The directors present the strategic report for the year ended 30 September 2022.
The group prides itself on its heritage and specialist skills in robe making, bespoke tailoring and as wigmakers. Our business units face pressure from increasing raw material prices and inflationary pressures on costs of all types.
Our Graduation Services business units saw a bounce back from the previous cancelled ceremonies resulting in significantly increased turnover which brought with it challenges of maintaining our service standards for the temporary increased activity levels. The following accounting period is expected to revert back to normalised trading levels.
Competition within the market remains strong as we return to a more normalised market. The business remains focused on providing high service levels to our clients and customers using technology and carefully selected modern practice combined with specialised skills.
The Group disposed of two of its businesses in the Ireland, Lafayette Graduation Services Limited & Lafayette Photography (NI) Ltd details are shown in note 31. The Group acquired a tangential graduation services business, Wm Northam & Co Limited and its results from acquisition are included in the results for the year.
The results of the group for the year ended 30 September 2022 are set out on pages 10 – 15. The impact of the bounce back from the pandemic, most notably in the Graduation Services business units and the impact of acquisition of the business referred to above has resulted in a return to profitability for the year.
The retained net loss of the group of £942,773 (2021: loss £2,918,694) is to be transferred to revenue reserves. At the end of the year, the shareholder funds totalled £25,048,344 (2021: £26,181,031) for the group and £23,554,349 (2021: £23,903,264) for the company. Dividends on the ordinary shares of £3,751,200 (2021: £151,200) were paid by the holding company during the year. The directors do not recommend a payment of a final ordinary dividend.
The directors continually monitor the operating and market risks faced by the group and manage these accordingly. These risks include (i) competitive pressures where lower quality, lower priced alternatives may be available; and (ii) potential shifts in fashion, particularly in relation to specialist products and services provided by the group.
The group's key financial and other performance indicators during the year were as follows:
Since March 2021 the business has seen a recovery from the impact of the Covid-19 pandemic that has significantly impacted trading of the Group and its subsidiaries and with the risks from erratic post pandemic activities with significant peak month activities. Whilst those trading issues have begun to reduce, the current uncertainty about inflationary pressure on all costs within the group mean that there is a continuing risk.
At the date of signing of this report the Directors remain optimistic that trade has returned to a more normalised level after this trading period. We expect the current year will continue to be impacted by inflationary pressures on all parts of the business and will result in higher costs throughout all the Groups operations. These cost pressures will impact adversely on the group results.
The business units have faced and are expected to face competitive tension which will restrict growth and development potential and the ability to pass on cost increases caused by inflation.
The Directors have considered the requirements of S172(1) (a-f) of the Companies Act 2006 and are committed to acting and promoting positively the interests of its Employees and Customers and Suppliers together with considering the impact of our operations on our communities and the environment.
The following summarise how the Directors’ have fulfilled their duties:
Likely consequences of long term decisions
The Board meet regularly and are responsible for the strategy and long-term vision of the group. The Board understand the business and the ever-changing environment in which we operate.
The interest of company employees
The Board recognise that the Group’s employees and workers are fundamental and core to our business and delivery of strategic ambitions.
The Board recognise the importance of good communications and endeavour to keep all employees informed of the activities and progress of the group and its plans for the future through the use of group intranet, staff bulletins and staff briefings.
Business relationships
Delivering our strategy requires strong mutually beneficial relationships with key suppliers and customers. The Board continuously reviews and approves the Group’s approach to these key relationships.
Impact on the community and the environment
The Board are committed to achieving environmental best practice through the business activities of the Group wherever this is practicable.
Reputation for high standards of business conduct
The Group aims to maintain the highest possible standards of business conduct to ensure it can continue to maintain its reputation of delivering high quality garments using the necessary specialist skills in robe making, wig making and bespoke tailoring.
The Board periodically review all areas of how the Group operates to ensure high standards are maintained within the Group and other business relationships.
Acting fairly between members of the company
After weighing up all relevant factors, the Board consider which course of action best enables delivery of our strategy through the long-term, whilst taking into consideration the impact on our stakeholders. In doing so, the Board consider that we act fairly between members of the group, whilst noting that sometimes not all stakeholder interests will be fully aligned.
On behalf of the board
The directors present their annual report and financial statements for the year ended 30 September 2022.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The Group is exposed to the following risks from its use of financial instruments:
- Credit risk
- Liquidity risk
- Interest rate risk
The directors have overall responsibility for the establishment and oversight of the Groups risk management framework.
The group’s principal financial instruments comprise bank balances, bank overdrafts, trade debtors, trade creditors, loans to the group and finance lease agreements. The main purpose of these instruments is to finance the group's operations.
In respect of bank balances, the liquidity risk and interest rate risk is managed by maintaining a balance between the continuity of funding and flexibility through the use of overdrafts at floating and fixed rates of interest. All of the group’s cash balances are held in such a way that achieves a competitive rate of interest. The group makes use of money market facilities where funds are available.
Trade debtors are managed in respect of credit and cash flow risk by policies concerning the credit offered to customers and the regular monitoring of amounts outstanding for both time and credit limits. The amounts presented in the balance sheet are net of specific allowances for doubtful debtors.
Trade creditors' liquidity risk is managed by ensuring sufficient funds are available to meet amounts due. Loans comprise of loans from financial institutions. The interest rate and monthly repayments on the loans from financial institutions are variable. The group manages the liquidity risk by ensuring that there are sufficient funds to meet the payments.
The Companies Act 2006 (Strategic Report and Directors’ Report) regulation 2018 requires the Group to disclose UK energy consumption and Greenhouse Gas (“GHG”) emissions from SECR regulated sources.
Consumption data was determined by using invoices and meter data from suppliers and estimating fuel usage based on expenditure. Emissions were determined by applying the UK government conversion factors to the energy consumption values and aggregating the total.
In 2022, an intensity metric of tCO2e per £m turnover has been applied for the annual total emissions.
The Group's policy is to conduct ourselves within the minimum carbon footprint and aim for a reduction over time.
We have audited the financial statements of Ede & Ravenscroft Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 September 2022 which comprise the group profit and loss account, the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept 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.
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the parent company or to cease operations, or have no realistic alternative but to do so.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.
We are not responsible for preventing irregularities. Our approach to detecting irregularities included, but was not limited to, the following:
obtaining an understanding of the legal and regulatory framework applicable to the entitiy and how the entitiy is complying with that framework;
obtaining an under understanding of the entity's policies and procedures and how the entity has complied with these, through discussions and walkthrough testing;
obtaining an understanding of the entity's risk assessment process, including the risk of fraud;
enquiring of management as to actual and potential fraud, litigation and claims;
designing our audit procedures to respond to our risk assessment;
performing audit testing over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness and evaluating the business rationale of significant transactions outside the normal course of business;
assessing whether judgements and assumptions made in determining the accounting estimates set out in note 2 were indicative of potential bias; and
performing analytical procedures to identify any large, unusual or unexpected relationships.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £3,402,285 (2021 - £2,864,247 loss).
The notes on pages 17 to 46 form part of these financial statements.
Ede & Ravenscroft Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is 93 Chancery Lane, London, WC2A 1DU.
The group consists of Ede & Ravenscroft Limited and all of its subsidiaries.
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
The consolidated group financial statements consist of the financial statements of the parent company Ede & Ravenscroft Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.
All financial statements are made up to 30 September 2022 - with the exception of one subsidiary (Ede and Ravenscroft (Malaysia) Sdn. Bhd). Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
Entities in which the group holds an interest and which are jointly controlled by the group and one or more other venturers under a contractual arrangement are treated as joint ventures. Entities other than subsidiary undertakings or joint ventures, in which the group has a participating interest and over whose operating and financial policies the group exercises a significant influence, are treated as associates.
Investments in joint ventures and associates are carried in the group balance sheet at cost plus post-acquisition changes in the group’s share of the net assets of the entity, less any impairment in value. The carrying values of investments in joint ventures and associates include acquired goodwill.
If the group’s share of losses in a joint venture or associate equals or exceeds its investment in the joint venture or associate, the group does not recognise further losses unless it has incurred obligations to do so or has made payments on behalf of the joint venture or associate.
Unrealised gains arising from transactions with joint ventures and associates are eliminated to the extent of the group’s interest in the entity.
At the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Investments in associates are initially recognised at the transaction price (including transaction costs) and are subsequently adjusted to reflect the group’s share of the profit or loss, other comprehensive income and equity of the associate using the equity method. Any difference between the cost of acquisition and the share of the fair value of the net identifiable assets of the associate on acquisition is recognised as goodwill. Any unamortised balance of goodwill is included in the carrying value of the investment in associates.
Losses in excess of the carrying amount of an investment in an associate are recorded as a provision only when the company has incurred legal or constructive obligations or has made payments on behalf of the associate.
In the parent company financial statements, investments in associates are accounted for at cost less impairment.
Entities in which the group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.
At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is 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.
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
On a periodic basis management makes an estimation of the recoverability of debtors. Management make such estimations taking into account their knowledge of the customers, connected companies and subsidiary companies of the group.
The valuations rely on a number of estimations and assumptions being made in relation to market conditions and developments.
Management calculates impairments by considering the nature and condition of the stocks and applies assumptions around anticipated saleability of finished goods and future usage of raw materials, overheads and labour.
Upon acquisition, management make an estimation as to the useful economic life of each asset and set a depreciation rate accordingly. On a periodic basis, management makes an estimation of the remaining useful economic lives of assets. Management make such estimations taking into account their knowledge of the assets.
During the prior year £172,011 impairment was recognised in respect of the photographic archive, within the machinery, fixtures and fittings category.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
The actual charge/(credit) for the year can be reconciled to the expected charge/(credit) for the year based on the profit or loss and the standard rate of tax as follows:
The carrying value of land and buildings comprises:
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
The fair value of the investment properties were reviewed by the directors at 30 September 2022. The fair values have been determined by carrying out a review of the property market and investment yields in the area. The directors also consider general property valuation changes from the dates of previous external valuations and consult with professional valuers for informal commentary around market prices.
Details of the company's subsidiaries at 30 September 2022 are as follows:
The period end of all subsidiaries' noted above is consistent with the parent entity with the exception of Ede & Ravenscroft (Malaysia) Sdn. Bhd. The period end of this subsidiary is 31 December.
Exemption from audit by parent guarantee
For the year ending 30 September 2022 the following subsidiaries were entitled to exemption from audit under section 479A of the Companies Act 2006 relating to subsidiary companies:
Lafayette Photography Limited - Company number 05699331
Luke Eyres Limited - Company number 02341012
As required Ede & Ravenscroft Limited have issued a guarantee under Section 479c of the Companies Act 2006, which guarantees all outstanding liabilities to which the subsidiary companies listed above are subject at the end of the financial year, until they are satisfied in full and the guarantee is enforceable against Ede & Ravenscroft Limited by any person to whom the subsidiary companies listed above is liable in respect of those liabilities.
Details of joint ventures at 30 September 2022 are as follows:
Group
Impairment of stock
The amount of impairment loss included in profit or loss is £31,330 (2021 - £156,700).
The carrying amount of stocks pledged as security for liabilities amounted to £6,104,556 (2021 - £5,698,225).
Company
Impairment of stock
The amount of impairment loss included in profit or loss is (£85,992) (2021 - £156,700).
The carrying amount of stocks pledged as security for liabilities amounted to £5,624,768 (2021 - £5,537,038).
Group
Bank borrowings
The carrying amount at year end is £3,747,500 (2021 - £5,535,901).
Bank borrowings are denominated in sterling and interest is charged on a fixed interest basis. The interest rate is 3.16% and the final instalment is due in July 2025.
The bank loans are secured by virtue of a legal charge over certain freehold land and building owned by the group.
The bank overdrafts are secured by virtue of legal charges and debentures against all of the current and fixed assets owned by the group.
Other borrowings
Obligations under finance lease and hire purchase contracts have a carrying amount at the year end of £24,948 (2021 - £60,953).
The obligations under finance lease and hire purchase contracts are secured on the related asset.
Company
Bank borrowings
The carrying amount at year end is £3,747,500 (2021 - £ 5,000,000).
Bank borrowings are denominated in sterling and interest is charged on a fixed interest basis. The interest rate is 3.16% and the final instalment is due in July 2025.
The bank loans are secured by virtue of a legal charge over certain freehold land and building owned by the group.
The bank overdrafts are secured by virtue of legal charges and debentures against all of the current and fixed assets owned by the group.
Other borrowings
Obligations under finance lease and hire purchase contracts have a carrying amount at the year end of £23,210 (2021 - £46,998).
The obligations under finance lease and hire purchase contracts are secured on the related asset.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
Group
The amount of the net reversal of deferred tax assets and deferred tax liabilities expected to occur during the year beginning after the reporting period is £(371,305) (2021 - £(621,064)). The reversal of deferred tax calculation assumes carry forward losses will be utilised in the subsequent account period.
Company
The amount of the net reversal of deferred tax assets and deferred tax liabilities expected to occur during the year beginning after the reporting period is £(371,380) (2021 - £(621,592)). The reversal of deferred tax calculation assumes carry forward losses will be utilised in the subsequent account period.
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
Contributions totalling £35,075 (2021 - £17,694) were payable to the scheme at the end of the year and are included in creditors.
Rights, preferences and restrictions
Ordinary shares have the following rights, preferences and restrictions:
Each share has full voting rights in the company with respect to voting, dividends and distributions.
Group
Profit and loss account
The profit and loss account represents cumulative profits and losses net of dividends and other adjustments.
Minority interest
The minority interest reserve represents the element of the above attributable to minority shareholders of subsidiaries within the group.
Fair value reserve
The fair value reserve represents the cumulative gains and impairments in relation to the group's non-current assets which are carried at fair value. The reserve also encompasses any deferred taxation movements on such gains.
Company
Profit and loss account
The profit and loss account represents cumulative profits and losses net of dividends and other adjustments.
Fair value reserve
The fair value reserve represents the cumulative gains and impairments in relation to the company's non-current assets which are carried at fair value. The reserve also encompasses any deferred taxation movements on such gains.
On 30 May 2022 the group acquired 100% percent of the issued capital of Wm. Northam & Co. Limited.
The goodwill arising on the acquisition of the business is attributable to the anticipated profitability of the company in relation to the contracts already held and the expectation of the market share being at least maintained into the future.
On 5 May 2022 the group disposed of its 100% holding in Lafayette Graduation Services Limited. Included in these financial statements are profits of £425,347 arising from the company's interests in Lafayette Graduation Services Limited up to the date of its disposal.
On 5 May 2022 the group disposed of its 100% holding in Lafayette Photography (NI) Limited. Included in these financial statements are losses of £32,791 arising from the company's interests in Lafayette Photography (NI) Limited up to the date of its disposal.
On 5th May 2022 the group completed the sale of the business. The disposal was effected in order to streamline its service offering.
A loss of £805,323 arose on the disposal, being the proceeds of the sale, less the carrying amount of the business assets and attributable goodwill.
On 5th May 2022 the group completed the sale of the business. The disposal was effected in order to streamline its service offering.
A gain of £182,147 arose on the disposal, being the proceeds of the sale, less the carrying amount of the business assets and attributable goodwill.
Group
The group have entered into cross guarantees and debentures to its bankers in respect of the liabilities of other related companies. The contingent liability as at 30 September 2022 is £4,525,364 (2021 - £3,711,306). The future outcome is dependent upon the performance of individual companies concerned. However the directors do not expect any liabilities to crystallise.
Company
The company has entered in cross guarantees and debentures to its bankers in respect of the liabilities of other group and related companies. The contingent liability as at the 30 September 2022 is £527,098 (2021 - £3,571,993). The future outcome is dependent upon the performance of individual companies concerned. However the directors do not expect any liability to crystallise.
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
At the reporting end date the group had contracted with tenants for the following minimum lease payments:
The following amounts were outstanding at the reporting end date:
After the balance sheet date, dividends of £151,200 were voted and paid.
At the balance sheet date, an amount of £359,000 (2021 - £nil) was owed to a director of the company.