Company registration number 05285557 (England and Wales)
NAUGHT ONE LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
NAUGHT ONE LTD
COMPANY INFORMATION
Directors
Mr R Woodbridge
Mrs N McNaught
Mr C Hagan
Secretary
Ms J Ede
Company number
05285557
Registered office
Central House
Beckwith Knowle
Harrogate
North Yorkshire
HG3 1UG
Auditor
BHP LLP
New Chartford House
Centurion Way
Cleckheaton
Bradford
West Yorkshire
BD19 3QB
NAUGHT ONE LTD
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Notes to the financial statements
11 - 23
NAUGHT ONE LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MAY 2023
- 1 -

The directors present the strategic report for the year ended 31 May 2023.

Review of the business

The company design and manufacture ancillary furniture for the contract market. We manufacture in Yorkshire, UK but supply into global geographical markets. Our key markets continue to be the UK and Ireland and North America. APMEA and Europe are strong emerging markets.

 

The company continued to grow during the year, in terms of sales and operating profit. The company's sales improved to £31,892,021 (2022 - £26,241,295), an increase of 21.5% year on year. The group realised profit after tax of £3,895,330 (2022 - £3,595,429), an increase of 8.3% year on year.

Principal risks and uncertainties

The group faces strategic, operational and financial risk relating to its chosen activities and markets. UK and Global economies pose a risk to NaughtOne's short term performance. Trading across multiple geographical markets and market segments diversifies our risk.

 

NaughtOne sources products from, and sells-to, a global market. Global raw materials price increases and logistical challenges present a risk to the group's activities.

 

The commercial furniture market is competitive. The group benefits from commercial opportunities provided by being a brand within the MillerKnoll collective.

 

Trading in foreign currencies, NaughtOne is exposed to exchange rate fluctuations. We have a hedging policy to minimize risk of the financial impact from this.

 

Legislative risk applies for our products and manufacturing environment. Product standards are subject to continuous revision which could impact our profitability.

Key performance indicators

The company’s key financial indicators during the period were as follows:

 

2023

£000

2022

£000

Change

%

Turnover

31,892

26,241

21.5

Operating Profit

4,878

4,438

9.9

Profit after tax

3,895

3,595

8.3

 

NAUGHT ONE LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 2 -
Strategy

The company aspires to provide people across the globe with useful, beautiful furniture that works in any commercial space. NaughtOne achieves its vision by combining great design with vast choice and robust functionality, supported by class-leading service from friendly experts.

 

We practice business in a responsible way that respects people and the planet, enabling us to thrive in diverse global markets.

 

We have developed a set of goals, which work together to deliver continued growth & profitability:

 

We stand for good design

Design that's inspiring, useful, durable, versatile, well-crafted, and distilled to its essence. We design for people with an ambition to improve quality of life at work, rest and play.

 

Unrivalled choice

At NaughtOne choice of colour, finish, fabric and material comes as standard. In an industry with an ‘any colour as long as it’s black’ mindset this sets us apart and means that our customers get what they really want.

 

Enduring relationships

We place a focus on people and relationships. Whether you are a specifier, dealer or end user, our approach is based on trust, honesty and working together to exceed expectations.

 

Uncompromising quality

Our furniture is designed and engineered to endure time, trends and use. We back this commitment with a standard 10-year warranty.

 

Serious about sustainability

Since its inception NaughtOne has always sought to have a positive impact on and in the world. Our approach is based on authenticity, transparency and innovation, and we have led the way in environmental certifications, circular design and sustainability education.

 

Available globally

With a global team and an ambitious localisation programme, we deliver on time and in full across the world.

Future developments

The Directors remain confident that their strategy will deliver continued growth and profitability. We are seeing significant growth in the start of the new financial year, and the company will continue to invest in people, product and process in our commitment to providing excellent and innovative furniture solutions to our customers.

On behalf of the board

Mrs N McNaught
Director
20 February 2024
NAUGHT ONE LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MAY 2023
- 3 -

The directors present their annual report and financial statements for the year ended 31 May 2023.

Principal activities

The principal activity of the company is the design, manufacture and sale of commercial furniture, within the UK and overseas markets.

Results and dividends

The results for the year are set out on page 8.

Ordinary dividends were paid amounting to £2,400,000.

Directors

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

Mr R Woodbridge
Mrs N McNaught
Mr C Hagan
Auditor

The auditor, BHP LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

Statement of disclosure to auditor

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.

On behalf of the board
Mrs N McNaught
Director
20 February 2024
NAUGHT ONE LTD
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MAY 2023
- 4 -

The directors are responsible for preparing the annual 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 of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

 

 

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.

NAUGHT ONE LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF NAUGHT ONE LTD
- 5 -
Opinion

We have audited the financial statements of Naught One Ltd (the 'company') for the year ended 31 May 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity 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:

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's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the 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:

NAUGHT ONE LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF NAUGHT ONE LTD
- 6 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

 

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

Responsibilities of directors

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.

Auditor's responsibilities for the audit of the financial statements

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

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 gained an understanding of the legal and regulatory framework applicable to the company and the industry in which it operates and considered the risk of acts by the company that were contrary to applicable laws and regulations, including fraud. We designed audit procedures to respond to the risk, 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 deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

We focused on laws and regulations, relevant to the company, which could give rise to a material misstatement in the financial statements. Our tests included agreeing the financial statement disclosures to underlying supporting documentation, enquiries with management, review of company minutes and legal expenses. There are inherent limitations in the audit procedures described 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.

As part of our audit, we addressed the risk of management override of internal controls, including testing of journals and review of nominal ledger. We evaluated whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

NAUGHT ONE LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF NAUGHT ONE LTD
- 7 -

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.

Jamie Williams
Senior Statutory Auditor
For and on behalf of BHP LLP
20 February 2024
Chartered Accountants
Statutory Auditor
New Chartford House
Centurion Way
Cleckheaton
Bradford
West Yorkshire
BD19 3QB
NAUGHT ONE LTD
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MAY 2023
- 8 -
2023
2022
as restated
Notes
£
£
Turnover
3
31,892,021
26,241,295
Cost of sales
(20,359,845)
(16,848,889)
Gross profit
11,532,176
9,392,406
Administrative expenses
(6,654,515)
(4,954,668)
Operating profit
4
4,877,661
4,437,738
Interest receivable and similar income
7
10
52
Profit before taxation
4,877,671
4,437,790
Tax on profit
8
(982,341)
(842,361)
Profit for the financial year
3,895,330
3,595,429

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

NAUGHT ONE LTD
BALANCE SHEET
AS AT
31 MAY 2023
31 May 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
10
7,434
-
Tangible assets
11
498,998
443,527
506,432
443,527
Current assets
Stocks
12
1,380,591
1,978,576
Debtors
13
5,417,534
6,235,242
Cash at bank and in hand
3,875,410
4,601,633
10,673,535
12,815,451
Creditors: amounts falling due within one year
14
(4,248,977)
(7,846,810)
Net current assets
6,424,558
4,968,641
Total assets less current liabilities
6,930,990
5,412,168
Provisions for liabilities
Deferred tax liability
15
78,905
55,413
(78,905)
(55,413)
Net assets
6,852,085
5,356,755
Capital and reserves
Called up share capital
17
201
201
Profit and loss reserves
6,851,884
5,356,554
Total equity
6,852,085
5,356,755
The financial statements were approved by the board of directors and authorised for issue on 20 February 2024 and are signed on its behalf by:
Mrs N McNaught
Director
Company Registration No. 05285557
NAUGHT ONE LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MAY 2023
- 10 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 June 2021
201
4,025,372
4,025,573
Year ended 31 May 2022:
Profit and total comprehensive income for the year
-
3,595,429
3,595,429
Dividends
9
-
(2,264,247)
(2,264,247)
Balance at 31 May 2022
201
5,356,554
5,356,755
Year ended 31 May 2023:
Profit and total comprehensive income for the year
-
3,895,330
3,895,330
Dividends
9
-
(2,400,000)
(2,400,000)
Balance at 31 May 2023
201
6,851,884
6,852,085
NAUGHT ONE LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2023
- 11 -
1
Accounting policies
Company information

Naught One Ltd is a private company limited by shares incorporated in England and Wales. The registered office is Central House, Beckwith Knowle, Harrogate, North Yorkshire, HG3 1UG.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

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. The principal accounting policies adopted are set out below.

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:

 

- Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;

- Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’: Interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;

- Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;

- Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.

 

The financial statements of the company are consolidated in the financial statements of Naughtone (Holdings) Limited. These consolidated financial statements are available from its registered office, Unit D, Knaresborough Technology Park, Manse Lane, Knaresborough, HG5 8LF. This is the smallest group of companies for which group financial statements are prepared.

1.2
Going concern

Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. The Directors have prepared forecasts to December 2024 and have confirmed the Group will remain profitable. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

1.3
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (on delivery of the goods per the company's terms and conditions of sale), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably. Where invoices are raised in advance of delivery, revenue is deferred.

NAUGHT ONE LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 12 -
1.4
Intangible fixed assets other than goodwill

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

 

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

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:

Trademarks and patents
10% straight line
1.5
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation 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:

Leasehold improvements
20% straight line
Plant & machinery
25% straight line
Fixtures, fittings & equipment
20% straight line
IT equipment
25% straight line

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.

1.6
Impairment of fixed assets

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.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

NAUGHT ONE LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 13 -
1.7
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

 

Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

1.8
Cash and cash equivalents

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, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.9
Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

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 in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

NAUGHT ONE LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 14 -
Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end 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 estimated 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 profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

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 company after deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares 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 payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

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

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts 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 creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

NAUGHT ONE LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 15 -
Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.10
Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

1.11
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current 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

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.

1.12
Employee benefits

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.

1.13
Retirement benefits

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

1.14
Leases

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

NAUGHT ONE LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
1
Accounting policies
(Continued)
- 16 -
1.15
Foreign exchange

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.

2
Judgements and key sources of estimation uncertainty

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.

Key sources of estimation uncertainty

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.

Revenue recognition

Revenue is recognised on delivery. Invoices are raised either on delivery or on order if a deposit is required. Therefore, ensuring correct cut-off at the year end is a key area of risk.

3
Turnover
2023
2022
£
£
Turnover analysed by class of business
Sale of furniture
28,273,425
23,496,137
Other income
3,618,596
2,745,158
31,892,021
26,241,295
2023
2022
£
£
Turnover analysed by geographical market
European Union
817,814
824,908
United Kingdom
9,828,012
9,022,101
Rest of World
1,673,382
1,133,278
North America
19,572,813
15,261,008
31,892,021
26,241,295
NAUGHT ONE LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 17 -
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses/(gains)
384,510
(233,353)
Fees payable to the company's auditor for the audit of the company's financial statements
13,120
10,670
Depreciation of owned tangible fixed assets
212,536
261,812
Loss on disposal of tangible fixed assets
651
-
Amortisation of intangible assets
143
-
Operating lease charges
401,551
399,404
5
Employees

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

2023
2022
Number
Number
Production and operations
40
34
Administrative
43
47
Senior management team
2
2
Total
85
83

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
3,583,989
3,283,085
Social security costs
370,391
307,840
Pension costs
103,825
94,752
4,058,205
3,685,677
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
309,887
335,861
Company pension contributions to defined contribution schemes
14,518
14,000
324,405
349,861

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2022 - 2).

NAUGHT ONE LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
6
Directors' remuneration
(Continued)
- 18 -
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
160,002
167,903
Company pension contributions to defined contribution schemes
4,326
9,800
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
10
52
8
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
958,849
839,473
Deferred tax
Origination and reversal of timing differences
23,492
2,888
Total tax charge
982,341
842,361

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

2023
2022
£
£
Profit before taxation
4,877,671
4,437,790
Expected tax charge based on the standard rate of corporation tax in the UK of 20.00% (2022: 19.00%)
975,534
843,180
Tax effect of expenses that are not deductible in determining taxable profit
(16,883)
(9,887)
Adjustments in respect of prior years
18,683
(19,866)
Effect of change in deferred tax rates
5,007
16,587
Other
-
0
12,347
Taxation charge for the year
982,341
842,361
NAUGHT ONE LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 19 -
9
Dividends
2023
2022
£
£
Final paid
2,400,000
2,264,247
10
Intangible fixed assets
Trademarks and patents
£
Cost
At 1 June 2022
7,165
Additions
7,577
Disposals
(7,165)
At 31 May 2023
7,577
Amortisation and impairment
At 1 June 2022
7,165
Amortisation charged for the year
143
Disposals
(7,165)
At 31 May 2023
143
Carrying amount
At 31 May 2023
7,434
At 31 May 2022
-
0
NAUGHT ONE LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 20 -
11
Tangible fixed assets
Leasehold improvements
Plant & machinery
Fixtures, fittings & equipment
IT equipment
Total
£
£
£
£
£
Cost
At 1 June 2022
78,301
740,570
17,828
94,160
930,859
Additions
-
0
224,209
18,754
25,695
268,658
Disposals
-
0
-
0
-
0
(18,600)
(18,600)
At 31 May 2023
78,301
964,779
36,582
101,255
1,180,917
Depreciation and impairment
At 1 June 2022
32,290
412,709
10,510
31,823
487,332
Depreciation charged in the year
17,710
166,764
3,930
24,132
212,536
Eliminated in respect of disposals
-
0
-
0
-
0
(17,949)
(17,949)
At 31 May 2023
50,000
579,473
14,440
38,006
681,919
Carrying amount
At 31 May 2023
28,301
385,306
22,142
63,249
498,998
At 31 May 2022
46,011
327,861
7,318
62,337
443,527
12
Stocks
2023
2022
£
£
Finished goods and goods for resale
1,380,591
1,978,576
13
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
2,502,799
2,091,813
Other debtors
2,471,096
3,822,590
Prepayments and accrued income
443,639
320,839
5,417,534
6,235,242
NAUGHT ONE LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 21 -
14
Creditors: amounts falling due within one year
2023
2022
£
£
Payments received on account
733,175
1,759,445
Trade creditors
686,422
1,718,880
Corporation tax
1,478,223
1,315,895
Other taxation and social security
207,377
112,642
Other creditors
302,743
1,413,052
Accruals and deferred income
841,037
1,526,896
4,248,977
7,846,810
15
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
78,905
55,413
2023
Movements in the year:
£
Liability at 1 June 2022
55,413
Charge to profit or loss
23,492
Liability at 31 May 2023
78,905
16
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
103,825
94,752

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.

17
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
201
201
201
201
NAUGHT ONE LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
- 22 -
18
Operating lease commitments
Lessee

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

2023
2022
£
£
Within one year
318,183
369,737
Between two and five years
191,538
511,882
509,721
881,619
19
Related party transactions
Transactions with related parties

During the year the company entered into the following transactions with related parties:

Sales
Sales
Purchases
Purchases
2023
2022
2023
2022
£
£
£
£
Entities with control, joint control or significant influence over the company
1,773,237
1,979,739
6,415
314
Other related parties
5,377,295
3,497,378
3,032,364
3,569,142
Recharges/Alliance fee due to
2023
2022
£
£
Entities with control, joint control or significant influence over the company
376,726
253,266

The following amounts were outstanding at the reporting end date:

2023
2022
Amounts due to related parties
£
£
Other related parties included in other creditors
302,743
1,413,152

The following amounts were outstanding at the reporting end date:

2023
2022
Amounts due from related parties
£
£
Entities with control, joint control or significant influence over the company included in other debtors
918,387
2,269,918
Other related parties included in other debtors
1,552,707
1,461,242
NAUGHT ONE LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2023
19
Related party transactions
(Continued)
- 23 -

Related party balances due are interest free and repayable on demand.

20
Ultimate controlling party

The immediate parent company is NaughtOne (Holdings) Limited, a company incorporated in England and Wales.

The ultimate parent undertaking is MillerKnoll Inc, a company incorporated in the state of Michigan, USA. This is the largest group of companies for which group financial statements are prepared and for which this company is a member.

 

Copies of its group financial statements are available on-line at www.millerknoll.com in the investors section.

21
Restatement of profit and loss account

The company has reallocated certain items in the prior year Profit & Loss Account for comparability purposes.

Changes to the profit and loss account
As previously reported
Adjustment
As restated
Period ended 31 May 2022
£
£
£
Turnover
26,222,749
18,546
26,241,295
Cost of sales
(16,862,214)
13,325
(16,848,889)
Administrative expenses
(4,941,343)
(13,325)
(4,954,668)
Other operating income
18,546
(18,546)
-
Profit for the financial period
3,595,429
-
3,595,429

The company has reallocated certain items in the prior year Profit & Loss Account to enable comparison with current year results. The tables above show the impact to the comparative Profit & Loss account. There was no impact to the balance sheet and other primary statements.

2023-05-312022-06-01falseCCH SoftwareCCH Accounts Production 2023.300Mr R WoodbridgeMrs N McNaughtMr C HaganMs J Edefalse052855572022-06-012023-05-3105285557bus:Director12022-06-012023-05-3105285557bus:Director22022-06-012023-05-3105285557bus:Director32022-06-012023-05-3105285557bus:CompanySecretary12022-06-012023-05-3105285557bus:RegisteredOffice2022-06-012023-05-31052855572023-05-31052855572021-06-012022-05-3105285557core:ContinuingOperations2021-06-012022-05-3105285557core:RetainedEarningsAccumulatedLosses2021-06-012022-05-3105285557core:RetainedEarningsAccumulatedLosses2022-06-012023-05-31052855572022-05-3105285557core:LandBuildingscore:OwnedOrFreeholdAssets2023-05-3105285557core:PlantMachinery2023-05-3105285557core:FurnitureFittings2023-05-3105285557core:ComputerEquipment2023-05-3105285557core:LandBuildingscore:OwnedOrFreeholdAssets2022-05-3105285557core:PlantMachinery2022-05-3105285557core:FurnitureFittings2022-05-3105285557core:ComputerEquipment2022-05-3105285557core:CurrentFinancialInstrumentscore:WithinOneYear2023-05-3105285557core:CurrentFinancialInstrumentscore:WithinOneYear2022-05-3105285557core:CurrentFinancialInstruments2023-05-3105285557core:CurrentFinancialInstruments2022-05-3105285557core:ShareCapital2023-05-3105285557core:ShareCapital2022-05-3105285557core:RetainedEarningsAccumulatedLosses2023-05-3105285557core:RetainedEarningsAccumulatedLosses2022-05-3105285557core:ShareCapital2021-05-3105285557core:RetainedEarningsAccumulatedLosses2021-05-3105285557core:IntangibleAssetsOtherThanGoodwill2022-06-012023-05-3105285557core:PatentsTrademarksLicencesConcessionsSimilar2022-06-012023-05-3105285557core:LandBuildingscore:OwnedOrFreeholdAssets2022-06-012023-05-3105285557core:PlantMachinery2022-06-012023-05-3105285557core:FurnitureFittings2022-06-012023-05-3105285557core:ComputerEquipment2022-06-012023-05-3105285557core:UKTax2022-06-012023-05-3105285557core:UKTax2021-06-012022-05-310528555712022-06-012023-05-310528555712021-06-012022-05-310528555722022-06-012023-05-310528555722021-06-012022-05-3105285557core:PatentsTrademarksLicencesConcessionsSimilar2022-05-3105285557core:PatentsTrademarksLicencesConcessionsSimilar2023-05-3105285557core:PatentsTrademarksLicencesConcessionsSimilarcore:ExternallyAcquiredIntangibleAssets2022-06-012023-05-3105285557core:PatentsTrademarksLicencesConcessionsSimilar2022-05-3105285557core:LandBuildingscore:OwnedOrFreeholdAssets2022-05-3105285557core:PlantMachinery2022-05-3105285557core:FurnitureFittings2022-05-3105285557core:ComputerEquipment2022-05-31052855572022-05-3105285557core:WithinOneYear2023-05-3105285557core:WithinOneYear2022-05-3105285557core:BetweenTwoFiveYears2023-05-3105285557core:BetweenTwoFiveYears2022-05-3105285557core:EntitiesWithJointControlOrSignificantInfluenceOverReportingEntitycore:SaleOrPurchaseGoods2022-06-012023-05-3105285557core:EntitiesWithJointControlOrSignificantInfluenceOverReportingEntitycore:SaleOrPurchaseGoods2021-06-012022-05-3105285557core:OtherRelatedPartiescore:SaleOrPurchaseGoods2022-06-012023-05-3105285557core:OtherRelatedPartiescore:SaleOrPurchaseGoods2021-06-012022-05-3105285557bus:PrivateLimitedCompanyLtd2022-06-012023-05-3105285557bus:FRS1022022-06-012023-05-3105285557bus:Audited2022-06-012023-05-3105285557bus:FullAccounts2022-06-012023-05-31xbrli:purexbrli:sharesiso4217:GBP