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Registration number: 04467117

The Empire Holding Company Limited

Annual Report and Consolidated Financial Statements

for the Year Ended 31 December 2023

Brebners
Chartered Accountants & Statutory Auditor
130 Shaftesbury Avenue
London
W1D 5AR

 

The Empire Holding Company Limited

Contents

Company Information

1

Strategic Report

2 to 3

Director's Report

4

Statement of Director's Responsibilities

5

Independent Auditor's Report

6 to 9

Consolidated Income Statement

10

Consolidated Statement of Comprehensive Income

11

Consolidated Statement of Financial Position

12

Statement of Financial Position

13

Consolidated Statement of Changes in Equity

14

Statement of Changes in Equity

15

Consolidated Statement of Cash Flows

16

Notes to the Financial Statements

17 to 39

 

The Empire Holding Company Limited

Company Information

Director

S C Burdge

Registered office

130 Shaftesbury Avenue
2nd Floor
London
W1D 5EU

Auditor

Brebners
Chartered Accountants & Statutory Auditor
130 Shaftesbury Avenue
London
W1D 5AR

 

The Empire Holding Company Limited

Strategic Report for the Year Ended 31 December 2023

The director presents his strategic report for the year ended 31 December 2023.

Principal activity

The principal activity of the company was that of a property investment company whilst its subsidiaries are principally engaged as creative film design agencies.

The Empire Group of companies are known for the production of high quality promotional material design and trailers creation and this has resulted in their becoming a market leader for this work in the UK and Europe. The group also contains a subsidiary company in New York, USA, to which the same production values attach.

Fair review of the business

The year ended 31 December 2023 was a difficult one for the film industry because of actors' and writers' strikes. Despite this, the group maintained a positive EBITDA although did not make an operating profit. The Empire Group continues to produce the high quality product that it is known for.

At 31 December 2023 the net assets of the group were £5,453,609.

The company continues to occupy a key place within the market and has a respected name within the industry.

Financial KPIs

The company's key financial performance indicators during the year were as follows:

 

Unit

2023

2022

Turnover

£

5,186,405

6,091,493

Gross profit

£

4,952,509

5,612,023

Staff / subcontractor costs as a percentage of turnover

%

68

61

EBITDA

£

13,226

960,329

(Loss) / Profit before tax

£

(525,264)

857,501

The director is of the opinion that the benchmarks above are at an acceptable level and expects continued positive EBITDA in the forthcoming year.

Future developments

As with many businesses the group has been impacted by the COVID-19 pandemic. Turnover has decreased since 31 December 2022, but is showing signs of improvement during 2024, and with the industry slowly recovering the director is hopeful that the business will recover strongly. The group intends to continue to service customers in both the film market and direct streaming market, which is an area that continues to grow.

The group consolidated all of its operations into one location in March 2024, with a view to reduce its overheads and increase its operating efficiencies.

 

The Empire Holding Company Limited

Strategic Report for the Year Ended 31 December 2023

Principal risks and uncertainties

The director considers the main business risks to be reduced demand for film and subsequently reduced demand for film promotion activities, together with increased competition within the industry in the UK, Europe and the USA. The company and group continue to place great emphasis on the quality of design work and it is this which the director believes helps to retain the group's status within the industry. It also strives to ensure that the highest quality staff are engaged, and retained, to support the output of the group, and consequently the loss of staff to competitors is considered an operating risk to the group. The director also considers the general economic outlook to be a risk to the business, although with recent global box office successes such as Barbie, Oppenheimer and Wonka, there is clearly still a strong appetite from customers for cinema exhibition.

RISK MANAGEMENT
The director is responsible for determining the level of risk acceptable to the company. This is subject to regular review. The company seeks to mitigate its risks through the application of strict limits and controls and a monitoring process at operational level. Where it is appropriate and cost effective risks are passed to insurers.

- Strategic risk
Strategic risk is the risk that results directly from operating in a specific industry at a specific time. The company mitigates this risk by maintaining good working relationships with its customers and by ensuring that the high quality design values are maintained.

- Compliance risk
Compliance risk is the risk that results from rules and regulations affecting the group. The group mitigates this risk by ensuring it continues to uphold all regulatory standards and by ensuring that it maintains the strictest control over data protection.

- Financial risk
Financial risk is any risk relating to financing. There are regular reviews of debtors to ensure they remain at a reasonable level. The group ensures that liquidity is maintained by monitoring cash balances regularly to ensure it retains flexibility in the management of cash flows and arranging additional finance facilities where necessary. Cash is held in GBP and US Dollar currencies, which mitigates exchange rate risks.

- Operational risk
Operational risk is caused by failures in business processes or the systems or physical infrastructure that support them that have the potential to result in financial loss or reputation damage. This includes errors, omissions, systems failure, lack of resources or physical assets and deliberate acts such as fraud. The group has sufficient staff to deliver design to the clients on a timely basis, as well as constant and regular investment in its own equipment and facilities to deliver quality work. Furthermore, the group seeks to continually improve its operating efficiencies and standards.

- Reputational risk
Reputational risk is the risk that the group's reputation may be damaged from negative publicity. The group enjoys a good reputation for high quality design, and aims to uphold this reputation at all times.

Approved by the director on 29 January 2025 and signed on its behalf by:

.........................................
S C Burdge
Director

 

The Empire Holding Company Limited

Director's Report for the Year Ended 31 December 2023

The director presents his report and the for the year ended 31 December 2023.

Director of the group

The director who held office during the year was as follows:

S C Burdge

Disclosure of information in the strategic report

The company has chosen in accordance with s.414C(11) Companies Act 2006 to set out in the company's strategic report information required by Schedule 7 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 to be contained in the directors' report. It has done so in respect of future developments and financial risk management and exposure.

Disclosure of information to the auditor

The director has taken steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditor is aware of that information. The director confirms that there is no relevant information that he knows of and of which he knows the auditor is unaware.

Approved by the director on 29 January 2025 and signed on its behalf by:

.........................................
S C Burdge
Director

 

The Empire Holding Company Limited

Statement of Director's Responsibilities

The director acknowledges his responsibilities for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the group and the company and of the profit or loss of the group for that period. In preparing these financial statements, the director is required to:

select suitable accounting policies and 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; and

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The director is 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 him to ensure that the financial statements comply with the Companies Act 2006 and in accordance with FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. He is 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.

 

The Empire Holding Company Limited

Independent Auditor's Report to the Members of
The Empire Holding Company Limited

Adverse opinion

We have audited the financial statements of The Empire Holding Company Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2023, which comprise the Consolidated Income Statement, Consolidated Statement of Comprehensive Income, Consolidated Statement of Financial Position, Statement of Financial Position, Consolidated Statement of Changes in Equity, Statement of Changes in Equity, Consolidated Statement of Cash Flows, 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 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, because of the significance of the matters described in the basis for adverse opinion section of our report, the group financial statements:

do not give a true and fair view of the state of the group's and the company's affairs as at 31 December 2023 and of the group's loss for the year then ended;

have not been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

have not been prepared in accordance with the requirements of the Companies Act 2006.

In our opinion, except for the effects of the matters described in the basis for adverse opinion section of our report, the financial statements:

give a true and fair view of the state of the group's and the company's affairs as at 31 December 2023 and of the group's loss 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.


Basis for adverse opinion

Included within the group’s other debtors are unsecured interest-free amounts due from entities under common control totalling £6,805,165 (2022: £6,737,248) which, based on conditions at the year end and prior year end respectively, are considered to be impaired.

We draw attention to note 2 in the financial statements, which refers to “Key sources of estimation uncertainty” in connection with this potential impairment which is considered likely to represent a substantial proportion of the net assets of the group. Corresponding adjustments would also be required in the elements making up the consolidated income statement, consolidated statement of changes in equity and the consolidated cash flow statement. In addition, the strategic report does not consider the effects of this impairment.

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 responsibilities for the audit of the financial statements section of our report. We are independent of the group 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 adverse opinion on the group financial statements.

 

The Empire Holding Company Limited

Independent Auditor's Report to the Members of
The Empire Holding Company Limited

Material uncertainty related to going concern

We draw attention to note 2 in the financial statements, which refers to the uncertainty regarding the group’s ability to meet its liabilities as they fall due. As stated in note 2 this indicates that a material uncertainty exists that may cast significant doubt on the group’s ability to continue as a going concern. The financial statements do not include the adjustments that would result if the group was unable to continue as a going concern. Our opinion is not modified in respect of this matter.

In auditing the financial statements, we have concluded that the director’s use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our responsibilities and the responsibilities of the director with respect to going concern are described in the relevant sections of this report.

Other information

The director is responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. 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.

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 or apparent material misstatements, 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.

As described in the basis for adverse opinion section of our report, the group financial statements do not include a diminution in value of the recoverable amount of a balance within the group’s other debtors. We have concluded that the other information is materially misstated for the same reason with respect to the amounts or other items in the annual report affected by the failure to provide for this diminution in value.

Opinion on other matters prescribed by the Companies Act 2006

Because of the significance of the matters described in the basis for adverse opinion section of our report, in our opinion, based on the work undertaken in the course of the audit:

the Strategic Report has not been prepared in accordance with applicable legal requirements.

In our opinion, based on the work undertaken in the course of the audit:

the information given in the Director's Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

the Director's Report has been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

As a result of the matter described in the basis for adverse opinion section of our report, in the light of our knowledge and understanding of the company and its environment obtained in the course of the audit, we have identified material misstatements in the Strategic Report but not in the Director's Report.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

 

The Empire Holding Company Limited

Independent Auditor's Report to the Members of
The Empire Holding Company Limited

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 director's remuneration specified by law are not made; or

we have not received all the information and explanations we require for our audit.

Responsibilities of the director

As explained more fully in the Statement of Director's Responsibilities [set out on page 5], the director is 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 director determines 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 director is 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 director either intends to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor 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.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Based on our understanding of the Group and the industry in which it operates, we determined that the principal risks of non-compliance with laws and regulations related to the reporting framework (FRS 102 and the Companies Act 2006) and UK corporate taxation laws, health and safety legislation, and data protection legislation. These risks were communicated to our audit team and we remained alert to any indications of non-compliance throughout our audit.

We understood how the Group is complying with relevant legislation by making enquiries of management. We also considered the results of our audit procedures and to what extent these corroborate this understanding and assessed the susceptibility of the company’s financial statements to material misstatement. This included consideration of how fraud might occur and evaluation of management’s incentives and opportunities for fraudulent manipulation of the financial statements.

We designed our audit procedures to identify any non-compliance with laws and regulations. Such procedures included, but were not limited to, inspection and understanding of legal costs; challenging assumptions and judgements made by management; identifying and testing journal entries with a focus on large or unusual transactions as determined based on our understanding of the business; and identifying and assessing the effectiveness of controls in place to prevent and detect fraud.

Owing to the inherent limitations of an audit, there remains a risk that a material misstatement may not have been detected, even though we have properly planned and performed our audit in accordance with auditing standards. We are not responsible for preventing non-compliance with laws and regulations and cannot be expected to detect all instances of non-compliance.

 

The Empire Holding Company Limited

Independent Auditor's Report to the Members of
The Empire Holding Company Limited

The primary responsibility for the detection and prevention of fraud rests with those responsible for governance and management. The further removed non-compliance with laws and regulations is from the events reflected in the financial statements, the less likely the auditor will become aware of it.

The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment, collusion, omission, misrepresentation or forgery.

A further description of our 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.

Use of our report

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

......................................
John Chamberlain (Senior Statutory Auditor)
For and on behalf of

Brebners, Statutory Auditor
130 Shaftesbury Avenue
London
W1D 5AR

30 January 2025

 

The Empire Holding Company Limited

Consolidated Income Statement for the Year Ended 31 December 2023

Note

2023
£

2022
£

Turnover

3

5,186,405

6,091,493

Cost of sales

 

(233,896)

(479,470)

Gross profit

 

4,952,509

5,612,023

Administrative expenses

 

(5,300,037)

(5,055,618)

Fair value movements

 

-

287,201

Other operating income

4

201,750

202,500

Operating (loss)/profit

5

(145,778)

1,046,106

Other interest receivable and similar income

6

16,603

12,396

Interest payable and similar charges

7

(396,089)

(201,001)

 

(379,486)

(188,605)

(Loss)/profit before tax

 

(525,264)

857,501

Taxation

11

50,040

(93,568)

(Loss)/profit for the financial year

 

(475,224)

763,933

Dividends paid

 

-

(211,000)

 

The Empire Holding Company Limited

Consolidated Statement of Comprehensive Income for the Year Ended 31 December 2023

2023
£

2022
£

(Loss)/profit for the year

(475,224)

763,933

Foreign currency translation gains/(losses)

62,694

(109,828)

Total comprehensive income for the year

(412,530)

654,105

Total comprehensive income attributable to:

Owners of the company

(417,890)

645,014

Minority interests

5,360

9,091

(412,530)

654,105

 

The Empire Holding Company Limited

Consolidated Statement of Financial Position as at 31 December 2023

Note

2023
£

2022
£

Fixed assets

 

Tangible assets

13

5,798,304

5,901,303

Investments

14

14,282

14,282

 

5,812,586

5,915,585

Current assets

 

Debtors

15

9,891,010

9,914,725

Cash at bank and in hand

16

40,431

194,558

 

9,931,441

10,109,283

Creditors: Amounts falling due within one year

17

(9,918,114)

(9,437,933)

Net current assets

 

13,327

671,350

Total assets less current liabilities

 

5,825,913

6,586,935

Creditors: Amounts falling due after more than one year

17

(30,760)

(43,732)

Provisions for liabilities

18

(341,544)

(465,584)

Net assets

 

5,453,609

6,077,619

Capital and reserves

 

Called up share capital

20

25,682

25,682

Profit and loss account

21

5,320,848

5,945,990

Equity attributable to owners of the company

 

5,346,530

5,971,672

Minority interests

 

107,079

105,947

Total equity

 

5,453,609

6,077,619

Approved and authorised by the director on 29 January 2025
 

.........................................

S C Burdge
Director

Company registration number: 04467117

 

The Empire Holding Company Limited

Statement of Financial Position as at 31 December 2023

Note

2023
£

2022
£

Fixed assets

 

Tangible assets

13

6,514,800

6,515,196

Investments

14

49,120

49,230

 

6,563,920

6,564,426

Current assets

 

Debtors

15

8,113,569

8,149,811

Cash at bank and in hand

 

-

972

 

8,113,569

8,150,783

Creditors: Amounts falling due within one year

17

(13,467,467)

(12,793,211)

Net current liabilities

 

(5,353,898)

(4,642,428)

Total assets less current liabilities

 

1,210,022

1,921,998

Provisions for liabilities

18

(488,584)

(487,133)

Net assets

 

721,438

1,434,865

Capital and reserves

 

Called up share capital

20

25,682

25,682

Retained earnings

695,756

1,409,183

Shareholders' funds

 

721,438

1,434,865

The company made a loss after tax for the financial year of £713,427 (2022 - loss of £751,337).

Approved and authorised by the director on 29 January 2025
 

.........................................
S C Burdge
Director

Company registration number: 04467117

 

The Empire Holding Company Limited

Consolidated Statement of Changes in Equity for the Year Ended 31 December 2023
Equity attributable to the parent company

Share capital
£

Profit and loss account
£

Total
£

Non- controlling interests
£

Total equity
£

At 1 January 2023

25,682

5,945,990

5,971,672

105,947

6,077,619

(Loss)/profit for the year

-

(480,584)

(480,584)

5,360

(475,224)

Other comprehensive income

-

62,694

62,694

-

62,694

Total comprehensive income

-

(417,890)

(417,890)

5,360

(412,530)

Payments to non-controlling interests

-

-

-

(211,480)

(211,480)

Transfers

-

(207,252)

(207,252)

207,252

-

At 31 December 2023

25,682

5,320,848

5,346,530

107,079

5,453,609

Share capital
£

Profit and loss account
£

Total
£

Non- controlling interests
£

Total equity
£

At 1 January 2022

25,682

5,729,239

5,754,921

105,593

5,860,514

Profit for the year

-

754,842

754,842

9,091

763,933

Other comprehensive income

-

(109,828)

(109,828)

-

(109,828)

Total comprehensive income

-

645,014

645,014

9,091

654,105

Dividends

-

(211,000)

(211,000)

-

(211,000)

Payments to non-controlling interests

-

-

-

(226,000)

(226,000)

Transfers

-

(217,263)

(217,263)

217,263

-

At 31 December 2022

25,682

5,945,990

5,971,672

105,947

6,077,619

 

The Empire Holding Company Limited

Statement of Changes in Equity for the Year Ended 31 December 2023

Share capital
£

Retained earnings
£

Total
£

At 1 January 2023

25,682

1,409,183

1,434,865

Loss for the year

-

(713,427)

(713,427)

At 31 December 2023

25,682

695,756

721,438

Share capital
£

Retained earnings
£

Total
£

At 1 January 2022

25,682

2,371,520

2,397,202

Loss for the year

-

(751,337)

(751,337)

Dividends

-

(211,000)

(211,000)

At 31 December 2022

25,682

1,409,183

1,434,865

 

The Empire Holding Company Limited

Consolidated Statement of Cash Flows for the Year Ended 31 December 2023

Note

2023
£

2022
£

Cash flows from operating activities

(Loss)/profit for the year

 

(475,224)

763,933

Adjustments to cash flows from non-cash items

 

Depreciation and amortisation

5

159,004

201,424

Changes in fair value of investment property

-

(287,201)

Profit from disposals of investments

(1,971)

-

Finance income

(16,603)

(12,396)

Finance costs

396,467

201,001

Income tax expense

11

(50,040)

93,568

Foreign exchange gains/losses

 

1,470

(9,879)

 

13,103

950,450

Working capital adjustments

 

Decrease/(increase) in trade debtors

15

246,381

(930,026)

Increase in trade creditors

17

320,912

1,610,812

(Decrease)/increase in provisions

18

(112,969)

10,270

Cash generated from operations

 

467,427

1,641,506

Income taxes paid

11

(67,177)

(251,014)

Net cash flow from operating activities

 

400,250

1,390,492

Cash flows from investing activities

 

Interest received

16,603

12,396

Acquisitions of tangible assets

(31,724)

(38,100)

Net cash flows from investing activities

 

(15,121)

(25,704)

Cash flows from financing activities

 

Interest paid

(178,557)

(177,755)

Repayment of bank borrowing

 

(157,924)

(391,698)

Repayment of other borrowing

 

(41,498)

(44,618)

Payments to minority interests

 

(211,480)

(226,000)

Dividends paid

-

(211,000)

Net cash flows from financing activities

 

(589,459)

(1,051,071)

Net (decrease)/increase in cash and cash equivalents

 

(204,330)

313,717

Cash and cash equivalents at 1 January

 

(252,085)

(423,020)

Effect of exchange rate fluctuations on cash held

 

71,208

(142,782)

Cash and cash equivalents at 31 December

 

(385,207)

(252,085)

 

The Empire Holding Company Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

1

General information

The address of its registered office is:
130 Shaftesbury Avenue
2nd Floor
London
W1D 5EU

The principal place of business is:
28 Bedford Square
London
WC1B 3JS

The principal activity of the company was that of a property investment company whilst its subsidiaries are principally engaged as creative film design agencies.

The Empire Group of companies are known for the production of high quality promotional material design and trailers creation and this has resulted in their becoming a market leader for this work in the UK and Europe. The group also contains a subsidiary company in New York, USA, to which the same production values attach.

2

Accounting policies

Statement of compliance

These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'.

Basis of preparation

These financial statements have been prepared using the historical cost convention except any items disclosed in the accounting policies as being shown at fair value and are presented in sterling, which is the functional currency of the entity.

Summary of significant accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Going concern

During the year the group did not make a profit but had a positive EBITDA. In addition, at the year end date the group had net assets of £5,453,609.

The group operates in a sector where, although overall activity has reduced, its services remain in demand and the director is optimistic that this demand will continue to increase as the film industry recovers.

Unaudited management forecasts show that the group's trade has improved significantly in the year to 31 December 2024 with a positive EBITDA in the period since the year end and, based on unaudited forecasts, the director is confident that the group will trade profitably in the year to 31 December 2025 and beyond. In addition, it is noted that since the year end, the group has identified and implemented significant cost savings within rent and other administrative expenses and has taken steps to ensure cash flows are managed in various scenarios.

 

The Empire Holding Company Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

The group's working capital requirements are currently met via a combination of trade creditors, bank facilities, hire purchase, other creditors, and funds from related undertakings. Within group loans and borrowings due within one year of the year end are balances amounting to £4,548,805, comprised of an overdraft balance amounting to £425,609 and mortgage and loan balances totalling £4,123,196, which are technically repayable on demand. In addition within creditors due within one year are material group balances due to HMRC which are also technically repayable on demand. As such, there is uncertainty regarding the group’s ability to meet its liabilities as they fall due. However, the director and management team have produced cash flow forecasts which show these loan liabilities being repaid over the period to December 2025 and HMRC liabilities being repaid in line with payment plans currently in negotiation. The director believes that the current bank facilities will remain until new banking facilities are in place. The director and management team have been exploring refinancing the investment property held by the group and valued at £6,514,800 at the year end and have been in talks with financial institutions in connection therewith. The director also believes that in the worst case scenario, the group has significant assets that could be realised in order to repay these debts.

On the basis of the above, and after making enquires and taking into account the combination of those circumstances outlined above, the director believes he has a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, the director continues to adopt the going concern basis in preparing the financial statements.

Summary of disclosure exemptions

The parent company satisfies the criteria of being a qualifying entity as defined in FRS 102. As such, advantage has been taken of the following reduced disclosures available under FRS 102:

(a) No cash flow statement has been presented.
(b) Disclosures in respect of financial instruments have not been presented.
(c) Disclosures in respect of key management personnel compensation in total have not been presented.

The company has taken advantage of the exemption in section 408 of the Companies Act from presenting its individual profit and loss account.

Basis of consolidation

The consolidated financial statements consolidate the financial statements of the company and its subsidiary undertakings drawn up to 31 December 2023.

 

The Empire Holding Company Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

A subsidiary is an entity controlled by the company. Control is achieved where the company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

The results of subsidiaries acquired or disposed of during the year are included in the Income Statement from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the group.

The purchase method of accounting is used to account for business combinations that result in the acquisition of subsidiaries by the group. The cost of a business combination is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the business combination. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Any excess of the cost of the business combination over the acquirer’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised is recorded as goodwill.

Inter-company transactions, balances and unrealised gains on transactions between the company and its subsidiaries, which are related parties, are eliminated in full.

Intra-group losses are also eliminated but may indicate an impairment that requires recognition in the consolidated financial statements.

Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group. Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the group’s equity therein. Non-controlling interests consist of the amount of those interests at the date of the original business combination and the non-controlling shareholder’s share of changes in equity since the date of the combination.

Judgements

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Other than those involving estimations there are no judgements that management have made in the process of applying the entity's accounting policies that have a significant effect on the amounts recognised in the financial statements.

 

The Empire Holding Company Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

Key sources of estimation uncertainty

Accounting estimates and assumptions are made concerning the future and, by their nature, will rarely equal the related actual outcome. The key assumptions and other sources of estimation uncertainty that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are as follows:

- Useful economic lives of tangible assets:
Tangible fixed assets are depreciated to their estimated residual values over their estimated useful lives. The group exercises judgement to determine these useful lives and residual values.

- Fair value of investment properties:
Investment properties are revalued to fair value. The group exercises judgement in determining fair value and the apportionment between investment and non-investment property.

- Impairment of amounts owed by entities under common control:
Included within other debtors are amounts advanced to two entities related by way of common control to provide working capital to fund the opening of cinemas. These amounts were on an informal basis and were interest-free at the year end.

The director and management team have considerable expertise and experience in this industry as a result of a successful previous cinema ventures and believe that both entities will also become successful and profitable in due course.

One of these entities is now forecast to be cash-generative and has commenced regular repayment whilst the other has secured external investment and is in the process of securing additional external investment.

As such, the company is currently negotiating formal commercial terms for repayment of these balances and as part of this has, subsequent to the year end, converted parts of these balances to preference shares.

The director has considered the recoverability of these balances on the above basis and believes that balances will be ultimately recovered and that as such no impairment provision is required.

It is noted that no such agreements to mitigate the uncertainty of recovery and hence potential impairment were in place at the year end.

Revenue recognition

The turnover shown in the profit and loss account represents amounts receivable for services supplied during the year, exclusive of Value Added Tax.

Turnover in respect of the provision of management services is recognised as services are performed when the company has a right to consideration.

Revenues from design services are normally recognised as services are performed, on a time basis when the company has a right to consideration. Occasionally design services are sold on a fixed price basis, and under these circumstances revenue is recognised according to the percentage of work performed.

If circumstances arise that may change the original estimates of revenues or extent of progress towards completion, estimates are revised. These revisions may result in increases or decreases in estimated revenues and are reflected in income in the period in which the circumstances that gave rise to the revision become known by management.

 

The Empire Holding Company Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

Government grants

Government grants are recognised when it is reasonable to expect that the grants will be received and that all related conditions will be met, usually on submission of a valid claim for payment.

Grants of a revenue nature are credited to income so as to match them with the expenditure to which they relate.

Foreign currency transactions and balances

Transactions in foreign currencies are initially recorded at the functional currency rate prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated into the respective functional currency of the entity at the rates prevailing on the reporting period date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the initial transaction dates.

Non-monetary items measured in terms of historical cost in a foreign currency are not retranslated.

Tax

The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except that a charge attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the group operates and generates taxable income.

Deferred tax is recognised in respect of all timing differences between taxable profits and profits reported in the consolidated financial statements.

Unrelieved tax losses and other deferred tax assets are recognised when it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference, except for revalued land and investment property where the tax rate that applies to the sale of the asset is used.

Goodwill

Goodwill arising on the acquisition of an entity represents the excess of the cost of acquisition over the group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the entity recognised at the date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is held in the currency of the acquired entity and revalued to the closing rate at each reporting period date. Goodwill is amortised over its useful life, which shall not exceed ten years if a reliable estimate of the useful life cannot be made.

Amortisation

Amortisation is provided on intangible assets so as to write off the cost, less any estimated residual value, over their useful life as follows:

Asset class

Amortisation method and rate

Goodwill

Straight line over 10 years

 

The Empire Holding Company Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

Tangible assets

Tangible assets are stated in the statement of financial position at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

Depreciation

Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:

Asset class

Depreciation method and rate

Freehold property

Straight line over 50 years

Leasehold property

Over the term of the lease

Fixtures, fittings, and equipment

10% to 25% straight line

Investment property

Investment property is carried at fair value, derived from the current market prices for comparable real estate determined annually using observable market prices and adjusted if necessary for any difference in the nature, location, or condition of the specific asset. Changes in fair value are recognised in profit or loss.

Investments

Fixed asset investments are initially recorded at cost, and subsequently stated at cost less any accumulated impairment losses.

Impairment of fixed assets

A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date.

For the purposes of impairment testing, when it is not possible to estimate the recoverable amount of an individual asset, as estimate is made of the recoverable amount of the cash-generating unit to which the asset belongs. The cash-generating unit is the smallest identifiable group of assets that includes the asset and generates cash inflows that largely independent of the cash inflows from other assets or groups of assets.

For impairment testing of goodwill, the goodwill acquired in a business combination is, from the acquisition date, allocated to each of the cash-generating units that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the company are assigned to those units.

Business combinations

Business combinations are accounted for using the purchase method. The consideration for each acquisition is measured at the aggregate of the fair values at acquisition date of assets given, liabilities incurred or assumed, and equity instruments issued by the group in exchange for control of the acquired, plus any costs directly attributable to the business combination. When a business combination agreement provides for an adjustment to the cost of the combination contingent on future events, the group includes the estimated amount of that adjustment in the cost of the combination at the acquisition date if the adjustment is probable and can be measured reliably.

 

The Empire Holding Company Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

Borrowings

Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the income statement over the period of the relevant borrowing.

Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.

Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

Provisions

Provisions are recognised when the group has an obligation at the reporting date as a result of a past event, it is probable that the group will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

Operating leases and and finance leases

Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease. Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee.

Assets held under finance leases are recognised at the lower of their fair value at inception of the lease and the present value of the minimum lease payments. These assets are depreciated on a straight-line basis over the shorter of the useful life of the asset and the lease term. The corresponding liability to the lessor is included in the Statement of Financial Position as a finance lease obligation.

Lease payments are apportioned between finance costs in the Income Statement and reduction of the lease obligation so as to achieve a constant periodic rate of interest on the remaining balance of the liability.

Operating lease income is recognised in profit or loss on a straight line basis over the lease term. The aggregate cost of lease incentives are recognised as a reduction to income over the lease term on a straight line basis. Costs, including depreciation, incurred in earning the lease income are recognised as an expense. Any initial direct costs incurred in negotiating and arranging the operating lease are added to the carrying amount of the lease and recognised as an expense over the lease term on the same basis as the lease income.

Dividends

Dividend distribution to the group’s shareholders is recognised as a liability in the financial statements in the reporting period in which the dividends are declared.

Defined contribution pension obligation

A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the group has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.

 

The Empire Holding Company Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

3

Turnover

The analysis of the group's Turnover for the year from continuing operations is as follows:

2023
£

2022
£

Rendering of services

5,186,405

6,091,493

4

Other operating income

The analysis of the group's other operating income for the year is as follows:

2023
£

2022
£

Miscellaneous other operating income

201,750

202,500

5

Operating (loss)/profit

Arrived at after charging/(crediting)

2023
£

2022
£

Depreciation expense

159,004

201,424

Operating lease expense - rent of property

584,058

602,100

Operating lease expense - hire of equipment

12,837

19,286

Foreign exchange variances

94,678

(242,783)

6

Other interest receivable and similar income

2023
£

2022
£

Other finance income

16,603

12,396

 

The Empire Holding Company Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

7

Interest payable and similar expenses

2023
£

2022
£

Interest on bank overdrafts and borrowings

376,601

182,128

Interest on obligations under finance leases and hire purchase contracts

9,794

6,298

Interest expense on other finance liabilities

9,694

12,575

396,089

201,001

8

Staff costs

The aggregate payroll costs (including director's remuneration) were as follows:

2023
£

2022
£

Wages and salaries

2,703,956

2,837,489

Social security costs

405,099

300,541

Pension costs, defined contribution scheme

40,904

45,519

Other employee expense

-

759

3,149,959

3,184,308

The average number of persons employed by the group (including the director) during the year, analysed by category was as follows:

2023
No.

2022
No.

Production

46

46

Administration and support

2

2

Management staff

5

5

53

53

9

Director's remuneration

The director's remuneration for the year was as follows:

2023
£

2022
£

Remuneration

-

10,834

During the year the number of directors who were accruing benefits under company pension plans was as follows:

2023
No.

2022
No.

Defined contribution plans

1

1

 

The Empire Holding Company Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

10

Auditor's remuneration

2023
£

2022
£

Audit of these financial statements

36,000

36,000


 

11

Taxation

Tax charged/(credited) in the income statement

2023
£

2022
£

Current taxation

UK corporation tax

35,802

123,662

UK corporation tax adjustment to prior periods

-

5,366

35,802

129,028

Effect of foreign taxes

(74,771)

(111,876)

Total current income tax

(38,969)

17,152

Deferred taxation

Arising from origination and reversal of timing differences

(11,071)

76,416

Tax (receipt)/expense in the income statement

(50,040)

93,568

 

The Empire Holding Company Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

The tax on profit before tax for the year is higher than the standard rate of corporation tax in the UK (2022 - lower than the standard rate of corporation tax in the UK) of 23.52% (2022 - 19%).

The differences are reconciled below:

2023
£

2022
£

(Loss)/profit before tax

(525,264)

857,501

Corporation tax at standard rate

(123,542)

162,925

Effect of fair value movement not subject to corporation taxation

-

(77,363)

Effect of expense not deductible in determining taxable profit (tax loss)

24,988

35,230

Effect of tax losses

87,993

3,010

Effect of foreign taxes

(37,385)

(111,876)

Increase from effect of deferred taxation

(11,071)

76,415

Over-provision of foreign taxes in previous periods

(1,583)

5,366

Tax increase/(decrease) from effect of capital allowances and depreciation

10,560

(139)

Total tax (credit)/charge

(50,040)

93,568

Deferred tax

Group

Deferred tax assets and liabilities

2023

Asset
£

Liability
£

Timing differences between capital allowances and depreciation

-

(8,058)

Revaluation of investment property

-

349,602

-

341,544

2022

Asset
£

Liability
£

Timing differences between capital allowances and depreciation

-

3,013

Revaluation of investment property

-

349,602

-

352,615

 

The Empire Holding Company Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

Company

Deferred tax assets and liabilities

2023

Asset
£

Liability
£

Timing differences between capital allowances and depreciation

-

(7,058)

Revaluation of investment property

-

495,643

-

488,585

2022

Asset
£

Liability
£

Timing differences between capital allowances and depreciation

-

638

Revaluation of investment property

-

101,794

-

102,432

12

Intangible assets

Group

Negative goodwill
£

Total
£

Cost or valuation

At 1 January 2023

(194,018)

(194,018)

At 31 December 2023

(194,018)

(194,018)

Amortisation

At 1 January 2023

(194,018)

(194,018)

At 31 December 2023

(194,018)

(194,018)

Carrying amount

At 31 December 2023

-

-

At 31 December 2022

-

-

Company

The company has no intangible assets.

 

The Empire Holding Company Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

13

Tangible assets

Group

Freehold property
£

Investment property
£

Leasehold property
£

Fixtures, fittings, and equipment
£

Total
£

Cost or valuation

At 1 January 2023

1,171,476

4,595,222

255,643

1,463,725

7,486,066

Additions

-

-

-

66,205

66,205

Foreign exchange movements

-

-

(10,696)

(18,646)

(29,342)

At 31 December 2023

1,171,476

4,595,222

244,947

1,511,284

7,522,929

Depreciation

At 1 January 2023

227,474

-

140,647

1,216,642

1,584,763

Charge for the year

23,430

-

24,444

111,130

159,004

Foreign exchange movements

-

-

(5,294)

(13,848)

(19,142)

At 31 December 2023

250,904

-

159,797

1,313,924

1,724,625

Carrying amount

At 31 December 2023

920,572

4,595,222

85,150

197,360

5,798,304

At 31 December 2022

944,002

4,595,222

114,996

247,083

5,901,303

The full investment property was valued on 24 October 2022 at an amount of £6,514,800 by Colliers, Chartered Surveyors who are independent of the group and have experience valuing similar properties. The property has been valued on a Market Value basis. The valuation of the property meeting the definition of investment property on a group basis has been reassessed by the director at 31 December 2023, who, having considered rental yields, believes that the property should continue to be valued at an amount of £6,514,800 at this date.

Included within the net book value of £5,798,304 is an amount of £71,857 (2022: £92,914) relating to assets held under finance lease agreements. The depreciation charged to the financial statements in the year in respect of such assets amounted to £24,135 (2022: £32,861).

 

The Empire Holding Company Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

Company

Investment property
£

Fixtures and fittings
 £

Plant and machinery
£

Total
£

Cost or valuation

At 1 January 2023

6,514,800

232,993

50,073

6,797,866

At 31 December 2023

6,514,800

232,993

50,073

6,797,866

Depreciation

At 1 January 2023

-

232,993

49,677

282,670

Charge for the year

-

-

396

396

At 31 December 2023

-

232,993

50,073

283,066

Carrying amount

At 31 December 2023

6,514,800

-

-

6,514,800

At 31 December 2022

6,514,800

-

396

6,515,196

The full investment property was valued on 24 October 2022 at an amount of £6,514,800 by Colliers, Chartered Surveyors who are independent of the group and have experience valuing similar properties. The property has been valued on a Market Value basis. The valuation of the property meeting the definition of investment property on a group basis has been reassessed by the director at 31 December 2023, who, having considered rental yields, believes that the property should continue to be valued at an amount of £6,514,800 at this date.

 

The Empire Holding Company Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

14

Investments

Group

2023
£

Artwork

At 1 January 2023 and 31 December 2023

14,282

Company

2023
£

2022
£

Investments in subsidiaries

49,120

49,230

Subsidiaries

£

Cost or valuation

At 1 January 2023 and 31 December 2023

166,189

Disposals

(110)

At 1 January 2023 and 31 December 2023

166,079

Provision

At 1 January 2023 and 31 December 2023

(116,959)

Carrying amount

At 31 December 2023

49,120

At 31 December 2022

49,230

The amount of impairment loss in respect of investments in subsidiaries recognised in the profit and loss in the company's income statement for the year was £Nil (2022: £116,959).

 

The Empire Holding Company Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

Details of undertakings

Details of the investments (including principal place of business of unincorporated entities) in which the company holds 20% or more of the nominal value of any class of share capital are as follows:

Undertaking

Registered office

Holding

Proportion of voting rights and shares held

2023

2022

Subsidiary undertakings

The Empire Design Company Limited

130 Shaftesbury Avenue, 2nd Floor, London, W1D 5EU

Ordinary

98%

98%

Empire Digital Limited (formerly The Empire ESOP Trustee Company Limited)

28 Bedford Square, London, United Kingdom, WC1B 3JS

Ordinary

98%

98%

Empire New York Corporation Limited

204 Elizabeth St # 3, New York, NY 10012, USA

Common stock

100%

100%

At 31 December 2023 the above holding by The Empire Holding Company Limited in Empire Digital Limited (formerly The Empire ESOP Trustee Company Limited) was indirect by way of The Empire Design Company Limited.

The remaining 2% holding in The Empire Design Company Limited is in a separate class of share. The declaration of a dividend on one class of share does not entitle holders of any other class of share to any right to any declaration of a dividend thereon.

All companies were included for consolidation purposes.

15

Debtors

 

Group

Company

2023
£

2022
£

2023
£

2022
£

Trade debtors

811,331

807,440

-

-

Other debtors

8,497,708

8,657,156

8,113,569

8,148,232

Prepayments and accrued income

581,971

450,129

-

1,579

9,891,010

9,914,725

8,113,569

8,149,811

Included within the group's other debtors is an amount of £90,000 (2022: £90,000) due in greater than one year in respect of rent deposits.
 

 

The Empire Holding Company Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

16

Cash and cash equivalents

 

Group

Company

2023
£

2022
£

2023
£

2022
£

Cash on hand

213

410

-

-

Cash at bank

40,218

194,148

-

972

40,431

194,558

-

972

Bank overdrafts

(425,638)

(446,643)

-

-

Cash and cash equivalents in statement of cash flows

(385,207)

(252,085)

-

972

17

Creditors

   

Group

Company

Note

2023
£

2022
£

2023
£

2022
£

Due within one year

 

Loans and borrowings

22

4,589,135

4,552,234

4,123,196

4,070,371

Trade creditors

 

443,367

332,615

-

9,868

Amounts due to group undertakings

26

-

-

8,803,117

8,091,793

Social security and other taxes

 

972,534

581,755

-

-

Other payables

 

3,309,856

3,356,172

280,000

533,788

Accruals and deferred income

 

122,406

289,284

80,640

79,503

Corporation tax liability

11

480,816

325,873

180,514

7,888

 

9,918,114

9,437,933

13,467,467

12,793,211

Due after one year

 

Loans and borrowings

22

30,760

43,732

-

-

 

The Empire Holding Company Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

18

Deferred tax and other provisions

Group

Deferred tax
£

Dilapidations provisions
£

Total
£

At 1 January 2023

352,615

112,969

465,584

Increase (decrease) in existing provisions

(11,071)

(112,969)

(124,040)

At 31 December 2023

341,544

-

341,544

Company

Deferred tax
£

Total
£

At 1 January 2023

487,133

487,133

Increase (decrease) in existing provisions

1,451

1,451

At 31 December 2023

488,584

488,584

19

Pension and other schemes

Defined contribution pension scheme

The group operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the group to the scheme and amounted to £40,904 (2022 - £45,519).

20

Share capital

Allotted, called up and fully paid shares

 

2023

2022

 

No.

£

No.

£

Ordinary shares shares of £1 each

25,682

25,682

25,682

25,682

         
 

The Empire Holding Company Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

21

Reserves

Profit and loss account - This reserve records retained earnings and accumulated losses.

Company

At 31 December 2023 the profit and loss account includes an amount of £945,327 (2022: £945,327) which is non-distributable.

22

Loans and borrowings

 

Group

Company

2023
£

2022
£

2023
£

2022
£

Current loans and borrowings

Bank borrowings

4,123,196

4,070,371

4,123,196

4,070,371

Bank overdrafts

425,638

446,643

-

-

Finance lease agreements

40,301

35,220

-

-

4,589,135

4,552,234

4,123,196

4,070,371

 

Group

Company

2023
£

2022
£

2023
£

2022
£

Non-current loans and borrowings

Finance lease agreements

30,760

43,732

-

-

Bank loans carry interest at 2.50% per annum plus base rate and 2.53% per annum fixed rate.

The loan with interest at 2.50% per annum plus base rate is secured first by a fixed charge fixed charge over the investment property of the company and by a fixed and floating charge over the assets of the company, its subsidiaries, and related undertakings, as disclosed below.

The loan with interest at 2.53% per annum fixed rate is secured by a limited guarantee given by the Secretary of State for Business, Energy and Industrial Strategy. This loan is also secured by a fixed and floating charge over the assets of the company, its subsidiaries, and related undertakings, as disclosed below.

The bank loans and overdrafts of The Empire Design Company Limited, The Empire Holding Company Limited, and one company under common control are secured by cross guarantee and debenture over the assets of the three aforementioned companies.

Bank loans are stated net of unamortised issue costs of £7,896 (2022: £9,852). The company originally incurred total issue costs of £25,200 (2022: £25,200) in respect of raising loan finance for funding purposes. These costs together with the interest rate expense are allocated to profit or loss over the term of the facilities at a constant rate on the carrying amount. During the year an amount of £1,956 (2022: £3,529) was recognised in profit or loss.

Included within bank borrowings under non-current loans and borrowings is an amount of £Nil due in more than 5 years (2022: £Nil).

Liabilities under finance lease agreements are secured on the assets concerned.

 

The Empire Holding Company Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

23

Obligations under leases and hire purchase contracts

Group

Finance lease agreements

The total of future minimum lease and hire purchase payments is as follows:

2023
£

2022
£

Not later than one year

40,301

34,917

Later than one year and not later than five years

30,760

43,286

71,061

78,203

Operating leases

The total of future minimum lease payments is as follows:

2023
£

2022
£

Not later than one year

748,674

751,242

Later than one year and not later than five years

1,441,564

1,048,904

Later than five years

30,348

-

2,220,586

1,800,146

The amount of non-cancellable operating lease payments recognised as an expense during the year was £584,058 (2022 - £602,100).

The above lease commitments relate to properties utilised by The Empire Holding Company Limited, The Empire Design Company Limited, and a company under common control.

Company

The company has no lease agreements.

24

Dividends

   

2023

 

2022

   

£

 

£

Dividends on ordinary shares

 

-

 

211,000

 

The Empire Holding Company Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

25

Financial commitments, guarantees and contingencies

Group

The group has given a cross guarantee in respect of bank borrowings of a company under common control. At 31 December 2023 the potential liability was £Nil (2022: £Nil). This guarantee is supported by a fixed and floating charge over the assets and undertakings of the company and a right of set off between the group's debit and credit balances.

Company

The total amount of financial commitments, guarantees and contingencies not included in the statement of financial position is £6,436,513 (2022: £7,179,924), including lease commitments of £1,423,472 (2022: £1,693,625), bank cross guarantees of £4,141,359 (2022: £4,070,601), supplier cross guarantees of £510,000 (2022: £1,255,562) and VAT cross guarantees totalling £361,682 (2022: £160,136).

26

Related party transactions

Group

During the year the group paid management charges of £197,955 (2022: £21,996), received management charges of £Nil (2022: £87,800) and received rental income of £202,500 (2022: £202,500) from companies under common control.

Included within other debtors is an amount of £7,346,084 (2022: £7,721,604) due from and included within other creditors is an amount of £2,174,382 (2022: £2,175,775) due to companies under common control. Of these balances, subsequent to 31 December 2023, balances amounting to £3,000,000 were converted to non-voting preference share capital in these entities under common control.

A director has given a personal guarantee in respect of bank loans limited to £90,000.

During the year an amount of £56,400 (2022: £56,400) was paid to a close family member of a director in respect of interior design services provided to the group.

Included within other debtors is an amount of £105,096 (2022: £197,496) due from key management personnel.

During the year remuneration of £56,018 (2022: £62,833) was paid to and interest of £4,683 (2022: £4,191) was received from key management personnel. During the year subsidiary undertakings paid dividends of £211,480 (2022: £226,000) to key management personnel.

 

The Empire Holding Company Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

Company

In accordance with FRS 102 paragraph 33.1A, exemption is taken not to disclose transactions in the year between wholly owned group undertakings where 100% of the voting rights are controlled within the group.

During the year the company received rental income of £236,160 (2021: £236,160) from subsidiary undertakings.

Included within other creditors is an amount of £10,000 (2022: £10,000) due to subsidiary undertakings.

Included within accruals and deferred income is an amount of £59,040 (2022: £59,499) due to subsidiary undertakings.

Included within other debtors is an amount of £7,317,482 (2022: £7,598,711) due from companies under common control. Of these balances, subsequent to 31 December 2023, balances amounting to £3,000,000 were converted to non-voting preference share capital in these entities under common control.

Included within other creditors is an amount of £270,000 (2022: £523,788) due to companies under common control.

A director has given a personal guarantee in respect of the bank loans limited to £90,000.

During the year an amount of £56,400 (2022: £56,400) was paid to a close family member of a director in respect of interior design services provided to the company.

Director's advances, credits, and guarantees

Included within debtors is a balance of £615,370 (2022: £543,401) due from a director. During the year advances of £71,973 and repayments of £4 were made. Interest of £11,911 (2022: £8,195) has been charged and there are no set terms in place.

27

Financial instruments

Group

The group has £Nil (2022: £Nil) financial assets or financial liabilities measured at fair value through profit or loss.

28

Non adjusting events after the financial period

Subsequent to the year end, there were payments to non-controlling interests amounting to £104,500.

 

The Empire Holding Company Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

29

Analysis of changes in net debt

Group

   

Cash flows

Non cash changes

Non cash changes

 

At 1 January 2023
£

Financing cash flows
£

New finance lease and hire purchase agreements
£

Foreign exchange movements
£

At 31 December 2023
£

Cash and cash equivalents

Cash

194,558

(225,366)

-

71,210

40,402

Overdrafts

(446,643)

21,034

-

-

(425,609)

(252,085)

(204,332)

-

71,210

(385,207)

Borrowings

Short term borrowings

(4,070,371)

(52,825)

-

-

(4,123,196)

Finance lease and hire purchase liabilities

(78,952)

41,498

(34,925)

1,318

(71,061)

(4,149,323)

(11,327)

(34,925)

1,318

(4,194,257)

 

(4,401,408)

(215,659)

(34,925)

72,528

(4,579,464)