PROFESSIONAL_BEAUTY_SYSTE - Accounts

The directors present the strategic report for the year ended 30 September 2021.

The group continued to manufacture and sell professional haircare and beauty products to the trade throughout the year.

The group's revenue increased by 11.01% to £46,710,018 and profit before tax decreased by 9.52% to £8,114,864.

The directors believe the group's financial position at the year end is very strong, due to the group having a net current asset position of £28,407,492. Shareholders' funds total £40,048,003, with distributable profits of £39,964,881.

The directors have assessed the main risk facing the group as being the competition from other companies within the industry. The directors believe that the reputation of the group and the quality of the products will mitigate this risk.

At the time of signing the financial statement, there has been no material impact to the group as a result of the COVID-19 pandemic. We have been able to innovate and create new opportunities which have helped mitigate the effects of the pandemic.

Brexit

The transitional arrangements with the EU ended 31 December 2020 and the directors have been working with the group's suppliers and customers to help mitigate the impact of the regulatory changes. The directors are confident that the group is well placed to continue to thrive through these changes and will be able to deal with any issues as they arise.

The group finances its day-to-day operations through cash reserves and surplus cash generated through the group's operations. Overall the group's exposure to price risk, credit risk, liquidity risk and cash flow risk is minimal and therefore not material for the assessment of the assets, liabilities, financial position and profit or loss of the group.

We report here on how our directors have addressed the matters set out under Section 172 (1) (a) to (f) of the Companies Act 2006.

The directors have acted in a way they consider, in good faith, would be most likely to promote the success of the group for the benefit of its members, and in doing so have regard (amongst other matters) to:

(a) The likely consequences of any decision in the long term

The board meets weekly, and regularly reviews our principal stakeholders and how we engage with them. The stakeholder feedback is brought into the boardroom throughout the year, through information provided by management and by direct engagement with stakeholders where appropriate. The relevance of each stakeholder group may increase or decrease depending on the matter or issue in question, so the Board seeks to consider the needs and priorities of each stakeholder group during its discussions and as part of its decision-making. The board considers all stakeholder feedback and considers any future consequences of its decision.

Key Decisions

Brexit – The board met regularly to assess and mitigate the risks associated with Brexit.

1. We established a structure and a procedure to mitigate the risks and manage the costs associated with importing from the EU.

2. We ensured all our products and materials are registered in and meet the technical requirements of both the EU and the UK to ensure our customers’ needs are satisfied

3. We established a new dedicated shipping line to ensure a smooth transition for our customers

COVID-19 – To identify the risks and opportunities associated with the Covid-19 pandemic

1. Manage the risks by creating a safe and secure workplace for our employees so that we can provide our customers with continuity of service.

2. Maximise the opportunities to secure sales of our products, secure employment, and shareholder value, meet customer demand and provide business for our suppliers.

(b) The interests of the group's employees

Our colleagues are crucial to delivering our strategy and achieving our goals. The success of the group is reliant on attracting, retaining, and motivating employees. The board continues to enhance its methods of engagement with its workforce. With regular detailed briefings, a quarterly staff newsletter, direct communications through e-mail, letters, and regular meetings with departmental leadership. The group has also embarked on the journey to achieve investors in people accreditation. The group has a target-based bonus system which ensures our colleagues participate in the ongoing success of the business.

(c) The need to foster the group's business relationships with suppliers, customers, and others

Suppliers

We aim to work responsibly with our suppliers. We monitor our suppliers' performance including their environmental management, health and safety, quality standards, including adherence to our code of conduct, which in turn abides by the principals stipulated in the Conventions of the International Labour Organisation, the Universal Declaration on Human Rights, the guiding principles of the OECD and the principals of the Global Compact.

We ensure all suppliers are treated fairly when negotiating trading terms, including prompt payment for goods and services

Customers

We are in regular communication with our customers, presenting new products and providing technical education sessions, and being a key participant at industry events.

(d) The impact of the group's operations on the community and the environment

Professional Beauty Systems Limited is ISO 22716 / ISO 14001 and ISO 45001 certified, and we have a Sustainability committee and a management team working on continual improvement initiatives.

(e) The desirability of the group to maintain a reputation for high standards of business conduct

The Board is responsible for monitoring and upholding the culture, values, standards, ethics, and reputation of the group to ensure that our obligations to our shareholders and our stakeholders are met. In 2021 we have appointed two external consultants to assist us in enhancing and improving our culture, employee engagement, communication and improving our working practices.

The board continues to plan for future growth with a focus on building a strong leadership team. There is a renewed drive across all areas of the group to ensure mission vision and values are instilled throughout. The Investors in People process is regarded as vital and the project for this is well underway. There has also been management training and personal development programmes launched across the group. Having a skilled and loyal workforce is vital to the growth of the business and at this stage in the company’s growth this is regarded as vital in facing the future. A clear strategy and set of objectives have been adopted to ensure the business is able to adapt to the changing environment that it operates in, whether this is due to customer trends, technology trends or geographical opportunities and to ensure that the group has a sustainable first approach

(f) The need to act between members of the group.

Professional Beauty Systems Limited is a wholly owned subsidiary of Professional Beauty Systems (Holdings) Limited. There is ongoing communication and engagement since four of the Board are members are directors of both companies

The company is funded fully by cash flows generated from its trading activities. The company has no third-party borrowings and is not subject to any cross-guarantee arrangements in respect of any third-party borrowings of other group undertakings.

The directors consider that the group, and consequently the company, has considerable financial resources available to it and that its business activities are diversified over several customers and geographic locations.

On behalf of the board

The directors present their annual report and financial statements for the year ended 30 September 2021.

The principal activity of the company and group continued to be the manufacture and sale of professional healthcare and beauty products to the trade.

The results for the year are set out on page 10.

Ordinary dividends were paid amounting to £130,000. The directors do not recommend payment of a further dividend.

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

During the year the group made donations of £16,659 (2020: £30,485) to local charities.

The auditor, Consilium Audit Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

The group has followed the 2019 HM Government Environmental Reporting Guidelines. The group has also used the GHG Reporting Protocol – Corporate Standard and have used the 2020 UK Government’s Conversion Factors for Company Reporting

The chosen intensity measurement ratio is total gross emissions in metric tonnes CO2e per £m of sales, the recommended ratio for the sector.

Throughout the course of the year we have implemented energy saving techniques: as replacing all of our light bulbs with Energy saving LED lights, Ensuring all electrical equipment is shut off when not in use. For our new site we have installed Solar panels, and an Air Source Heat Pump. These should significantly offset our carbon usage.

The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and company, 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 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 ;

•     prepare the on the going concern basis unless it is inappropriate to presume that the group and company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the auditor of the company is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the auditor of the company is aware of that information.

We have audited the financial statements of Professional Beauty Systems (Holdings) Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 September 2021 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

•     give a true and fair view of the state of the group's and the parent company's affairs as at 30 September 2021 and of the group's profit for the year then ended;

•     have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

•     have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

• the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

• the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.

In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report and the directors' 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:

• adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

• the parent company financial statements are not in agreement with the accounting records and returns; or

• certain disclosures of directors' remuneration specified by law are not made; or

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

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

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

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

• We ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations.

• We identified the laws and regulations applicable to the company through discussions with directors and management and from our knowledge of the regulatory environment relevant to the company.

• We assessed the extent of compliance with laws and regulations through making enquiries of management and inspecting legal correspondence.

• We assessed the susceptibility of the company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by making enquiries of management as to where they considered there was susceptibility to fraud and their knowledge of actual, suspected and alleged fraud.

• To address the risk of fraud through management bias and override of controls, we tested journal entries to identify unusual transactions, we assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias and we investigated the rationale behind significant or unusual transactions.

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

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

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £1,299,888 (2020 - £499,866 profit).

Professional Beauty Systems (Holdings) Limited (“the company”) is a private limited company domiciled and incorporated in Scotland. The registered office is Unit 3 Newmains Avenue, Inchinnan Business Park, Renfrew, Scotland, PA4 9RR. . The company's registration number is SC313968.

The group consists of Professional Beauty Systems (Holdings) Limited and all of its subsidiaries.

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.

The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:

• Section 4 ‘Statement of Financial Position’: Reconciliation of the opening and closing number of shares;

• Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;

• Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.

In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.

The consolidated group financial statements consist of the financial statements of the parent company Professional Beauty Systems (Holdings) Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.

All financial statements are made up to 30 September 2021. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Minority interests are only attributed to a minority shareholder to the extent that the minority shareholder has an obligation to make good those liabilities.

The equity element of the Minority Interest is not recognised through reserves as the minority shareholder has not liabilities at the Balance Sheet date for the liabilities of the Knot Dr Ltd.

At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

The turnover shown in the Consolidated Statement of Comprehensive Income represents the value of all goods sold during the year, less returns received and services delivered at a selling price exclusive of Value Added Tax. Sales are recognised at the point at which the Group has fulfilled its contractual obligations and the risks and rewards attaching to the product such as obsolescence, have been transferred to the customer.

Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.

Purchase goodwill, being the amount paid in connection with the acquisition of businesses in 2015 & 2019, is being amortised evenly over its estimated useful life of ten years.

Goodwill arising on consolidation is being amortised evenly over its estimated useful life of ten years as detailed in the above 'basis of consolidation' accounting policy.

Trademarks, brands, licences and intellectual property

Trademarks, brands, licences and intellectual property were initially measured at cost and amortised in equal instalments over 10 years based on the directors' estimate of their useful economic life. They are tested for impairment whenever events give rise to concerns over their carrying value. They are assessed by comparing the carrying value of the assets to the higher of net realisable value and value in use.

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.

Depreciation is not charged on land and buildings as it is the opinion of the directors that the residual value of the property is lower than the residual value of the land and buildings. An annual impairment review is carried out under Financial Reporting Standard 102 on that property.

Depreciation is not charged on assets under construction as these assets are still in the development phase. Once complete, these assets will be transferred and depreciated accordingly.

In the parent company financial statements, investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

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

At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.

Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.

Cost consists of the purchase price of materials and an appropriate proportion of production overheads, where applicable.

The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

Rentals applicable to operating leases, where substantially all of the benefits and risks of ownership remain with the lessor, are charged against profits on a straight line basis over the period of the lease.

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

Government grants relating to turnover are recognised as income over the periods when the related costs are incurred. Grants relating to an asset are recognised in income systematically over the asset's expected useful life. If part of such a grant is deferred it is recognised as deferred income rather than being deducted from the asset's carrying amount.

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

Current asset investments

Current asset investments are held at market value.

Pension costs

The group operates a defined contribution pension scheme for employees. The assets of the scheme are held separately from those of the group. The annual contributions payable are charged to the Consolidated Statement of Comprehensive Income.

In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

In preparing the financial statements the directors have made the following judgements:

• Determine whether leases entered into by the Group as a lessee are operating or finance leases. These decisions depend on an assessment of whether the risks and rewards of ownership have been transferred from the lessor to the lessee on a lease by lease basis.

• Determine whether there are indicators of impairment of the Group's tangible assets. Factors taken into consideration in reaching such a decision include the economic viability and expected future financial performance of the asset.

• Determine whether any bad debt provision is required via review of trade debtors, with debts provided for on a specific basis. Factors considered include customer payment history and agreed credit terms.

• Determine whether any stock provision is required via comparison of cost and net realisable value of stock on an item by item basis.

• Determine the whether there are indicators of impairment of the Group's intangible assets (including goodwill). Factors taken into consideration in reaching such a decision include the economic viability and expected future financial performance of the asset.

The average monthly number of persons (including directors) employed by the group and company during the year was:

Their aggregate remuneration comprised:

The number of directors to whom retirement benefits were accruing under money purchase schemes amounted to 3 (2020 - 3).

The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

Included in cost of land and buildings is freehold land of £186,668 (2020: £186,668) which is not depreciated.

All investments in subsidiaries have been eliminated on consolidation.

Details of the company's subsidiaries at 30 September 2021 are as follows:

Group

Included within other creditors above are outstanding pension contributions of £51,273 (2020: £41,755).

The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

There are 4 types of Preferred Ordinary shares: A Preferred Ordinary shares, B Preferred Ordinary shares, C Preferred Ordinary shares and D Preferred Ordinary shares. Holders of the Preferred Ordinary shares have the same voting rights as holders of the Ordinary shares however they have priority to participate in any dividend declared.

At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

Amounts contracted for but not provided in the financial statements:

The capital commitments at the year end relate to contract work agreed for the refurbishment of the new property addition in the year.

The group has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.

Transactions between group entities which have been eliminated on consolidation are not disclosed within the financial statements,

The group made sales to companies connected by common directors amounting to £4,157,656 (2020: £5,618,376). At the balance sheet date the total amount due from companies connected by common directors was £1,918,228 (2020: £1,868,228).

At 30 September 2021 the amounts due to Directors' totalled £2,588,244 (2020: £nil).

No other transactions with related parties were undertaken such as are required to be disclosed under Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland".