THE_HORTICULTURAL_TRADES_ - Accounts

At our conference in October last year I referred to this somewhat dated but appropriately relevant concept of the VUCA world we live in. A world where Volatility-Uncertainty-Complexity-Ambiguity abound. A world of constant unpredictable change.

Again I think this has indeed been a good descriptor for what we have all had to face into. Whether that be the macro-economic environment both nationally and internationally, whether that be a function of Brexit, Covid or the new geopolitical environment we find ourselves in or all three. Perhaps all exacerbated by the climate change and technological revolutions referred to in previous reports.

Change will always be there - the skill is in recognising its pace and scanning forward for its impacts.

Indeed it has been a year of significant change for your trade association. Perhaps the most significant of which has been the recruitment of effectively a new senior leadership team. A process you could argue commenced two years ago with the recruitment of Jon Dixon as our Director of Gifting Sales and the promotion of Dave Denny to Director of Research and Insights. This was followed by the joining in September last year of Elia Johnston and Jennifer Pheasey as Director of Marketing and Director of Public Affairs respectively. And latterly the recruitment of Fran Barnes as CEO. That said all with the degree of essential continuity brought by Alex Vick our Finance Director.

This has allowed your organisation to continue to expand its activities.

Our profile across government is now substantially higher. Our presence at Westminster is now weekly and we continue to foster very positive engagement with devolved nations - Holyrood in particular. Our communications strategy has, I believe, started to deliver more with additional briefings, technical workshops, webinars and a refreshed weekly update. Our ability to collect and analyse data has gained momentum, with our monthly market review being the most widely read report we produce. In addition, HTA events continue to attract larger audiences.

Our gifting proposition that you will know from previous reports underwrites approximately two thirds of what we do. Successful contract negotiations ensured a positive future for the HTA, migrating all gift card sales from our legacy provider to our current gift card partner ePay. This is a key step towards the HTA achieving a single gifting operating model, something I know all our retail members will appreciate. In fact, it has allowed us to get closer to some of the issues and to articulate some of the commercial advantages of gifting alongside positioning members to take advantage of the new digital technology that could revolutionise benefits for both customers and retailers.

Finally, I hope our ability to build strong working relationships with other groups and Associations will be seen to bear fruit, whether that be our long-standing close relationship with the RHS; the NFU; through the recently created HCP that will be so vital in managing future crop protection issues or our association with Plant Healthy and the significant role I believe the HTA can play with regard to UK biosecurity.

All of these individual achievements I believe have combined to raise our profile and our reputation for standing up for our membership and the wider industry.

Financials

Our aim as a not-for-profit membership association is to maximise the benefits to all members, to match our income with our expenditure, and thus to breakeven or declare a small surplus each year at the operating profit level.

From a balance sheet perspective, the HTA Board takes a very conservative approach to matching our liabilities with our assets and to building our net assets in line with the growth of our business and to a level that gives us cover for a “rainy day”. In particular, we consider the potential detriment of a market value reduction in investment values at year end.

With this in mind your Association built its net assets in prior years to a high of £3.4M in 2021.

In 2022, your association delivered a loss before tax of (£858k). To say this was planned might sound remiss but to the extent that the key impacts on profitability were known and understood is accurate. In fact we ended the year ahead of forecast. When considered within the context of a gift card breakage share impact of (£754k), and changes in investment market values of (£650k), the underlying result is a positive one.

I would like to explain the trading result in a little more detail. Our total revenue, the majority of which relates to gifting and annual subscriptions, decreased (£190k) to £5,186k. Within this, membership subscriptions increased £92k to £1,501k and other income increased £356k to £871k. Other income was predominantly affected by the welcome return to physical events in 2022, with strong attendance figures and engagement across the events calendar.

Gifting income reduced by (£638k) to £2.8m. It is the ongoing contribution received from gifting revenues, some 54% in 2022, that allows us to maintain and expand the range of activities that we carry out on behalf of our membership, and we have continued this into the current year. Gifting income comprises two elements, a commission on sales less redemptions, and breakage (that element of spend left on cards or vouchers post expiry). Top-line gifting sales remained strong at £30.9m, within which member sales are the largest channel. This allowed income from commission to rise to £1.7m. In 2022, gift voucher breakage was 4.5%. This is slightly lower than the ten-year average of 6.1% and indicates that consumer engagement in the scheme remains high. In recent years, we have seen significant movements in the gift voucher breakage percentage, something that is directly linked to the strength of the spring trading season immediately following the year of voucher issue Vouchers that expired in 2022 were originally issued in 2019. Redemptions were particularly strong in 2021 and 2022, more than offsetting the impact of spring 2020 and the first lockdown.

Gift card breakage is increasing in relevance with the ongoing migration away from paper voucher sales. As I mentioned in last year’s report, gift card breakage up to June 2024 will be shared with the outgoing gift card partner according to an updated contract agreed in July 2022. This means that run-rate breakage for gift cards is temporarily suppressed. Given the above total breakage income fell to £1.1m.

Cost of sales at £758k is broadly consistent with the prior year and relates mainly to gifting sales, including direct expenses such as gift card activation fees, production costs and merchandising.

Administrative expenses increased by £1,011k to £4,873k, or 26%. There were a number of key initiatives within this expansion, in particular related to headcount and the strengthening of the senior leadership team, including the hiring of a new Chief Executive as mentioned earlier in my report. Physical events costs are the largest single contributor at around 30% of the increase, but steady state costs also expanded in line with increased member-facing activities to support the association’s ongoing remit.

Other operating income increased £7k to £103k. Additional Horticulture House rental income was offset by a reduction in furlough grants claimed.

The net impact of interest income, investment income and capital gains in the year was negative at (£515k). This compares to upside of £445k in 2021. The change is due to a general downward trend in investment values across both bonds and equities. The association’s investment strategy is designed to allow for temporary fluctuations of this nature. As portfolio assets are held to maturity, any losses will not be realised and will naturally reverse over time.

Net assets for 2022 have decreased by (£760k) to £2,675k.

I would, as always, draw your attention to the fact that a proportion of our gifting liabilities are likely never to materialise through natural breakage. This year this number is estimated at £4.4m and is a further underwrite to your Association’s net assets.

Outlook

Given this reduction in net assets, it would be important for me to point out where results sit in relation to the current year.

Net assets as mentioned reached a peak of £3.4m in 2021. This has given us a cushion to cope with any potential fall in investment income and also allows for a planned expansion in the HTA offer. 2022 has seen a fall in net assets to £2.7m. This still provides more than adequate cover for future risk and to underwrite a further expansion in services. In fact our plans indicate a further diminution in net assets in 2023, incorporating the ongoing EML impact and a continued investment in the service provision.

Notwithstanding the headwinds that impact so many of our membership, I remain optimistic about our industry’s potential and the role the HTA can play within it.

The more complex, uncertain and ambiguous the world is the greater the need for really insightful assistance and even more so when so much of that comes from government itself. I hope our increased ability to not only shine a light on the complexities but to genuinely push back on some of the regulatory inconsistencies is where we are able to add huge value. The recent House of Lords Committee on Horticulture is a first in a generation and I believe will result in a further recognition of our sector’s contribution to the UK economy and to society as a whole.

One of the key strategic challenges will be how we really construct a broader sustainability plan for our sector building on what we have already achieved. Not only as a genuine practical guide for business improvement and benchmarking but something that gets us ahead of the game in terms of net zero and the plethora of other environmental ambitions that other institutions may wish to challenge us on.

Our new senior leadership team bring with them great insight and I am confident that, under the leadership of your new CEO Fran Branes, we can deliver a fresh strategic approach to our challenges.

A thank you to all of you for again allowing us the time and the access to data sources that are so critical to achieving our ambitions particularly on the policy agenda—without data we have nothing. And finally a thank you to all HTA staff who have contributed so much over the past twelve months.

The directors present their annual report and financial statements for the year ended 31 December 2022.

The principal activity of the company continued to be that of the principal trade association representing ornamental growers, garden retailers, landscapers and suppliers.

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

The company has made qualifying third party indemnity provisions for the benefit of its directors during the year. These provisions remain in force at the reporting date.

Johnston Carmichael LLP were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.

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

This report has been prepared in accordance with the provisions applicable to companies entitled to the small companies exemption.

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

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

•     select suitable accounting policies and then apply them consistently;

•     make judgements and accounting estimates that are reasonable and prudent;

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

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

We have audited the financial statements of The Horticultural Trades Association (the 'company') for the year ended 31 December 2022 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in members' funds 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 Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

•     give a true and fair view of the state of the company's affairs as at 31 December 2022 and of its loss for the year then ended;

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

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

Basis for 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 responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

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

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

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

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 directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

• the directors' report has been prepared in accordance with applicable legal requirements.

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 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, or returns adequate for our audit have not been received from branches not visited by us; or

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

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

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

•     the directors were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemption in preparing the directors' report and take advantage of the small companies exemption from the requirement to prepare a strategic report.

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

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

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/Our-Work/Audit/Audit-and-assurance/Standards-and-guidance/Standards-and-guidance-for-auditors/Auditors-responsibilities-for-audit/Description-of-auditors-responsibilities-for-audit.aspx. This description forms part of our auditor’s report.

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.

We assessed whether the engagement team collectively had the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations by considering their experience, past performance and support available.

All engagement team members were briefed on relevant identified laws and regulations and potential fraud risks at the planning stage of the audit. Engagement team members were reminded to remain alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

Extent to which the audit is considered capable of detecting irregularities, including fraud (continued)

We obtained an understanding of the legal and regulatory frameworks that are applicable to company and the sector in which it operates, focusing on those provisions that had a direct effect on the determination of material amounts and disclosures in the financial statements. The most relevant frameworks we identified include:

• Companies Act 2006;

• Tax legislation (specify jurisdictions); and

• UK Generally Accepted Accounting Practice.

We gained an understanding of how the company is complying with these laws and regulations by making enquiries of management and those charged with governance. We corroborated these enquiries through our review of relevant correspondence with regulatory bodies and board meeting minutes.

We assessed the susceptibility of the financial statements to material misstatement, including how fraud might occur, by meeting with management and those charged with governance to understand where it was considered there was susceptibility to fraud. This evaluation also considered how management and those charged with governance were remunerated and whether this provided an incentive for fraudulent activity. We considered the overall control environment and how management and those charged with governance oversee the implementation and operation of controls. We identified a heightened fraud risk in relation to:

• Management override of controls

• Revenue recognition

In addition to the above, the following procedures were performed to provide reasonable assurance that the financial statements were free of material fraud or error:

• Reviewing minutes of meetings of those charged with governance for reference to: breaches of laws and regulation or for any indication of any potential litigation and claims; and events or conditions that could indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud;

• Reviewing the level of and reasoning behind the company’s procurement of legal and professional services;

• Performing audit work procedures over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing judgements made by management in their calculation of accounting estimates for potential management bias;

• Completion of appropriate checklists and use of our experience to assess the Company’s compliance with the Companies Act 2006; and

• Agreement of the financial statement disclosures to supporting documentation.

Our audit procedures were designed to respond to the risk of material misstatements in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve intentional concealment, forgery, collusion, omission or misrepresentation. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it.

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.

The profit and loss account has been prepared on the basis that all operations are continuing operations.

These financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.

The Horticultural Trades Association is a company incorporated in England & Wales under the Companies Act. The address of the registered office is given on the contents page and the nature of the Company's operations, and its principal activities are set out in the Directors' report.

The financial statements have been prepared in accordance with FRS 102, Section 1A Small Entities. The preparation of financial statements in compliance with FRS 102, Section 1A Small Entities requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies as outlined in Note 2.

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 certain financial instruments at fair value. The principal accounting policies adopted are set out below.

The Directors have assessed the HTA's current and future solvency by means of a prudent forecasting exercise with detailed assumptions regarding future income generation, expenditure, and cash flows. true

Income and expenditure are closely monitored in order to protect cash reserves whilst prioritising activities that maximise member value and engagement. The Directors are satisfied that the Association is well placed to manage its risks and has sufficient cash resources to fund ongoing operations for at least twelve months from the date of approval of these financial statements.

In conclusion, the Directors have formed a judgment, at the time of approving the financial statements, that there is a reasonable expectation that the Association has adequate resources to meet its obligations as they fall due whilst maintaining member services at their current level. For this reason, the Directors continue to adopt the going concern basis in preparing the financial statements.

Turnover represents the recognised value of goods and services provided and is stated net of trade discounts and VAT.

Membership subscriptions are recognised as turnover in the period to which they relate. Subscriptions in advance are treated as deferred income.

Commission on National Garden Gift Vouchers is substantially recognised on the date of sale when the Company has transferred the significant risks and rewards of ownership to the buyer, and it is probable that the Company will receive the previously agreed upon payment. A small, fixed percentage of the commission is deferred until the voucher is redeemed or the financial obligation has expired. Vouchers are sold and redeemed under contract within a closed community of members.

Commission on Garden Gift Cards is recognised at the point of sale. Garden Gift Cards are sold via an agency agreement with third parties and redeemed under contract within a closed community of members. Any residual financial liability relating to National Garden Gift Vouchers and Garden Gift Cards is released to turnover on expiry of the relevant obligation.

Intangible assets represent the Company's 50% interest in organising and staging The Garden Press Event in the UK, which commenced in 2017.

The Directors considered that the future income generated form these events would benefit the Company over a period of 5 years and accordingly the cost was amortised from this period.

Intangible assets purchased are stated at historical cost less amortisation.

The right to host trade events is being amortised over its estimated useful life of 5 years.

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

Freehold properties are stated at their fair value. Tangible fixed assets other than freehold properties are stated at historical cost less depreciation.

Depreciation is provided at rates calculated to write off the cost of fixed assets, less their estimated residual value, over their expected 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 credited or charged to profit or loss.

Land is not depreciated.

A profit or loss on revaluation of freehold buildings is recognised in other comprehensive income in the Statement of Comprehensive Income, except to the extent that a loss exceeds accumulated gains, in which case the excess is recognised in profit or loss.

Profits and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised within other comprehensive income or losses in the Statement of Comprehensive Income.

At each reporting period end date, the company 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.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Stocks consist of books, leaflets, deactivated gift cards and gift vouchers. These are stated at the lower of cost and net realisable value after making provisions for obsolete or slow-moving items.

At each reporting date, stock is assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to sell. The impairment loss is recognised immediately in the profit or loss for the period.

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less.

Financial assets, other than current asset investments which are held at fair value, are initially measured at transaction price (including transaction costs) and subsequently held at cost, less any impairment.

Financial liabilities and equity instruments are classified according to the substance of the financial instrument's contractual obligations, rather than the financial instrument's legal form. Financial liabilities are held at amortised cost.

National Garden Gift Vouchers and Garden Gift Cards in circulation are held at the value of the financial obligation until that obligation has expired.

The tax expense for the period comprises current 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 company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

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

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

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.

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.

Prior period restatement

The directors have revisited the prior year classification of IT software costs between tangible and intangible fixed assets. Following this review, a decision was taken to restate the comparative financial statements to reflect the reclassification of IT software costs with a carrying value of £399,383 (being cost of £841,602 and accumulated amortisation of £442,219) from tangible to intangible fixed assets.

Additionally, the prior year movements in current asset investments, as shown in the statement of comprehensive income, have been updated. Interest receivable has increased from £540 to £393,770, whilst the loss on disposal of current asset investments has moved from a £416,761 gain to a £93,495 loss. A commensurate movement in the changes in fair value of current asset investments has also been processed, with this being revised from £27,352 to £144,378. These changes have not impacted the profit for the year.

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

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

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

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

• Determination of the appropriate amount of commission revenue to defer until a National Garden Gift Voucher is redeemed. Factors taken into consideration in reaching such a judgement include the estimated costs to the Company of providing the related administration service.

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

• Tangible fixed assets are depreciated over their useful lives taking into account residual values, where appropriate. Freehold property is maintained at fair value as determined annually by a valuation of the property at hand.

• Determination of the allowance required for vouchers issued prior to FRS 102 transition date which do not have expiry dates and are expected to be redeemed in the future.

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

Their aggregate remuneration comprised:

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

In addition to the amount (credited)/charged to the profit and loss account, the following amounts relating to tax have been recognised directly in other comprehensive income:

The above other intangibles cost represents the Company's 50% interest in organising and staging The Garden Press Event in the UK, which commenced in 2017.

The Directors considered that the income generated from these events would benefit the Company over a period of 5 years and accordingly the above cost was amortised over this period.

The freehold property, Horticulture House, Chilton, is included at its fair value, as revalued by Savills (UK) Limited as at 31 December 2019. It is the view of the directors that this valuation remains appropriate and representative of the fair value of the property as at 31 December 2022.

The freehold property is carried at its fair value. If the asset were measured using the cost model, the carrying amounts would be as follows:

Current asset investments comprise shares and bonds in listed companies which are traded on a regular basis, together with deposit accounts. The loss recognised on these investments in the income statement for the period was £517,651 (2021: £444,113 income) representing profits and losses on disposals and both realised and unrealised fair value re-measurements.

Other creditors contain financial instruments in circulation, being gift vouchers and gift cards with liabilities totalling £26,188,470 (2021 - £26,856,599).

The financial instruments in circulation include both National Garden Gift Vouchers and Garden Gift Cards. The amount outstanding at the balance sheet date represents the financial obligation of the company for all unexpired vouchers and cards. These financial instruments are not discounted as they are deemed to be payable on demand. Based on experience, the directors estimate that at 31 December 2022, £4.4m (2021: £3.2m) of vouchers and cards in circulation are not expected to be redeemed.

In accordance with FRS 102, Section 1A Small Entities, these financial instruments will be derecognised only upon expiration of the liability or as account maintenance fees are applied in the case of certain gift cards.

The following are the major deferred tax liabilities and assets recognised by the 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.

The revaluation reserve represents gains made on the revaluation of fixed assets.

The profit and loss reserve represents cumulative profits or losses.

The company is a private company limited by guarantee and consequently does not have share capital. Each of the members is liable to contribute an amount not exceeding £1.05 towards the assets of the company in the event of liquidation. There is no ultimate controlling party of The Horticultural Trades Association.