Registered number:
08069858
ATTIRE EMEA LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2020
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ATTIRE EMEA LIMITED
CONTENTS
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Directors' Responsibilities Statement
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Independent Auditor's Report
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Statement of Profit or Loss and Other Comprehensive Income
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Statement of Financial Position
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Statement of Changes in Equity
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Notes to the Financial Statements
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ATTIRE EMEA LIMITED
COMPANY INFORMATION
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J McNamee
(appointed
2 June 2021
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R Pollock
(appointed
2 June 2021
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W T McKeown
(resigned
2 June 2021
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Blick Rothenberg Audit LLP
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Chartered Accountants & Statutory Auditor
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ATTIRE EMEA LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MAY 2020
The directors present their report and the financial statements for the year ended 31 May 2020.
The principal activity of the Company continued to be that of the manufacture and sale of branded commercial apparel.
On 2 June 2021 the Company changed its name from Cintas Hospitality UK Limited to Attire EMEA Limited.
The loss for the year, after taxation, amounted to £
1,681,853
(2019 -
loss
£
107,617
)
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The directors did not declare a dividend for the year (2019: £nil).
The director who served during the year was:
W T McKeown
(resigned
2 June 2021
)
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Disclosure of information to auditor
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Each of the persons who are
directors at the time when this Directors' Report is approved has confirmed that:
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so far as the director is aware, there is no relevant audit information of which the Company's auditor is unaware, and
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the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditor is aware of that information.
Post balance sheet events
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On 2 June 2021 the entire share capital of the Company was acquired by Attire Holdings Limited, a limited company incorporated in England and Wales. Prior to the sale of the Company's shares to Attire Holdings Limited, a loan waiver was signed to release the Company from the obligation to settle the intercompany loan with Cintas Corporation. The balance outstanding of £2,613,607 was converted to a capital contribution on that date.
Other matters
On 30 January 2020 the World Health Organisation declared Coronavirus (COVID-19) a public health emergency. There are no comparable recent events which may provide guidance as to the effect of the spread of COVID-19 and a pandemic, and, as a result, the ultimate impact of the COVID-19 outbreak or similar health epidemic is highly uncertain and subject to change.
This report was approved by the board and signed on its behalf.
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ATTIRE EMEA LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MAY 2020
The directors are responsible for preparing the Directors' Report and the financial statements, in accordance with applicable law.
Company law requires the directors to prepare financial statements for each financial year. Under that law they have elected to prepare the financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU.
Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period. In preparing the financial statements, the directors are required to:
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select suitable accounting policies and then apply them consistently;
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make judgments and estimates that are reasonable and prudent;
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state whether they have been prepared in accordance with IFRS as adopted by the EU, subject to any material departures disclosed and explained in the financial statements;
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assess the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and
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use the going concern basis of accounting unless they either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.
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ATTIRE EMEA LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE SHAREHOLDERS OF ATTIRE EMEA LIMITED
We have audited the financial statements of Attire EMEA Limited for the year ended 31 May 2020 which comprise
the Statement of Profit or Loss and Other Comprehensive Income
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the Statement of Financial Position,
the Statement of Changes in Equity
and the related notes, including a summary of significant accounting policies set out on pages 15 - 22. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.
In our opinion the financial statements:
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give a true and fair view of the state of the Company's affairs as at 31 May 2020 and of its loss for the year then ended;
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have been properly prepared in accordance with IFRSs as adopted by the European Union; and
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have been prepared in accordance with the requirements of the Companies Act 2006 and Article 4 of the IAS Regulation.
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 United Kingdom, including the Financial Reporting Council'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
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In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the 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.
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ATTIRE EMEA LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE SHAREHOLDERS OF ATTIRE EMEA LIMITED
The directors are 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.
We have nothing to report in this regard.
Opinion on other matters prescribed by the Companies Act 2006
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In our opinion, based on the work undertaken in the course of the audit:
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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
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the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors' Report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
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adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
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the financial statements are not in agreement with the accounting records and returns; or
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certain disclosures of directors' remuneration specified by law are not made; or
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we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement on page 4, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.
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ATTIRE EMEA LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE SHAREHOLDERS OF ATTIRE EMEA LIMITED
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities 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.
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.
Daniel Burke
(Senior Statutory Auditor)
for and on behalf of
Blick Rothenberg Audit LLP
Chartered Accountants & Statutory Auditor
16 Great Queen Street
Covent Garden
London
WC2B 5AH
25 June 2021
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ATTIRE EMEA LIMITED
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MAY 2020
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Total comprehensive income
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ATTIRE EMEA LIMITED
REGISTERED NUMBER:
08069858
STATEMENT OF FINANCIAL POSITION
AS AT
31 MAY 2020
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Property, plant and equipment
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Trade and other receivables
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Cash and cash equivalents
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ATTIRE EMEA LIMITED
REGISTERED NUMBER:
08069858
STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT
31 MAY 2020
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Trade and other liabilities
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Issued capital and reserves
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The financial statements on pages 8 to 33 were approved and authorised for issue by the board of directors and were signed on its behalf by:
The notes on pages 13 to 22 form part of these financial statements.
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ATTIRE EMEA LIMITED
FOR THE YEAR ENDED
31 MAY 2020
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Comprehensive income for the year
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Total comprehensive income for the year
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Impact of change in accounting policy
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At 1 June 2019 (adjusted balance)
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Comprehensive income for the year
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Total comprehensive income for the year
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The notes on pages 13 to 22 form part of these financial statements.
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ATTIRE EMEA LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MAY 2020
Cash flows from operating activities
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Depreciation of tangible assets
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Bad debt provision movement
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Credit note provision movement
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Increase in creditors within one year
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Cash generated from operations
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Net cash used in operating activities
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Cash flows from investing activities
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Payments for property, plant and equipment
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Net cash used in investing activities
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Cash flows from financing activities
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Payment of lease liabilities
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Net cash (used in)/from financing activities
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Net increase in cash and cash equivalents
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Cash and cash equivalents at the beginning of the year
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Cash and cash equivalents at the end of the year
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ATTIRE EMEA LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2020
Attire EMEA Limited
(the 'Company') is a limited company incorporated in England and Wales. The Company's registered office is at 2665 Kings Court, Birmingham Business Park, Birmingham, B37 7YE. The Company's principal activity is
the manufacture and sale of branded apparel
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Until 2 June 2021 the Company's name was Cintas Hospitality UK Limited.
The financial statements have been prepared in accordance with International Financial Reporting Standards, International Accounting Standards and Interpretations (collectively IFRSs).
Details of the Company's accounting policies, including changes during the year, are included in note 4.
In preparing these financial statements, management has made judgments, estimates and assumptions that affect the application of the Company accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised prospectively.
The areas where judgments and estimates have been made in preparing the financial statements and their effects are disclosed in note 5.
The financial statements have been prepared on the historical cost basis except for the following items, which are measured on an alternative basis on each reporting date:
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2.2 Changes in accounting policies
i) New standards, interpretations and amendments effective from 1 June 2019
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IFRS 16
The date of initial application of IFRS 16 for the Company is 1 June 2019.
There are no material adjustments required to be made to the Company's financial statements as a result of the application of IFRS 16.
The Company has applied IFRS 16 using the modified retrospective approach, under which the cumulative effect of initial application is recognised in retained earnings at 1 June 2019.
When measuring lease liabilities, the Company discounted lease payments using its incremental borrowing rate at 1 June 2019. The weighted average rate applied is 5%
The following table provides a reconciliation of the finance lease liabilities and operating lease commitments at 31 May 2019 disclosed in the Company's financial statements to the lease liabilities recognised at 1 June 2019.
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ATTIRE EMEA LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2020
2.
Basis of preparation (continued)
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2.2 Changes in accounting policies (continued)
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i) New standards, interpretations and amendments effective from 1 June 2019 (continued)
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Operating lease commitments at 31 May 2019 as disclosed in the Company's financial statements
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Discounted using the incremental borrowing rate at 1 June 2019
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Finance lease liabilities recognised as at 31 May 2019
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Lease liabilities recognised at 1 June 2019
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New standards, interpretations and amendments not yet effective
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The following standards and interpretations to published standards are not yet effective:
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New standard or interpretation
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Mandatory effective date (period beginning)
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IFRS17: Insurance Contracts
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The directors anticipate that the adoption of these Standards in future periods will not have a material impact on the Company's financial statements in the period of initial adoption.
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Functional and presentation currency
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These financial statements are presented in pound sterling, which is the Company's functional currency. All amounts have been rounded to the nearest pound, unless otherwise indicated.
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ATTIRE EMEA LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2020
4.
Accounting policies
At 31 May 2020 the Company had net assets of £36,604 (2019: £1,719,662) and held cash at bank totalling £849,699 (2019: £1,517,259) having made a loss for the year of £1,681,853 (2019: £107,617) due to one-off stock provisioning of £1,487,369 as detailed in note 12. The Company's management accounts at 31 May 2021, however show a profit for the year of £189,534, and net assets of £157,863 with a cash holding of £627,316.
As detailed in the Post Balance Sheet Events note the Company was acquired by Attire Holdings Limited on 2 June 2021, and as part of this acquisition the Company has been released from its obligations to settle the balance of the intercompany loan owed to Cintas Corporation by way of converting the balance, which totalled £3,076,703 at 31 May 2020, and amounted to £2,613,607 in the May 2021 management accounts, to a capital contribution. This loan represented the Company's largest creditor and the release from the obligation to settle the amount will be a significant boost for the Company's going concern status.
The directors have considered the forecasts of the Company for a period of at least twelve months following the date of approval of these financial statements and they are confident that, along with the cash held at 31 May 2021, the Company will generate turnover and cashflow sufficient to ensure that the Company is able to fund its fixed cost base and day-to-day operational expenses.
After considering the above, and making further enquiries, the directors have a reasonable expectation that the Company has adequate resources to continue in operational existence and meet its liabilities as they fall due for the foreseeable future, being a period of at least twelve months from the date these financial statements were approved. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.
Goodwill arising on an acquisition of a business is carried at cost as established at the date of acquisition of the business less accumulated impairment losses, if any.
For the purposes of impairment testing, goodwill is allocated to each of the Company's cash-generating units (or groups of cash-generating units) that is expected to benefit from the synergies of the combination.
A cash-generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro rata based on the carrying amount of each asset in the unit. Any impairment loss for goodwill is recognised directly in profit or loss. An impairment loss recognised for goodwill is not reversed in subsequent periods.
On disposal of the relevant cash-generating unit, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.
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ATTIRE EMEA LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2020
4.
Accounting policies (continued)
Revenue is measured based on the consideration specified in a contract with a customer and excludes amounts collected on behalf of third parties. The Company recognises revenue when it transfers control over a product or service to a customer.
The Company does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, the Company does not adjust any of the transaction prices for the time value of money.
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ATTIRE EMEA LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2020
4.
Accounting policies (continued)
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
The Company assesses whether a contract is or contains a lease, at inception of a contract. The Company recognises a right-of-use asset and a corresponding lease liability with respect to all lease agreements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low-value assets. For these leases, the Company recognises the lease payments as an operating expense on a straight-line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Company uses its incremental borrowing rate.
Lease payments included in the measurement of the lease liability comprise:
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fixed lease payments (including in-substance fixed payments), less any lease incentives;
The lease liability is included in the 'Loans and borrowings' line in the Statement of Financial Position.
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made.
The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses.
Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset. If a lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the Company expects to exercise a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation starts at the commencement date of the lease.
The right-of-use assets are included in the 'Property, Plant and Equipment' and 'Investment Property' lines, as applicable, in the Statement of Financial Position.
The Company applies IAS 36 to determine whether a right-of-use asset is impaired and accounts for any identified impairment loss as described in note 4.9.
As a practical expedient, IFRS 16 permits a lessee not to separate non-lease components, and instead account for any lease and associated non-lease components as a single arrangement. The Company has used this practical expedient.
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ATTIRE EMEA LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2020
4.
Accounting policies (continued)
In preparing the financial statements of each individual group entity, transactions in currencies other than the entity's functional currency (foreign currencies) are recognised at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.
Exchange differences on monetary items are recognised in profit or loss in the period in which they arise except for:
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exchange differences on foreign currency borrowings relating to assets under construction for future productive use, which are included in the cost of those assets when they are regarded as an adjustment to interest costs on those foreign currency borrowings;
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exchange differences on transactions entered into in order to hedge certain foreign currency risks (see for hedging accounting policies); and
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exchange differences on monetary items receivable from or payable to foreign operation for which settlement is neither planned nor likely to occur (therefore forming part of the net investment in the foreign operation), which are recognised initially in other comprehensive income and reclassified from equity to profit or loss on repayment of the monetary items.
For the purposes of presenting these financial statements, the assets and liabilities of the Company's foreign operations are translated into pounds using exchange rates prevailing at the end of each reporting period. Income and expense items are translated at the average exchange rates for the period, unless exchange rates fluctuate significantly during that period, in which case the exchange rates at the dates of the transactions are used. Exchange differences arising, if any, are recognised in other comprehensive income and accumulated in equity (and attributed to non-controlling interests as appropriate).
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.
All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
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ATTIRE EMEA LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2020
4.
Accounting policies (continued)
Government grants are not recognised until there is reasonable assurance that the Company will comply with the conditions attaching to them and that the grants will be received.
Government grants are recognised in profit or loss on a systematic basis over the periods in which the Company recognises as expenses the related costs for which the grants are intended to compensate. Specifically, government grants whose primary condition is that the Company should purchase, construct or otherwise acquire non-current assets are recognised as deferred revenue in the consolidated statement of financial position and transferred to profit or loss on a systematic and rational basis over the useful lives of the related assets.
Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Company with no future related costs are recognised in profit or loss in the period in which they become receivable.
The tax expense for the year comprises current and deferred tax. Tax is recognised in the profit and loss account, except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
Current tax is the amount of income tax payable in respect of taxable profit for the year or prior years.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the company operates and generates income.
Deferred tax arises from timing differences that are differences between taxable profits and total comprehensive income as stated in the financial statements. These timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in the financial statements.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
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The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
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Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
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ATTIRE EMEA LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2020
4.
Accounting policies (continued)
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Property, plant and equipment
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Items of property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment losses.
If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment. Any gain or loss on disposal of an item of property, plant and equipment is recognised in profit or loss. Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the Company.
Depreciation is provided on all other items of property, plant and equipment so as to write off their carrying value over their expected useful economic lives. It is provided at the following rates:
Inventories are stated at the lower of cost and net realisable value. Costs of inventories are determined on a first in, first out basis. Net realisable value represents the estimated selling price for inventories less all estimated costs of completion and costs necessary to make the sale. Impairments to inventory are assessed and booked as required in order to ensure that inventories are stated at the lower of cost and net realisable value.
Financial assets and financial liabilities are recognised when Company entity becomes a party to the contractual provisions of the instruments.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.
All regular way purchases or sales of financial assets are recognised and derecognised on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace.
All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on the classification of the financial assets.
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ATTIRE EMEA LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2020
4.
Accounting policies (continued)
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Financial assets (continued)
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(i)
Classification of financial assets
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Debt instruments that meet the following conditions are subsequently measured at amortised cost:
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the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and
∙
the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
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Financial liabilities and equity instruments
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(i)
Classification as debt or equity
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Debt and equity instruments issued by an entity are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by an entity are recognised at the proceeds received, net of direct issue costs.
Repurchase of the Company's own equity instruments is recognised and deducted directly in equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Company's own equity instruments.
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ATTIRE EMEA LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2020
4.
Accounting policies (continued)
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Financial liabilities and equity instruments (continued)
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(iii)
Financial liabilities
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All financial liabilities are subsequently measured at amortised cost using the effective interest method or at FVTPL.
However, financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition or when the continuing involvement approach applies, financial guarantee contracts issued by the Company, and commitments issued by the Company to provide a loan at below-market interest rate are measured in accordance with the specific accounting policies set out below.
Financial liabilities subsequently measured at amortised cost
Financial liabilities that are not (i) contingent consideration of an acquirer in a business combination, (ii) held for trading, or (iii) designated as at FVTPL, are subsequently measured at amortised cost using the effective interest method.
The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the amortised cost of a financial liability.
Foreign exchange gains and losses
For financial liabilities that are denominated in a foreign currency and are measured at amortised cost at the end of each reporting period, the foreign exchange gains and losses are determined based on the amortised cost of the instruments. These foreign exchange gains and losses are recognised in the 'finance income' or 'finance expense' line item, for gains and losses respectively, in profit or loss for financial liabilities that are not part of a designated hedging relationship.
The fair value of financial liabilities denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of the reporting period. For financial liabilities that are measured as at FVTPL, the foreign exchange component forms part of the fair value gains or losses and is recognised in profit or loss for financial liabilities that are not part of a designated hedging relationship.
See note regarding the recognition of exchange differences where the foreign currency risk component of a financial liability is designated as a hedging instrument for a hedge of foreign currency risk.
Derecognition of financial liabilities
The Company derecognises financial liabilities when, and only when, the Company's obligations are discharged, cancelled or have expired. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.
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Defined contribution schemes
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Contributions to defined contribution pension schemes are charged to the statement of comprehensive income in the year to which they relate.
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ATTIRE EMEA LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2020
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Accounting estimates and judgments
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5.1 Estimates and assumptions
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Provisions for inventories
Inventories are regularly reviewed to ensure that cost is fully recoverable. Should it be considered that inventories are not fully recoverable then a provision is made to hold inventories at their net realisable value. At 31 May 2020 a provision of £1,487,369 (2019: £174,194) had been made against the stock holding.
Allowance for doubtful receivables
Trade and other receivables are regularly reviewed to assess recoverability, and a provision is made against those in doubt. At 31 May 2020 a total provision of £155,236 (2019: £97,505) had been made against potential doubtful
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The following is an analysis of the Company's revenue for the year from continuing operations:
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Timing of revenue recognition:
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Goods and services transferred over time
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Government grants receivable
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ATTIRE EMEA LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2020
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Employee benefit expenses
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Employee benefit expenses (including directors) comprise:
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Defined contribution pension cost
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Key management personnel compensation
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Company, including the directors of the Company listed on page 2, and the Financial Controller of the Company.
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Key management personnel compensation
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The monthly average number of persons, including the directors, employed by the Company during the year was as follows:
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ATTIRE EMEA LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2020
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Recognised in profit or loss
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Interest on lease liabilities
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Net finance expense recognised in profit or loss
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ATTIRE EMEA LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2020
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10.1 Income tax recognised in profit or loss
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Current tax on profits for the year
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The reasons for the difference between the actual tax charge for the year and the standard rate of corporation tax in the United Kingdom applied to losses for the year are as follows:
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Tax using the Company's domestic tax rate of 19% (2019:19%)
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Expenses not deductible for tax purposes, other than goodwill, amortisation and impairment
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Capital allowances for the year in excess of depreciation
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Other timing differences leading to an increase/(decrease) in taxation
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Unrelieved tax losses carried forward
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Changes in tax rates and factors affecting the future tax charges
Deferred tax has not been provided in respect of timing differences relating primarily to trading losses and as there is insufficient evidence that the benefit of the losses will be recovered. The amount of the asset not recognised is £586,161 (2019: £291,411). The above deferred tax asset has been calculated based on a future UK tax rate of 19% (2019: 19%) as applicable from 1 April 2020.
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ATTIRE EMEA LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2020
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Property, plant and equipment
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Impact of change in accounting policy
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At 1 June 2019 (adjusted balance)
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Accumulated depreciation and impairment
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Charge owned for the year
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Impact of change in accounting policy
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At 1 June 2019 (adjusted balance)
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Charge owned for the year
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ATTIRE EMEA LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2020
11.
Property, plant and equipment (continued)
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11.1. Assets held under leases
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The net book value of owned and leased assets included as "Property, plant and equipment" in the Statement of Financial Position is as follows:
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Property, plant and equipment owned
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Right-of-use assets, excluding investment property
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Information about right-of-use assets is summarised below:
Net book value
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Finished goods and goods for resale
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In 2020, a total of £2,853,255 (2019: £2,030,076) of inventories was included in profit or loss as an expense. This includes an amount of £1,487,369 (2019: £174,194) resulting from write-down of inventories.
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ATTIRE EMEA LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2020
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Trade and other receivables
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Less: provision for impairment of trade receivables
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Receivables from related parties
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Total financial assets other than cash and cash equivalents classified as loans and receivables
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Prepayments and accrued income
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Total trade and other receivables
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Payables to related parties
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Total financial liabilities, excluding loans and borrowings, classified as financial liabilities measured at amortised cost
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Other payables - tax and social security payments
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Total trade and other payables
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Less: current portion - trade payables
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Less: current portion - payables to related parties
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Less: current portion - other payables
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Less: current portion - accruals
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Total non-current position
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ATTIRE EMEA LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2020
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Total loans and borrowings
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Ordinary shares
shares of £
1.00
each
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Ordinary shares shares of £
1.00
each
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The fully paid ordinary shares have full voting, dividend and capital distribution rights. They do not confer
any right of redemption. Each £1 share carries one vote.
Retained earnings
The profit and loss account includes all current and prior period retained profits and losses.
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ATTIRE EMEA LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2020
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Lease liabilities are due as follows:
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Contractual undiscounted cash flows due
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Between one year and five years
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Lease liabilities included in the Statement of Financial Position at 31 May
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The following amounts in respect of leases have been recognised in profit or loss:
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Interest expense on lease liabilities
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ATTIRE EMEA LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2020
|
19.1 Financial risk management objectives
|
The overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting the Company’s flexibility. Further details regarding these policies are set out below:
Liquidity risk arises from the Company’s management of working capital. There is a risk that the Company will encounter difficulty in meeting its financial obligations as they fall due.
The Company’s policy is to ensure that it will always have sufficient cash to allow it to meet its liabilities when they become due. The principal liabilities of the Company arise in respect of administrative expenditure and trade and other payables. The Board receives cash flow projections on a regular basis as well as information on cash balances. The Company receives support from Group as required.
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19.3 Foreign currency risk management
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The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. Exchange rate exposures are managed within approved policy parameters utilising forward foreign exchange contracts.
The carrying amounts of the Company's foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are as follows:
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19.4 Credit risk management
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Credit risk with cash and cash equivalents is reduced by placing funds with banks with high credit ratings.
The Company's policy is to make a provision against those debts that are overdue, unless there are grounds for believing that all or some of the debts will be collected. Further details provided in note 3.
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ATTIRE EMEA LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2020
|
Related party relationships and transactions
|
During the year the Company undertook significant transactions with its former parent company, Cintas Corporation. Attire EMEA Limited purchased stock from Cintas Corporation totalling £832,731 (2019: £1,293,486). Attire EMEA Limited made repayments to Cintas Corporation of £648,006 (2019: £588,292) during the year. All transactions are charged on an arms-length basis; however indefinite payment terms have been allowed to Attire EMEA Limited in order to support the Company until it becomes profitable. Interest of £nil (2019: £nil) was charged on the intercompany loan during the year. As at the reporting date Attire EMEA Limited owed a balance of £3,076,703 (2019: £2,891,978) to Cintas Corporation. As detailed in the Post Balance Sheet Events note, on 2 June 2021 prior to the sale of the Company's shares to Attire Holdings Limited, a loan waiver was signed to release the Company from the obligation to settle the intercompany loan with Cintas Corporation. The balance outstanding of £2,613,607 was converted to a capital contribution on that date.
The immediate parent company in the current and prior period was Cintas Netherlands B.V., a company incorporated in the Netherlands. The ultimate parent company in the current and prior period is Cintas Corporation, a publicly listed company incorporated in the United States. Copies of the publicly available annual report are obtainable from its registered address, Cintas Corporation, PO Box 625737, Cincinnati, Ohio 45262.
On 2 June 2021 the entire share capital of the Company was acquired by Attire Holdings Limited, a limited company incorporated in England and Wales. Attire Holdings Limited is the ultimate parent company.
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Notes supporting statement of cash flows
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Cash at bank available on demand
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Cash and cash equivalents in the statement of financial position
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Cash and cash equivalents in the statement of cash flows
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Post balance sheet events
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On 2 June 2021 the entire share capital of the Company was acquired by Attire Holdings Limited, a limited company incorporated in England and Wales. Prior to the sale of the Company's shares to Attire Holdings Limited, a loan waiver was signed to release the Company from the obligation to settle the intercompany loan with Cintas Corporation. The balance outstanding of £2,613,607 was converted to a capital contribution on that date.
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