, which is dealt with in the financial
statements of the parent undertaking.
4. COSTS RELATING TO LITIGATION
All remaining matters in issue between the parties have been finally
resolved to their satisfaction.
5. INTEREST PAYABLE
2001 2000
(pound) (pound)
Bank overdrafts 25,196 32,012
====== ======
6. TAX ON PROFIT ON ORDINARY ACTIVITIES
2001 2000
(pound) (pound)
Corporation Tax on profit for period at 30% (2000 - 30%) 50,000 57,625
Prior period adjustment 2,378 426
------ ------
52,378 58,051
====== ======
27
UNITED BREWERIES INTERNATIONAL (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS continued
7. DIRECTORS AND EMPLOYEES
Staff costs during the period were as follows: Six months Six months
to to
2001 2000
(pound) (pound)
Wages and salaries 202,107 148,682
Other pension costs 9,227 6,126
------- -------
211,334 154,808
======= =======
The average monthly number of employees, including directors, during the
period was as follows:
2001 2000
Number Number
Sales and marketing 15 13
==== ====
8. INTANGIBLE FIXED ASSETS - Group
Goodwill
(pound)
Cost
At 1st January 2001 and at 30th June 2001 32,001
======
Aggregate amortisation
At 1st January 2001 9,600
Charge for the period 1,600
------
At 30th June 2001 11,200
======
Net Book Value
At 30th June 2001 20,801
======
At 31st December 2000 22,401
======
28
UNITED BREWERIES INTERNATIONAL (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS continued
9. TANGIBLE FIXED ASSETS - Group
Plant
and Motor
Equipment Vehicles Total
(pound) (pound) (pound)
Cost
At 1st January 2001 1,473,813 132,319 1,606,132
Additions 59,329 29,995 89,324
--------- ------- ---------
At 30th June 2001 1,533,142 162,314 1,695,456
========= ======= =========
Depreciation
At 1st January 2001 976,644 51,132 1,027,776
Charge for period 78,557 13,947 92,504
--------- ------- ---------
At 30th June 2001 1,055,201 65,079 1,120,280
========= ======= =========
Net Book Value
At 30th June 2001 477,941 97,235 575,176
========= ======= =========
At 31st December 2000 497,169 81,187 578,356
========= ======= =========
10. FIXED ASSET INVESTMENTS - Company
Shares in
group
undertakings
and
participating
interests
(pound)
Cost and Net Book Value at
30th June 2000 and 30th June 2001 299,119
=======
The subsidiary undertakings are as follows:-
Percentage of
equity held
UBSN Limited Registered in England 100%
11. STOCKS Group Company
2001 2000 2001 2000
(pound) (pound) (pound) (pound)
Finished goods and goods for resale 26,570 78,764 -- --
====== ====== ====== ======
29
UNITED BREWERIES INTERNATIONAL (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS continued
12. DEBTORS
Group Company
2001 2000 2001 2000
(pound) (pound) (pound) (pound)
Trade debtors:
Amounts owed by Shepherd Neame Limited 520,757 233,893 -- --
Other 2,153,561 1,929,949 42,032 5,434
Prepayments 12,104 -- -- --
Prepayments and accrued income in respect of
related parties:
Amounts owed by Shepherd Neame Limited -- 5,601 -- --
--------- --------- ------ -----
2,686,422 2,169,443 42,032 5,434
========= ========= ====== =====
13. CREDITORS - amounts falling due within one year
Group Company
2001 2000 2001 2000
(pound) (pound) (pound) (pound)
Bank overdraft (secured - see note 19) 969,224 724,049 -- --
Trade creditors:
Amounts owed to Shepherd Neame 1,208,260 1,322,174 -- --
Limited -- 25,363 -- --
UB Global Corporation Limited 180,095 88,707 68,545 7,162
Others 145,890 126,719 -- 72
Corporation tax 24,790 16,182 683 16,002
Other taxation and social security
Accruals:
Amounts owed to Shepherd Neame Limited 32,947 66,043 -- --
American United Breweries Inc 23,403 -- -- --
Other 9,810 112,716 -- 3,000
Other creditors -- -- -- --
Loan from subsidiary undertaking UBSN Ltd -- -- 156,125 156,125
--------- --------- ------- -------
2,594,419 2,481,953 225,353 182,361
========= ========= ======= =======
14. PENSION COSTS
The group operates a defined contribution pension scheme. The assets of the
scheme are held separately from those of the company in an independently
administered fund. The pension cost charge represents contributions payable
by the company to the fund and amounted to (pound)9,227 (2000 -
(pound)6,126).
30
UNITED BREWERIES INTERNATIONAL (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS continued
15. DEFERRED TAXATION
The full potential liability for 2001 is (pound)Nil (2000 - (pound)4,000)
in respect of accelerated capital allowances carried forward which have not
been provided for in the accounts.
16. CALLED UP SHARE CAPITAL - Company and Group
Authorized Allotted, called up
and Issued and fully paid
2001 2000 2001 2000
No. No. No. No.
100,000 Ordinary shares of(pound)1 each 500,000 500,000 100,000 100,000
------- ------- ------- -------
500,000 500,000 100,000 100,000
======= ======= ======= =======
17. PROFIT AND LOSS ACCOUNT - Group
(pound)
At 1st January 2001 544,322
Retained profit for period 95,176
-------
At 30th June 2001 639,498
=======
18. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS - Group
2001 2000
(pound) (pound)
Profit after taxation for the financial period 95,176 118,821
------- -------
Net addition to shareholders' funds 95,176 118,821
Profit after taxation for the financial period
1st July 2000 to 31st December 2000 -- 153,022
Opening shareholders' funds 644,322 372,479
------- -------
Closing shareholders' funds 739,498 644,322
======= =======
31
UNITED BREWERIES INTERNATIONAL (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS continued
19. BANK OVERDRAFT
The bank overdraft is secured by a fixed and floating charge over the
assets of UBSN Limited. The maximum facility available to the group is
(pound)1,250,000. This facility is available on an on-going basis and is
repayable on demand. Interest is calculated on a daily basis at 1.5% above
the bank's base rate.
20. OPERATING LEASE COMMITMENTS
Financial commitments under non-cancelable operating leases will result in
the following payments falling due in the next financial year:
2001 2000
Land and Land and
buildings buildings
(pound) (pound)
Expiring:
Within two to five years 7,000 7,000
===== =====
21. ULTIMATE PARENT UNDERTAKING AND CONTROL
The directors consider the company's ultimate parent undertaking to be
Mendocino Brewing Company, Inc., a company incorporated in the United
States of America.
22. POST BALANCE SHEET EVENTS
On 13th August, 2001 Inversion Mirabele S.A. transferred its shareholding
in United Breweries International (UK) Limited, in its entirety, to
Mendocino Brewing Company. Inc., a company incorporated in the United
States of America.
32
UNITED BREWERIES INTERNATIONAL (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS continued
23. RELATED PARTY TRANSACTIONS
During the year the group had the following transactions with its related
parties:
30th June 30th June
Nature of 2001 2000
relationship (pound) (pound)
Shepherd Neame Limited Common trade
(Company registered in the UK)
Sales 520,159 485,281
Freight cost 128,906 138,272
Commission payable 51,997 39,644
Purchases 2,638,325 2,436,613
Galaxy International Limited Common commercial
(Company registered in the UK) interests
Management charge payable 17,000 --
American United Breweries Inc Mutuality of
(Company registered in the USA) interest 20,290 53,897
Commission/advertising payable
United Breweries Limited Licence owner
(Company registered in India) 18,142 3,260
Royalty payable
As a result of the trading and other activities with related parties, the
following balances remained outstanding as at 30th June 2001.
2001 2000
(pound) (pound)
Amounts owed by Shepherd Neame Limited 520,757 233,893
Amounts owed to Shepherd Neame Limited 1,208,260 1,322,174
Amounts owed to Galaxy International Limited 19,975 --
Amounts owed to United Breweries Limited 24,101 3,260
Accruals - Shepherd Neame Limited 32,947 66,043
- American United Brewers Inc 23,403 --
33
UNITED BREWERIES INTERNATIONAL (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS continued
24. CASH FLOW STATEMENT
a. RECONCILIATION OF OPERATING PROFIT TO NET CASH INFLOW FROM OPERATING
ACTIVITIES
2001 2000
(pound) (pound)
Operating profit 172,750 240,468
Depreciation charges 92,504 107,337
Amortisation charges 1,600 1,600
(Profit) on disposal of tangible assets -- (2,185)
Decrease/(increase) in stocks 42,483 (15,690)
Decrease/(increase) in debtors 121,663 552,792
(Decrease)/increase in creditors (364,207) (121,162)
Costs relating to litigation -- (31,584)
-------- --------
Net cash inflow from continuing operating activities 66,793 731,576
======== ========
b. ANALYSIS OF CHANGES IN NET DEBT
At 1st At 1st At 30th
July Cash January Cash June
2000 Flows 2001 Flows 2001
(pound) (pound) (pound) (pound) (pound)
Net cash:
Cash at bank and in hand
Bank overdrafts 103,356 35,918 139,274 (114,326) 24,948
(724,049) (269,821) (993,870) 24,646 (969,224)
-------- -------- -------- -------- --------
(620,693) (233,903) (854,596) (89,680) (944,276)
======== ======== ======== ======== ========
c. RECONCILIATION OF NET CASH FLOW MOVEMENT TO MOVEMENT IN NET DEBT
2001 2000
(pound) (pound)
(Decrease)Increase in cash in the
period and change in net debt (89,680) 589,405
(Decrease) in cash in the period 1st
July 2000 to 31st December 2000 -- (233,903)
Opening net debt (854,596) (1,210,098)
-------- ----------
Closing net debt (944,276) (854,596)
======== ==========
34
UNITED BREWERIES INTERNATIONAL (UK) LIMITED
DETAILED CONSOLIDATED PROFIT AND LOSS ACCOUNT
Period ended 30th June 2001
Six months Six months
to 30th June to 30th June
2001 2000
(pound) (pound)
GROSS PROFIT
Sales and commissions 4,103,366 3,829,076
Cost of sales (2,700,495) (2,478,177)
---------- ----------
Gross profit 1,402,871 1,350,899
---------- ----------
DISTRIBUTION AND SELLING EXPENSES
Freight 187,097 225,543
Advertising and promotional expenses 248,207 230,852
Sales commission 72,287 93,541
Dispense equipment repairs 85,017 58,647
Operational expenses 170,419 124,924
Sponsorship 900 27,280
Other distribution and selling 82,604 52,341
---------- ----------
846,531 813,128
---------- ----------
GENERAL AND ADMINISTRATIVE EXPENSES
Management fees 17,000 --
Audit and taxation fees 25,420 11,700
Postage and stationery 3,077 1,885
Bad debt provision 15,000 12,500
Depreciation/profit on asset disposal 92,504 105,152
Amortisation 1,600 1,600
Exchange rate differences (4,797) 6,389
Operational expenses 116,974 93,858
Royalties payable/receivable 21,995 2,370
Miscellaneous 94,817 61,849
---------- ----------
383,590 297,303
---------- ----------
FINANCE COSTS
Bank interest paid and charges 25,196 32,012
---------- ----------
25,196 32,012
---------- ----------
EXCEPTIONAL ITEMS
Litigation costs -- 31,584
---------- ----------
-- 31,584
---------- ----------
Profit on ordinary activities before taxation 147,554 176,872
========== ==========
35