Company registration number 05876585 (England and Wales)
RAPPORT HOME FURNISHINGS LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2023
RAPPORT HOME FURNISHINGS LTD
COMPANY INFORMATION
Directors
Mrs S R Virani
S S Virani
R J Virani
P B Virani
S J Crompton
Secretary
R J Virani
Company number
05876585
Registered office
2nd Floor
Regis House
45 King William Street
London
United Kingdom
EC4R 9AN
Auditor
Azets Audit Services
2nd Floor
Regis House
45 King William Street
London
EC4R 9AN
RAPPORT HOME FURNISHINGS LTD
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Independent auditor's report
4 - 6
Statement of comprehensive income
7
Balance sheet
8
Statement of changes in equity
9
Notes to the financial statements
10 - 23
RAPPORT HOME FURNISHINGS LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 30 APRIL 2023
- 1 -
The directors present the strategic report for the year ended 30 April 2023.
Fair review of the business
During the period, turnover reduced it turnover for the 12 month period to £5,226,565 (18 month period to 30 April 2022: £13,313,639), which is still considered to be lower than expected, mainly due to the ongoing changes in customer base and the pressures of the cost of living crisis in the UK. This has resulted in a gross profit of £1,384,457 (18 month period to 30 April 2022: £3,570,813) in the period, as margins on sales has reduced due to its change in customers. The company's administrative expenses have continued to decrease from last year which has resulted in a profit before tax (in relation to turnover) of 1% (18 month period to 30 April 2022: 8.9%).
The company has increased its reserves at the end of the year. The directors were satisfied with the position of the company at the year end.
Principal risks and uncertainties
The main risks and uncertainty perceived by the company are:
Exchange rate risk
A significant number of transactions are in a foreign currency so any movement on the exchange rate can have an effect on the company.
Economic climate
The company is always clearly effected when there is a shift in the economic climate. Turnover fell during the last recession as household textiles are not considered a necessary commodity.
The company's financial instruments at the balance sheet date comprised cash and liquid resources. The main purpose of these financial instruments is to support the company's operations. The company has various other financial instruments such as trade debtors and trade creditors, which arise directly from its operations. It is, and has been throughout the period under review, the company's policy that no trading in financial instruments shall be undertaken.
The main risks arising from the company's financial instruments are interest rate, exchange rate and liquidity risk:
Interest rate risk
The company has a policy to manage any exposure to interest rate fluctuations so as to finance its operations through retained profits.
Exchange rate risk
The company has a policy to manage any exposure to exchange rate fluctuations so as to finance its operations through retained profits.
Liquidity risk
The company has confirmed overdraft facilities which will enable the company to meet its liabilities as they fall due.
The company has no financial assets other than debtors, current asset investments and cash at the bank.
Borrowing facilities
The company has no undrawn committed borrowing facilities.
R J Virani
Director
31 January 2024
RAPPORT HOME FURNISHINGS LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 APRIL 2023
- 2 -
The directors present their annual report and financial statements for the year ended 30 April 2023.
Principal activities
The principal activity of the company in the year under review was that of the importers and distributors of household linen textiles.
Results and dividends
The results for the year are set out on page 7.
The directors opted to not take dividends in the year and for the funds to be used for business growth.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mrs S R Virani
S S Virani
R J Virani
P B Virani
S J Crompton
Statement of directors' responsibilities
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
RAPPORT HOME FURNISHINGS LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023
- 3 -
On behalf of the board
R J Virani
Director
31 January 2024
RAPPORT HOME FURNISHINGS LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF RAPPORT HOME FURNISHINGS LTD
- 4 -
Opinion
We have audited the financial statements of Rapport Home Furnishings Ltd (the 'company') for the year ended 30 April 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 30 April 2023 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
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.
RAPPORT HOME FURNISHINGS LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF RAPPORT HOME FURNISHINGS LTD
- 5 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
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.
RAPPORT HOME FURNISHINGS LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF RAPPORT HOME FURNISHINGS LTD
- 6 -
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the company through enquiry and inspection;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Rebecca Boys (Senior Statutory Auditor)
For and on behalf of Azets Audit Services
12 February 2024
Chartered Accountants
Statutory Auditor
2nd Floor
Regis House
45 King William Street
London
EC4R 9AN
RAPPORT HOME FURNISHINGS LTD
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 APRIL 2023
- 7 -
Year
Period
ended
ended
30 April
30 April
2023
2022
Notes
£
£
Turnover
3
5,226,565
13,313,639
Cost of sales
(3,842,108)
(9,742,826)
Gross profit
1,384,457
3,570,813
Administrative expenses
(1,568,163)
(2,715,479)
Other operating income
219,201
337,465
Operating profit
4
35,495
1,192,799
Interest receivable and similar income
7
11,109
Interest payable and similar expenses
8
(1,010)
(1,825)
Profit before taxation
45,594
1,190,974
Tax on profit
9
6,433
(227,445)
Profit for the financial year
52,027
963,529
Other comprehensive income
Revaluation of tangible fixed assets
1,382,000
Tax relating to other comprehensive income
(335,545)
Total comprehensive income for the year
52,027
2,009,984
The profit and loss account has been prepared on the basis that all operations are continuing operations.
RAPPORT HOME FURNISHINGS LTD
BALANCE SHEET
AS AT 30 APRIL 2023
30 April 2023
- 8 -
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
11
38,181
30,874
Tangible assets
12
3,274,415
3,352,427
3,312,596
3,383,301
Current assets
Stocks
13
1,207,784
2,312,019
Debtors
14
589,007
727,326
Cash at bank and in hand
1,476,773
892,375
3,273,564
3,931,720
Creditors: amounts falling due within one year
15
(2,605,560)
(3,371,435)
Net current assets
668,004
560,285
Total assets less current liabilities
3,980,600
3,943,586
Creditors: amounts falling due after more than one year
16
(6,013)
Provisions for liabilities
Deferred tax liability
18
356,024
365,024
(356,024)
(365,024)
Net assets
3,624,576
3,572,549
Capital and reserves
Called up share capital
20
200
200
Revaluation reserve
1,796,119
1,796,119
Profit and loss reserves
1,828,257
1,776,230
Total equity
3,624,576
3,572,549
The financial statements were approved by the board of directors and authorised for issue on 31 January 2024 and are signed on its behalf by:
S S Virani
P B Virani
Director
Director
Company Registration No. 05876585
RAPPORT HOME FURNISHINGS LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 APRIL 2023
- 9 -
Share capital
Revaluation reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 November 2020
200
749,664
1,812,701
2,562,565
Period ended 30 April 2022:
Profit for the period
-
-
963,529
963,529
Other comprehensive income:
Revaluation of tangible fixed assets
-
1,382,000
-
1,382,000
Tax relating to other comprehensive income
-
(335,545)
(335,545)
Total comprehensive income for the period
1,046,455
963,529
2,009,984
Dividends
10
-
-
(1,000,000)
(1,000,000)
Balance at 30 April 2022
200
1,796,119
1,776,230
3,572,549
Year ended 30 April 2023:
Profit and total comprehensive income for the year
-
-
52,027
52,027
Balance at 30 April 2023
200
1,796,119
1,828,257
3,624,576
RAPPORT HOME FURNISHINGS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2023
- 10 -
1
Accounting policies
Company information
The company is a private company limited by shares and is incorporated in England. The registered office is 2nd Floor, Regis House, 45 King William Street, London, EC4R 9AN and its principal place of business is 23 Cosgrove Way, Luton, Bedfordshire, LU1 1XL.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary 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.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: The disclosure requirements of paragraphs 11.42, 11.44, 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b), 11.48(c), 12.26, 12.27, 12.29(a), 12.29(b), and 12.29A;
Section 26 ‘Share based Payment’: Share based payment arrangements required under FRS 102 paragraphs 26.18(b), 26.19 to 26.21 and 26.23;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Rapport Holdings Limited. These consolidated financial statements are available from its registered office.
1.2
Going concern
The directors have considered trading up to the date of signing these financial statements and to date revenues have proved resilient. true
The directors have also considered the certainty of future cash flows in light of rising inflation for 2023/2024.
At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.
Turnover relates to the sale of home textiles.
RAPPORT HOME FURNISHINGS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023
1
Accounting policies
(Continued)
- 11 -
1.4
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Software
3 years straight line
1.5
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Plant and equipment
25% on reducing balance
Fixtures and fittings
25% on reducing balance
Motor vehicles
20% on cost
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.6
Stocks
Stock are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow arrangements and defined contribution pension plans.
1.7
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.8
Financial instruments
The Company has chosen to adopt Sections 11 and 12 of FRS 102 in respect of financial instruments.
RAPPORT HOME FURNISHINGS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023
1
Accounting policies
(Continued)
- 12 -
Basic financial assets
Basic financial assets, including trade and other receivables, cash and bank balances are initially recognised at transaction price, unless the arrangement constitutes a financial transaction, where the transaction is measured at the present value of the future receipts.
Such assets are subsequently carried at amortised cost using the effective interest method.
At the end of each reporting period, financial assets measured at amortised cost are assessed for objective evidence of impairment. 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 the income statement.
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 the income statement. Financial assets are derecognised when (i) the contractual rights to the cash flows from the asset expire or are settled; or (ii) substantially all the risks and rewards of the ownership of the asset are transferred to another party; or (iii) despite having retained some significant risks and rewards of ownership, control of the asset has been transferred to another party who has the practical ability to unilaterally sell the asset to an unrelated third party without imposing additional restrictions.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies, are initially recognised at transaction price unless the arrangement constitutes a financing transaction. Financial liabilities classified as payable within one year are not amortised.
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.
RAPPORT HOME FURNISHINGS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023
1
Accounting policies
(Continued)
- 13 -
1.9
Taxation
Taxation expense for the period comprises current and deterred tax recognised in the reporting period. Tax is recognised in the income statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, tax is also recognised in other comprehensive income or directly in equity respectively.
Current or deferred taxation assets and liabilities are not discounted.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.10
Employee benefits
The company provides a range of benefits to employees, including annual bonus arrangements, paid holiday arrangements and defined contribution pension plans.
(i) Short term benefits
Short term benefits, including holiday pay and other similar non-monetary benefits, are recognised as an expense in the period in which the service is received
(ii) Annual bonus plan
The company operates an annual bonus plan for employees. An expense is recognised in the profit and loss when the company has a legal or constructive obligation to make payments under the bonus plan as a result of past events and a reliable estimate of the obligation can be made
(iii) Defined contribution pension plans
The company contributes to defined contribution plans for its employees. A defined contribution plan is a pension plan under which the company pays fixed contributions into a separate entity. Once the contributions have been paid, the Company has no further payment obligations. The contributions are recognised as an expense when they are due. Amounts not paid are shown in accruals in the balance sheet. The assets of the plan are held separately from the Company in independently administered funds.
RAPPORT HOME FURNISHINGS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023
1
Accounting policies
(Continued)
- 14 -
1.11
Leases
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.
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
1.12
Government grants
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.
1.13
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
RAPPORT HOME FURNISHINGS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023
- 15 -
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Impairment of Debtors
The company makes an estimate of the recoverable value of its debtors, including inter-company and other debtors. When assessing impairment of debtors, management considers factors including any history of non-payment by the counter-party or any other factors which indicate that they may not be able to settle their obligation to the company in full.
Impairment of Inventories
The company makes an estimate of the stock obsolescence. When assessing the impairment of inventories, management considers factors including future selling price of stock and expected demand and best before dates of goods for resale.
Useful economic lives of inventories
The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful economic lives and residual values of the assets. The useful economic lives and residual values are re-assessed annually. They are amended when necessary to reflect current estimates, based on technological advancement future investments, economic utilisation and the physical condition of the assets.
3
Turnover
The turnover and profit before taxation are attributable to the one principal activity of the company.
2023
2022
£
£
Turnover analysed by geographical market
UK
4,300,831
12,228,943
Europe
925,734
1,084,696
5,226,565
13,313,639
RAPPORT HOME FURNISHINGS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023
- 16 -
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses/(gains)
213,836
(40,492)
Government grants
-
(69,574)
Fees payable to the company's auditor for the audit of the company's financial statements
15,250
15,250
Depreciation of owned tangible fixed assets
54,477
72,583
Depreciation of tangible fixed assets held under finance leases
22,904
43,937
Profit on disposal of tangible fixed assets
(11,883)
(11,260)
Amortisation of intangible assets
9,216
-
The company qualified for the government job retention scheme to furlough a number of employees for the period November 2020 to September 2021.
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Management
6
6
Other
30
31
Total
36
37
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
678,815
1,197,269
Social security costs
70,518
124,784
Pension costs
43,053
109,631
792,386
1,431,684
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
23,000
86,440
Company pension contributions to defined contribution schemes
173
40,346
23,000
126,786
RAPPORT HOME FURNISHINGS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023
6
Directors' remuneration
(Continued)
- 17 -
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2022 - 1).
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
11,109
8
Interest payable and similar expenses
2023
2022
£
£
Interest on finance leases and hire purchase contracts
1,010
1,825
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
17,302
207,201
Adjustments in respect of prior periods
(14,735)
(4,368)
Total current tax
2,567
202,833
Deferred tax
Origination and reversal of timing differences
(9,000)
24,612
Total tax (credit)/charge
(6,433)
227,445
RAPPORT HOME FURNISHINGS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023
9
Taxation
(Continued)
- 18 -
The actual (credit)/charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Profit before taxation
45,594
1,190,974
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2022: 19.00%)
8,663
226,285
Tax effect of expenses that are not deductible in determining taxable profit
2,580
Tax effect of income not taxable in determining taxable profit
(7,458)
Effect of change in corporation tax rate
245
Permanent capital allowances in excess of depreciation
5,814
(11,626)
Under/(over) provided in prior years
(14,735)
(4,368)
Deferred tax adjustments in respect of prior years
(9,000)
24,612
Taxation (credit)/charge for the year
(6,433)
227,445
In addition to the amount (credited)/charged to the profit and loss account, the following amounts relating to tax have been recognised directly in other comprehensive income:
2023
2022
£
£
Deferred tax arising on:
Revaluation of property
-
335,545
10
Dividends
2023
2022
£
£
Interim paid
1,000,000
RAPPORT HOME FURNISHINGS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023
- 19 -
11
Intangible fixed assets
Software
£
Cost
At 1 May 2022
30,874
Additions
16,523
At 30 April 2023
47,397
Amortisation and impairment
At 1 May 2022
Amortisation charged for the year
9,216
At 30 April 2023
9,216
Carrying amount
At 30 April 2023
38,181
At 30 April 2022
30,874
12
Tangible fixed assets
Freehold land and buildings
Plant and equipment
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
£
Cost or valuation
At 1 May 2022
3,132,000
44,855
311,314
371,032
3,859,201
Additions
1,896
1,896
Disposals
(31,936)
(31,936)
At 30 April 2023
3,132,000
44,855
313,210
339,096
3,829,161
Depreciation and impairment
At 1 May 2022
38,823
263,758
204,193
506,774
Depreciation charged in the year
1,508
11,082
64,791
77,381
Eliminated in respect of disposals
(29,409)
(29,409)
At 30 April 2023
40,331
274,840
239,575
554,746
Carrying amount
At 30 April 2023
3,132,000
4,524
38,370
99,521
3,274,415
At 30 April 2022
3,132,000
6,032
47,556
166,839
3,352,427
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2023
2022
£
£
Motor vehicles
25,914
51,346
RAPPORT HOME FURNISHINGS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023
12
Tangible fixed assets
(Continued)
- 20 -
Freehold land and buildings was valued at the fair value by the directors based on third party external valuations and recent market transactions on arm's length terms for similar properties.
Land and buildings are carried at valuation. If land and buildings were measured using the cost model, the carrying amounts would have been approximately £175,000 (2022 - £175,000).
13
Stocks
2023
2022
£
£
Finished goods and goods for resale
1,207,784
2,312,019
An impairment loss of £2,101,307 (2022: £2,503,929) was recognised in cost of sales against stock during the period due to slow-moving and obsolete stock.
14
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
535,148
621,549
Amounts owed by group undertakings
23,250
18,500
Other debtors
30,609
87,277
589,007
727,326
15
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Obligations under finance leases
17
5,404
10,316
Trade creditors
462,924
351,770
Amounts owed to group undertakings
515,000
475,000
Corporation tax
17,302
217,568
Other taxation and social security
95,026
100,802
Other creditors
1,459,904
1,597,404
Accruals and deferred income
50,000
618,575
2,605,560
3,371,435
16
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Obligations under finance leases
17
6,013
RAPPORT HOME FURNISHINGS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023
- 21 -
17
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
8,194
10,925
In two to five years
8,914
8,194
19,839
Less: future finance charges
(2,790)
(3,510)
5,404
16,329
Finance lease payments represent rentals payable by the company or group for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 3 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
18
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
52,000
61,000
Investment property
304,024
304,024
356,024
365,024
2023
Movements in the year:
£
Liability at 1 May 2022
365,024
Credit to profit or loss
(9,000)
Liability at 30 April 2023
356,024
19
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
43,053
109,631
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
RAPPORT HOME FURNISHINGS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023
- 22 -
20
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary of £1 each
100
100
100
100
Ordinary B of £1 each
100
100
100
100
200
200
200
200
The ordinary B shares are non-voting shares.
Both classes of shares are entitled to receive dividends except that the directors may at any time resolve to differentiate between the share classes as to the time, amount or percentage of dividend payable to each class.
21
Financial commitments, guarantees and contingent liabilities
The company has contingent liabilities in respect of a duty deferment guarantee of £50,000 (2022: £50,000) in favour of HM Revenue and Customs.
The company operates under a cross guarantee and debenture dated 22 September 2020 given by Virsons Ltd, Rapport Holdings Limited and Rapport Home Furnishings Limited.
22
Operating lease commitments
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2022
£
£
Within one year
95,708
80,403
Between two and five years
160,767
213,996
256,475
294,399
23
Capital commitments
Amounts contracted for but not provided in the financial statements:
2023
2022
£
£
Acquisition of intangible assets
-
21,885
RAPPORT HOME FURNISHINGS LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2023
- 23 -
24
Related party transactions
Transactions with related parties
During the year the company entered into the following transactions with related parties:
Other information
The company has taken the exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.
25
Directors' transactions
At the balance sheet date, the directors were owed £20,000 (2022: £550,000) from the company.
26
Ultimate controlling party
The ultimate controlling company is Rapport Holdings Limited, a company incorporated in the United Kingdom and its registered office is 2nd Floor, Regis House, 45 King William Street, London, EC4R 9AN. Rapport Holdings Limited prepare consolidated accounts which are available at Companies House.
The ultimate controlling company is under the control of its directors, by virtue of their beneficial interest in the issued share capital of that company.
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