PONDICHERRY DESIGNS LIMITED - Filleted accounts

PONDICHERRY DESIGNS LIMITED - Filleted accounts

PONDICHERRY DESIGNS LIMITED - Company Information

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Registered number
06971087
(England and Wales)
PONDICHERRY DESIGNS LIMITED
AUDITED FINANCIAL STATEMENTS
FOR THE YEAR ENDED
30 September 2022
PONDICHERRY DESIGNS LIMITED
AUDITED FINANCIAL STATEMENTS
FOR THE YEAR ENDED
30 September 2022
Contents Page
Company information 1
Statement of Financial Position 2
Notes to the Financial Statements 3 to 10
PONDICHERRY DESIGNS LIMITED
COMPANY INFORMATION
FOR THE YEAR ENDED
30 September 2022
Directors
S Lodha
D Chandris
E Guerrand
Auditors
Haines Watts
Chartered Accountants & Statutory Auditors
New Derwent House
69-73 Theobalds Road
London
WC1X 8TA
Registered office
3rd Floor
1-5 Clerkenwell Road
London
EC1M 5PA
Registered number
06971087
PONDICHERRY DESIGNS LIMITED Registered number:
Statement of Financial Position 06971087
as at 30 September 2022
Notes 2022 2021
£ £ £ £
Fixed assets
Intangible assets 5 25,041 28,069
Tangible assets 6 117,039 220,616
142,080 248,685
Current assets
Stocks 8 830,668 382,658
Debtors 9 1,334,180 1,363,614
Cash at bank and in hand 1,025,217 893,951
3,190,065 2,640,223
Creditors: amounts falling due within one year 10 (1,577,003) (1,371,268)
Net current assets 1,613,062 1,268,955
Total assets less current liabilities 1,755,142 1,517,640
Creditors: amounts falling due after more than one year 11 (133,333) (183,333)
Provisions for liabilities 12 (28,539) (51,478)
Net assets 1,593,270 1,282,829
Capital and reserves
Called up share capital 13 143 143
Share premium 1,200,997 1,200,997
Profit and loss account 392,130 81,689
Shareholders' funds 1,593,270 1,282,829
The directors acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 relating to small companies with respect to accounting records and the preparation of financial statements.
The financial statements have been prepared and delivered in accordance with the special provisions applicable to companies subject to the small companies regime.
The financial statements were approved by the Board of Directors on 10 April 2023 and were
signed on its behalf by:
S Lodha
Director
PONDICHERRY DESIGNS LIMITED
Notes to the Financial Statements
for the Year Ended 30 September 2022
1 Statutory information
PONDICHERRY DESIGNS LIMITED is a private company limited by shares and incorporated in England. Its registered office is:
3rd Floor
1-5 Clerkenwell Road
London
EC1M 5PA
The presentation currency of the financial statements is Pound Sterling (£).
2 Accounting policies
Basis of preparation
The financial statements have been prepared under the historical cost convention and in accordance with FRS 102, The Financial Reporting Standard applicable in the UK and Republic of Ireland (as applied to small entities by section 1A of the standard) and Companies Act 2006.
Preparation of consolidated financial statements
The financial statements contain information about Pondicherry Designs Limited as an individual Company and do not contain consolidated financial information as the parent of a group. The Company is exempt under Section 399(2A) of the Companies Act 2006 from the requirements to prepare consolidated financial statements.
Going Concern
As part of the director’s assessment of going concern, management has prepared detailed forecasts taking into consideration the continuing inflationary pressures and their impact on the cost structure, the requirement to implement the 5 year growth strategy and the current business performance. The directors have reviewed the forecast with reference to the ability of the business to meet its liabilities as they fall due and have concluded that the company is able to manage its risks successfully. The forecasts cover a period beyond the 12 months and they make allowance for any reasonably foreseeable impacts on the current economic conditions. Following a detailed review of the forecast assessments, the directors have also concluded that the company will not require any external funding and it will be able to support its growth organically.
Revenue Recognition
Turnover is measured at the fair value of the consideration received or receivable, net of discounts and value added taxes. Turnover includes revenue earned from the sale of goods. Turnover from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have transferred to the buyer.
Significant judgements and estimates
Preparation of the financial statements requires management to make significant judgements and estimates in determining the carrying amounts of certain assets and liabilities. Management makes assumptions of the effects of uncertain future events on those assets and liabilities at the balance sheet date. The management's estimates and assumptions are based on historical experience and expectation of future events and are reviewed periodically.
Stock Provision
Management judgement is required to estimate the provision for the devaluation of stock for older seasons of £215,627 (2021: £301,361). The provision calculation is based on the ageing and commerciality of stock on hand and management had determined that inventory for seasons prior to the pandemic has a nil book value. This includes a provision of £7,304 (2021: £9,495) for slow selling inventory had been booked for goods shipped during the current year.
Returns accrual
At the year end, the management have concluded that, although there is no contractual requirement to accept returns of inventory in relation to its wholesale revenue, there is a commercial long term benefit to support its major partners. Therefore, the management have provided a credit note provision in the statement of financial position based on the amount of inventory returns the company considers it can absorb in a given year and can sell through its Offprice channels without impacting its full price sales channels. In addition, the company has a contractual obligation to accept returns in relation to its online sales and has booked a provision in the financial statements of the actual inventory that has been returned post year end in line with its 30 day returns policy.
Tangible and intangible fixed assets
Tangible and intangible fixed assets are measured at cost less accumulative depreciation or amortisation and any accumulative impairment losses. Depreciation and amortisation are provided on all tangible and intangible fixed assets, other than freehold land, at rates calculated to write off the cost, less estimated residual value, of each asset evenly over its expected useful life, as follows:
Improvements to leasehold property over the lease term
Fixtures, fittings, equipment and selling platform straight line over 5 years
Trademarks straight line over 10 years
Investments
Investments in subsidiaries are measured at cost.
Stocks
Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the average cost method. The carrying amount of stock sold is recognised as an expense in the period in which the related revenue is recognised. Provision is made for obsolete, slow moving or defective items where appropriate.
Debtors
Short term debtors are measured at transaction price (which is usually the invoice price), less any impairment losses for bad and doubtful debts. Loans and other financial assets are initially recognised at transaction price including any transaction costs and subsequently measured at amortised cost determined using the effective interest method, less any impairment losses for bad and doubtful debts.

Direct costs that relate to fashion collections to be delivered in future periods are deferred until such collections are delivered. Selling and administration costs associated with such collections are written off as incurred.
Creditors
Short term creditors are measured at transaction price (which is usually the invoice price). Loans and other financial liabilities are initially recognised at transaction price net of any transaction costs and subsequently measured at amortised cost determined using the effective interest method.
Taxation
Taxation for the year comprises current and deferred tax. Tax is recognised in the Statement of Income and Retained Earnings, 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.
Foreign currency translation
Transactions in foreign currencies are initially recognised at the rate of exchange ruling at the date of the transaction. At the end of each reporting period foreign currency monetary items are translated at the closing rate of exchange. Non-monetary items that are measured at historical cost are translated at the rate ruling at the date of the transaction. All differences are charged to profit or loss.
Pensions
Contributions to defined contribution plans are expensed in the period to which they relate.
Financial instruments
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments Whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at the balance sheet date.

Financial assets are impaired where there is objective evidence that as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimate cash flows discounted at the asset's original effective interest rate. The impairment loss is recognised in profit or loss.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in the profit or loss.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.

Basic financial liabilities, including trade and other payables, bank loans. loans from fellow group companies that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest.

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

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less. If not. they are presented as non-current liabilities. Trade payables are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Hire purchase and leasing commitments
Assets obtained under hire purchase contracts or finance leases are capitalised in the balance sheet. Those held under hire purchase contracts are depreciated over their estimated useful lives. Those held under finance leases are depreciated over their estimated useful lives or the lease term, whichever is the shorter. The interest element of these obligations is charged to profit or loss over the relevant period. The capital element of the future payments is treated as a liability.
Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease.
Short term benefits and holiday pay
The costs of short-term employee benefits, including holiday pay, are recognised as a liability and an expense. The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Government grants
Government grants are not recognised until there is reasonable assurance that the entity will (a) comply with the conditions attached to them and (b) the grants will be received. The company chooses to recognise grants based on the accrual model. Grants related to income are presented as part of profit or loss, under a general heading of ‘other operating income’.
3 Employees and directors 2022 2021
Number Number
Average number of persons including directors employed by the Company 24 25
4 Disclosure under Section 444(5B) of the Companies Act 2006
The Auditors' Report was unqualified.
Nicola Pearson (Senior Statutory Auditor)
for and on behalf of Haines Watts Chartered Accountants
The audit report in the full accounts makes reference to the accounting policy on going concern.
20/04/2023
Date
5 Intangible fixed assets Trademarks
£
Cost
At 1 October 2021 32,056
Additions 7,634
Disposals and reclassifications (8,332)
At 30 September 2022 31,358
Amortisation
At 1 October 2021 3,987
Provided during the year 2,369
On disposals and reclassifications (39)
At 30 September 2022 6,317
Net book value
At 30 September 2022 25,041
At 30 September 2021 28,069
6 Tangible fixed assets
Improvements to leasehold property Fixtures, fittings, equipment and selling platform Total
£ £ £
Cost
At 1 October 2021 81,395 421,643 503,038
Additions - 30,998 30,998
At 30 September 2022 81,395 452,641 534,036
Depreciation and impairment
At 1 October 2021 66,690 215,732 282,422
Depreciation charge for the year 11,823 80,344 92,167
Impairment - 42,408 42,408
At 30 September 2022 78,513 338,484 416,997
Net book value
At 30 September 2022 2,882 114,157 117,039
At 30 September 2021 14,705 205,911 220,616
7 Investments in subsidiary undertakings
During year ended 30 September 2017 the Company invested in a subsidiary undertaking. The cost of the investment was £0.11 and remains unchanged at the balance sheet date.
8 Stocks 2022 2021
£ £
Finished goods 830,668 382,658
9 Debtors: amounts falling due within one year 2022 2021
£ £
Factored debts outstanding 973,702 784,167
Trade debtors not factored 117,635 151,734
Other debtors 242,843 427,713
1,334,180 1,363,614
10 Creditors: amounts falling due within one year 2022 2021
£ £
Bank loans and overdrafts 50,000 16,667
Trade creditors 1,024,917 578,300
Amounts owed to group undertakings and undertakings in which the company has a participating interest 75,909 118,340
Taxation and social security costs 119,166 187,810
Other creditors 307,011 470,151
1,577,003 1,371,268
All amounts owing to the bank are secured by first fixed and floating charge over all the company assets.

As at the year end (and the previous year end) no payments were drawn on account from the factoring company. Such payments are secured by charge over certain company assets.
11 Creditors: amounts falling due after one year 2022 2021
£ £
Bank loans 133,333 183,333
12 Provisions for liabilities 2022 2021
£ £
Deferred tax 28,539 51,478
13 Called up share capital Nominal 2022 2021
value Number £ £
Allotted, issued and fully paid:
Ordinary shares £0.001 each 142,617 143 143
14 Pension commitments
The Company is operating a defined contribution pension scheme. During the year the Company contributed £17,585 (2021: £15,246).
15 Other financial commitments 2022 2021
£ £
Total future minimum payments under non-cancellable operating leases:
- less than one year 106,625 170,590
- between 1 and 5 years 23,973 130,598
130,598 301,188
16 Related Party Transactions
The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.
17 Other operating income
Other operating income included receipts from Coronavirus Job Retention Scheme of £NIL (2021: £83,143).
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