Future Garments Limited - Limited company accounts 20.1

REGISTERED NUMBER: 02690536 (England and Wales)

STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 29 MAY 2021

FOR

FUTURE GARMENTS LIMITED

Page

Company Information

1

Strategic Report

2

Report of the Directors

3

Report of the Independent Auditors

5

Income Statement

9

Other Comprehensive Income

10

Balance Sheet

11

Statement of Changes in Equity

12

Cash Flow Statement

13

Notes to the Cash Flow Statement

14

Notes to the Financial Statements

15

DIRECTORS:

K S Palak

H S Palak

SECRETARY:

Mr. K S Palak

REGISTERED OFFICE:

Aqua House, Buttress Way

Smethwick

Warley

West Midlands

B66 3DL

REGISTERED NUMBER:

02690536 (England and Wales)

BANKERS:

Handelsbanken

35 Newhall Street

Birmingham

West Midlands

B3 3PU

The directors present their strategic report for the year ended 29 May 2021.

REVIEW OF BUSINESS

The overall sales growth for the group in this year is over 18%, following on from 13% in the previous reporting period with the healthy increased gross profit margins of 29%. Future Garments Ltd has also realigned its pricing to reflect the exchange rate conditions. Even with more competition in the market the client retention rate has not been affected and the group has made a profit. The liquidity rate of the company has been stable with less borrowings this year as compared to last year.

As a consequence of all of the above the directors of Future Garments Ltd have decided to pass a modest return to shareholders by way of a dividend.

By taking good care as we undertake our business in the present we will ensure the long-term sustainability of our business in the future. At the heart of our operation we consider carefully how we interact with the world around us, work hard to minimise our impact and strive to make a positive contribution, taking on board the views of all of our key stakeholders. Corporate Responsibility is a specific business discipline that takes a proactive approach to forward thinking management. It recognises that business decisions have to consider social and environmental factors alongside economic ones. We care about where our garments and material come from, how it is produced, the people who make it and how it is moved & sold.

With the recent economic and political uncertainty due to the global pandemic COVID-19 and Brexit, we at Aqua Holdings Limited are trying our best to keep our business running as smoothly as possible by insuring that we provide support needed by our subsidiary companies in any form or way.

We are an equal opportunities employer, committed to giving fair and equal treatment to all employees and job applicants in terms of recruitment, pay conditions, promotions, training and all employment matters regardless of their race, sex, ethnic background or religious beliefs, sexual orientation or disabilities. An equal opportunities policy is in force which aims to ensure that all employees are selected, trained, compensated, promoted and transferred solely on the strength of their ability, skills, qualifications and merit. We also believe that all employees have a right to work in an environment free from discrimination and bullying.

ON BEHALF OF THE BOARD:

K S Palak - Director

28 February 2022

The directors present their report with the financial statements of the company for the year ended 29 May 2021.

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of Manufacture of workwear

DIVIDENDS

No interim dividend was paid during the year. The directors recommend a final dividend of 25000 per share.

The total distribution of dividends for the year ended 29 May 2021 will be £ 25,000 .

EVENTS SINCE THE END OF THE YEAR

Information relating to events since the end of the year is given in the notes to the financial statements.

DIRECTORS

The directors' who also served the parent company, had the following interests in the parent company Aqua Holdings Limited:

£1 Ordinary Shares 29/5/19

£1 Ordinary Shares30/05/18

Mr K S Palak

6,250

6,250

Mr H S Palak

3,125

3,125

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Strategic Report, the Report of the Directors 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 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 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.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

AUDITORS

The auditors, Thapers Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

K S Palak - Director

28 February 2022

Opinion

We have audited the financial statements of Future Garments Limited (the 'company') for the year ended 29 May 2021 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes to the Cash Flow Statement, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 29 May 2021 and of its profit for the year then ended;

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

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

Basis for qualified 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 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 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 directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors 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 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 the audit:

-	the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Strategic Report and the Report of the Directors 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 Report of the Directors.

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 directors' remuneration specified by law are not made; or

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

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page three, 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 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.

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

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

As part of our planning process:

" We enquired of management the systems and controls the company has in place, the areas of the financial statements that are mostly susceptible to the risk of irregularities and fraud, and whether there was any known, suspected or alleged fraud. The company did not inform us of any known, suspected or alleged fraud.

" We obtained an understanding of the legal and regulatory frameworks applicable to the company. We determined that the following were most relevant: FRS 102, Companies Act 2006, health and safety and employment law.

" We considered the incentives and opportunities that exist in the company, including the extent of management bias, which present a potential for irregularities and fraud to be perpetuated, and tailored our risk assessment accordingly.

" Using our knowledge of the company, together with the discussions held with the company at the planning stage, we formed a conclusion on the risk of misstatement due to irregularities including fraud and tailored our procedures according to this risk assessment.

The key procedures we undertook to detect irregularities including fraud during the course of the audit included:

" Identifying and testing journal entries and the overall accounting records, in particular those that were significant and unusual.

" Reviewing the financial statement disclosures and determining whether accounting policies have been appropriately applied.

" Reviewing and challenging the assumptions and judgements used by management in their significant accounting estimates, in particular in relation to depreciation.

" Assessing the extent of compliance, or lack of, with the relevant laws and regulations in particular those that are central to the entities ability to continue in operation.

" Testing key revenue lines, in particular cut-off, for evidence of management bias.

" Performing a physical verification of key assets , including stock.

" Obtaining third-party confirmation of material bank and loan balances.

" Documenting and verifying all significant related party and consolidated balances and transactions.

" Reviewing documentation such as the company board minutes, correspondence with solicitors, for discussions of irregularities including fraud.

" Testing all material consolidation adjustments.

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements even though we have properly planned and performed our audit in accordance with auditing standards. The primary responsibility for the prevention and detection of irregularities and fraud rests with the directors.

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 Report of the Auditors.

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 a Report of the Auditors 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.

Andeep Mangal F.C.A. (Senior Statutory Auditor)

for and on behalf of Thapers Limited

Chartered Accountants

Harpal House

14 Holyhead Road

Handsworth

Birmingham

West Midlands

B21 0LT

28 February 2022

TURNOVER

8,574,301

12,847,022

Cost of sales

5,785,406

8,985,286

GROSS PROFIT

2,788,895

3,861,736

Administrative expenses

2,385,804

2,661,695

403,091

1,200,041

Other operating income

485,864

181,822

OPERATING PROFIT

4

888,955

1,381,863

Interest payable and similar expenses

5

3,721

6,277

PROFIT BEFORE TAXATION

885,234

1,375,586

Tax on profit

6

168,840

263,928

PROFIT FOR THE FINANCIAL YEAR

716,394

1,111,658

PROFIT FOR THE YEAR

716,394

1,111,658

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

716,394

1,111,658

FIXED ASSETS

Tangible assets

8

61,144

68,973

CURRENT ASSETS

Stocks

9

2,159,923

1,643,842

Debtors

10

5,593,098

6,252,201

Cash at bank and in hand

4,364,273

1,923,662

12,117,294

9,819,705

CREDITORS

Amounts falling due within one year

11

3,672,525

2,014,159

NET CURRENT ASSETS

8,444,769

7,805,546

TOTAL ASSETS LESS CURRENT LIABILITIES

8,505,913

7,874,519

CREDITORS

Amounts falling due after more than one year

12

90,000

150,000

NET ASSETS

8,415,913

7,724,519

CAPITAL AND RESERVES

Called up share capital

15

12,500

12,500

Retained earnings

16

8,403,413

7,712,019

SHAREHOLDERS' FUNDS

8,415,913

7,724,519

The financial statements were approved by the Board of Directors and authorised for issue on 28 February 2022 and were signed on its behalf by:

K S Palak - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 30 May 2019

12,500

6,625,361

6,637,861

Changes in equity

Dividends

-

(25,000

)

(25,000

)

Total comprehensive income

-

1,111,658

1,111,658

Balance at 29 May 2020

12,500

7,712,019

7,724,519

Changes in equity

Dividends

-

(25,000

)

(25,000

)

Total comprehensive income

-

716,394

716,394

Balance at 29 May 2021

12,500

8,403,413

8,415,913

Cash flows from operating activities

Cash generated from operations

1

2,696,275

400,309

Interest paid

(3,721

)

(6,277

)

Tax paid

(158,908

)

(82,587

)

Net cash from operating activities

2,533,646

311,445

Cash flows from investing activities

Purchase of tangible fixed assets

(8,035

)

(2,422

)

Net cash from investing activities

(8,035

)

(2,422

)

Cash flows from financing activities

Loan repayments in year

(60,000

)

(60,000

)

Equity dividends paid

(25,000

)

(25,000

)

Net cash from financing activities

(85,000

)

(85,000

)

Increase in cash and cash equivalents

2,440,611

224,023

Cash and cash equivalents at beginning of year

2

1,923,662

1,699,639

Cash and cash equivalents at end of year

2

4,364,273

1,923,662

1.	RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

29/5/21

29/5/20

£

£

Profit before taxation

885,234

1,375,586

Depreciation charges

15,864

14,183

Finance costs

3,721

6,277

904,819

1,396,046

(Increase)/decrease in stocks

(516,081

)

99,049

Decrease/(increase) in trade and other debtors

659,103

(870,058

)

Increase/(decrease) in trade and other creditors

1,648,434

(224,728

)

Cash generated from operations

2,696,275

400,309

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 29 May 2021

29.5.21

30.5.20

£

£

Cash and cash equivalents

4,364,273

1,923,662

Year ended 29 May 2020

29.5.20

30.5.19

£

£

Cash and cash equivalents

1,923,662

1,699,639

3.	ANALYSIS OF CHANGES IN NET FUNDS

At 30.5.20

Cash flow

At 29.5.21

£

£

£

Net cash

Cash at bank

and in hand

1,923,662

2,440,611

4,364,273

1,923,662

2,440,611

4,364,273

Debt

Debts falling due

within 1 year

(60,000

)

(60,000

)

(60,000

)

Debts falling due

after 1 year

(150,000

)

60,000

(90,000

)

(210,000

)

-

(150,000

)

Total

1,713,662

2,440,611

4,214,273

1.	STATUTORY INFORMATION

Future Garments Limited is a private company, limited by shares, registered in England and Wales. The company's registered number is 02690536 (England & Wales) and registered office address is Aqua House, Buttress Way, Smethwick, Warley, West Midlands, B66 3DL.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Turnover

Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Improvements to property

-

2% on cost

Plant and machinery

-

15% on cost

Fixtures and fittings

-

50% on cost, 33% on cost and 15% on cost

Motor vehicles

-

25% on cost

Stock

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

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

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

Pension costs and other post-retirement benefits

The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate.

3.	EMPLOYEES AND DIRECTORS

29/5/21

29/5/20

£

£

Wages and salaries

1,059,231

1,060,312

Social security costs

73,644

79,566

Other pension costs

11,747

14,004

1,144,622

1,153,882

The average number of employees during the year was as follows:

29/5/21

29/5/20

Accounts & Admin

5

7

Sales & Marketing

15

10

Warehouse

22

25

Purchasing

6

1

Management

3

3

IT

1

-

52

46

29/5/21

29/5/20

£

£

Directors' remuneration

24,000

24,000

4.	OPERATING PROFIT

The operating profit is stated after charging:

29/5/21

29/5/20

£

£

Depreciation - owned assets

15,864

14,184

Auditors' remuneration

9,035

8,180

Depreciation of assets held under hire purchase agreements

2,651

4,500

Net loss/(profit) on foreign currency translation

(33,452

)

304,459

5.

INTEREST PAYABLE AND SIMILAR EXPENSES

29/5/21

29/5/20

£

£

Bank loan interest

3,721

6,277

6.

TAXATION

Analysis of the tax charge

The tax charge on the profit for the year was as follows:

29/5/21

29/5/20

£

£

Current tax:

UK corporation tax

168,840

263,928

Tax on profit

168,840

263,928

7.

DIVIDENDS

29/5/21

29/5/20

£

£

Ordinary Shares shares of 1 each

Final

25,000

25,000

8.	TANGIBLE FIXED ASSETS

Improvements

Fixtures

to

Plant and

and

Motor

property

machinery

fittings

vehicles

Totals

£

£

£

£

£

COST

At 30 May 2020

67,521

310,242

123,911

84,499

586,173

Additions

-

-

8,035

-

8,035

At 29 May 2021

67,521

310,242

131,946

84,499

594,208

DEPRECIATION

At 30 May 2020

16,515

308,715

122,296

69,674

517,200

Charge for year

1,350

896

3,018

10,600

15,864

At 29 May 2021

17,865

309,611

125,314

80,274

533,064

NET BOOK VALUE

At 29 May 2021

49,656

631

6,632

4,225

61,144

At 29 May 2020

51,006

1,527

1,615

14,825

68,973

Fixed assets with a net book value of £NIL (2019: £NIL) are on hire purchase.

9.

STOCKS

29/5/21

29/5/20

£

£

Finished Goods

2,159,923

1,643,842

10.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

29/5/21

29/5/20

£

£

Trade debtors

1,000,733

1,711,434

Other debtors

4,437,037

4,449,470

VAT

155,328

91,297

5,593,098

6,252,201

11.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

29/5/21

29/5/20

£

£

Bank loans and overdrafts (see note 13)

60,000

60,000

Trade creditors

1,746,569

1,348,922

Corporation tax payable

432,769

422,837

Social security and other taxes

24,614

20,148

Other creditors

1,408,573

162,252

3,672,525

2,014,159

12.

CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

29/5/21

29/5/20

£

£

Bank loans (see note 13)

90,000

150,000

13.

LOANS

An analysis of the maturity of loans is given below:

29/5/21

29/5/20

£

£

Amounts falling due within one year or on demand:

Bank loans

60,000

60,000

Amounts falling due between one and two years:

Bank loans - 1-2 years

60,000

60,000

Amounts falling due between two and five years:

Bank loans - 2-5 years

30,000

90,000