Financial Statements
Portfolio Brands International UK Limited
For the year ended 31 January 2024
Registered number: 11629318
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Portfolio Brands International UK Limited
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Company Information
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Chartered Accountants & Statutory Auditors
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12 - 15 Donegall Square West
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Portfolio Brands International UK Limited
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Contents
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Independent auditor's report
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Consolidated statement of comprehensive income
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Consolidated balance sheet
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Consolidated statement of changes in equity
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Company statement of changes in equity
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Consolidated statement of cash flows
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Consolidated analysis of net debt
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Notes to the financial statements
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Portfolio Brands International UK Limited
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Group strategic report
For the year ended 31 January 2024
The directors present their Strategic report on the Group and the Company for the year ended 31 January 2024.
Business review, key performance indicators and future developments
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Turnover decreased from the previous year by 4.6% to $18.7m, giving operating profit of $15.6m (2023: $15.9m). Net assets increased from the previous year to $68.3m. Our existing licensees continue to perform well and are growing retail brand awareness in their various international markets. We continue to search out new licensees and look forward to increasing our brand presence in new markets.
Ukraine
The directors note the continuing conflict in Ukraine. To date the conflict has had limited impact on the Company. The directors are continuously monitoring the situation.
Middle East conflict
Noting the wide range of possible scenarios and macroeconomic outcomes, and the relative uncertainty of the situation developing and its social and economic consequences will flow, the directors have considered the events and it is not expected to have a material impact on the results of the group or the Company but the directors are continuously monitoring the situation. This is a non-adjusting subsequent event and therefore no adjustments havebeen made to these financial statements.
The directors have considered that current uncertainties would not have a material impact on our ability to continue as a going concern as of the approval date. Therefore, the directors are satisfied that the going concern basis is appropriate in the preparation of these financial statements.
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Page 1
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Portfolio Brands International UK Limited
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Group strategic report (continued)
For the year ended 31 January 2024
Principal risks and uncertainties
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Portfolio Brands International UK Ltd is a wholly owned subsidiary of Portfolio Brands LLC, and has been incorporated to operate as a holding company. As such, the directors believe the key risks and uncertainties for this Company and the Group are in line with those of its trading subsidiary, Perry Ellis International Europe Limited. Those principal risks and uncertainties include:
Commercial risk
The Group's sales are exposed to fluctuations in the global retail market and changes in general economic conditions globally. The Group has considered the risks prevalent and are in a position to change the emphasis of their sales in response to changes in economic conditions. The Group is proactive strategy which seeks to identify profitable branded products for licensing opportunities.
Financial risk management objectives and policies
The Group's objectives when managing its capital structure are to safeguard the Group's ability to continue as a going concern in order to provide returns to shareholders and benefits for other stakeholders, while maintaining a strong balance sheet to support the continued organic and acquisitive growth of its businesses and to maintain investor, creditor and market confidence. Management reviews and agrees policies for the prudent management of these risks as follows:
Currency risk
The Group’s activities globally are conducted in US Dollar; this results in low levels of currency transaction risk, variances affecting operational activities in this regard are reflected in operating costs in the profit and loss account in the years in which they arise. Exposure to currency fluctuations are managed through the group treasury function of Perry Ellis International Inc.
Liquidity and cash flow risk
The Group maintains a strong Balance Sheet with cash balances.
Credit risk
The Group has no significant concentrations of credit risk. Customers that the Group trades with on credit terms are subject to strict verification procedures in advance of contracts being finalised and are continually being monitored. Contracts are only commenced with high credit quality customers. Section 172 (1) statement is not applicable as the company qualifies as a medium-sized group in the financial period under sections 465 and 467 of the Companies Act 2006.
This report was approved by the board on 31 October 2024 and signed on its behalf.
Page 2
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Portfolio Brands International UK Limited
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Directors' report
For the year ended 31 January 2024
The directors present their report and the financial statements for the year ended 31 January 2024.
Directors' responsibilities statement
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The directors are responsible for preparing the Group strategic report, the Directors' report and the consolidated 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and the Group and of the profit or loss of the Group for that period.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Group's financial statements and then apply them consistently;
∙make judgements and accounting estimates that are reasonable and prudent;
∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group 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 the Group and to 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 the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The principal activity of the Company is that of a holding company. The Group owns certain trademarks and generates royalty income from the licensing of these trademarks. The Group has budgetary and financial reporting procedures, supported by appropriate key performance indicators, to manage credit, liquidity and other financial risk.
Key performance indicators used by management include assessment of turnover and profitability from principal activities. Each of these indicators is monitored by local management against targets and against prior periods. The directors are satisfied with the performance of the Company during the year with regard to these indicators.
The profit for the year, after taxation, amounted to $13,168,667 (2023 - $14,139,101).
The directors do not recommend payment of a dividend (2023: £Nil).
Page 3
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Portfolio Brands International UK Limited
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Directors' report (continued)
For the year ended 31 January 2024
The directors who served during the year were:
The Company made no political contributions during the year.
The directors are not aware, at the date of this report, of any likely major changes in the Group's activities in the next financial year.
Matters covered in the Group strategic report
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Under Schedule 7.1A of 'Large and Medium-Sized Companies and Groups (Accounting and Reporting) Regulations 2008', the Company has elected to disclose the following directors' report information in the Strategic Report:
−Business review; and
−Principal risks and uncertainties.
Disclosure of information to auditor
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Each of the persons who are directors at the time when this Directors' report is approved has confirmed that:
∙so far as the director is aware, there is no relevant audit information of which the Company and the Group's auditor is unaware, and
∙the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company and the Group's auditor is aware of that information.
Post balance sheet events
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There have been no significant events affecting the Group since the year end.
The auditor, Grant Thornton (NI) LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board on 31 October 2024 and signed on its behalf.
Page 4
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Independent auditor's report to the members of Portfolio Brands International UK Limited
We have audited the financial statements of Portfolio Brands International UK Limited (the 'parent Company') and its subsidiaries (the 'Group'), which comprise the Consolidated Statement of comprehensive income, the Consolidated and Company Balance sheets, the Consolidated Statement of cash flows, the Consolidated and Company Statement of changes in equity for the financial year ended 31 January 2024, and the related 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 Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
In our opinion, Portfolio Brands International UK Limited's financial statements:
∙give a true and fair view in accordance with United Kingdom Generally Accepted Accounting Practice of the assets, liabilities and financial position of the Group's and the Company as at 31 January 2024 and of the Group financial performance and cash flows for the financial year then ended; 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 'Responsibilities of the auditor for the audit of the financial statements' section of our report. We are independent of the Group and Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, namely the FRC's Ethical Standard and the ethical pronouncements established by Chartered Accountants Ireland, applied as determined to be appropriate in the circumstances of the entity. 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
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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 or the parent Company's ability to continue as a going concern for a period of at least twelve months from the date 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.
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Independent auditor's report to the members of Portfolio Brands International UK Limited (continued)
The year ended 31 January 2024 was the first year that Grant Thornton (NI) LLP were appointed as external auditors. The predecessor auditor, PricewaterhouseCoopers, issued an unqualified audit opinion for Portfolio Brands International UK Limited for the year ended 31 January 2023. The audit report was signed on 9 May 2024.
Other information comprises the information included in the Annual Report, other than the financial statements and our Auditor's report thereon, including the Directors' report and the Strategic Report. The directors are responsible for the other information. Our opinion on the financial statements does not cover the information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies in the financial statements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Directors' report and the Strategic Report for the financial year for which the financial statements are prepared is consistent with the financial statements, and
∙the Directors' report and the Strategic Report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
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In the light of the knowledge and understanding of the company and its environment we have obtained in the course of the audit, we have not identified material misstatements in the Directors' report and the Strategic 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.
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Independent auditor's report to the members of Portfolio Brands International UK Limited (continued)
Responsibilities of management and those charged with governance for the financial statements
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Management is responsible for the preparation of the financial statements which give a true and fair view in accordance with United Kingdom Generally Accepted Accounting Practice, including FRS102 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, management is responsible for assessing the Group and 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 management either intend to liquidate the Group and Company or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Group and Company's financial reporting process.
Responsibilities of the auditor for the audit of the financial statements
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The objectives of an auditor 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 their 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 an auditor's responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Explanation as to what extent 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, to detect material misstatements in respect of irregularities, including fraud. Owing to the inherent limitations of an audit, there is an unavoidable risk that material misstatement in the financial statements may not be detected, even though the audit is properly planned and performed in accordance with ISAs (UK).
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below:
Based on our understanding of the Company and industry, we identified that the principal risks of non-compliance with laws and regulations related to Data Privacy Laws, and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as Companies Act 2006 and applicable tax laws. The Audit engagement partner considered the experience and expertise of the engagement team to ensure that the team had appropriate competence and capabilities to identify or recognise non-compliance with the laws and regulations.
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Independent auditor's report to the members of Portfolio Brands International UK Limited (continued)
We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries to manipulate financial performance and management bias through judgements and assumptions in significant accounting estimates, in particular in relation to significant one-off or unusual transactions. We apply professional scepticism through the audit to consider potential deliberate omission or concealment of significant transactions, or incomplete/inaccurate disclosures in the financial statements.
In response to these principal risks, our audit procedures included but were not limited to:
∙inquiries of management on the policies and procedures in place regarding compliance with laws and regulations, including consideration of known or suspected instances of non-compliance and whether they have knowledge of any actual, suspected or alleged fraud;
∙inspection of the Company’s regulatory and legal correspondence and review of minutes of the board of directors meetings during the year to corroborate inquiries made;
∙gaining an understanding of the internal controls established to mitigate risk related to fraud;
∙discussion amongst the engagement team in relation to the identified laws and regulations and regarding the risk of fraud, and remaining alert to any indications of non-compliance or opportunities for fraudulent manipulation of financial statements throughout the audit;
∙identifying and testing journal entries to address the risk of inappropriate journals and management override of controls;
∙designing audit procedures to incorporate unpredictability around the nature, timing or extent of our testing;
∙challenging assumptions and judgements made by management in their significant accounting estimates, including estimating impairment debtors; and
∙review of the financial statement disclosures to underlying supporting documentation and inquiries of management.
The primary responsibility for the prevention and detection of irregularities including fraud rests with those charged with governance and management. As with any audit, there remains a risk of non-detection or irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations or override of internal controls.
The purpose of our audit work and to whom we owe our responsibilities
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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.
Louise Kelly FCA (Senior statutory auditor)
for and on behalf of
Grant Thornton (NI) LLP
Chartered Accountants
Statutory Auditors
Belfast
Date: 31 October 2024
Page 8
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Portfolio Brands International UK Limited
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Consolidated statement of comprehensive income
For the year ended 31 January 2024
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Interest receivable and similar income
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Profit for the financial year
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Profit for the year attributable to:
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Owners of the parent Company
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Total comprehensive income for the year attributable to:
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Owners of the parent Company
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There was no other comprehensive income for 2024 (2023:$NIL).
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The notes on pages 16 to 32 form part of these financial statements.
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Page 9
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Portfolio Brands International UK Limited
Registered number:11629318
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Consolidated balance sheet
As at 31 January 2024
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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Provisions for liabilities
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Equity attributable to owners of the parent Company
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The financial statements were approved and authorised for issue by the board and were signed on its behalf on 31 October 2024.
The notes on pages 16 to 32 form part of these financial statements.
Page 10
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Portfolio Brands International UK Limited
Registered number:11629318
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Company balance sheet
As at 31 January 2024
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Total assets less current liabilities
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The financial statements were approved and authorised for issue by the board and were signed on its behalf on 31 October 2024.
The notes on pages 16 to 32 form part of these financial statements.
Page 11
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Portfolio Brands International UK Limited
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Consolidated statement of changes in equity
For the year ended 31 January 2024
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Equity attributable to owners of parent Company
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Consolidated statement of changes in equity
For the year ended 31 January 2023
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Equity attributable to owners of parent Company
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Page 12
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Portfolio Brands International UK Limited
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Company statement of changes in equity
For the year ended 31 January 2024
Company statement of changes in equity
For the year ended 31 January 2023
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The notes on pages 16 to 32 form part of these financial statements.
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Page 13
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Portfolio Brands International UK Limited
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Consolidated statement of cash flows
For the year ended 31 January 2024
Cash flows from operating activities
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Profit for the financial year
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Depreciation of tangible assets
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Net cash generated from operating activities
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Cash flows from investing activities
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Purchase of tangible fixed assets
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Net cash from investing activities
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Net increase in cash and cash equivalents
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Cash and cash equivalents at beginning of year
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Cash and cash equivalents at the end of year
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Cash and cash equivalents at the end of year comprise:
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The notes on pages 16 to 32 form part of these financial statements.
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Page 14
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Portfolio Brands International UK Limited
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Consolidated Analysis of Net Debt
For the year ended 31 January 2024
The notes on pages 16 to 32 form part of these financial statements.
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Page 15
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Portfolio Brands International UK Limited
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Notes to the financial statements
For the year ended 31 January 2024
Portfolio Brands International UK Ltd (‘the Company') is a holding company. The Company was incorporated on 18 October 2018 and these financial statements are for the financial year ended 31 January 2024.
The Company is a private company limited by shares and is incorporated in the United Kingdom and registered in England. The address of its registered office is 3 The Matchyns, London Road, Rivenhall End, Witham. Essex, England, CM8 3HA.
2.Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgement in applying the Group's accounting policies (see note 3).
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of comprehensive income in these financial statements.
The following principal accounting policies have been applied:
The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated statement of comprehensive income from the date on which control is obtained. They are deconsolidated from the date control ceases.
Page 16
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Portfolio Brands International UK Limited
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Notes to the financial statements
For the year ended 31 January 2024
2.Accounting policies (continued)
At 31 January 2024, the Group had cash and cash equivalents of $6.2m and no external borrowings and is in a net current asset position of $69.8m. The Group continues to meet its day to day working capital requirements through its bank facilities. The Company has net assets of $55.0m and no external liabilities at year end.
After making enquiries, the directors have a reasonable expectation that the Company and Group has adequate resources to continue in operational existence for the foreseeable future, being a period of at least twelve months from the date of approval of these financial statements. The directors have considered that current uncertainties would not have a material impact on the Company and Group's ability to continue as a going concern as of the approval date. Therefore, the directors are satisfied that the going concern basis is appropriate in the preparation of these individual and consolidated financial statements.
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Exemptions for qualifying entities under FRS 102
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As Portfolio Brands International UK Ltd is part of this consolidation, the Company is a qualifying entity and has taken advantage of the below available disclosure exemptions for qualifying entities:
−Exemption under paragraph 1.12(b) of FRS 102 not to present the company statement of cash flows on the basis that it is a qualifying entity and the consolidated statement of cash flows, included in these financial statements, includes the Company's cash flows;
−Exemption from the financial instrument disclosure requirements of Section 11 paragraphs 11.39 to 11.48A and Section 12 paragraphs 12.26 to 12.29A of FRS 102 providing the equivalent disclosures are included in the consolidated financial statements of the Group in which the entity is consolidated.
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Portfolio Brands International UK Limited
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Notes to the financial statements
For the year ended 31 January 2024
2.Accounting policies (continued)
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Foreign currency translation
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Functional and presentation currency
The Company's functional and presentational currency is USD.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.
Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Consolidated statement of comprehensive income within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.
The Group earns royalties from retailers under licenses and intellectual property held by the subsidiary
company, Perry Ellis International Europe Limited. Royalty income is recognised on an accruals basis in accordance with the substance of the relevant agreement.
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Operating leases: the Group as lessee
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Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.
Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.
Interest income is recognised in profit or loss using the effective interest method.
Page 18
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Portfolio Brands International UK Limited
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Notes to the financial statements
For the year ended 31 January 2024
2.Accounting policies (continued)
Defined contribution pension plan
The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations.
The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance sheet. The assets of the plan are held separately from the Group in independently administered funds.
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Current and deferred taxation
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The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company and the Group operate and generate income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits;
∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met; and
∙Where they relate to timing differences in respect of interests in subsidiaries, associates, branches and joint ventures and the Group can control the reversal of the timing differences and such reversal is not considered probable in the foreseeable future.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
Page 19
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Portfolio Brands International UK Limited
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Notes to the financial statements
For the year ended 31 January 2024
2.Accounting policies (continued)
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Investments in subsidiaries are measured at cost less accumulated impairment.
Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
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Cash and cash equivalents
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Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
In the Consolidated statement of cash flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Group's cash management.
Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
Page 20
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Portfolio Brands International UK Limited
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Notes to the financial statements
For the year ended 31 January 2024
2.Accounting policies (continued)
The Group has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.
The Group has elected to apply the recognition and measurement provisions of IFRS 9 Financial Instruments (as adopted by the UK Endorsement Board) with the disclosure requirements of Sections 11 and 12 and the other presentation requirements of FRS 102.
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, with 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
Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, 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.
Discounting is omitted where the effect of discounting is immaterial. The Group's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.
Other financial assets
Other financial assets, which includes investments in equity instruments which are not classified as subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the recognised transaction price. Such assets are subsequently measured at fair value with the changes in fair value being recognised in the profit or loss. Where other financial assets are not publicly traded, hence their fair value cannot be measured reliably, they are measured at cost less impairment.
Impairment of financial assets
Financial assets are assessed for indicators of impairment at each reporting date.
Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.
If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.
Financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual
Page 21
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Portfolio Brands International UK Limited
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Notes to the financial statements
For the year ended 31 January 2024
2.Accounting policies (continued)
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Financial instruments (continued)
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arrangements entered into. An equity instruments any contract that evidences a residual interest in the assets of the Group after the deduction of all its liabilities.
Basic financial liabilities, which include trade and other payables, bank loans, other loans and loans due to fellow group companies are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.
Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.
Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.
Other financial instruments
Derivatives, including forward exchange contracts, futures contracts and interest rate swaps, are not classified as basic financial instruments. These are initially recognised at fair value on the date the derivative contract is entered into, with costs being charged to the profit or loss. They are subsequently measured at fair value with changes in the profit or loss.
Debt instruments that do not meet the conditions as set out in FRS 102 paragraph 11.9 are subsequently measured at fair value through the profit or loss. This recognition and measurement would also apply to financial instruments where the performance is evaluated on a fair value basis as with a documented risk management or investment strategy.
Derecognition of financial instruments
Derecognition of financial assets
Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Group transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Group will continue to recognise the value of the portion of the risks and rewards retained.
Derecognition of financial liabilities
Financial liabilities are derecognised when the Group's contractual obligations expire or are discharged or cancelled.
Page 22
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Portfolio Brands International UK Limited
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Notes to the financial statements
For the year ended 31 January 2024
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Judgements in applying accounting policies and key sources of estimation uncertainty
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Estimates and judgements made in the process of preparing the entity financial statements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
Critical judgement in applying the entity's accounting policies
There were no critical judgements made by the directors that had a significant effect on the amounts recognised in the financial statements.
Critical accounting estimates and assumptions
The directors make estimates and assumptions concerning the future in the process of preparing the entity financial statements. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below:
Investments in subsidiaries
The carrying value of investments in subsidiary companies is stated at cost less impairment. The initial cost was set through a contribution agreement with the ultimate parent company, Perry Ellis International Inc. On an annual basis the directors consider whether any impairment indicators exist that would require an impairment review be performed. No such impairment indicators arose.
Impairment of debtors
The directors make an assessment at the end of each financial year of whether there is objective evidence that a trade or other debtor is impaired. When assessing impairment of trade and other debtors, the directors consider factors including the current credit rating of the debtor, the age profile of outstanding invoices, recent correspondence and trading activity, and historical experience of cash collections from the debtor.
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An analysis of turnover by class of business is as follows:
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In the opinion of the directors, an analysis of turnover by geographic market would be seriously prejudicial to the interests of the Group, and therefore has not been made as permitted under SI 2008/410 1 Sch 68 paragraph 5.
The Company had no turnover in the year (2023: £Nil).
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Page 23
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Portfolio Brands International UK Limited
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Notes to the financial statements
For the year ended 31 January 2024
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The operating profit is stated after charging:
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Depreciation of tangible assets
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Defined contribution pension cost
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The Company had no operating profit in the year ended 31 January 2024.
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During the year, the Group obtained the following services from the Company's auditor:
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Fees payable to the Company's auditor for the audit of the consolidated and parent Company's financial statements (borne by the subsidiary companies)
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Fees payable to the Company’s auditor for other services:
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Audit of the Company’s subsidiaries
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Page 24
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Portfolio Brands International UK Limited
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Notes to the financial statements
For the year ended 31 January 2024
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The average monthly number of employees, including the directors, during the year was as follows:
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Average number of employees
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The Company has no employees other than the directors, who did not receive any remuneration (2023: $Nil).
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Staff costs, including directors' remuneration, were as follows:
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Cost of defined contribution scheme
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The directors did not receive any remuneration from the Company or its subsidiaries during the year in respect of management services or in their capacity as director.
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Other interest receivable
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Page 25
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Portfolio Brands International UK Limited
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Notes to the financial statements
For the year ended 31 January 2024
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Current tax on profits for the year
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Foreign tax on income for the year
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Factors affecting tax charge for the year
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The principal trading activity of the Group is taxed in the Republic of Ireland. The tax assessed for the year is higher than (2023 - lower than) the standard rate of corporation tax in Ireland of 12.5% (2023 - 12.5%). The differences are explained below:
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Profit on ordinary activities before tax
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Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 12.5% (2023 - 12.5%)
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Expenses not deductible for tax purposes
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Capital allowances for year in excess of depreciation
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Other permanent timing differences
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Foreign withholding tax deducted
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Income taxed at a higher rate
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Total tax charge for the year
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Page 26
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Portfolio Brands International UK Limited
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Notes to the financial statements
For the year ended 31 January 2024
11.Taxation (continued)
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Factors that may affect future tax charges
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There were no factors that may affect future tax charges.
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Parent company profit for the year
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The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of comprehensive income in these financial statements. The profit after tax of the parent Company for the year was $NIL (2023 - $NIL).
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Charge for the year on owned assets
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Page 27
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Portfolio Brands International UK Limited
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Notes to the financial statements
For the year ended 31 January 2024
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Investments in subsidiary companies
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The following were subsidiary undertakings of the Company:
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Perry Ellis International Group Holdings Limited
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Olympic House, Pleasants Street, Dublin 8, Ireland
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Perry Ellis International Europe Limited (directly owned by Perry Ellis International Group Holdings Limited)
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Olympic House, Pleasants Street, Dublin 8, Ireland
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Page 28
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Portfolio Brands International UK Limited
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Notes to the financial statements
For the year ended 31 January 2024
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Due after more than one year
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Amounts owed by group undertakings
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Trade debtors are after provision for impairment of $Nil (2023: $Nil).
Amounts due by group undertakings are unsecured, interest free, have no fixed date of repayment and are repayable on demand.
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Cash and cash equivalents
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Creditors: Amounts falling due within one year
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Amounts owed to group undertakings
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Accruals and deferred income
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Page 29
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Portfolio Brands International UK Limited
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Notes to the financial statements
For the year ended 31 January 2024
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Creditors: Amounts falling due after more than one year
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Accruals and deferred income
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The Company had no creditors falling due after more than one year (2023: $Nil).
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Financial assets measured at fair value through profit or loss
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Financial assets that are debt instruments measured at amortised cost
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Financial liabilities measured at amortised cost
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Charged to profit or loss
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Change in provision balance
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Page 30
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Portfolio Brands International UK Limited
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Notes to the financial statements
For the year ended 31 January 2024
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Allotted, called up and fully paid
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1,100 (2023 - 1,100) Ordinary shares shares of $1.00 each
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On 18 October 2018, 1,000 ordinary shares were issued for $1,000. On 22 October 2018, 100 ordinary shares were issued for $55,000,000, including share premium of $54,999,900. Expenses on the issues of shares were borne by the ultimate subsidiary company, Perry Ellis international Europe Limited.
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Share premium account
Includes any premium received on issue of share capital. Any transactions costs associated with the issuing of shares are deducted from share premium.
Merger reserve
The merger reserve represents the difference between the carrying value of the assets and liabilities acquired and the cost of investment in respect of the acquisition by the Company of Perry Ellis International Group Holdings Limited. The contribution agreement dated 22 October 2018, constituted a merger, in accordance with the Companies Act 2006, and a merger reserve of $ 54,999,976 was created on the issue of 100 ordinary shares.
Profit and loss account
This includes all current and prior period retained profits and losses.
The Group operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Group in an independently administered fund. The pension cost charge represents contributions payable by the Group to the fund and amounted to $11,513 (2023: $8,811). Contributions totalling £Nil (2023: $Nil) were payable to the fund at the balance sheet date and are included in creditors.
Page 31
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Portfolio Brands International UK Limited
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Notes to the financial statements
For the year ended 31 January 2024
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Commitments under operating leases
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At 31 January 2024 the Group and the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
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Later than 1 year and not later than 5 years
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The Company had no off-balance sheet arrangements.
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Related party transactions
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The Company is exempt from disclosing other related party transactions as they are with other companies that are wholly owned within the Group.
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Post balance sheet events
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There have been no significant events affecting the Group since the year end.
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Ultimate parent undertaking and controlling party
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The immediate parent undertaking is Portfolio Brands LLC, a company incorporated in the United States of America. Portfolio Brands International UK Ltd is the smallest and largest company to consolidate financial statements. Copies of the Portfolio Brands International UK Ltd consolidated financial statements can be obtained from the Companies House website.
The ultimate controlling party is Feldenkreis Holdings LLC, a company incorporated in the United States of America.
The Company's subsidiaries act as a guarantor for group debt facilities held by Sound Point Agency LLC under a mortgage debenture dated 20 December 2021. Under the terms of the debentures, the Company has charges and assignments over all of its present and future real property, plant, licences, intellectual property, agreements, insurances, life policies, bank accounts, certain book debts, securities, and uncalled capital and goodwill.
The Company acts as a guarantor for group debt facilities held by Sound Point Agency LLC under a mortgage debenture dated 20 December 2021. Under the terms of the debentures, the Company has charges and assignments over all of its present and future real property, plant, licences, intellectual property, agreements, insurances, life policies, bank accounts, certain book debts, securities, and uncalled capital and goodwill.
Page 32
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