ACCOUNTS - Final Accounts
ACCOUNTS - Final Accounts
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Registered number: 02442948
DIRECTORS' REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
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FUTURE DESIGNS LIMITED
COMPANY INFORMATION
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FUTURE DESIGNS LIMITED
CONTENTS
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FUTURE DESIGNS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2019
The directors present the strategic report for the year ended 31 December 2019.
Building off the back of a successful 2018, the business started 2019 with a healthy order book and potential to achieve the sales target of £10.0m. However due to exceptional circumstances this was not the case resulting in £5.9m turnover. Several key factors outside of our control has limited our ability to secure and convert enquiries into sales orders. These issues can be broken down into three areas.
• The sudden resignation of the sales director. • Continued uncertainty of Brexit. • Covid 19 epidemic. Losing a third of the sales team suddenly significantly affected the ability to cover the ground to generate and convert new enquiries into sales orders. We also found due to the uncertainty of Brexit contractors and specifiers were delaying placing orders often leaving it to just a few weeks before being needed on site. The unprecedented Covid 19 epidemic was catastrophic for us, seeing London and our showroom closed with no access to our clients and high levels of enquires and converted orders put on hold. Albeit the business remained open with office personnel working from home we took no advantage of the furlough scheme and government grants. Looking forward into 2020 the risks to the business are that the large projects we already have purchase orders and stock for remain on hold with uncertainty on when the projects will restart. Access to our client base remains limited with key sales opportunities being cancelled, for example, MIPIM. This along with other sales and marketing opportunities will restrict the potential for 2020/2021. Should there be another lock down this will extend the downturn in sales. The business continues to be resilient and driven by its directors with focus on other opportunities to embellish lighting enquiries. It is exploring other technologies to incorporate into lighting to extend its market and lighting sectors. We have successfully completed a large project in the USA showing we can operate in this restricted area by meeting the UL criteria are also seeking SASO certification to enable trading with Saudi Arabia. The middle East remains very strong for us with increased levels of enquiries. We have successfully replaced the role of sales director who joined the business in January 2020. We have extended our trading partners in the UAE by adding Light Link to our network. New UK based companies have been sourced to ensure fluid manufacture regardless of any Brexit outcome. In addition new European trading partners have been identified to reduce risk from material supply. Having out grown our business MRP / ERP system, plans for the back end of 2020 is to move from our current provider to a more complex system where all tasks are based around one software platform rather than multiple software packages.
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FUTURE DESIGNS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
The key risks and uncertainties faced by the business arise from the external environment. Other than the impact of the Covid-19 pandemic, which is discussed in more detail later in this report, the key corporate risks identified by the company include:
• Competition and market risks • The impact of Brexit In June 2016, the United Kingdom voted to leave the European Union, leading to uncertainty in the financial markets and the wider economy. The full impact remains unclear until the outcome of political and trade negotiations are finalised. The key areas of risk set out in the ‘Principal risks and uncertainties’ above are exasperated as a result of the Covid-19 pandemic, with many businesses closed for months and a significant volume of the workforce working from home. The company’s risks have been assessed alongside their potential impact and we continue to closely monitor the ongoing situation. In addition to the above, other principal risks are as follows: Competitive risk The company manages competitive trading risk by providing added value services to its customers, having fast response times, not only in supplying products, but also in handling all customer queries and, additionally, by maintaining strong relationships with customers. Market risk The company depends, to a large extent, on the state of the market in the lighting sector. The company manages its risk by maintaining a wide customer base, offering innovative solutions to customers and exploring other markets across a range of geographical locations. Liquidity risk The liquidity risk is managed by maintaining a balance between the continuity of funding and flexibility through the use of overdrafts at floating rates of interest. It is ensured that sufficient funds are available to meet amounts due and by negotiating extended credit terms with suppliers where necessary. The company protects its liquidity by ensuring there are adequate funds available to meet repayments. Credit risk Credit risk is managed by agreeing payment terms in advance. Appropriate credit control procedures are followed to manage perceived credit risk. Trade receivables are managed in respect of credit and cash flow risk by policies concerning the credit offered to customers and the regular monitoring of amounts outstanding for both time and credit limits.
The directors consider that the principal key performance indicators relating to the company are the gross profit
levels included within these financial statements. The results of the company as set out on page 8 show sales of £7.993m (2018: £12.213m) and profit before tax of £1.230m (2018: £3.135m).
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FUTURE DESIGNS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
This report was approved by the board and signed on its behalf.
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FUTURE DESIGNS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2019
The directors present their report and the financial statements for the year ended 31 December 2019.
The directors are responsible for preparing the Strategic report, 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Company's financial statements and then apply them consistently;
∙make judgments 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 to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The profit for the year, after taxation, amounted to £952,778 (2018 - £2,649,277).
Dividends of £384,000 were paid during the year (2018: £404,500)
The directors who served during the year were:
Each of the persons who are directors at the time when this Directors' report is approved has confirmed that:
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FUTURE DESIGNS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
The financial statements were authorised for issue on 1 December 2020 and for disclosure purposes it is important to note that due to the economic impact of the Covid-19 pandemic the company has considered the potential impact on trading further to that as a result of the lockdown and imposed site closure. Any estimation of this reduction due to the economic climate is incredibly difficult to assess at the sign off date however any impact is not expected to affect going concern.
The auditors, Wellers, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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FUTURE DESIGNS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF FUTURE DESIGNS LIMITED
We have audited the financial statements of Future Designs Limited (the 'Company') for the year ended 31 December 2019, which comprise the Statement of income and retained earnings, the Balance sheet, the Statement of cash flows and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
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 Auditors' 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.
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
∙the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
∙the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the Company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.
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 Auditors' 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
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FUTURE DESIGNS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF FUTURE DESIGNS LIMITED (CONTINUED)
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.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Strategic report and the Directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Strategic report and the Directors' report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the 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:
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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FUTURE DESIGNS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF FUTURE DESIGNS LIMITED (CONTINUED)
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 Auditors' 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 Auditors' report.
This report is made solely to the Company's members 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 Auditors' 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 for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Accountants
Statutory Auditors
1 Vincent Square
SW1P 2PN
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FUTURE DESIGNS LIMITED
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 DECEMBER 2019
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FUTURE DESIGNS LIMITED
REGISTERED NUMBER: 02442948
BALANCE SHEET
AS AT 31 DECEMBER 2019
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FUTURE DESIGNS LIMITED
REGISTERED NUMBER: 02442948
BALANCE SHEET (CONTINUED)
AS AT 31 DECEMBER 2019
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 13 to 22 form part of these financial statements.
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FUTURE DESIGNS LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2019
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FUTURE DESIGNS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
Future Designs Limited is a limited liability company. The company is incorporated in England and Wales. The registered office is 1 Vincent Square, London, SW1P 2PN.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Section 1A of Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The following principal accounting policies have been applied:
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:
Sale of goods
Revenue from the sale of goods is recognised when all of the following conditions are satisfied:
Rendering of services
Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
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FUTURE DESIGNS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
2.Accounting policies (continued)
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a weighted averagebasis. Work in progress and finished goods include labour and attributable overheads.
At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.
Short term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
In the Statement of cash flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Company's cash management.
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FUTURE DESIGNS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
2.Accounting policies (continued)
Short term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
Functional and presentation currency
The Company's functional and presentational currency is GBP.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.
Rentals paid under operating leases are charged to profit or loss on a straight line basis over the lease term.
Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.
Defined contribution pension plan
The Company contributes to a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.
The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance sheet. The assets of the plan are held separately from the Company in independently administered funds.
Interest income is recognised in profit or loss using the effective interest method.
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FUTURE DESIGNS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
2.Accounting policies (continued)
In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research shall be recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured. The capitalised development costs are subsequently amortised on a straight line basis over their useful economic lives, which range from 3 to 6 years.
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.
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FUTURE DESIGNS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
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FUTURE DESIGNS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
8.Taxation (continued)
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FUTURE DESIGNS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
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FUTURE DESIGNS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
10.Tangible fixed assets (continued)
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FUTURE DESIGNS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
The Company contributes to a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £83,242 (2018 - £39,670). Contributions totalling £8,866 (2018 - £9,233) were payable to the fund at the balance sheet date and are included in creditors.
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FUTURE DESIGNS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
The company is a wholly owned subsidiary of Mia 18 Limited, a company registered in England and Wales. During both the current and previous year, the company was under the control of D S Clements, by virtue of his majority shareholding of the parent company.
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