FEVERTREE LTD Annual Report and Accounts for the year ended 31 December 2014

Transcription

1 FOR THE YEAR ENDED

2 04 IFC FEVERTREE LTD Annual Report and Accounts for the year ended 31 December Fever-Tree pioneered the concept of the premium mixer to match the established but growing premiumisation of spirits worldwide. A virtuous circle. Fever-Tree s premium mixers consist of a range of all natural carbonated mixers, including Tonics, Ginger Ale, Ginger Beer, Bitter Lemon and Lemonades. Sourced from the finest ingredients, from all parts of the globe, the product range continues to win many international product awards and has received endorsements from the world s top taste makers including Ferran Adria in Spain, Jamie Oliver in the UK and Robert Parker in the US. It was recently voted the best selling and no.1 trending tonic water across the world s top 250 bars and is served in 7 of the world s top 10 restaurants. With a founder-led management team, Fever-Tree has created a premium drinks niche of which it is the market leader occupying c 50% of the category (EY, September ). In just ten years Fever-Tree has achieved a position where it is already sold in 50 countries around the world, selling 80 million bottles in, achieving revenues of 34.7m and growth of 49%. With 68% of revenues derived from outside the UK, Fever-Tree offers investors a chance to be part of a global, premium drinks opportunity, which is still in its infancy. With fragmented competition, Fever-Tree has an opportunity to consolidate its position in its existing markets and also to deepen distribution through new geographies and products. It operates an outsourced business model ensuring minimal capital expenditure requirements and strong cash conversion rates. OUR PRODUCTS The Group s products are designed to be accompaniments for alcoholic spirits or used in cocktails, although they can also be consumed on their own. The Group currently sells the following range of 12 products, all under the Fever-Tree brand: Indian Tonic Water (the original flavour) Naturally Light Tonic Water (a low calorie version) Elderflower Tonic Water Mediterranean Tonic Water Ginger Ale Ginger Beer Naturally Light Ginger Beer (a low calorie version) Bitter Lemon (or Lemon Tonic in the UK) Sicilian Lemonade Lemonade Spring Soda Water Premium Cola (currently only sold in Spain)

3 Stock code: FEVR MILLION BOTTLES SOLD SALES GROWTH OF 60% IN THE UK, OUR FIRST MARKET REVENUE OF 34.7M UP BY 49% (: 23.3M) ADJUSTED EBITDA OF 10.0M UP BY 48% (: 6.7M) NET CASH AT YEAR END OF 3.3M ADJUSTED OPERATING CASH FLOW CONVERSION OF 73% LAUNCHED IN INDIA, OUR 50TH COUNTRY SECOND PRODUCTION PARTNER ADDED TO ALLOW REFILLABLE BOTTLES IN GERMANY SUCCESSFUL LISTING ON THE AIM MARKET OF THE LONDON STOCK EXCHANGE REVENUE (M) 34.7M : 34.7m : 23.3m 2012 : 16.2m ADJUSTED EBITDA (M) 10.0M : 10.0m : 6.7m 2012 : 3.9m NOTE ON THE COMPARATIVES Fevertree Drinks plc was incorporated in February and acquired the trading entity Fevertree Limited in March. As such, the audited financial statements are required by the Companies Act to present as the comparison the trading period from 7 March to 31 December. To allow meaningful comparisons to be made against prior year figures, pages 1-11 of this front section of the Annual Report refers to the full year ending 31 December as the comparison period, which therefore also includes Fevertree Limited s results for the period from 1 January to 6 March prior to its acquisition by Fevertree Drinks plc. More detail on this can be found in the Financial Review. Analysis on pages 1-11 of this front end of the Annual Report refers to adjusted EBITDA and adjusted operating cash flow. Adjusted EBITDA for the year ended 31 December is operating profit of 8.1m before depreciation of 0.1m, amortisation of 0.7m and exceptional items of 1.1m (see note 5 for further details). Adjusted operating cash flow at 31 December is cash generated from operations of 6.2m excluding exceptional items of 1.1m. STRATEGIC REPORT Our Key Strengths 02 Chairman s Statement 03 Chief Executive s Report 04 Strategy and Growth Opportunities 07 Financial Review 09 Principal Risks and Uncertainties 11 OUR GOVERNANCE Board of Directors 12 Corporate Governance Statement 13 Remuneration Report 14 Directors Report 16 Statement of Directors Responsibilities 18 FINANCIAL STATEMENTS Independent Auditors Report 20 Consolidated Statement of Comprehensive Income 22 Consolidated Statement of Financial Position 23 Consolidated Statement of Changes in Equity 24 Consolidated Statement of Cash Flows 25 Notes to the Consolidated Financial Statements 26 Company Balance Sheet 54 Notes to the Company Financial Statements 55 OTHER INFORMATION Company Information 60 Notice of Annual General Meeting 61 Explanatory Notes to the Notice of Annual General Meeting 64

4 02 FEVERTREE LTD Annual Report and Accounts for the year ended 31 December was a notable year for Fever-Tree as we continued to strengthen our market share and reputation as the leading international premium mixer brand. We achieved a 49% increase in revenue and 48% increase in adjusted EBITDA. Encouragingly, growth came from all four of our international regions, illustrating the global appeal of the brand and was underpinned by strong margins and high cash conversion rates. We look forward to the year ahead with confidence. TIM WARRILLOW CEO A STRONG DISTINCTIVE BRAND Fever-Tree is a well-established leading brand in the premium mixer market internationally. Protection and enhancement of the brand s market position continues to be a major focus of the Group. FIRST MOVER ADVANTAGE Fever-Tree is widely known within the industry to have been the first mover and innovator of the premium mixer category which has added to the brand s authenticity and attractiveness to the industry s leading bartenders and trade influencers. CLEARLY DIFFERENTIATED PRODUCTS WITH PREMIUM PROVENANCE Since inception, the Group has made a conscious decision to use only the highest quality ingredients in its products and the founders have travelled around the world to track down and source these ingredients. This premium provenance is a clear differentiator from the Group s mass market competition, and key to both product quality and brand image. SCALABLE BUSINESS MODEL The Group s largely outsourced business model, with strong, established relationships with suppliers, bottlers and distributors, allows for efficient and effective scalability without the requirement for major capital commitment from the Group. EXPERIENCED FOUNDER-LED MANAGEMENT TEAM The Group s executive management team includes the founders of the business, who have considerable experience in the mixers and premium spirits sectors. The executive Directors are also supported by experienced outsourced partners with many years experience in the beverage industry. STRONG CASH FLOW GENERATION AND ADJUSTED EBITDA MARGINS The Group requires minimal capital expenditure, and has to date achieved strong cash generation which it has been able to reinvest in the business. In, adjusted operating cash flow was 73% of adjusted EBITDA. The Group s largely outsourced business model supports its operating margins, and in the Group achieved a gross profit margin of 50.9% and an adjusted EBITDA margin of 28.8% of revenue. STRONG AND DIVERSE CUSTOMER RELATIONSHIPS The Group has strong, and in its key markets, long established relationships with its network of importers and distributors as well as On Trade and Off Trade customers. STRATEGIC REPORT

5 Stock code: FEVR 03 OVERVIEW This year has been a landmark one for the business, with the successful initial public offering in November positioning the Group for its next stage of development, further raising the profile of the business and providing it with a platform for future growth. RESULTS The Group achieved a very pleasing result in, with revenue of 34.7 million reflecting growth of 49% versus. Although high growth was achieved in all regions, of particular note is the growth achieved in our two largest single territories UK, which grew by 60% and USA, which grew by 59%. This growth continued to be underpinned by strong stable margins. DIVIDEND The Board is pleased to recommend a final dividend of 0.30 pence per share, reflecting the short trading period from our listing date to year end. If approved by the shareholders at the AGM on 7 May 2015, it will be paid on 22 May 2015 to shareholders on the register on 24 April PEOPLE I joined the Board as non-executive Chairman in June. In November, we welcomed two new non-executive Directors, Coline McConville and David Adams. Between them, they have a wealth of experience and in the short time since their appointments they have already made a valuable contribution to the Group. It is a great privilege for me to be able to work with this Board and a founder-led executive management team who have made the business the success that it has become. This is a young, dynamic business driven by a small team of talented individuals. On behalf of the Board and shareholders, I would like to record our thanks for their fantastic contribution to our result. OUTLOOK The outlook for the Group in 2015 is positive and continued implementation of the Group s strategy will allow us to build on the success of. There is much to do, with growth opportunities to realise, and I very much look forward to working with the Board and the wider team over the coming years to achieve our aims. BILL RONALD Chairman Fever-Tree has shown that careful positioning and selective partnering has earned them a healthy lead over their competitors in the race to win over the hearts of gin fans GIN FOUNDRY REPORT Fever-Tree was voted favourite tonic by 56% of gin lovers in an independent survey carried out by Gin Foundry.

6 04 FEVERTREE LTD Annual Report and Accounts for the year ended 31 December UK 32% USA 24% SALES BY REGION EUROPE 39% REST OF WORLD 5% Fever-Tree is burning up our charts, dominating its category like no other brand in any other sector DRINKS INTERNATIONAL ANNUAL BRANDS REPORT Based on a survey of the world s top 250 bars, #1 best-selling brand and #1 trending brand. Mixer of the Year AT THE PRESTIGIOUS MIXOLOGY BAR AWARDS IN BERLIN In my first Chief Executive s report I am delighted to be able to report on a notable year for Fever-Tree. We achieved revenue of 34.7m, representing growth of 49% on and in the year in which we added our 50th territory it is particularly encouraging that strong growth was achieved across all regions, illustrating the international appeal of the brand. The growth in revenue was underpinned by a stable gross profit margin of 50.9% and adjusted EBITDA margin of 28.8%, resulting in 10m of adjusted EBITDA generated in the year. We ended the year with a strong balance sheet and net cash of 3.3m. REGIONAL REVIEW We consider our global sales across four regions, being the UK, USA, Rest of Europe ( Europe ), and Rest of the World ( RoW ). SALES BY REGION The split of the Group s sales are shown above. Whilst the UK is the Group s largest single territory, representing 32% of sales, 68% of sales are generated overseas, reflecting the international appeal of our drinks and truly global nature of the Fever-Tree brand. UK In our largest market the Group achieved sales growth of 60%. UK growth was skewed slightly to the On-Trade, where 60% of UK revenue is generated, and where growth came from both an uplift in the rate of sale and significant new distribution wins. In the Off-Trade, strong underlying sales growth was achieved at each of the Group s principal retail customers (Waitrose, Tesco and Sainsbury s) alongside a significant distribution increase at Tesco. The year was capped by a notable sales performance over the Christmas period against strong comparatives in the prior year. The continued growth in the number of craft gin producers and the emphasis placed on premium gin and vodka brands by the major spirits companies shows no sign of diminishing which in turn plays to the Fever-Tree drinks proposition. Tonic flavours in particular benefit from the craft gin trend and continue to be our best-selling range of products in the UK. USA The USA is currently the Group s second largest single territory and it was especially encouraging to achieve growth of 59% in this market, aided as in the UK by a very strong finish to the year across the Thanksgiving and Christmas periods. Both the On and Off-Trade markets grew strongly with significant new national listings being achieved. In the US, the growing popularity of the Moscow Mule cocktail has driven growth of 91% in Ginger Beer sales in. Ginger Beer is now the Group s highest selling product in the US, representing over a third of total US revenue. EUROPE Sales growth of 35% was achieved in the region in, underpinned by the continued sweep of the gin and tonic renaissance across Western Europe. Sales in Belgium built impressively on strong performance in which followed a switch to a new importer in that territory. Equally of note was the strong growth in other key territories including Italy, Germany, Holland and Switzerland. ROW Key territories within the RoW region are Canada, Australia and Colombia. However, another 19 territories are also included within this region, many of which have been added in the last 18 months and provide good potential for growth in the future. Of note this year was the launch of the brand in India, returning high quality Indian Tonic Water back to its spiritual home. Best Non Alcoholic Beverage THE AUSTRALIAN LIQUOR INDUSTRY AWARDS STRATEGIC REPORT

7 Stock code: FEVR 05 HISTORIC SALES BY REGION FY11 UK USA EUROPE REST OF WORLD FY12 FY13 FY14 OPERATIONAL REVIEW The Group principally focuses on the selection of quality ingredients, the development of new flavours and the branding and marketing of its products, with other aspects of its operations, including manufacturing and fulfilment, being outsourced. This model has enabled the Group to grow without the requirement for significant capital investment to date and has allowed the Group s management to focus on realising strategic growth opportunities. The Group aims to use the highest quality ingredients acquired through both its own sources and through flavour houses. The Group also outsources the buying of commodity ingredients to its bottler to benefit from further economies of scale. Manufacturing is completely outsourced, primarily to a single UK based bottler. The Group is responsible for arranging for the delivery of key ingredients, water, glass and packaging to the bottler who manufactures the final product from these component parts. The Group s UK bottler has sufficient manufacturing capacity to cater for its near term growth, with scope to increase capacity by adding additional shifts, additional machinery and increasing the length and volume of runs. Whilst the majority of production for global distribution is manufactured and bottled in the UK, saw the establishment of outsourced bottling in Germany, which utilises the reusable glass bottles specifically required in that territory. MARKET DEVELOPMENTS The Group is the pioneer and market leader of the premium mixer category, not only in market share (estimated to be c.50% globally EY, September ), but also in terms of reputation. This was recently confirmed by a Drinks International survey of the world s top 250 bars that stated the Fever-Tree brand was the no.1 best-selling and no.1 trending tonic water. The Group s key competitor has a highly fragmented ownership structure due to the past intervention of the Competition Commission and as a result is in the hands of more than 15 owners around the world, many of whom have competing interests. One of these owners has launched a premium version of the brand, however, this is restricted to certain parts of Europe where that owner has distribution rights and we estimate its size to be less than 25% of the Group. We strongly believe that the consumer trend towards spirits premiumisation will continue and that product innovation and increased awareness of taste differentiations between standard and premium, is driving consumers to spend more to get better quality and variety from what they buy. This movement is being fuelled by the marketing efforts of the premium spirit producers and supported by the On and Off- Trade market who are increasing their focus on higher margin premium products. We believe that as the gin market further premiumises in more countries, demand for premium tonic water will increase. Similarly, as the market for other spirits (for example, vodka, rum and whisky blends) continues to premiumise, there is expected to be increased demand for the wider range of premium mixers that the Group produces. As such we are confident about the future opportunities for the Group. OUTLOOK We are encouraged by our start to the current financial year and the Board remains positive about the outlook for With continued implementation of our strategy across our diverse range of products, territories, channels and customers we look forward to the future with confidence. TIM WARRILLOW Chief Executive

8 06 FEVERTREE LTD Annual Report and Accounts for the year ended 31 December STRATEGIC REPORT

9 Stock code: FEVR 07 The overall mixer market may be mature, but the significant and rapid trend towards premiumisation, mirroring what has happened in the spirits space, is expected to offer continued growth opportunities. The principle routes to achieve this growth are: Capitalising on market trends The Group expects to continue to benefit from the well-established premiumisation of the global spirit market and the rapid premiumisation of mixers. To take one example of this trend, premium gin currently represents approximately 13% of the total gin market by volume and grew by 10% in compared to a reduction of 2% in total gin volume (Source: IWSR). Strengthening distribution in existing markets growth was generated almost entirely within existing markets and the Group intends to continue to drive penetration in all of the markets in which it has established a presence, by endeavouring to increase the number of customers in both the On-Trade and Off-Trade. There are opportunities to grow further in the Group s existing territories by expanding the Group s distribution footprint, its customers penetration, and the volume of sales to each customer, particularly as its profile grows with end consumers in each territory. Extension of co-promotion strategy with other industry brands, incorporating both On and Off Trade Global spirits companies are increasingly focused on driving customers towards highermargin premium products. The Group have proven the value to both parties of co-promoting with leading spirits brands and activity in included copromotional neck hangers with Tanqueray Gin in Waitrose, Sainsbury s and Tesco, and partnering with Bombay Sapphire at a popup bar in Belgium. As a result the Directors expect to see further growth from the Group s involvement in co-branded promotional activities with leading alcohol brands. Expanding distribution into new markets The Group expects to generate growth by entering new markets and is actively assessing new distribution opportunities. In the Group entered 8 new markets, the most high profile being the UK government supported launch in India. New product development, including expansion of existing range, as well as development of new product lines There are further opportunities to develop new products and variations of existing flavours, for example, expanding the Naturally Light range, a sub-range of all natural, low calorie mixers also under the Fever-Tree brand. The Group also sees regional opportunities to develop, for example, tonic flavours more suited to specific local tastes, such as the Mediterranean Tonic Water which has been a successful early example of that. The longerterm strategy is to offer a premium carbonated mixer for the revival of each classic long drink mixed with premium spirits. In addition to new flavours there may be opportunities to launch new formats and refreshed packaging, the latter of which the Group has recently implemented. Fever-Tree s organic growth continues to be driven by consumers desire to drink premium mixers that match the quality of their favourite premium spirits. Fever-Tree s superior taste, ingredients and brand proposition is winning new converts in both old and new markets alike. We are confident that we will continue to be able to grow and lead in this premium segment, which we believe will outperform other drinks categories for some time to come as the natural ratio between premium spirits and premium mixers equilibrates. CHARLES ROLLS Executive Deputy Chairman

10 STRATEGIC REPORT

11 Stock code: FEVR 09 Fevertree Drinks plc was incorporated in February and acquired the trading entity Fevertree Limited in March. As such, the audited financial statements are required by the Companies Act to present as the comparison the trading period from 7 March to 31 December. To allow meaningful comparisons to be made against prior year figures, this front section of the Annual Report refers to the full year ending 31 December as the comparison period. Therefore, the comparative information in the table below includes loss after tax of 116,000 relating to the period from 1 January to 6 March. YEAR ENDED 31 DEC 000 YEAR ENDED 31 DEC 000 Revenue 34,691 23,302 Cost of sales (17,028) (11,419) Gross Profit 17,663 11,883 Administrative expenses (9,575) (8,900) Adjusted EBITDA 10,005 6,738 Depreciation (84) (23) Amortisation (717) (582) Exceptional Items (1,116) (3,150) Operating profit 8,088 2,983 Finance income 9 58 Finance expense (5,576) (4,138) Profit/(loss) before tax 2,521 (1,097) Tax expense (1,225) (961) Profit/(loss) for the period 1,296 (2,058) REVENUE Revenue grew by 49% from 23.3m to 34.7m. An overview of sales is included in the Chief Executive s report. GROSS MARGIN AND OPERATING EXPENSES In, despite the impact on overseas revenue of a weakening Euro and US Dollar against Sterling, gross margin was maintained at 50.9%, representing a very small decrease from the 51.0% gross margin achieved in. Underlying operating expenses 1 remained consistent as a proportion of revenue (22.1% in and ) and whilst certain efficiencies were achieved on central overheads in these were offset by increased marketing expenditure. EXCEPTIONAL COSTS The exceptional costs of 1.1m were the fees associated with the listing on AIM. The exceptional costs of 3.2m related to the acquisition of Fevertree Limited by Fevertree Drinks plc in March. FINANCE EXPENSES The finance expenses of 5.6m included 4m of shareholder loan note interest expense incurred prior to the IPO in November. The shareholder loan notes were converted to equity immediately prior to the IPO and so this expense will not be on-going. In addition, the conversion of the shareholder loan notes to equity triggered a one-off 1.1m release of the shareholder loan note arrangement fee in which again will not be on-going. The on-going expense incurred on the Group s bank loans, being interest expense and the release of the bank loan arrangement fee was 0.4m. The finance expenses of 4.1m included 3.8m of shareholder loan note expense and 0.3m of expense related to the Group s bank loans for the period from the acquisition of Fevertree Limited by Fevertree Drinks plc in March. TAX The effective tax rate in and was influenced by the level of exceptional costs in each year, as well as the proportion of investor loan note interest deemed to be deductible in advance of finalising an Advanced Thin Capitalisation Agreement with HMRC. It is expected that in future years the Group s effective tax rate will be in line with statutory levels. 1 Underlying operating expenses are defined as administrative expenses less depreciation, amortisation and exceptional items.

12 10 FEVERTREE LTD Annual Report and Accounts for the year ended 31 December CONTINUED EARNINGS PER SHARE AND DIVIDENDS The basic and diluted earnings per share for the year are 1.54 pence. In order to compare earnings per share year on year and to aid future comparisons, the weighted average number of shares in issue has been restated on a pro-forma basis to reflect the post-ipo share capital structure. The adjustment assumes the total shares issued post-ipo were in issue throughout all of and. In addition, earnings have been adjusted to exclude amortisation, shareholder loan note interest and exceptional items, and the statutory tax rates have been applied (disregarding other tax adjusting items). On this basis, normalised earnings per share for were 6.46 pence per share and for were 4.27 pence per share, an increase of 51%. CASH POSITION The Group had net cash of 3.3m at year end, with 9.6m of cash at the bank offset by 6.3m of bank loans. In addition the Group has access to a 2m revolving credit facility provided by Lloyds Bank plc. WORKING CAPITAL Working capital increased by 2.7m during. This is a 47% increase in working capital compared to revenue growth of 49%. Adjusted operating cash flow remains strong at 73% of adjusted EBITDA. CAPITAL EXPENDITURE Due to the Group s outsourced business model, capital expenditure requirements are low. The main area of capital expenditure in was the 0.2m spent on crates used to transport re-usable bottles within Germany. This level of expenditure was required in due to rapid growth in the German market and in future, as crates are returned more rapidly from local distributors it is expected that the level of investment required in crates relative to incremental revenue in Germany will decrease. PERFORMANCE INDICATORS The Group monitors its performance through a number of key indicators. These are formulated at Board meetings and reviewed at both operational and Board level. Revenue growth % Group revenue growth was 48.9% in (: 43.4%) Gross margin % The Group achieved a gross margin of 50.9% in (: 51.0%) Adjusted EBITDA margin% The Group achieved an adjusted EBITDA margin of 28.8% (: 28.9%) ANDREW BRANCHFLOWER Finance Director STRATEGIC REPORT

13 Stock code: FEVR 11 The Board sets out below the principal risks and uncertainties that the Directors consider could impact the business. The Board continually reviews the potential risks facing the Group and the controls in place to mitigate any potential adverse impacts. The Board also recognises that the nature and scope of risks can change and that there may be other risks to which the Group is exposed and so the list is not intended to be exhaustive. COMPETITION The Group may face increased competition from other beverage companies seeking to enter the Group s core markets by introducing their own brands or by acquiring local brands. Increased competition and unanticipated actions by competitors could lead to downward pressure on prices or a decline in the Group s market share, which may materially adversely affect the Group s operations and hinder its growth potential. However, the Groups first mover advantage and diverse territorial, channel and customer mix mitigates the risk of increased competition affecting Group performance. ECONOMIC ENVIRONMENT The Group s results of operations are affected by overall economic conditions in its key geographic markets and the level of consumer confidence and spending in those markets. The worldwide financial and economic downturn, which began in late 2008, affected many business sectors in which the Group operates. Any worsening of the economic conditions in the Group s key markets could lead to reduced consumer confidence and spending, reduced demand for products and limitations on the Group s ability to increase or maintain the prices of its products. However, the Group has grown strongly throughout the period from 2008 and the product s position as an affordable luxury mitigates the impact of an economic downturn. FOREIGN EXCHANGE RISK The Group is subject to foreign currency exchange risk in its transactions because its business involves transactions in a variety of currencies due to its wide distribution market and sourcing of raw materials in various jurisdictions. To mitigate this risk the Group employs a dynamic 12 month hedging strategy for Euro and US Dollars, which includes a degree of natural hedging on US Dollars through local spend in that territory, and the implementation of forward contracts against reducing proportions of forecast net inflows of each currency over a 12 month window. In addition the Group has the ability to recalibrate for large movements in foreign currencies by implementing price rises to its overseas importers. KEY MANAGEMENT The Group s success depends substantially upon the efforts and abilities of key personnel and its ability to retain such personnel. The executive management team has significant experience in the industry and has made an important contribution to the Group s growth and success. The loss of the services of any member of the executive management team of could have an adverse effect on the Group s operations. To mitigate this risk, the Group s Remuneration Policy is designed to attract, retain and motivate key management and includes a long-term incentive scheme and performance-related pay. FINANCIAL CONTROLS The Group has a system on internal financial controls, which are set out in the Corporate Governance statement on page 13 as part of the Group s consideration and application of Corporate Governance as a whole. The Group recognises that management of the business would become compromised if there were a failure in the internal controls and systems and continues to review its internal controls, but recognises that any such procedures can provide only reasonable, not absolute assurance. DISRUPTION TO OUTSOURCED PRODUCTION AND LOGISTICS The Group relies predominantly on one main production and bottling site in the UK and on third-party warehousing facilities in the UK and the US. In addition, the Group is dependent on the supply of a number of key ingredients for its products, such as quinine and fresh green ginger, for which there are a limited number of suppliers. The Group would be affected if there were a significant disruption to any of the Group s key raw material suppliers, production, storage or distribution operations. In the event of such disruption the Group may not be able to arrange for alternative supply, production, storage or distribution on as favourable terms, or with sufficient speed to ensure continuity of business. To mitigate this risk, alongside holding appropriate insurance cover, the Group continues to develop its business continuity planning in order to increase redundancy of supply and reduce lead times in the event of disruption in all aspects of the outsourced business model. INCONSISTENT QUALITY OR CONTAMINATION OF THE GROUP S PRODUCTS The success of the Group s brand depends upon the positive image that consumers have of the brand. A lack of consistency in the quality of products or contamination of the Group s products, whether occurring accidentally or through deliberate thirdparty action, could harm the integrity of, or consumer support for, the brand and could adversely affect sales. A significant product liability judgment or a widespread product recall may negatively impact the reputation of the affected product or the Group s brand for a period of time depending on product availability, competitive reaction and consumer attitudes. To mitigate this risk, alongside holding appropriate insurance cover, the Group has employed in an experienced Quality Control manager, who works closely with key suppliers and our bottlers to ensure appropriate systems and controls are in place to minimise the risk of quality and contamination issues. This Strategic Report was approved on behalf of the Board on 20 March 2015 ANDREW BRANCHFLOWER Finance Director

14 12 FEVERTREE LTD Annual Report and Accounts for the year ended 31 December BILL RONALD (59) Chairman Bill Ronald has been the Chairman of the Group since June. Bill has a strong brand background, having spent 23 years in a variety of roles at Mars, including managing director of the UK confectionery operation. Since leaving Mars, he has been chief executive officer of Uniq and has held non-executive roles in Bezier, Halfords and Alfesca. His current roles include Chairman of Dialight, The Compleat Food Group and the Muscular Dystrophy Campaign. CHARLES ROLLS (57) Co-founder and Executive Deputy Chairman Charles has an engineering degree from Imperial College and an MBA from INSEAD. After leaving strategy consultants Bain & Co, he has been a serial entrepreneur, best known for his success in turning around the gin maker, Plymouth Gin. He acquired an equity stake in Plymouth Gin in 1997 becoming Managing Director, and after growing sales 14 times, it was sold to Absolut Vodka in Spotting a gap for a premium tonic, after meeting Tim Warrillow in 2003, they set to work on a premium mixers business, which resulted in the formation of Fever-Tree. TIM WARRILLOW (40) Co-founder and Chief Executive Officer Tim has a Business Management and Marketing degree from Newcastle University, specialising in food marketing. During university he started his first business, a waitering agency. In 1998 he joined a London-based advertising and branding agency. Subsequently, he launched the Business Development Consultancy which included identifying opportunities in the premium food and drink sector and it was in this role that he made contact with Charles Rolls, which resulted in the formation of Fever-Tree. ANDREW BRANCHFLOWER (35) Finance Director Andrew joined the Group in September 2012 and joined the Board on 16 October. Andrew is a graduate of Cambridge University where he studied Natural Sciences and qualified as an ACA in He has worked for a boutique firm specialising in start-ups and fast growing businesses and prior to joining the Group was Head of Finance at the Design Council. Andrew joined the Group in September 2012, in the run-up to the investment in the Group by Lloyds Development Capital, and was appointed Finance Director in September. COLINE MCCONVILLE (50) Non-executive Director Coline joined the Group as a non-executive Director on 7 November. Coline studied law at the University of New South Wales and holds an MBA from Harvard (Baker Scholar). She has previously worked for McKinsey and for Clear Channel as CEO of the International division. Coline is currently a nonexecutive director on the boards of: Travis Perkins plc, UTV Media plc, Inchcape plc and Wembley National Stadium Limited and is on the Germany Supervisory Board of TUI AG, since its merger with TUI Travel plc. Coline was Remuneration Committee Chair at TUI Travel plc for 3 years and is taking over as Remuneration Committee Chair at Inchcape and Travis Perkins, as well as holding various committee responsibilities on other boards. DAVID ADAMS (60) Non-executive Director David has over 25 years of experience in the UK retail industry, holding several executive and non-executive roles, including Finance Director and Deputy Chief Executive at House of Fraser and positions at Moss Bros, HMV, Alexon and Jessops. He is currently Chairman of Conviviality Retail plc, Ecovision Ltd and Walk the Walk, a breast cancer charity. He is Senior Independent Non-executive Director and Audit Chair at Halfords plc and Non-executive Director and Audit Chair at Hornby plc. GOVERNANCE

15 Stock code: FEVR 13 PRINCIPLES OF CORPORATE GOVERNANCE The Board recognises that applying sound governance principles in the running of the Group is essential. The Company is listed on AIM and is therefore not required to comply with the UK Corporate Governance Code ( the Code ). However, in recognising the value and importance of high standards of corporate governance we intend to adopt the principal provisions of the UK Corporate Governance Code ( the Code ) as appropriate for the size and nature of the Company and given the composition of the board. The Company also proposes to follow the recommendations on corporate governance of the QCA Corporate Governance Code for Small and Mid-Size Quoted Companies ( QCA guidelines ). THE BOARD The Board is the link between the shareholders and executive management and is responsible for the successful stewardship of the Group. As such the Board plays a key role in the corporate governance process. From admission to AIM on 7 November the Board comprised three non-executive Directors and three executive Directors. In view of his existing appointment as Chairman of the Group prior to admission to AIM, Bill Ronald is not considered to be independent. However, the two non-executive Directors are fully independent and therefore the Board is compliant with the Code requirement that companies below the FTSE 350 should have at least two independent directors. The Board s composition and skill set is considered appropriate for the Group s current stage of development. Biographical details of current Board members are shown on page 12. As the Board is small, there will not be a separate nominations committee and recommendations for appointments to the Board will be considered by the Board as a whole after due evaluation. BOARD COMMITTEES Key sub-committees of the Board include the Audit Committee and the Remuneration Committee. THE AUDIT COMMITTEE The Audit Committee is chaired by David Adams. Its other members are Bill Ronald and Coline McConville. David Adams and Coline McConville are fully independent. The Audit Committee has primary responsibility for monitoring the quality of internal controls and ensuring that the financial performance of the Group is properly measured and reported on. It receives and reviews reports from the Group s management and auditors relating to the interim and annual accounts and the accounting and internal control systems in use throughout the Group. It also advises the Board on the appointment of Auditors, reviews their fees and discusses the nature, scope and results of the audit with the Auditors. The Audit Committee meets at least twice a year and has unrestricted access to the Group s auditors. THE REMUNERATION COMMITTEE The Remuneration Committee is chaired by Coline McConville. Its other members are Bill Ronald and David Adams. The Remuneration Committee reviews the performance of the executive Directors and makes recommendations to the Board on matters relating to their remuneration and terms of employment. The Remuneration Committee also makes recommendations to the Board on proposals for the granting of share options and other equity incentives pursuant to any share option scheme or equity incentive scheme in operation from time to time. The remuneration and terms and conditions of appointment of the non-executive directors of the Company is set by the Board. The Remuneration Report on pages 14 and 15 contains more detailed information on the Committee s role and the Directors remuneration and fees. INTERNAL CONTROLS The Board has ultimate responsibility for the Group s system of internal control and for reviewing its effectiveness. However, any such system of internal control can provide only reasonable, but not absolute, assurance against material misstatement or loss. The Board considers that the internal controls in place are appropriate for the size, complexity and risk profile of the Group. The principal elements of the Group s internal control system include: Close management of the day to day activities of the Group by the executive Directors; An organisational structure with defined levels of responsibility, which promotes entrepreneurial decision making and rapid implementation whilst minimising risks; A comprehensive annual budgeting process producing a detailed integrated profit and loss, balance sheet and cash flow, which is approved by the Board; Detailed monthly reporting of performance against budget; and Central control over key areas such as capital expenditure authorisation and banking facilities. The Group continues to review its system of internal control to ensure compliance with best practice, whilst also having regard to its size and the resources available. The Board considers that the introduction of an internal audit function is not appropriate at this juncture. RELATIONS WITH SHAREHOLDERS The Group maintains communication with institutional shareholders through individual meetings with executive Directors, particularly following publication of the Group s interim and full year results. Private shareholders are encouraged to attend the Annual General Meeting at which the Group s activities are considered and questions answered. General information about the Group is also available on the Group s website: This includes an overview of activities of the Group and details of all recent Group announcements.

16 14 FEVERTREE LTD Annual Report and Accounts for the year ended 31 December The Group is not required to prepare a Directors remuneration report and so the following disclosures are prepared on a voluntary basis for the Group. COMPOSITION AND ROLE The Remuneration Committee s members are Coline McConville, who is the Chairman, Bill Ronald and David Adams. The Committee operates under the Group s agreed Terms of Reference and is responsible for reviewing all senior executive appointments and determining the Group s policy in respect of the terms of employment, including remuneration packages of executive Directors. The Remuneration Committee did not meet in the period from admission to AIM to 31 December but intends to meet at least twice a year going forward. REMUNERATION POLICY The objective of the Group s remuneration policy is to attract, motivate and retain high quality individuals who will contribute fully to the success of the Group. To achieve this objective, the Group provides competitive salaries and benefits to all employees. Executive Directors remuneration is set to create an appropriate balance between both fixed and performance-related elements. Remuneration is reviewed each year in light of the Group s business objectives. It is the Remuneration Committee s intention that remuneration should reward achievement of objectives and that these are aligned with shareholders interests over the medium term. Remuneration consists of the following elements: Basic salary; Performance-related annual bonus; and Share options SHARE OPTIONS The company has two share option schemes, details of which are in note 20 to the Consolidated Financial Statements. Under these schemes, share options can be granted to the executive Directors and other employees within the Group. The non-executive Directors are not entitled to participate in the Company s share option schemes. The Group grants share options to encourage continual improvement and align the interests and objectives of the senior management team with those of shareholders over the medium term. In its review of share options, the Remuneration Committee takes a number of factors such as: The available headroom under the scheme for new grants; The price of previously granted options and whether these continue to act as the intended incentive; and Share price movements as compared to the Group s performance. DIRECTORS REMUNERATION At admission to AIM, the key terms of remuneration were as follows: EXECUTIVE ROLE EXECUTIVE DIRECTORS SERVICE CONTRACTS The executive Directors signed new service contracts with the Company on admission to AIM. These are not of fixed duration and are terminable by either party giving twelve months written notice. NON-EXECUTIVE DIRECTORS The non-executive Directors signed letters of appointment with the Company on admission to AIM for the provision of non-executive Directors services, which may be terminated by either party giving one month s written notice. The non-executive Directors fees are determined by the Board. BASIC SALARY/ FEE 000 MAXIMUM BONUS POTENTIAL Tim Warrillow Chief Executive Offices % Charles Rolls 1 Executive Deputy Chairman % Andrew Branchflower Finance Director % NON-EXECUTIVE Bill Ronald Chairman 60 Coline McConville Chairman of Remuneration Committee 35 David Adams Chairman of Audit Committee 35 The following table summarises the total gross remuneration of the Directors who served during the year to 31 December. TOTAL REMUNERATION EXECUTIVE 000 Tim Warrillow 487 Charles Rolls 480 Andrew Branchflower 2 33 NON-EXECUTIVE Bill Ronald 51 Coline McConville 3 6 David Adams Charles Rolls is contracted to work 4 days per week with his salary to be pro-rated accordingly. 2 Andrew Branchflower was appointed as Director on 16 October 3 Coline McConville and David Adams were appointed as Directors on 7 November GOVERNANCE

17 Stock code: FEVR 15 DIRECTORS SHAREHOLDINGS The Directors, who served in the period from admission to AIM to 31 December and who held an interest in the ordinary shares of the Company, were as follows: ORDINARY SHARES OF 0.25P EACH AS AT EXECUTIVE Tim Warrillow 8,538,168 Charles Rolls 19,363,894 Andrew Branchflower 166,488 NON-EXECUTIVE Bill Ronald 442,771 Coline McConville 11,194 David Adams 14,925 DIRECTORS INTERESTS Shares granted under the Group s share option schemes in the period to 31 December are as follows: DATE OF GRANT NUMBER OF CSOP OPTIONS NUMBER OF UNAPPROVED OPTIONS FIRST EXERCISE DATE EXERCISE PRICE (P) Tim Warrillow 3/11/14 275,820 6/11/ Charles Rolls 3/11/14 275,820 6/11/ Andrew Branchflower 3/11/14 22, ,522 6/11/ The details of the share option schemes are set out in note 20 to the Consolidated Financial Statements. The high low market price of ordinary shares in the Company during the period from admission to AIM was 160p 184p and the market price of the ordinary shares at 31 December was 173.5p. COLINE MCCONVILLE Chairman of the Remuneration Committee

18 16 FEVERTREE LTD Annual Report and Accounts for the year ended 31 December The directors present their report together with the audited financial statements for the year ended 31 December. PRINCIPAL ACTIVITY Fevertree Drinks plc is a public limited company incorporated in the United Kingdom, registered number , which is listed on the Alternative Investment Market ( AIM ) of London Stock Exchange. Its principal activity is that of a holding and investment company. The principal activity of the Group in the year under review continued to be that of developer of premium mixer drinks, growing sales into the UK, European, North American and wider international markets. REVIEW OF BUSINESS The Chairman s Statement on page 3, and the Strategic Report pages 2 to 11 provide a review of the business, the Group s trading for the year ended 31 December, key performance indicators and an indication of future developments and risks. RESULT AND DIVIDEND The Group has reported its Consolidated Financial Statements in accordance with International Financial Reporting Standards as adopted by the European Union. The Group s results for the year are set out in the Consolidated Statement of Comprehensive Income on page 22. The Company Financial Statements continue to be reported under UK GAAP. The Group s profit for the year was 1.3m (period ended 31 December : loss of 1.9m). The Group s turnover of 34.7m, gross margin of 50.9% and adjusted EBITDA of 10.0m are ahead of expectations and represent a successful year for the business. The company continued to strengthen its position within the UK mixer drink market. It also continued to cultivate its presence within overseas mixer drink markets, presently being sold in 50 countries. The Directors recommend a dividend of 0.30 pence per share in respect of the period from admission to AIM to 31 December. DIRECTORS The directors of the company during the period were: NAME APPOINTED RESIGNED WDG Ronald C T Rolls T D G Warrillow A Branchflower 16 October CL McConville 7 November DAR Adams 7 November DW Sasaki 6 August BT Aykroyd 6 August P Sellers 6 August 3 November J Showering 3 November The names of the Directors, along with their brief biographical details, are given on page 12. DIRECTORS INTERESTS The Directors interests in the Company s shares and options over ordinary shares are shown in the Remuneration Report on pages 14 and 15. The Company has purchased and maintained throughout the financial period Directors and Officers liability insurance in respect of itself and its Directors. No Director has any beneficial interest in the share capital of any subsidiary or associate undertaking. CORPORATE GOVERNANCE The Financial Reporting Council issues and updates the UK Corporate Governance Code. The Company has incorporated those aspects which are considered relevant, given its size and changing strategy. This also includes the Statement of Directors responsibilities in preparing the Annual Report and financial statements on page 18. The Corporate Governance Statement forms part of this Directors Report. DISCLOSURE OF INFORMATION TO AUDITORS As far as the Directors are aware, there is no relevant audit information (that is, information needed by the Group s Auditors in connection with preparing their Report) of which the Group s Auditors are unaware, and each Director has taken all reasonable steps that he ought to have taken as a Director in order to make himself aware of any relevant audit information and to establish that the Group s Auditors are aware of that information. FINANCIAL INSTRUMENTS The financial risk management objectives of the Group, including credit risk, interest rate risk and currency risk, are provided in note 3 to the Consolidated Financial Statements on pages 32 to 35. SHARE CAPITAL STRUCTURE At 31 December, the Company s issued share capital was 288,102 divided into 115,240,896 ordinary shares of 0.25p each. The holders of ordinary shares are entitled to one vote per share at the meetings of the Company. SHARE OPTION SCHEMES Details of employee share schemes are set out in note 20 to the Consolidated Financial Statements. GOING CONCERN After making enquiries, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the financial statements. GOVERNANCE

19 Stock code: FEVR 17 AUDITORS BDO LLP has expressed its willingness to continue in office as Auditors and a resolution to reappoint them will be proposed at the forthcoming Annual General Meeting. ANNUAL GENERAL MEETING The Annual General Meeting will be held on 7 May The ordinary business comprises receipt of the Directors Report and audited financial statements for the year ended 31 December, the re-election of Directors, the reappointment of BDO LLP as Auditors and authorisation of the Directors to determine the Auditors remuneration. The Notice of Annual General Meeting and the ordinary and special resolutions to be put to the meeting are included at the end of this Annual Report and financial statements. APPROVAL This directors report was approved on behalf of the Board on 20 March ANDREW BRANCHFLOWER Finance Director

20 18 FEVERTREE LTD Annual Report and Accounts for the year ended 31 December The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations. Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare the Group s Consolidated Financial Statements in accordance with International Financial Reporting Standards ( IFRS ) as adopted by the European Union, and the Company 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 Group and Company and of the profit or loss of the Group for that period. The Directors are also required to prepare financial statements in accordance with the rules of the London Stock Exchange for companies trading securities on the Alternative Investment Market. In preparing these financial statements, the Directors are required to: 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 Group and Company and enable them to ensure that the financial statements comply with the requirements of the Companies Act They are also responsible for safeguarding the assets of the Group and Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. WEBSITE PUBLICATION The Directors are responsible for ensuring the Directors Report and financial statements are made available on a website. Financial statements are published on the Company s website in accordance with legislation in the United Kingdom governing the preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the Company s website is the responsibility of the Directors. The Directors responsibility also extends to the ongoing integrity of the financial statements contained therein. Select suitable accounting policies and then apply them consistently; Make judgements and accounting estimates that are reasonable and prudent; State whether they have been prepared in accordance with applicable accounting standards, subject to any material departures disclosed and explained in the financial statements; and Prepare the financial statements on a going concern basis unless it is inappropriate to presume that the Company will continue in business. GOVERNANCE

21 Stock code: FEVR 19

22 20 FEVERTREE LTD Annual Report and Accounts for the year ended 31 December TO THE MEMBERS OF FEVERTREE DRINKS PLC We have audited the financial statements of Fevertree Drinks plc for the year ended 31 December which comprise of the company balance sheet, the consolidated statement of comprehensive income, the consolidated statement of financial position, the consolidated statement of cash flows, the consolidated statement of changes in equity and the related notes. The financial reporting framework that has been applied in the preparation of the Group financial statements is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union. The financial reporting framework that has been applied in the preparation of the parent company financial statements is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice). 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 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. RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS As explained more fully in the statement of directors responsibilities, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Financial Reporting Council s (FRC s) Ethical Standards for Auditors. SCOPE OF THE AUDIT OF THE FINANCIAL STATEMENTS A description of the scope of an audit of financial statements is provided on the FRC s website at auditscopeukprivate. OPINION ON FINANCIAL STATEMENTS In our opinion: the financial statements give a true and fair view of the state of the Group s and the parent company s affairs as at 31 December and of the Group s profit for the year then ended; the Group financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union; the parent company s financial statements have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and the financial statements have been prepared in accordance with the requirements of the Companies Act OPINION ON OTHER MATTERS PRESCRIBED BY THE COMPANIES ACT 2006 In our opinion the information given in the Strategic Report and Directors Report for the financial year for which the financial statements are prepared is consistent with the financial statements. MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or the parent company financial statements are not in agreement with the accounting records and returns; or certain disclosures of directors remuneration specified by law are not made; or we have not received all the information and explanations we require for our audit. SOPHIE BEVAN (senior statutory auditor) For and on behalf of BDO LLP, statutory auditor London 20 March 2015 BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127). FINANCIALS

23 Stock code: FEVR 21

24 22 FEVERTREE LTD Annual Report and Accounts for the year ended 31 December CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED NOTE YEAR ENDED PERIOD ENDED Revenue 4 34,691,034 20,577,019 Cost of sales (17,028,408) (10,258,896) Gross profit 17,662,626 10,318,123 Administrative expenses (9,574,793) (7,630,400) Adjusted EBITDA* 10,005,110 5,627,549 Depreciation Amortisation Exceptional items (84,263) (20,403) (717,041) (581,918) (1,115,973) (2,337,505) Operating profit 5 8,087,833 2,687,723 Finance costs Finance income 7 9,222 58,292 Finance expense 7 (5,575,813) (4,139,467) Profit/(loss) before tax 2,521,242 (1,393,452) Tax expense 8 (1,224,831) (548,417) Profit/(loss) for the year/period and comprehensive income attributable to equity holders of the parent company 1,296,411 (1,941,869) Earnings/(loss) per share for profit/(losses) attributable to the owners of the parent during the year Basic and Diluted (pence) (3.08) * Adjusted EBITDA is earnings before interest, tax, depreciation, amortisation, exceptional items and finance costs (note 5). FINANCIALS

25 Stock code: FEVR 23 CONSOLIDATED STATEMENT OF FINANCIAL POSITION FOR THE YEAR ENDED NOTE Non-current assets Property, plant and equipment , ,239 Intangible assets 11 44,570,655 45,287,696 Total non-current assets 44,922,354 45,455,935 Current assets Inventories 13 4,346,168 2,541,773 Trade and other receivables 14 8,390,202 5,996,386 Derivative financial instruments 16 11,051 46,389 Cash and cash equivalents 9,583,313 3,353,018 Total current assets 22,330,734 11,937,566 Total assets 67,253,088 57,393,501 Current liabilities Trade and other payables 15 4,387,498 2,905,355 Loans and borrowings , ,584 Corporation tax liability 658, ,825 Total current liabilities 5,410,547 3,972,764 Non-current liabilities Loans and borrowings 17 5,895,828 52,235,759 Deferred tax liability 18 2,679,661 2,658,730 Total non-current liabilities 8,575,489 54,894,489 Total liabilities 13,986,036 58,867,253 Net assets/(liabilities) 53,267,052 (1,473,752) Equity attributable to equity holders of the company Share capital , ,321 Share premium 19 53,521, ,796 Capital Redemption Reserve 19 93,189 Retained earnings 21 (635,625) (1,941,869) Total equity 53,267,052 (1,473,752) The financial statements were approved by the Board of Directors on 20 March 2015 and were signed on its behalf by: ANDREW BRANCHFLOWER Finance Director 20 March 2015

26 24 FEVERTREE LTD Annual Report and Accounts for the year ended 31 December CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED SHARE CAPITAL SHARE PREMIUM CAPITAL REDEMPTION RESERVE RETAINED EARNINGS Equity as at 22 February TOTAL Issue of shares 281, , ,117 Comprehensive (Loss) for the period (1,941,869) (1,941,869) Equity as at 31 December 281, ,796 (1,941,869) (1,473,752) Buy back of shares (93,189) 93,189 Issue of shares 99,970 53,334,590 53,434,560 Comprehensive income for the year 1,296,411 1,296,411 Share based payments 9,833 9,833 Equity as at 31 December 288,102 53,521,386 93,189 (635,625) 53,267,052 FINANCIALS

27 Stock code: FEVR 25 CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED YEAR ENDED PERIOD ENDED Operating activities Profit/(loss) before tax 2,521,242 (1,393,452) Finance expense 5,575,813 4,139,467 Finance income (9,222) (58,292) Depreciation of property, plant and equipment 84,263 20,403 Amortisation of intangible assets 717, ,918 Share based payments 9,833 8,898,970 3,290,044 (Increase)/decrease in trade and other receivables (2,401,730) (3,254,563) (Increase)/decrease in inventories (1,804,395) (974,446) Increase/(decrease) in trade and other payables 1,482, ,243 (2,723,982) (3,803,766) Cash generated from operations before exceptional items 7,290,961 1,823,783 Exceptional items (1,115,973) (2,337,505) Cash generated from operations 6,174,988 (513,722) Income taxes paid (1,320,121) (676,004) Net cash flows from operating activities 4,854,867 (1,189,726) Investing activities Purchase of property, plant and equipment (267,723) (171,367) Acquisition of subsidiary, net of cash (note 26) (44,158,164) Net cash used in investing activities (267,723) (44,329,531) Financing activities Interest (paid) (1,459,545) (1,528,025) Interest received 9,222 15,282 Loans repaid (350,000) (150,000) Loan note repaid (49,991,087) Loans drawn down 50,066,901 Shares issued (net of fees allocated against equity) 53,434, ,117 Net cash used in financing activities 1,643,151 48,872,275 Net increase in cash and cash equivalents 6,230,295 3,353,018 Cash and cash equivalents at beginning of period 3,353,018 Cash and cash equivalents at end of period 9,583,313 3,353,018

28 26 FEVERTREE LTD Annual Report and Accounts for the year ended 31 December NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 1. ACCOUNTING POLICIES Basis of preparation Fevertree Drinks plc ( The Company ) has historically prepared its consolidated financial statements in accordance with UK Generally Accepted Accounting Practice ( UK GAAP ). The Group s consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ( IFRS ) and IFRC Interpretations issued by the International Accounting Standards Board as adopted by the European Union and with those parts of the Companies Act 2006 applicable to companies preparing their financial statements under IFRS. This is the first time that the Company has prepared its consolidated financial statements in accordance with IFRS as adopted by the European Union. Details of how the transition from UK GAAP to IFRS has affected the Group s reported financial position are given in note 27. The principal accounting policies adopted in the preparation of the Group s consolidated financial statements are set out below. The policies have been consistently applied to all of the years presented, unless otherwise stated. Description of business Fevertree Drinks plc is a public limited company domiciled in the United Kingdom. The principal activity of the Group is that of developer and supplier of premium mixer drinks. Changes in accounting policies These financial statements have been prepared in accordance with International Financial Reporting Standards ( IFRS ) and IFRC Interpretations issued by the International Accounting Standards Board as adopted by the European Union for periods beginning 1 January. New standards, interpretations and amendments not yet effective The following new standards, interpretations and amendments, which are not yet effective and have not been adopted early in these financial statements, will or may have an effect on the Group s future financial statements: IFRS 15 Revenue from Contracts with Customers, mandatory effective date 1 January IFRS 15 is intended to clarify the principles of revenue recognition and establish a single framework for revenue recognition. This supersedes IAS 18 Revenue and the core principle is that an entity should recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. It is not expected that this will have a material impact on Fevertree. IFRS 9 Financial Instruments, mandatory effective date 1 January IFRS 9 Financial instruments will ultimately replace IAS 39 Financial Instruments: Recognition and Measurement in its entirety. IFRS 9 uses a single approach to determine whether a financial asset is measured at amortised cost or fair value, replacing the many different rules in IAS 39. The approach in IFRS 9 is based on how an entity manages its financial instruments (its business model) and the contractual cash flow characteristics of the financial assets. It is not expected that this will have a material impact on Fevertree. Basis of consolidation Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. The consolidated financial information incorporates the results of business combinations using the acquisition method. In the statement of financial position, the acquiree s identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. FINANCIALS

29 Stock code: FEVR ACCOUNTING POLICIES CONTINUED Revenue Recognition Revenue for the Group represents invoiced sales of goods, excluding value added tax and discounts provided. Revenue is recognised as income in the income statement on the date the goods are delivered. Expenditure Expenditure is recognised in respect of goods and services received when supplied in accordance with contractual terms. Provision is made when a present obligation exists for a future liability relating to a past event and where the amount of the obligation can be reliably estimated. Business combinations The Group uses the acquisition method of accounting for the acquisition of a subsidiary. The consideration transferred is measured at the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange. Costs directly attributable to the acquisition are expensed in the period. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The results of acquired operations are included in the consolidated statement of comprehensive income from the date on which control is obtained. Goodwill Goodwill arising on the acquisition of a business represents any excess of the fair value of the consideration over the fair value of the identifiable assets and liabilities acquired. The identifiable assets and liabilities acquired are incorporated into the consolidated financial statements at their fair value to the Group. Where the goodwill calculation results in a negative amount (bargain purchase) this amount is taken to the statement of comprehensive income in the period in which it is derived. Goodwill is not amortised but tested for impairment annually. Any impairment is recognised immediately in the consolidated statement of comprehensive income and is not subsequently reversed. On disposal of a business, the attributable amount of goodwill is included in the determination of the profit or loss on disposal. Impairment of non-financial assets Impairment tests on goodwill and other intangible assets with indefinite useful lives are undertaken annually for the reporting year end. Other non-financial assets are subject to impairment tests whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Where the carrying value of an asset is judged to exceed its recoverable amount (i.e. the higher of value in use or the fair value less costs to sell), the asset is written down accordingly. With the exception of goodwill, all assets are subsequently reassessed for indications that an impairment loss previously recognised may no longer exist. Where it is not possible to estimate the recoverable amount of an individual asset, the impairment test is carried out on the asset s cashgenerating unit (i.e. the lowest group of assets, in which the asset belongs, for which there are separately identifiable cash flows). Goodwill is allocated on initial recognition to each of the Group s cash-generating units that are expected to benefit from the synergies of the combination giving rise to the goodwill. Impairment charges, and the reversal of previous impairment charges, are expensed/credited to the consolidated statement of comprehensive income. An impairment loss recognised for goodwill is not reversed.

30 28 FEVERTREE LTD Annual Report and Accounts for the year ended 31 December NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED 1. ACCOUNTING POLICIES CONTINUED Externally acquired intangible assets Externally acquired intangible assets are initially recognised at cost and subsequently amortised on a straight line basis over their useful economic lives. The amortisation expense for both externally and internally acquired intangible assets is recognised within administrative expenses. Intangible assets acquired as part of a business combination Intangible assets acquired in a business combination are identified and recognised separately from goodwill where they satisfy the definition of an intangible asset. The cost of such intangible assets is their fair value at the acquisition date and comprises the Group s brand names. All intangible assets acquired through business combination are amortised over their estimated useful lives. The significant intangibles recognised by the Group, their useful economic lives and the methods used to determine the cost of the intangibles acquired in a business combination are as follows: Intangible asset Useful economic life Valuation method Brands 20 years Fair value Subsequent to initial recognition, intangible assets acquired in a business combination are reported at cost less accumulated amortisation and, where appropriate, provision for impairment in value. Property, plant and equipment Items of property, plant and equipment are initially recognised at cost. As well as the purchase price, cost includes directly attributable costs. Subsequently property, plant and equipment are stated at cost less the accumulated depreciation and, where appropriate, provision for impairment in value or estimated loss on disposal. Depreciation is provided on all items of property, plant and equipment so as to write off their carrying value over the expected useful economic lives. It is provided at the following rates: Fixtures and fittings 33% per annum straight line Computer equipment 33% per annum straight line Re-usable crates 20% per annum straight line Motor vehicles 20% per annum straight line Financial assets The Group classifies its financial assets into the categories, discussed below, based upon the purpose for which the asset was acquired. The Group has not classified any of its financial assets as held to maturity. Fair value through profit or loss This category comprises only in-the-money derivatives (see Financial liabilities section for out-of-money derivatives). They are carried in the consolidated statement of financial position at fair value with changes in fair value recognised in the consolidated statement of comprehensive income in the finance income or expense line. The Group does not have any assets held for trading nor does it voluntarily classify any financial assets as being at fair value through profit or loss. FINANCIALS

31 Stock code: FEVR ACCOUNTING POLICIES CONTINUED Loans and receivables These assets are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise principally through the provision of services to customers (e.g. trade receivables), but also incorporate other types of contractual monetary assets. They are initially recognised at fair value plus transactions costs that are directly attributable to their acquisition or issue, and are subsequently carried at amortised cost using the effective interest method, less provision for impairment. The Group s loans and receivables comprise trade and other receivables included within the consolidated statement of financial position. Cash and cash equivalents include cash held at bank Impairment provisions are recognised when there is objective evidence (such as significant financial difficulties on the part of the counterparty or default or significant delay in payment) that the Group will be unable to collect all of the amounts due under the terms receivable, the amount of such a provision being the difference between the net carrying amount and the present value of the future expected cash flows associated with the impaired receivable. For trade receivables, which are reported net, such provisions are recorded in a separate allowance account with the loss being recognised within administrative expenses in the consolidated statement of comprehensive income. On confirmation that the trade receivables will not be collectable, the gross carrying value of the asset is written off against the associated provision. Financial liabilities The Group classifies its financial liabilities into one of two categories, depending on the purpose for which the liability was acquired: Fair value through profit or loss This category comprises only out-of-the-money derivatives (see Financial assets for in the money derivatives). They are carried in the consolidated statement of financial position at fair value with changes in fair value recognised in the consolidated statement of comprehensive income. The Group does not hold or issue derivative instruments for speculative purposes, but for hedging purposes. Other than these derivative financial instruments, the Group does not have any liabilities held for trading nor has it designated any financial liabilities as being at fair value through profit or loss. Other financial liabilities Bank loans and shareholder loan notes which are initially recognised at fair value net of any transaction costs directly attributable to the issue of the instrument. Such interest bearing liabilities are subsequently measured at amortised cost using the effective interest rate method, which ensures that any interest expense over the period to repayment is at a constant rate on the balance of the liability carried in the consolidated statement of financial position. The interest expense includes initial transaction costs and premiums payable on redemption, as well as any interest coupon payable while the liability is outstanding. Trade payables, other borrowings and other short-term monetary liabilities, which are initially recognised at fair value and subsequently carried at amortised cost using the effective interest method. Share Capital Financial instruments issued by the Group are treated as equity only to the extent that they do not meet the definition of a financial liability. The Group s ordinary shares are classified as equity instruments. Leased Assets Where substantially all of the risks and rewards incidental to ownership are not transferred to the Group (an operating lease ), the total rentals payable under the lease are charged to the consolidated statement of comprehensive income on a straight line basis over the lease term. The aggregate benefit of lease incentives is recognised as a reduction of the rental expense over the lease term on a straight-line basis.

32 30 FEVERTREE LTD Annual Report and Accounts for the year ended 31 December NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED 1. ACCOUNTING POLICIES CONTINUED Deferred taxation Deferred tax assets and liabilities are recognised where the carrying amount of an asset or liability in the consolidated statement of financial position differs from its tax base, except for differences arising on: the initial recognition of goodwill; the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction affects neither accounting or taxable profit; and investments in subsidiaries and jointly controlled entities where the Group is able to control the timing of the reversal of the difference and it is probable that the difference will not reverse in the foreseeable future. Recognition of deferred tax assets is restricted to those instances where it is probable that taxable profit will be available against which the difference can be utilised. The amount of the asset or liability is determined using tax rates that have been enacted or substantively enacted by the reporting date and are expected to apply when the deferred tax liabilities or assets are settled or recovered. Deferred tax balances are not discounted. Deferred tax assets and liabilities are offset when the Group has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority on either: the same taxable group company; or different company entities which intend either to settle current tax assets and liabilities on a net basis, or to realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax assets and liabilities are expected to be settled or recovered. Inventories Inventories are initially recognised at cost, and subsequently at the lower of cost and net realisable value after making due allowance for obsolete and slow moving items. Weighted average cost is used to determine the cost of ordinarily interchangeable items. Operating Segments Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision maker has been identified as the management team including the Chief Executive Officer, Executive Deputy Chairman and Chief Financial Officer. The Board considers that although the Group s activity is generated from global sales across four regions (as shown in the Chairman s statement and note 4), there is ultimately one overarching reporting and operating segment, as defined under IFRS 8. Management reviews the performance of the Group by reference to total results against budget. The total profit measures are operating profit and profit for the year, both disclosed on the face of the consolidated statement of comprehensive income. No differences exist between the basis of preparation of the performance measures used by management and the figures in the Group financial statements. Share-based payments Where share options are awarded to employees, the fair value of the option at the date of grant is charged to the Consolidated Statement of Comprehensive Income over the vesting period. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each balance sheet date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options that eventually vest. Market vesting conditions are factored into the fair value of the options granted. As long as all other vesting conditions are satisfied, a charge is made irrespective of whether the market vesting conditions are satisfied. The cumulative expense is not adjusted for failure to achieve a market vesting condition. Where share options are cancelled, their remaining unamortised fair value is fully written off through the Consolidated Statement of Comprehensive Income. FINANCIALS

33 Stock code: FEVR ACCOUNTING POLICIES CONTINUED Foreign currency Transactions entered into by Group entities in a currency other than the currency of the primary economic environment in which they operate (their functional currency ) are recorded at the rates ruling when the transactions occur. Foreign currency monetary assets and liabilities are translated at the rates ruling at the reporting date. Exchange differences arising on the retranslation of unsettled monetary assets and liabilities are recognised immediately in the consolidated statement of comprehensive income. 2. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS The Group makes certain estimates and assumptions regarding the future. Estimates and judgements are continually evaluated based on historical experience and other factors, including the expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumptions. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below. Accounting judgements, estimates and assumptions (a) Property, plant and equipment Property, plant and equipment is depreciated over the useful lives of the assets. Useful lives are based on the management s estimates of the period that the assets will generate revenue, which are reviewed annually for continued appropriateness. The carrying values are tested for impairment when there is an indication that the value of the assets might be impaired. When carrying out impairment tests these would be based upon future cash flow forecasts and these forecasts would be based upon management judgement. Future events could cause the assumptions to change, therefore this could have an adverse effect on the future results of the Group. (b) Other Intangible assets As set out in note 1, accounting policies, intangible assets acquired in a business combination are capitalised and amortised over their useful lives. Both initial valuations and valuations for subsequent impairment tests are based on risk adjusted future cash flows discounted using appropriate discount rates. These future cash flows will be based on forecasts which are inherently judgemental. Future events could cause the assumptions to change which could have an adverse effect on the future results of the Group. (c) Income taxes The Group is subject to income taxation in the UK and US state taxation, where judgement arises in determining the provision for income taxes. During the ordinary course of business, there are transactions and calculations for which the ultimate tax determination is uncertain. As a result, the company recognises tax liabilities based on estimates of whether additional taxes and interest will be due. The company believes that its accruals for tax liabilities are adequate for all financial years based on its assessment of many factors including past experience and interpretations of tax law. This assessment relies on estimates and assumptions and may involve a series of judgement about future events. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences will impact on the taxation charge made in the consolidated statement of comprehensive income in the period in which such determination is made. (d) Impairment of goodwill The Group is required to test, on an annual basis, whether goodwill has suffered any impairment. The recoverable amount is determined based on value in use calculations. The use of this method requires the estimation of future cash flows and the determination of a discount rate in order to calculate the present value of the cash flows. More information including carrying values is included in note 11. (e) Fair Value of financial instruments A number of assets and liabilities included in the Group s financial statements require measurement at, and/or disclosure of, fair value. The Group determines the fair value of financial instruments that are not quoted using valuation techniques. Those techniques are significantly affected by the assumptions used, including discount rates and estimates of future cash flows. In that regard, the derived fair value estimates cannot always be substituted by comparison with independent markets and, in many cases, may not be capable of being realised immediately.

34 32 FEVERTREE LTD Annual Report and Accounts for the year ended 31 December NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED 2. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS CONTINUED The fair value measurement of the Groups financial and non-financial assets and liabilities utilises market observable inputs and data as far as possible. Inputs used in determining fair value measurements are categorised into different levels based on how observable the inputs used in the valuation technique utilised are (the fair value hierarchy ): Level 1: Quoted prices, in active markets Level 2: Observable direct or indirect inputs other than Level 1 inputs Level 3: Inputs that are not based on observable market data The Group measures several items at fair value:» Financial instruments relating to foreign exchange contracts (note 16) Level 2» Financial instruments relating to interest rate swaps (note 16) Level 2 Movements on the underlying value of financial instruments of foreign exchange contracts and interest rate swaps have been measured versus market rates and therefore are easily identifiable. 3. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT The Board has overall responsibility for the determination of the Group s risk management objectives and policies. The overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting the Group s competitiveness and flexibility. The Group reports in Sterling. All funding requirements and financial risks are managed based on policies and procedures adopted by the Board of Directors. The Group uses derivative financial instruments including forward currency contracts and interest rate swaps to manage its exposure to certain financial risks. The Group is exposed to the following financial risks: Credit risk Liquidity risk Pricing risk Foreign exchange risk In common with all other businesses, the Group is exposed to risks that arise from its use of financial instruments. The principal financial instruments used by the Group, from which financial instrument risk arises, are as follows: Trade and other receivables Cash and cash equivalents Trade and other payables Bank loans Interest rate swaps Forward currency contracts To the extent that financial instruments are not carried at fair value in the consolidated statement of financial position, the carrying values approximate fair values at 31 December and 31 December. Trade and other receivables are categorised as loans and other receivables. Carrying values and expected cash flows are reviewed by the Board and any impairment charged to the consolidated statement of comprehensive income in the relevant period. FINANCIALS

35 Stock code: FEVR FINANCIAL INSTRUMENTS AND RISK MANAGEMENT CONTINUED Financial instruments by category FINANCIAL ASSETS FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS LOANS AND RECEIVABLES Cash and cash equivalents 9,583,313 3,353,018 Trade and other receivables 7,593,861 5,658,484 Derivative financial instruments 11,051 46,389 Total financial assets 11,051 46,389 17,177,174 9,011,502 FINANCIAL ASSETS FINANCIAL LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS FINANCIAL LIABILITIES AT AMORTISED COST Trade and other payables 3,931,616 2,772,495 Loans and borrowings 6,260,273 52,528,343 Total financial liabilities 10,191,889 55,300,838 Cash and cash equivalents are categorised as loans and receivables. Trade and other payables and loans and borrowings are categorised as financial liabilities at amortised cost. Derivative financial instruments including interest rate swaps and forward currency contracts are categorised as financial assets at fair value through profit or loss. Credit risk Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations. The Group is mainly exposed to credit risk from credit sales. At 31 December the Group has net trade receivables of 6,865,658 (: 5,188,859). The Group is exposed to credit risk in respect of these balances such that, if one or more customers encounter financial difficulties, this could materially and adversely affect the Group s financial results. In order to minimise this risk the Group endeavours only to deal with companies which are demonstrably creditworthy and this, together with the aggregate financial exposure, is continuously monitored. Supply of products by members of the Group results in trade receivables which the management consider to be of low risk, other receivables are likewise considered to be low risk. The management do not consider that there is any concentration of risk within either trade or other receivables. The ageing of overdue debtors is included in note 14. The Directors are unaware of any factors affecting the recoverability of outstanding balances at 31 December and consequently no material provisions have been recognised for bad and doubtful debts. Credit risk on cash and cash equivalents is considered to be small as the counterparties are all substantial banks with high credit ratings.

36 34 FEVERTREE LTD Annual Report and Accounts for the year ended 31 December NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED 3. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT CONTINUED Liquidity risk Liquidity risk arises from the Group s management of working capital. It is the risk that the Group will encounter difficulty in meeting its financial obligations as they fall due. The Group s actively manages its cash generation and maintains sufficient cash holdings to cover its immediate obligations. The Group actively manages its cash and currently holds substantial cash balances in Sterling, US Dollars and Euros. The Group also has access to additional equity funding and, for short term flexibility, an unused revolving credit facility is arranged with the Group s bankers. Trade and other payables are monitored as part of normal management routine. WITHIN ONE YEAR ONE TO TWO YEARS TWO TO FIVE YEARS OVER FIVE YEARS Trade and other payables 3,931,616 Bank borrowings principal 425, ,500 5,137,500 Bank borrowings interest 246, , ,445 WITHIN ONE YEAR ONE TO TWO YEARS TWO TO FIVE YEARS OVER FIVE YEARS Trade and other payables 2,772,495 Bank borrowings principal and interest 645, ,000 4,654,500 2,123,625 Shareholders loans 45,982,528 Pricing risk Pricing risk is the risk that oscillation in the price of key input costs will affect the profitability of the business. The company manages this risk by agreeing long-term prices with suppliers where possible. Market risk Market risk arises from the Group s interest bearing, tradable and foreign currency financial instruments. It is the risk that the fair value, or future cash flows, of a financial instrument will fluctuate because of changes in the interest rates (interest rate risk) or foreign exchange rates (foreign exchange risk). (a) Interest rate risk The Group is exposed to cash flow interest rate risk from its loan facilities, which carry interest at variable rates. The Group s policy is to balance exposure to interest rate risk with the cost and flexibility of funding. This policy is managed centrally. The Group carries significant borrowings. Interest on bank loans has a variable element and to mitigate this risk the Group has an Interest Swap arrangement in place over three quarters (31 December : three quarters) of the loan balance until March Changes in the fair value of the interest rate swap and the interest on borrowings are both recognised in profit or loss. The shareholder s loans that were in place during and part of carried interest at fixed rates. As a result the directors consider that there is no significant interest rate risk. The requirement for interest rate hedging is reviewed periodically, being a mechanism available to manage interest rate risk. These reviews acknowledge that interest rate hedges will not necessarily protect the Group from the risk of paying rates in excess of current market rates nor eliminate cash flow risk associated with the variability in interest payments. Judgements are therefore exercised in the context of the market and the materiality of the potential risk compared to the cost. Based upon the Group s debt at year-end, it is estimated that a rise/fall of one percentage point in the principal interest rates to which the Group is exposed would decrease/increase profit before taxation by approximately 16,000 (31 December : 14,000). FINANCIALS

37 Stock code: FEVR FINANCIAL INSTRUMENTS AND RISK MANAGEMENT CONTINUED (b) Foreign exchange risk Foreign exchange risk is the risk that movements in exchange rates affect the profitability of the business. The Group is exposed to transaction foreign exchange risk as it operates within the USA and Europe where transactions are predominantly denominated in US Dollars and Euros respectively. The carrying value of the Group s foreign currency denominated assets comprise the trade receivables held in currencies other than Sterling are detailed in note 14. The majority of the Group s financial assets are held in Sterling but movements in the exchange rate of the Euro and the US Dollar against Sterling have an impact on both the result for the year and equity. Forward contracts are used to manage foreign exchange risk. Those receivables in currencies other than Sterling may be the subject of informal hedging arrangements using forward contracts where the counterparty is the Group s banker or an independent broker. The receivable is carried in the consolidated statement of financial position at the rate of exchange at the period end. The derivative instruments are carried at fair value with that value being the contract value at the reporting date. At 31 December there were commitments to purchase foreign currency exchange forward contracts with a total sterling value of approximately 5.8 million (31 December : 1.0 million) in Euros and US Dollars. All contracts mature within twelve months of the reporting date. Although the Board accepts that this policy does not protect the Group entirely from currency risk or from incurring an exchange rate in the future that is adverse to the then spot rate in operation, it considers that it achieves an appropriate balance against exposure to the risk. The effect of fluctuations in exchange rates on the Euro and Dollar denominated trade receivables is partially offset through the use of foreign exchange contracts to the extent that any impact on profit after tax is not material. Capital Management The Group s capital is made up of share capital, retained earnings and other reserves. The Group s objectives when maintaining capital are: To safeguard the entity s ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders; and To provide an adequate return to shareholders by pricing products and services commensurately with the level of risk. The capital structure of the Group consists of shareholders equity as set out in the consolidated statement of changes in equity. All working capital requirements are financed from existing cash resources.

38 36 FEVERTREE LTD Annual Report and Accounts for the year ended 31 December NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED 4. REVENUE YEAR ENDED PERIOD ENDED Revenue arises from: Sale of goods 34,691,034 20,577,019 Analysis of concentration of customers top 3 and other: Customer 1 13% 23% Customer 2 12% 6% Customer 3 5% 4% Other 70% 67% 100% 100% An analysis of turnover by geographical market is given below: YEAR ENDED PERIOD ENDED United Kingdom 11,138,177 6,163,939 United States of America 8,286,535 4,526,808 Europe 13,438,075 8,840,848 Rest of the World 1,828,247 1,045,424 34,691,034 20,577,019 FINANCIALS

39 Stock code: FEVR PROFIT/(LOSS) FROM OPERATIONS Operating profit is stated after charging: YEAR ENDED PERIOD ENDED Foreign exchange losses 27, ,890 Depreciation of property, plant and equipment 84,263 20,403 Amortisation of intangible assets 717, ,918 Exceptional items* 1,115,973 2,337,505 Operating lease payments Premises 48,189 21,955 Equipment and vehicles 11,764 12,939 Auditors remuneration: Fees for audit of the company 20,000 7,000 Fees for audit of subsidiaries 44,750 20,000 Other taxation services 46,000 4,595 * exceptional items comprise advisers fees and non-audit fees incurred by Fevertree Limited and Fevertree Drinks plc in respect of the acquisition of Fevertree Limited by Fevertree Drinks plc on March 12,. Included in the costs are 115,000 paid to the auditors for non-audit services. exceptional items comprise advisers fees and non-audit fees incurred by Fevertree Drinks plc in relation to the AIM listing. Included in the costs are amounts paid to the auditors in respect of the AIM listing of 51,000 relating to interim audits and audit of the conversion of historic financials to IFRS, and 190,000 of non-audit services split between 150,000 for corporate finance services and 40,000 for tax advisory services. 6. STAFF COSTS YEAR ENDED PERIOD ENDED Wages and salaries 1,896,897 1,341,813 Share based payments 9,833 Social security costs 231, ,386 2,137,773 1,511,199

40 38 FEVERTREE LTD Annual Report and Accounts for the year ended 31 December NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED 6. STAFF COSTS CONTINUED The average monthly number of employees (including directors) during the period was as follows: YEAR ENDED PERIOD ENDED Sales & Marketing 13 8 Production and Administration YEAR ENDED PERIOD ENDED Directors remuneration, included in staff costs Salaries 378, ,654 Bonuses 676, ,999 Share based payments 8,046 1,062, ,653 Information regarding the highest paid director is as follows: 486, , FINANCE INCOME AND EXPENSES YEAR ENDED PERIOD ENDED Finance income Bank interest 9,222 15,282 Fair value adjustment on derivative instruments 43,010 9,222 58,292 Finance expense Bank loan interest 333, ,585 Loan note interest 4,010,236 3,641,415 Loan fee amortisation 1,192, ,467 Fair value adjustment on derivative instruments 39,875 5,575,813 4,139,467 FINANCIALS

41 Stock code: FEVR INCOME TAX YEAR ENDED PERIOD ENDED Current tax expense Current tax on profits/(losses) for the period 1,362, ,484 Adjustment in respect of prior period (158,597) US state income tax 236,000 1,203, ,484 Deferred tax expense Origination and reversal of temporary differences (97,592) (224,067) Adjustment in respect of prior period 118,523 20,931 (224,067) Total tax expense 1,224, ,417 The reasons for the difference between the actual tax charge for the year and the standard rate of corporation tax in the United Kingdom applied to profit/(loss) for the year are as follows: YEAR ENDED PERIOD ENDED Profit/(loss) for the period 2,521,242 (1,393,452) Expected tax charge based on corporation tax rate of 21.5% in (23.25% in ) 542,067 (323,978) Expenses not deductible for tax purposes 722, ,395 Adjustment in respect of prior period (40,074) US state income tax 236,000 Total tax expense 1,224, ,417

42 40 FEVERTREE LTD Annual Report and Accounts for the year ended 31 December NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED 9. EARNINGS/(LOSS) PER SHARE Basic earnings per ordinary share are calculated using the weighted average number of ordinary shares in issue during the financial year of 83,934,200 (31 December : 63,056,921). The weighted average number of ordinary shares in issue has been adjusted retrospectively for the subdivision of shares as discussed in note 19. Diluted earnings per ordinary share are calculated with reference to 84,068,082 (31 December : 63,056,921) ordinary shares. The effect of the exercise of options on the weighted average number of ordinary shares in issue is 133,882 (31 December : nil). YEAR ENDED PERIOD ENDED Profit/(loss) Profit/(loss) used in calculating basic and diluted EPS 1,296,411 (1,941,869) Number of shares Weighted average number of shares for the purpose of basic earnings per share 83,934,200 63,056,921 Weighted average number of employee share options outstanding 133,882 Weighted average number of shares for the purpose of diluted earnings per share 84,068,082 63,056,921 Basic earnings/(loss) per share (pence) 1.54 (3.08) Diluted earnings/(loss) per share (pence) 1.54 (3.08) The acquisition of Fevertree Limited by Fevertree Drinks plc took place on 12 March. To this end, earnings per share has been calculated using a weighted average number of shares between acquisition and period end. 10. PROPERTY, PLANT AND EQUIPMENT RE-USABLE CRATES MOTOR VEHICLES FIXTURES AND FITTINGS COMPUTER EQUIPMENT Cost At 22 February Acquired through business combination 3,599 13,676 17,275 Additions 105,055 56, , ,367 At 31 December 105,055 56,716 3,761 23, ,642 Additions 195,899 30,700 29,077 12, ,723 At 31 December 300,954 87,416 32,838 35, ,365 TOTALS Depreciation At 22 February Charge for the period 1,751 8,767 2,572 7,313 20,403 At 31 December 1,751 8,767 2,572 7,313 20,403 Charge for the year 49,262 14,362 9,282 11,357 84,263 At 31 December 51,013 23,129 11,854 18, ,666 Net book value At 31 December 249,941 64,287 20,984 16, ,699 At 31 December 103,304 47,949 1,189 15, ,239 Property, plant and equipment are pledged as security as explained in note 17. FINANCIALS

43 Stock code: FEVR INTANGIBLE ASSETS GOODWILL BRANDS Cost At 22 February Acquired through business combination 31,469,614 14,400,000 45,869,614 At 31 December and 31,469,614 14,400,000 45,869,614 TOTALS Amortisation At 22 February Charge for the period 581, ,918 At 31 December 581, ,918 Charge for the year 717, ,041 At 31 December 1,298,959 1,298,959 Net book value At 31 December 31,469,614 13,101,041 44,570,655 At 31 December 31,469,614 13,818,082 45,287,696 Intangible assets represent the fair value at the 12 March acquisition date of the Fever-Tree brand. The fair value has been determined by applying the relief from royalty method to the cash flows earned from the Brands. The key management assumptions are around growth forecasts (over 20 years and at an ongoing growth rate of 3%), discount factors (a discount factor of 20% was used) and royalty percentage utilised. A brand useful life of 20 years has been deemed appropriate and projected cash flows have been discounted over this period. Goodwill recognised upon the acquisition of Fevertree Limited on 12 March represented the difference between the consideration paid and the fair value of assets acquired and liabilities assumed. In line with IAS 36, a cash-generating unit to which goodwill has been allocated is tested for impairment at least annually by comparing the carrying amount of the unit, including the goodwill, with the recoverable amount of the unit. Management have made this consideration and do not believe there to be any impairment indicators. Goodwill is not amortised but tested for impairment annually. The impairment model for goodwill is based on the fair value less costs to sell using the quoted price for the company as an estimate of the fair value. Further details of the acquisition of Fevertree Limited are in note SUBSIDIARIES The principal subsidiary of the Company, which has been included in the consolidated financial statements, are as follows: YEAR ENDED PERIOD ENDED NAME PRINCIPAL ACTIVITY OWNERSHIP % OWNERSHIP % Fevertree Limited Development and sale of premium mixer drinks 100% 100% The Company acquired Fevertree Limited, registered in the UK, on 12 March.

44 42 FEVERTREE LTD Annual Report and Accounts for the year ended 31 December NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED 13. INVENTORIES Raw materials 506, ,927 Finished goods 3,839,338 2,057,846 4,346,168 2,541,773 The cost of inventories recognised as an expense and included in the cost of sales amounted to 14,037,079 (31 December : 8,550,799). Inventories are pledged as security as explained in note TRADE AND OTHER RECEIVABLES Trade receivables 7,062,001 5,332,502 Bad debt provision (196,343) (143,643) Net trade receivables 6,865,658 5,188,859 Other receivables 728, ,625 Total financial assets other than cash and cash equivalents classified as loans and receivables 7,593,861 5,658,484 Prepayments 591,964 84,250 Recoverable VAT 204, ,652 Total trade and other receivables 8,390,202 5,996,386 There is no material difference between the net book amount and the fair value of current trade and other receivables due to their short-term nature. Trade and other receivables are pledged as security as explained in note 17. There is no particular concentration of credit risk to the Group s trade receivables as the Group has a large number of customers. Trade and other receivables that have not been received within the payment terms agreed are classified as overdue and have not been impaired. The ageing of overdue amounts at 31 December is as follows: Less than 30 days 827, ,450 Over 30 days 698, ,103 1,526, ,553 The provision for impairment is analysed as follows: Balance at beginning of the period 143,643 93,614 Increase in provision 52,700 50,029 Balance at end of the period 196, ,029 The creation and release of provision for impaired receivables has been included in the Consolidated Statement of Comprehensive Income under administrative expenses. FINANCIALS

45 Stock code: FEVR TRADE AND OTHER RECEIVABLES CONTINUED Receivables held in currencies other than sterling are as follows: Euro 1,806,922 1,611,928 US Dollar 1,180, ,869 Other 86, ,730 3,073,779 2,516, TRADE AND OTHER PAYABLES CURRENT Trade payables 1,930,865 1,171,262 Related party payables 254,112 Accruals 1,452,722 1,347,121 Other 548,029 Total financial liabilities, excluding loans and borrowings, classified as financial liabilities measured at amortised cost 3,931,616 2,772,495 Other 4,028 Social security & other taxes 455, ,832 Total trade and other payables 4,387,498 2,905,355 There is no material difference between the net book amount and fair value of trade and other payables due to their short-term nature. No significant balances were denominated in currencies other than the Group s reporting currency. 16. DERIVATIVE FINANCIAL INSTRUMENTS Foreign currency exchange contracts 7,916 3,379 Interest rate swaps 3,135 43,010 Total derivative financial instruments 11,051 46,389 The fair value of a derivative financial instrument is split between current and non-current depending on the remaining maturity of the derivative contract and its contractual cash flows. All contracts mature in less than 12 months; therefore, the instruments are classified as current. The fair value of foreign exchange and interest swap derivatives is based on bank valuations. The maximum exposure to credit risk at the reporting date is the fair value of the derivative instruments in the consolidated statement of financial position. 17. LOANS AND BORROWINGS

46 44 FEVERTREE LTD Annual Report and Accounts for the year ended 31 December NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED Bank Loans 6,260,273 6,545,815 Shareholders loans 45,982,528 Total loans and borrowings 6,260,273 52,528,343 Classified as follows: Bank loans 364, ,584 Current portion 364, ,584 Bank loans 5,895,828 6,253,231 Shareholder loans 45,982,528 Non current portion 5,895,828 52,235,759 Bank loans are secured by a fixed and floating charge over the Group s assets. Principal terms and the debt repayment schedule of the Group s loan and borrowings are as follows: CURRENCY CONDITIONS Bank loans A Sterling Secured Bank loans B Sterling Secured NOMINAL RATE % YEAR OF MATURITY LIBOR % 2017 LIBOR % DEFERRED TAX Deferred tax is calculated in full on temporary differences under the liability method using a tax rate of 20%. The movement on the deferred tax account is as shown below: Opening balance 2,658,730 Recognised on acquisition of Fevertree Limited 2,882,797 Recognised in comprehensive income 20,931 (224,067) Closing balance 2,679,661 2,658,730 FINANCIALS

47 Stock code: FEVR DEFERRED TAX CONTINUED Details of the deferred tax liability are as follows: ACCELERATED CAPITAL ALLOWANCES FAIR VALUATION OF INTANGIBLE ASSETS OTHER TEMPORARY DIFFERENCES (CREDITED)/ DEBITED TO STATEMENT OF COMPREHENSIVE INCOME At 22 February Recognised on acquisition of Fevertree Limited 2,880,000 2,797 2,882,797 Comprehensive income (credit)/debit 35,272 (116,384) (142,955) (224,067) At 31 December 35,272 2,763,616 (140,158) 2,658,730 Comprehensive income (credit)/debit 45,816 (143,408) 118,523 20,931 At 31 December 81,088 2,620,208 (21,635) 2,679,661 The deferred tax has arisen due to the timing difference on accelerated capital allowances and interest payments, and the recognition at acquisition of the Brand intangible asset in Fevertree Limited. 19. SHARE CAPITAL NUMBER NUMBER Class A ordinary shares of 0.10 each At beginning of the period 1,335, ,534 Issued during the period 1,335, ,534 Converted into new Ordinary and Deferred shares (1,335,337) (133,534) At end of the period 1,335, ,534 Class B ordinary shares of 0.05 each At beginning of the period 2,000, ,000 Issued during the period 2,000, ,000 Converted into new Ordinary and Deferred shares (2,000,000) (100,000) At end of the period 2,000, ,000 Class C ordinary shares of 0.05 each At beginning of the period 175,544 8,777 Issued during the period 175,544 8,777 Converted into new Ordinary and Deferred shares (175,544) (8,777) At end of the period 175,544 8,777

48 46 FEVERTREE LTD Annual Report and Accounts for the year ended 31 December NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED 19. SHARE CAPITAL CONTINUED NUMBER NUMBER Class D ordinary shares of 0.10 each At beginning of the period 273,068 27,307 Issued during the period 273,068 27,307 Converted into new Ordinary and Deferred shares (273,068) (27,307) At end of the period 273,068 27,307 Class E ordinary shares of 0.10 each At beginning of the period 117,030 11,703 Issued during the period 117,030 11,703 Converted into new Ordinary and Deferred shares (117,030) (11,703) At end of the period 117,030 11,703 Deferred shares of 0.05 each At beginning of the period Issued during the period as a result of conversion of Class A, B, C, D and E shares 1,863,781 93,189 Buy back of shares (1,863,781) (93,189) At end of the period Ordinary shares of each At beginning of the period Issued during the period as a result of conversion of Class A, B, C, D and E shares (to Ordinary shares of 0.05 each) 3,762, ,132 Additional issued as a result of share subdivision from 0.05 each to each 71,490,027 Issue of ordinary shares of each 39,988,236 99,970 At end of the period 115,240, ,102 On 12 March, the Company issued 1,335,337 A ordinary shares of 0.10 each, 2,000,000 B ordinary shares of 0.05 each, 174,544 C ordinary shares of 0.05 each, 273,068 D ordinary shares of 0.10 each and 117,030 E ordinary shares of 0.10 each. On 3 November, 47,357 A ordinary shares of 0.10 each were converted into 94,714 deferred shares of 0.05 each, 83,273 B ordinary shares of 0.05 each were converted into 83,273 deferred shares of 0.05 each and 7,716 C ordinary shares of 0.05 each were converted into 7,716 deferred shares of 0.05 each. On 3 November, immediately following the conversion described above, the Company converted and subdivided the A, B, C, D and E ordinary shares into one class of ordinary shares with a nominal value of 0.05 each and some deferred shares of 0.05 each. On 3 November, immediately following the conversion described above, the Company sub-divided each ordinary share of 0.05 each into 20 Ordinary Shares of each. On 3 November, immediately following the sub-division, the Company bought back all of the issued deferred shares. On 3 November, immediately following the buy back of the deferred shares the principal and interest in respect of loan notes issued by the Company were capitalised in consideration for the issue of Ordinary Shares, all of which were fully paid up. FINANCIALS

49 Stock code: FEVR SHARE CAPITAL CONTINUED On 3 November the Company issued a further 2,985,075 Ordinary shares pursuant to the initial public offering. Pursuant to the Companies Act, with effect from 1 October 2009, the concept of authorised share capital was abolished and accordingly there is no limit on the maximum amount of shares that may be allotted by the Company. There are no shares in the capital of the Company currently in issue with a fixed date on which entitlement to a dividend arises and there are no arrangements in force whereby future dividends are waived or agreed to be waived. There are no outstanding convertible securities issued by the Company. In and while A, B, C, D and E share were in issue, 49.9 per cent voting rights were shared pro-rata among holders of B shares and the remaining 50.1 per cent of voting rights were shared pro-rata among the holders of A, C and D shares. As regards rights to distribution, each A, B, C, D and E ordinary share had attributed to it rights to dividends and to participate in capital distributions (including on winding up), save that the ratchet provisions contained in the articles applied. None of the shares confer any right of redemption. The movement on the share premium and capital redemption reserves are reconciled as follows: SHARE PREMIUM CAPITAL REDEMPTION SHARE PREMIUM CAPITAL REDEMPTION Balance at beginning of the period 186,796 Premium arising on shares issued during the period 53,484, ,796 Share issue costs (149,676) Share buyback (93,189) Balance at end of the period 53,521,386 (93,189) 186, SHARE BASED PAYMENTS In November the Group established two incentive plans whereby share options are granted to employees. The Company Share Option Plan ( CSOP ) The CSOP is a share option plan that satisfies the requirements for tax relief under Schedule 4, ITEPA. All employees and full-time directors of the Group are eligible to participate at the discretion of the Remuneration Committee. Options may be granted subject to objective performance conditions, but no performance conditions applied to the first grant of Options under the CSOP. The exercise price of options granted under the CSOP must be equal to or above the market value of the ordinary shares on the date of grant of the options. Options may not generally be exercised prior to the third anniversary of grant, unless the option holder s employment ceases for a specified good leaver reason, such as ill-health, disability, redundancy, retirement or a sale out of the Group of the company or the business by which they are employed or if there is a change of control of the Company due to a cash takeover. The first options granted under the CSOP vested three years from the date of grant and have an exercise price equal to the placing price under the Group s initial public offering of These options lapse after ten years. Unapproved Scheme The Unapproved Scheme largely mirrors the CSOP, save to the extent that it does not need to satisfy the requirements of Schedule 4, ITEPA. The exercise price of the granted options is equal to the estimated market price of the shares on the date of the grant. Options may normally be exercised in whole or in part during the period between the third and tenth anniversaries of their grant provided any performance targets specified at the date of grant have been achieved. Options may be satisfied by the issue of Ordinary Shares or the transfer of existing Ordinary Shares.

50 48 FEVERTREE LTD Annual Report and Accounts for the year ended 31 December NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED 20. SHARE BASED PAYMENTS CONTINUED Options will normally lapse on cessation of employment. However, exercise is permitted for a limited period following cessation of employment for specified reasons such as redundancy, retirement or ill-health, and, in other circumstances, at the discretion of the Remuneration Committee. In the event of an amalgamation, takeover or winding up of the Company, Options may be exercised within certain time limits. There are also provisions for the exchange of Options in specified circumstances. Options immediately lapse on the tenth anniversary of the date of grant and in the event of the participant s bankruptcy. Movements in the number of share options outstanding and their related weighted average exercise prices are as follows: WEIGHTED CSOP NUMBER OF SHARES NUMBER AVERAGE EXERCISE PRICE Outstanding at beginning of the year Granted 156, Outstanding at the end of the year 156, Vested and exercisable 156, WEIGHTED UNAPPROVED SCHEME NUMBER OF SHARES NUMBER AVERAGE EXERCISE PRICE Outstanding at beginning of the year Granted 685, Outstanding at the end of the year 685, Vested and exercisable 685, The weighted average grant date fair value of options granted during the period was determined at 0.23 per option. The outstanding options have a weighted average remaining contractual life of three years. Options were valued using the Black Scholes option-pricing model. No performance conditions were included in the fair value calculations. The fair value per option granted and the assumptions used in the calculation are as follows: Risk-free interest rate 0.74% Expected life 5 years Expected volatility 22.06% Expected dividend yield 1.25% FINANCIALS

51 Stock code: FEVR SHARE BASED PAYMENTS CONTINUED The expected volatility has been difficult to ascribe with certainty since the Group was unquoted up to grant date and lacks historical or meaningful comparisons. A volatility of 22.06% has been used reflecting the growth potential of the Group and with reference to comparable entities and to the historical volatility based on share transactions since incorporation. The maximum vesting period was used as a basis to determine the expected life of the option. The expected life used in the valuation has been adjusted, based on management s best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations. The risk free rate was based on the Bank of England spot yields in effect at the time of grant. The expected dividend yield reflects management s and market expectations based on budget projections. The Group recognised total expenses of 9,833 relating to equity-settled share-based payments in (: Nil). 21. RESERVES Share premium is the amount subscribed for share capital in excess of nominal value. Retained earnings are the cumulative net profits in the consolidated statement of comprehensive income. Movements on these reserves are set out in the consolidated statement of changes in equity. Capital redemption reserve was created during the year as a result of the share buy-back during the period. 22. DIVIDENDS No dividends were declared or paid in the current or prior period. The directors are proposing a final dividend of 0.30 pence per share. This dividend has not been accrued in the consolidated statement of financial position. 23. OPERATING LEASES The Group leases its office premises. The total value of minimum lease payments due until the end of the lease is payable as follows: Not later than one year 64,285 9,020 Later than one year and not later than five years 13,385 77,670 9, RELATED PARTY TRANSACTIONS Compensation of key management personnel (including Directors): YEAR ENDED PERIOD ENDED Short term employee benefits 315, ,815 Bonus 676, ,999 Share based payments 8,046 Employers national insurance 134, ,708 1,134,296 1,068,522

52 50 FEVERTREE LTD Annual Report and Accounts for the year ended 31 December NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED 24. RELATED PARTY TRANSACTIONS CONTINUED The following table details the related party transactions which occurred during the year which are on normal commercial terms and on an arm s length basis. RELATED PARTY NATURE OF RELATIONSHIP PERIOD ENDED SUPPLIER PURCHASES BALANCE OUTSTANDING PERIOD ENDED SUPPLIER PURCHASES BALANCE OUTSTANDING Treetops LLP Charles Rolls controls Treetops LLP 1,120 At 31 December loans from directors amounted to 12,658,581 and 4,711,337 payable to Messrs Rolls and Warrillow respectively. During the year ended 31 December interest of 1,479,671 (: 1,377,733) accrued in favour of the two directors. There were no amounts or interest accrued outstanding as at 31 December in this regard. 25. ULTIMATE CONTROLLING PARTY In the opinion of the directors there is no ultimate controlling party. 26. ACQUISITION OF FEVERTREE LIMITED On 12 March, the Group acquired all the issued share capital of Fevertree Limited for a cash consideration of 50.48million. Details of the acquisition balance sheet and the subsequent fair value exercise carried out by management are shown below: AT BOOK VALUE FAIR VALUE ADJUSTMENTS Brands identified at acquisition 14,400,000 14,400,000 Property, plant and equipment 17,275 17,275 Receivables 2,745,202 2,745,202 Inventories 1,567,327 1,567,327 Cash and cash equivalents 6,321,962 6,321,962 Deferred tax liability (2,797) (2,880,000) (2,882,797) Payables (3,158,457) (3,158,457) Net assets 7,490,512 11,520,000 19,010,512 Goodwill 31,469,614 Consideration paid 50,480,126 Satisfied by: Cash consideration 50,480,126 AT FAIR VALUE Other assets including inventories acquired at net book value are considered to be at their fair value. Goodwill is the difference between the consideration paid and the fair value of assets acquired and liabilities assumed. Deferred tax liability represents the temporary differences at 20% for the acquired Brands. Expenses of the acquisition amounting to 2,337,505 were charged to the consolidated statement of comprehensive income in. FINANCIALS

53 Stock code: FEVR TRANSITION TO IFRS In the Group financial statements were prepared under UK GAAP. In, the Group financial statements adopted International Financial Reporting Standards (IFRS) for the first time. The comparatives have been revised retrospectively as if IFRS had been adopted from the incorporation date of 22 February. The main items contributing to the change in financial information compared with that reported under UK GAAP as at the transition date are shown below: IAS 39 Financial Instruments The use of forward foreign exchange contracts and interest rate swaps as informal hedging arrangements is prescribed by the standard and requires the fair value of the informal hedging instrument to be recognised on the balance sheet from the transition date. IFRS 3 Business combinations Business combinations that occurred after the transition date have been restated to comply with IFRS 3 Business Combinations. Goodwill carried at the transition date is no longer amortised and is subject to annual impairment testing and, in addition, the acquired assets are subject to fair valuation which includes the valuation and recognition on the balance sheet of additional intangible assets which comply with the IAS 38 Intangible assets definition. A deferred tax liability arose on the recognition of the brand at acquisition (note 26). There is no material difference between the UK GAAP balance sheet at incorporation date and IFRS balance sheet at incorporation date. Detailed reconciliations between UK GAAP and IFRS of both equity and total comprehensive income are shown below: Reconciliation of equity as at 31 December : UK GAAP IFRS 3 BUSINESS COMBINATIONS IAS 39 FINANCIAL INSTRUMENTS Fixed Assets Goodwill 42,710,636 (11,241,022) 31,469,614 Intangible Assets 52,273 13,765,809 13,818,082 Tangible Assets 168, ,239 42,931,148 2,524,787 45,455,935 Current Assets Inventories 2,541,773 2,541,773 Trade & other receivables 6,015,539 (15,774) (3,379) 5,996,386 Derivative financial instruments 46,389 46,389 Cash 3,353,018 3,353,018 11,910,330 30,615 (3,379) 11,937,566 Current liabilities Amounts < 1 year (3,972,764) (3,972,764) IFRS Net current assets 7,937,566 30,615 (3,379) 7,964,802 Total assets less current liabilities 50,868,714 2,555,402 (3,379) 53,420,737 Non-current liabilities > 1 year (52,235,759) (52,235,759) Provisions for liabilities 104,886 (2,763,616) (2,658,730) Net Assets (1,262,159) (208,214) (3,379) (1,473,752)

54 52 FEVERTREE LTD Annual Report and Accounts for the year ended 31 December NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED 27. TRANSITION TO IFRS CONTINUED UK GAAP IFRS 3 BUSINESS COMBINATIONS IAS 39 FINANCIAL INSTRUMENTS Capital and Reserves Share capital 281, ,321 Share premium 186, ,796 Retained earnings (1,730,276) (208,214) (3,379) (1,941,869) (1,262,159) (208,214) (3,379) (1,473,752) IFRS Reconciliation of total comprehensive income for the period ended 31 December : UK GAAP IFRS 3 BUSINESS COMBINATIONS ACQUISITION EXPENSES IAS 39 FINANCIAL INSTRUMENTS AND OTHER ADJUSTMENTS Revenue 20,577,019 20,577,019 Cost of sales (10,258,896) (10,258,896) Gross profit 10,318,123 10,318,123 IFRS Administrative expenses (7,135,345) 1,850,443 (7,993) (5,292,895) Finance income/(expense) (4,124,185) 43,010 (4,081,175) Acquisition costs (124,068) (2,213,437) (2,337,505) Profit/(loss) before tax (1,065,475) 1,850,443 (2,213,437) 35,017 (1,393,452) Taxation (664,801) 116,384 (548,417) Profit/(loss) for the period / Total comprehensive income (1,730,276) 1,966,827 (2,213,437) 35,017 (1,941,869) Cash flows As a result of the transition to IFRS the following changes have resulted in the consolidated statement of cash flows. Under UK GAAP payments to acquire property, plant and equipment were classified as part of Capital expenditure and financial investment whilst under IFRS such payments have been reclassified as part of Investing activities. There are no other material differences between the consolidated statement of cash flows presented under IFRS and that presented under UK GAAP other than the presentational convention. FINANCIALS

55 Stock code: FEVR NOTES SUPPORTING THE CONSOLIDATED STATEMENT OF CASH FLOWS Cash and cash equivalents for purposes of the statement of cash flows comprises: Cash available on demand 9,583,313 3,353,018 Significant non-cash transactions are as follows: Financing activities Issue of shares: Equity consideration for shareholders loans settlement 49,584,236 Borrowings: Settlement of shareholders loans through issue of additional ordinary share equity (49,584,236)

56 54 FEVERTREE LTD Annual Report and Accounts for the year ended 31 December COMPANY BALANCE SHEET AT COMPANY NUMBER NOTE Fixed assets Fixed asset investments 2 60,493,564 52,693,564 Current assets Debtors 3 164,553 1,061,183 Cash at bank and in hand 3,596, ,083 3,761,317 1,200,266 Creditors: amounts falling due within one year 4 (1,191,342) (1,171,781) Net current assets 2,569,975 28,485 Total assets less current liabilities 63,063,539 52,722,049 Creditors: amounts falling due after more than one year 5 (5,895,828) (52,235,759) Net assets 57,167, ,290 Capital and reserves Called up share capital 6 288, ,321 Share premium 7 53,521, ,796 Capital redemption reserve 7 93,189 Profit and loss account 7 3,265,034 18,173 Shareholders funds 8 57,167, ,290 The financial statements were approved by the Board of Directors on and were signed on its behalf by: ANDREW BRANCHFLOWER Finance Director FINANCIALS

57 Stock code: FEVR 55 NOTES TO THE COMPANY FINANCIAL STATEMENTS 1. ACCOUNTING POLICIES Basis of preparation The Company Financial Statements have been prepared on the basis of accounting policies set out below, they have been prepared using the historical cost convention, using applicable accounting standards generally accepted in the United Kingdom (UK GAAP). As permitted by Section 408 of the Companies Act 2006, the profit and loss account is not presented. The profit for the year amounted to 3,237,027 (31 December : 18,173). The following principal accounting policies have been applied: Investments Fixed asset investments are stated at cost less provisions for diminution in value. Deferred tax Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date, except that the recognition of deferred tax assets is limited to the extent that the Group anticipates making sufficient taxable profits in future to absorb the reversal of the underlying timing differences. Foreign currencies Assets in respect of trading transactions are translated into sterling at the rates of exchanges specified in related forward contracts. All other monetary assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result. Financial instruments Short term debtors and creditors are not treated as financial assets or financial liabilities except for the currency disclosures; The Company does not hold or issue derivative financial instruments for trading purposes; and Forward exchange contracts are used to fix the exchange rate of committed and anticipated foreign currency transactions. Gains and losses arising on such hedges are not recognised until the transaction occurs. Share-based payments The Company operates equity-settled share-based option plans. The fair value of the employee services received in exchange for the participation in the plan is recognised as an expense in the profit and loss account. The corresponding credit has been recognised in the profit and loss account reserve. The fair value of the employee service is based on the fair value of the equity instrument granted. This expense is spread over the vesting period of the instrument.

58 56 FEVERTREE LTD Annual Report and Accounts for the year ended 31 December NOTES TO THE COMPANY FINANCIAL STATEMENTS CONTINUED 2. FIXED ASSET INVESTMENT SUBSIDIARY UNDERTAKINGS Cost At 22 February Additions 52,693,564 At 31 December 52,693,564 Additional investment in subsidiary 7,800,000 At 31 December 60,493, DEBTORS YEAR ENDED PERIOD ENDED Amounts owed by group undertakings 37, ,057 Other debtors 117, ,603 Prepayments 9,275 Deferred taxation 118, ,553 1,061, CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR YEAR ENDED PERIOD ENDED Bank loans (see note 5) 364, ,584 Trade creditors 113,041 36,840 Other taxation and social security 406,851 95,830 Accruals 307, ,527 1,191,342 1,171,781 FINANCIALS

59 Stock code: FEVR CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR YEAR ENDED PERIOD ENDED Bank loans (see below) 5,895,828 6,253,231 Loan notes 45,982,528 5,895,828 52,235,759 Bank loans are denominated in sterling and are repayable in instalments over the period to 12 March Interest is payable at a floating rate of between 2.75% 3.5% above LIBOR. The company has an interest rate swap arrangement in place in respect of 4,875k fixed at 6.275%, effective until 31st March The Company has access to a 2m revolving debt facility with Lloyds Banking Group over the term of the above bank loans. As at the 31 December none of this has been utilised (31 December : Nil). Maturity of debt: LOANS LOAN NOTES 31 December In one year or less, or on demand 364, ,445 In more than one year but not more than two years 937, ,500 In more than two years but no more than five years 4,958,328 4,958,328 In more than five years 5,895,828 5,895, December In one year or less, or on demand 292, ,584 In more than one year but not more than two years 357, ,403 In more than two years but no more than five years 3,802,905 3,802,905 In more than five years 2,092,923 45,982,528 48,075,451 6,253,231 45,982,528 52,235,759 TOTAL

60 58 FEVERTREE LTD Annual Report and Accounts for the year ended 31 December NOTES TO THE COMPANY FINANCIAL STATEMENTS CONTINUED 6. SHARE CAPITAL NUMBER NUMBER Class A ordinary shares of 0.10 each At beginning of the period 1,335, ,534 Issued during the period 1,335, ,534 Converted into new Ordinary and Deferred shares (1,335,337) (133,534) At end of the period 1,335, ,534 Class B ordinary shares of 0.05 each At beginning of the period 2,000, ,000 Issued during the period 2,000, ,000 Converted into new Ordinary and Deferred shares (2,000,000) (100,000) At end of the period 2,000, ,000 Class C ordinary shares of 0.05 each At beginning of the period 175,544 8,777 Issued during the period 175,544 8,777 Converted into new Ordinary and Deferred shares (175,544) (8,777) At end of the period 175,544 8,777 Class D ordinary shares of 0.10 each At beginning of the period 273,068 27,307 Issued during the period 273,068 27,307 Converted into new Ordinary and Deferred shares (273,068) (27,307) At end of the period 273,068 27,307 Class E ordinary shares of 0.10 each At beginning of the period 117,030 11,703 Issued during the period 117,030 11,703 Converted into new Ordinary and Deferred shares (117,030) (11,703) At end of the period 117,030 11,703 Deferred shares of 0.05 each At beginning of the period Issued during the period as a result of conversion of Class A, B, C, D and E shares 1,863,781 93,189 Buy back of shares (1,863,781) (93,189) At end of the period See consolidated accounts note 19 for share capital section. FINANCIALS

61 Stock code: FEVR RESERVES SHARE PREMIUM ACCOUNT CAPITAL REDEMPTION RESERVE PROFIT AND LOSS ACCOUNT At 22 February Profit for the period 18,173 Issue of shares 186,796 At 31 December 186,796 18,173 Profit for the year 3,237,027 Share based payments 9,833 Issue of shares 53,334,590 Share buyback 93,189 At 31 December 53,521,386 93,189 3,265, RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS FUNDS The Company s reconciliation of movements in shareholders funds is shown below: YEAR ENDED PERIOD ENDED Profit for the financial year/period 3,237,027 18,173 Share based payments 9,833 Buy back of shares (93,189) Issue of shares 53,527, ,117 Net addition to shareholders deficit 56,681, ,290 Opening shareholders funds 486,290 Closing shareholders (deficit)/funds 57,167, , RELATED PARTY TRANSACTIONS The Company has taken advantage of the exemptions laid out in Financial Reporting Standard 8 Related party disclosures and hence has not presented and disclosed details of transactions with other related parties belonging to the Group. Details of directors remuneration are shown in note 6 of the Consolidated Financial Statements. There are no other related party transactions. 10. SHARE-BASED PAYMENTS Share-based payment arrangements for employees are set out in the Remuneration Report. Details of the share options in existence are shown in note 20 of the Consolidated Financial Statements.

62 60 FEVERTREE LTD Annual Report and Accounts for the year ended 31 December COMPANY INFORMATION REGISTERED OFFICE HEAD OFFICE COMPANY WEBSITE COMPANY SECRETARY ADVISERS Nominated Adviser and Broker Legal advisers to the Company AUDITORS REGISTRARS Kildare House 3 Dorset Rise London EC4Y 8EN The Plaza 535 Kings Road London SW20 0SZ Andrew Branchflower Investec Bank plc 2 Gresham Street London EC2V 7QP Osborne Clarke One London Wall London EC2Y 5EB BDO LLP 55 Baker Street London W1U 7EU Capital Registrars Limited The Registry 34 Beckenham Road Beckenham Kent BR3 4TU OTHER INFORMATION

63 Stock code: FEVR 61 FEVERTREE DRINKS PLC NOTICE OF ANNUAL GENERAL MEETING Notice is hereby given that the Annual General Meeting (the AGM ) of Fevertree Drinks plc (the Company ) will be held at the offices of FTI Consulting, 200 Aldersgate, London EC1A 4HD on 7 May 2015 at 5.00 p.m. for the following purposes: ORDINARY BUSINESS To consider and, if thought fit, pass the following resolutions which will be proposed as ordinary resolutions: 1. Report and accounts To receive the audited annual accounts of the Company for the year ended 31 December together with the directors reports and the auditors report on those annual accounts. 2. Declaration of dividend To declare a final dividend of 0.30p per ordinary share for the year ended 31 December payable on 22 May 2015 to shareholders who are on the register of members of the Company on 24 April Re-election of director To re-elect William Ronald as a director, who retires by rotation in accordance with the Company s articles of association. 4. Re-election of director To re-elect Charles Rolls as a director, who retires by rotation in accordance with the Company s articles of association. 5. Re-election of director To re-elect Timothy Warrillow as a director, who retires by rotation in accordance with the Company s articles of association. 6. Re-election of director To re-elect Andrew Branchflower as a director, who retires by rotation in accordance with the Company s articles of association. 7. Re-election of director To re-elect Coline McConville as a director, who retires by rotation in accordance with the Company s articles of association. 8. Re-election of director To re-elect David Adams as a director, who retires by rotation in accordance with the Company s articles of association. 9. Re-appointment of auditors To re-appoint BDO LLP as auditors of the Company to hold office from the conclusion of this Annual General Meeting until the conclusion of the next general meeting at which accounts are laid before the Company. 10. Auditors remuneration To authorise the directors to determine the remuneration of the auditors. SPECIAL BUSINESS To consider and, if thought fit, pass the following resolutions of which 11 will be proposed as an ordinary resolution and 12 and 13 will be proposed as special resolutions. Directors authority to allot shares That, in substitution for any equivalent authorities and powers granted to the directors prior to the passing of this resolution, the directors be and they are generally and unconditionally authorised pursuant to Section 551, Companies Act 2006 (the Act ) to exercise all powers of the Company to allot shares in the Company, and grant rights to subscribe for or to convert any security into shares of the Company (such shares, and rights to subscribe for or to convert any security into shares of the Company being relevant securities ) up to an aggregate nominal amount of 96,000 provided that, unless previously revoked, varied or extended, this authority shall expire on the earlier of the date falling 18 months after the date of the passing of this resolution and the conclusion of the next Annual General Meeting of the Company, except that the Company may at any time before such expiry make an offer or agreement which would or might require relevant securities to be allotted after such expiry and the directors may allot relevant securities in pursuance of such an offer or agreement as if this authority had not expired. 11. Directors power to issue shares for cash That the directors be and they are empowered to allot equity securities (as defined in Section 560 of the Act) of the Company wholly for cash pursuant to the authority of the directors under Section 551 of the Act conferred by resolution 11 above (in accordance with Section 570(1) of the Act) and/or by way of a sale of treasury shares (in accordance with Section 573 of the Act), in each case as if Section 561(1) of the Act did not apply to such allotment provided that:

64 62 FEVERTREE LTD Annual Report and Accounts for the year ended 31 December 12.1 the power conferred by this resolution shall be limited to: (a) the allotment of equity securities in connection with an offer of, or invitation to apply for, equity securities: (i) (ii) in favour of holders of ordinary shares in the capital of the Company, where the equity securities respectively attributable to the interests of all such holders are proportionate (as nearly as practicable) to the respective number of ordinary shares in the capital of the Company held by them; and to holders of any other equity securities as required by the rights of those securities or as the directors otherwise consider necessary, but subject to such exclusions or other arrangements as the directors may deem necessary or expedient to deal with treasury shares, fractional entitlements or legal, regulatory or practical problems arising under the laws or requirements of any overseas territory or by virtue of shares being represented by depository receipts or the requirements of any regulatory body or stock exchange or any other matter whatsoever; and (b) the allotment, otherwise than pursuant to sub-paragraph (a) above, of equity securities up to an aggregate nominal value equal to 14,000; and unless previously revoked, varied or extended, this power shall expire on the earlier of the date falling 18 months after the date of the passing of this resolution and the conclusion of the next Annual General Meeting of the Company except that the Company may before the expiry of this power make an offer or agreement which would or might require equity securities to be allotted after such expiry and the directors may allot equity securities in pursuance of such an offer or agreement as if this power had not expired. 13. Notice period for general meetings That a general meeting other than an annual general meeting may be called on not less than 14 clear days notice. Dated: 30 March 2015 Registered Office: Kildare House 3 Dorset Rise London EC47 8EN By order of the Board ANDREW BRANCHFLOWER Company Secretary OTHER INFORMATION

65 Stock code: FEVR 63 NOTES: 1. Pursuant to Regulation 41 of the Uncertificated Securities Regulations 2001 (as amended), only those members registered in the register of members of the Company at 6 p.m. on 5 May 2015 (or if the AGM is adjourned, 48 hours before the time fixed for the adjourned AGM) shall be entitled to attend and vote at the AGM in respect of the number of shares registered in their name at that time. Any changes to the register of members after such time shall be disregarded in determining the rights of any person to attend or vote at the AGM. 2. If you wish to attend the AGM in person, you should make sure that you arrive at the venue for the AGM in good time before the commencement of the meeting. You may be asked to prove your identity in order to gain admission. 3. In the case of joint holders of shares, the vote of the first named in the register of members who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of other joint holders. 4. A member that is a company or other organisation not having a physical presence cannot attend in person but can appoint someone to represent it. This can be done in one of two ways: Either by the appointment of a proxy (described in Note 6 below) or of a corporate representative. Members considering the appointment of a corporate representative should check their own legal position, the Company s articles of association and the relevant provision of the Companies Act The following documents are available for inspection at the registered office of the Company during the usual business hours on any weekday (Saturday, Sunday or public holidays excluded) from the date of this notice until the conclusion of the AGM and will also be available for inspection at the place of the AGM from 9 a.m. on the day of the AGM until its conclusion: (a) Copies of the executive directors service contracts with the Company and any of its subsidiary undertakings. 6. CREST members who wish to appoint a proxy or proxies through the CREST proxy appointment service may do so for the Meeting (and any adjournment thereof) by following the procedures described in the CREST Manual. CREST personal members or other CREST sponsored members (and those CREST members who have appointed a voting service provider) should refer to their CREST sponsor or voting service provider, who will be able to take the appropriate action on their behalf. In order for a proxy appointment or instruction made by means of CREST to be valid, the appropriate CREST message (a CREST Proxy Instruction ) must be properly authenticated in accordance with Euroclear UK & Ireland Limited s ( Euroclear ) specifications and must contain the information required for such instructions, as described in the CREST Manual. The message (regardless of whether it relates to the appointment of a proxy or to an amendment to the instruction given to a previously appointed proxy) must, in order to be valid, be transmitted so as to be received by Capita Registrars, RA10, by 5.00 p.m. on 5 May For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp applied to the message by the CREST Applications Host) from which Capita Registrars is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. After this time any change of instructions to proxies appointed through CREST should be communicated to the appointee through other means. CREST members (and, where applicable, their CREST sponsors or voting service providers) should note that Euroclear does not make available special procedures in CREST for any particular messages. Normal system timings and limitations will therefore apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or if the CREST member is a CREST personal member or sponsored member or has appointed a voting service provider, to procure that his CREST sponsor or voting service provider takes) such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any particular time. In this connection, CREST members (and, where applicable, their CREST sponsors or voting service providers) are referred, in particular, to those sections of the CREST Manual (available at concerning practical limitations of the CREST system and timings. The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities Regulations 2001 (as amended).

66 64 FEVERTREE LTD Annual Report and Accounts for the year ended 31 December FEVERTREE DRINKS PLC NOTICE OF ANNUAL GENERAL MEETING - EXPLANATORY NOTES Resolution 1 Receiving the account and reports All quoted companies are required by law to lay their annual accounts before a general meeting of the Company, together with the directors reports and auditors report on the accounts. At the AGM, the directors will present these documents to the shareholders for the financial year ended 31 December. Resolution 2 Declaration of dividend This resolution concerns the Company s final dividend payment. The directors are recommending a final dividend of 0.30p per ordinary share in respect of the year ended 31 December which, if approved, will be payable on 22 May 2015 to the shareholders on the register of members on 24 April Resolutions 3 to 8 (inclusive) Re-election of directors These resolutions concern the re-election of William Ronald, Charles Rolls, Timothy Warrillow, Andrew Branchflower, Coline McConville and David Adams who are retiring at the meeting by rotation in accordance with the Company s articles of association. Resolution 9 Re-appointment of auditors This resolution concerns the re-appointment of BDO LLP as auditors until the conclusion of the next general meeting at which accounts are laid, that is, the next Annual General Meeting. Resolution 10 Auditors remuneration This resolution authorises the directors to fix the auditors remuneration. Resolution 11 Directors power to allot shares This resolution grants the directors authority to allot shares in the capital of the Company and other relevant securities up to an aggregate nominal value of 96,000, representing approximately one third of the nominal value of the issued ordinary share capital of the Company as at 27 March 2015, being the latest practicable date before publication of this notice. The directors do not have any present intention of exercising the authorities conferred by this resolution but they consider it desirable that the specified amount of authorised but unissued share capital is available for issue so that they can more readily take advantage of possible opportunities. Unless revoked, varied or extended, this authority will expire at the conclusion of the next AGM of the Company or the date falling 18 months from the passing of the resolution, whichever is the earlier. Resolution 12 Directors power to issue shares for cash This resolution authorises the directors in certain circumstances to allot equity securities for cash other than in accordance with the statutory preemption rights (which require a company to offer all allotments for cash first to existing shareholders in proportion to their holdings). The relevant circumstances are either where the allotment takes place in connection with a rights issue or the allotment is limited to a maximum nominal amount of 14,000, representing approximately 5% of the nominal value of the issued ordinary share capital of the Company as at 27 March 2015 being the latest practicable date before publication of this notice. Unless revoked, varied or extended, this authority will expire at the conclusion of the next AGM of the Company or 18 months after the passing of the resolution, whichever is the earlier. Resolution 13 Notice period for general meetings The Companies (Shareholders Rights) Regulations 2009 require the Company to call general meetings (other than annual general meetings) on at least 21 clear days notice unless shareholders approve a shorter notice period of not less than 14 clear days. This resolution seeks such approval. The directors intention is to only call general meetings on less than 21 days notice where such shorter notice period would be in the interests of shareholders as a whole. OTHER INFORMATION

67 Stock code: FEVR 06 TM * Fever-Tree was recently named tonic of choice by the majority of the world s top bars and restaurants interviewed. Leslie Henry Research June. Fevertree Ltd.

68 F E V E R - T R E E. C O M TM Fevertree Ltd. Fever-Tree is proudly served in 7 of the world s top 10 restaurants. Restaurant Magazine.