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Registration number: 11023736 (England & Wales)

Furndeco Limited

Annual Report and Financial Statements

for the Year Ended 31 December 2023

 

Furndeco Limited

Contents

Company Information

1

Strategic Report

2 to 3

Directors' Report

4

Statement of Directors' Responsibilities

5

Independent Auditor's Report

6 to 8

Profit and Loss Account

9

Balance Sheet

10

Statement of Changes in Equity

11

Notes to the Financial Statements

12 to 22

 

Furndeco Limited

Company Information

Directors

B Doouss

P Small

Registered office

2 Marconi Drive
Quedgeley
Gloucester
Gloucestershire
GL2 2AH

Auditors

Hazlewoods LLP
Staverton Court
Staverton
Cheltenham
GL51 0UX

 

Furndeco Limited

Strategic Report for the Year Ended 31 December 2023

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

Principal activity

The principal activity of the company is the retail of furniture.

Fair review of the business

The results for the year which are set out in the profit and loss account show turnover of £13,790,774 (2022 - £19,750,880) and an operating profit of £2,580 (2022 - £1,055,613). At 31 December 2023 the company had net assets of £5,642,117 (2022 - £5,995,979).

The past year has presented a number of challenges that have culminated in a noticeable decline in our revenue. This was partly due to a change in business direction at the end of 2022 driving a reduction in unprofitable revenue, and focusing on stabilisation in view of further growth in the years ahead. Post-pandemic trading conditions have continued to disrupt supply chains and consumer spending habits, leading to a reduced demand for our products and services. Additionally, the economic environment has been particularly difficult, with widespread uncertainty affecting market dynamics and consumer preferences. This, coupled with political instability, created a volatile business climate, shaking the confidence of both consumers and businesses alike. Together, these factors contributed to the downturn in revenue.

Despite the past year’s challenges, we have seen a promising turnaround in our financial performance. Through good cost control, we have effectively navigated the high inflation pressures, optimising our operational expenses and mitigating some of the economic impacts. The introduction of new products has been met with enthusiasm from both existing and new customers, contributing to incremental revenue and diversifying our market presence. Additionally, improved stock control measures have led to a reduction in excess inventory and minimised carrying costs. These strategic initiatives have been instrumental in our ability to increase our profit margins back to more normal levels.

As we continue to adapt and innovate, we are confident in our ability to sustain growth and profitability in the dynamic global market.

The company's key financial and other performance indicators during the year were as follows:

Financial KPIs

Unit

2023

2022

Turnover

£'000

13,791

19,751

Gross profit margin

%

42

35

Operating profit

£'000

3

1,056

Net assets

£'000

5,642

5,996

Principal risks and uncertainties

The directors have considered the key risks facing the business and concluded as follows:

Liquidity risk
The directors monitor cash flows to ensure the company is able to meet its operational requirements. The financial statements have been prepared on a going concern basis and the directors are confident that the company will meet its financial obligations over the next 12 months and beyond. It is expected that the company will continue in business for the foreseeable future and continued growth is anticipated.

Credit risk
The company offers certain of its customers credit. Before credit terms are agreed, an assessment of the customer's credit rating is undertaken to ensure the company is not exposed to major credit risk. Credit limits are set accordingly. Customers who are not given credit are required to pay deposits or pay in full prior to shipment.

Price and foreign exchange risk
A number of the company's purchases are transacted in non-sterling currencies. As a result exchange rate fluctuations impact on the results and cash flows of the company. Fluctuations in exchange rates are carefully monitored by the directors and the directors prepare hedging policies accordingly.

Inventory price risk
Ensuring that sufficient levels of inventory are available to satisfy sales orders as they are received is also considered to be a principal risk facing the company. The company has a network of reliable suppliers to ensure this risk is minimised.

 

Furndeco Limited

Strategic Report for the Year Ended 31 December 2023

Approved by the Board on 29 July 2024 and signed on its behalf by:


B Doouss
Director

 

Furndeco Limited

Directors' Report for the Year Ended 31 December 2023

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

Directors of the company

The directors who held office during the year were as follows:

B Doouss

P Small


Financial instruments
The company's financial instruments comprise borrowings, cash and liquid resources, and various other items such as trade debtors and trade creditors that arise directly from its operations. The main purpose of these financial instruments is to finance the operations of the company.

The company is exposed to the usual credit risk and cash flow risk associated with selling on credit and manages these through credit control procedures. The nature of these financial instruments means they are not subject to price risk or liquidity risk.

Future developments

The business continues to focus on its people structure to support the sales growth strategy along with product range that introduces new products that support growth to existing and new customers. The business is also looking to undertake a number of product category innovations to enhance our customer offering where this makes sense for the business and customer alike.

Going concern

The financial statements have been prepared on a going concern basis, which assumes that the company will be able to continue to operate for the foreseeable future.

After reviewing the company's forecasts and projections, the directors have a reasonable expectation that the company has adequate resources available to continue in operational existence for at least 12 months from the date of approval of the financial statements.

On this basis, the directors consider it appropriate to prepare the financial statements on a going concern basis.

Disclosure of information to the auditors

Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditors are aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditors are unaware.

Reappointment of auditors

In accordance with section 485 of the Companies Act 2006, a resolution for the re-appointment of Hazlewoods LLP as auditors of the company is to be proposed at the forthcoming Annual General Meeting.

Approved by the Board on 29 July 2024 and signed on its behalf by:


B Doouss
Director

 

Furndeco Limited

Statement of Directors' Responsibilities

The directors are responsible for preparing the Strategic Report, Directors' Report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and 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 apply them consistently;

make judgements and accounting estimates that are reasonable and prudent;

state whether applicable UK Accounting Standards has been followed, subject to any material departures disclosed and explained in the financial statements; and

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.

 

Furndeco Limited

Independent Auditor's Report to the Members of Furndeco Limited

Opinion

We have audited the financial statements of Furndeco Limited (the 'company') for the year ended 31 December 2023, which comprise the Profit and Loss Account, Balance Sheet, Statement of Changes in Equity, and 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 31 December 2023 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 opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditor responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

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

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the original financial statements were 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 included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinion on other matter 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 Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

the Strategic Report and Directors' Report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of our 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 and the Directors' Report.

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

 

Furndeco Limited

Independent Auditor's Report to the Members of Furndeco Limited

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 5, 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.

Extent to which the audit was capable of detecting irregularities, including fraud

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 considered the nature of the company’s industry and its control environment and reviewed the company’s documentation of their policies and procedures relating to fraud and compliance with laws and regulations. We also enquired of management about their own identification and assessment of the risks of irregularities.

We obtained an understanding of the legal and regulatory framework that the company operates in and identified the key laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements, including the UK Companies Act and tax legislation, and, those that do not have a direct effect on the financial statements but compliance with which may be fundamental to the company’s ability to operate or to avoid a material penalty.

We discussed among the audit engagement team regarding the opportunities and incentives that may exist within the organisation for fraud and how and where fraud might occur in the financial statements.

In common with all audits conducted in accordance with ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override of controls. In addressing the risk of fraud through management override of controls, we tested the appropriateness of journal entries and other adjustments; assessed whether the judgements made in accounting estimates are indicative of a potential bias; and evaluated the business rationale of any significant transactions that are unusual or outside the normal course of business.

In addition to the above, our procedures to respond to the risks identified included the following:

reviewing financial statement disclosures by testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;

performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatements due to fraud;

enquiring of management concerning actual and potential litigation and claims and instances of non-compliance with laws and regulations; and

reading minutes of meetings of those charged with governance.

 

Furndeco Limited

Independent Auditor's Report to the Members of Furndeco Limited

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

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

Use of this 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.





Scott Lawrence (Senior Statutory Auditor)
For and on behalf of Hazlewoods LLP, Statutory Auditor

Staverton Court
Staverton
Cheltenham
GL51 0UX

29 July 2024

 

Furndeco Limited

Profit and Loss Account for the Year Ended 31 December 2023

Note

2023
 £

2022
 £

Turnover

3

13,790,774

19,750,880

Cost of sales

 

(8,018,965)

(12,751,642)

Gross profit

 

5,771,809

6,999,238

Distribution costs

 

(342,543)

(299,013)

Administrative expenses

 

(5,465,269)

(5,644,612)

Other operating income

38,583

-

Operating profit

4

2,580

1,055,613

Other interest receivable and similar income

5

17,439

2,519

Interest payable and similar charges

6

(1)

(1,076)

Profit before tax

 

20,018

1,057,056

Taxation

10

84,748

(196,190)

Profit for the financial year

 

104,766

860,866

The above results were derived from continuing operations.

The company has no other comprehensive income for the year.

 

Furndeco Limited

(Registration number: 11023736)
Balance Sheet as at 31 December 2023

Note

2023
 £

2022
 £

Fixed assets

 

Intangible assets

11

186,872

147,381

Tangible assets

12

1,024,843

1,196,743

 

1,211,715

1,344,124

Current assets

 

Stocks

13

3,898,029

4,405,040

Debtors

14

1,458,465

2,441,117

Cash at bank and in hand

352,784

828,716

 

5,709,278

7,674,873

Creditors: Amounts falling due within one year

15

(1,065,588)

(2,780,825)

Net current assets

 

4,643,690

4,894,048

Total assets less current liabilities

 

5,855,405

6,238,172

Provisions for liabilities

10

(213,288)

(242,193)

Net assets

 

5,642,117

5,995,979

Capital and reserves

 

Called up share capital

18, 19

2,230,010

2,350,010

Profit and loss account

19

3,412,107

3,645,969

Total equity

 

5,642,117

5,995,979

Approved and authorised by the Board on 29 July 2024 and signed on its behalf by:
 


B Doouss
Director

 

Furndeco Limited

Statement of Changes in Equity for the Year Ended 31 December 2023

Share capital
£

Profit and loss account
£

Total
£

At 1 January 2023

2,350,010

3,645,969

5,995,979

Profit for the year

-

104,766

104,766

Dividends

-

(338,628)

(338,628)

Redemption of preference shares

(120,000)

-

(120,000)

At 31 December 2023

2,230,010

3,412,107

5,642,117

Share capital
£

Profit and loss account
£

Total
£

At 1 January 2022

2,350,010

2,973,783

5,323,793

Profit for the year

-

860,866

860,866

Dividends

-

(188,680)

(188,680)

At 31 December 2022

2,350,010

3,645,969

5,995,979

 

Furndeco Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

 

1

General information

The company is a private company limited by share capital, incorporated in the United Kingdom .

The address of its registered office is:
2 Marconi Drive
Quedgeley
Gloucester
Gloucestershire
GL2 2AH

 

2

Accounting policies

Summary of significant accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Statement of compliance

These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland' and the Companies Act 2006.

Basis of preparation

These financial statements have been prepared using the historical cost convention except for, where disclosed in these accounting policies, certain items that are shown at fair value.

The presentational currency of the financial statements is Pounds Sterling, being the functional currency of the primary economic environment in which the company operates. Monetary amounts in these financial statements are rounded to the nearest Pound.

Summary of disclosure exemptions

Furndeco Limited meets the definition of a qualifying entity under FRS 102 and has therefore taken advantage of the disclosure exemptions available in respect of its financial statements. Exemptions have been taken in relation to financial instruments and presentation of a statement of cash flows.

Name of parent of group

These financial statements are consolidated in the financial statements of Callow Investments Limited.

The financial statements of Callow Investments Limited may be obtained from the company's registered office.

Going concern

The financial statements have been prepared on a going concern basis, which assumes that the company will be able to continue to operate for the foreseeable future.

After reviewing the company's forecasts and projections, the directors have a reasonable expectation that the company has adequate resources available to continue in operational existence for at least 12 months from the date of approval of the financial statements.

On this basis, the directors consider it appropriate to prepare the financial statements on a going concern basis.

Critical accounting 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 amounts 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 if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
 

 

Furndeco Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

Judgements

No significant judgements have been made by management in preparing these financial statements.

Key sources of estimation uncertainty

Management regularly review the nature, condition and expected saleability of the inventory held by the company and a provision is made for any slow moving and discontinued stock lines identified. The carrying amount is £304,393 (2022 - £209,954).

Revenue recognition

Turnover comprises the fair value of the consideration received or receivable for the sale of goods in the ordinary course of the company’s activities. Turnover is shown net of sales/value added tax, returns, rebates and discounts and after eliminating sales within the company.

The company recognises revenue when, the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity and specific criteria have been met for each of the company's activities.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership have transferred to the customer, which is upon delivery of the product.

Foreign currency transactions and balances

Transactions in foreign currencies are initially recorded at the functional currency rate prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated into the respective functional currency of the entity at the rates prevailing on the reporting period date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the initial transaction dates.

Non-monetary items measured in terms of historical cost in a foreign currency are not retranslated.

Tax

The tax expense for the period comprises current and deferred tax. Tax is recognised in the profit and loss account, except that a charge attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the company operates and generates taxable income.

Deferred income tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements and on unused tax losses or tax credits in the company. Deferred income tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.

The carrying amount of deferred tax assets are reviewed at each reporting date and a valuation allowance is set up against deferred tax assets so that the net carrying amount equals the highest amount that is more likely than not to be recovered on current or future taxable profit.

Tangible assets

Tangible assets are stated in the balance sheet at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

Depreciation

Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:

Asset class

Depreciation method and rate

Leasehold improvements

10% Straight line

Plant, machinery & office equipment

10-33% Straight line

Motor vehicles

20% Straight line

 

Furndeco Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

Intangible assets

Separately acquired intangible assets are stated in the balance sheet at cost less any subsequent accumulated amortisation and subsequent accumulated impairment losses.

Amortisation

Amortisation is provided on intangible assets so as to write off the cost, less any estimated residual value, over their useful life as follows:

Asset class

Amortisation method and rate

Computer software

20% Straight line

Trade debtors

Trade debtors are amounts due from customers for goods sold in the ordinary course of business.

Trade debtors are recognised initially at the transaction price. All trade debtors are repayable within one year and hence are included at the undiscounted cost of cash expected to be received. A provision for the impairment of trade debtors is established when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of the debtors.

Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first-in, first-out (FIFO) method.

The cost of finished goods and work in progress comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. At each reporting date, stocks are assessed for impairment. If stocks are impaired, the carrying amount is reduced to its selling price less costs to complete and sell; the impairment loss is recognised immediately in profit or loss.

Trade creditors

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade creditors are classified as current liabilities if the company does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.

Trade creditors are recognised initially at the transaction price and all are repayable within one year and hence are included at the undiscounted amount of cash expected to be paid.

Share capital

Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.

Defined contribution pension obligation

A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the company has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.

Dividends

Dividend distribution to the company’s shareholders is recognised as a liability in the financial statements in the reporting period in which the dividends are declared.

 

Furndeco Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

Borrowings

Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the profit and loss account over the period of the relevant borrowing.

Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.

Borrowings are classified as current liabilities unless the company has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

Leases

Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee.

Assets held under finance leases are recognised at the lower of their fair value at inception of the lease and the present value of the minimum lease payments. These assets are depreciated on a straight-line basis over the shorter of the useful life of the asset and the lease term. The corresponding liability to the lessor is included in the Balance Sheet as a finance lease obligation.

Lease payments are apportioned between finance costs in the Profit and Loss Account and reduction of the lease obligation so as to achieve a constant periodic rate of interest on the remaining balance of the liability.

Financial instruments


Classification
Financial instruments are classified and accounted for according to the substance of the contractual arrangement, as financial assets, financial liabilities or equity instruments. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities. Where shares are issued, any component that creates a financial liability of the company is presented as a liability on the balance sheet. The corresponding dividends relating to the liability component are charged as interest expenses in the profit and loss account.

 Recognition and measurement
All financial assets and liabilities are initially measured at transaction price (including transaction costs), except for those financial assets classified as at fair value through profit or loss, which are initially measured at fair value (which is normally the transaction price excluding transaction costs), unless the arrangement constitutes a financing transaction. If an arrangement constitutes a financing transaction, the financial asset or financial liability is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.

 Impairment
Assets, other than those measured at fair value, are assessed for indicators of impairment at each balance sheet date. If there is objective evidence of impairment, an impairment loss is recognised in profit or loss as described below.

A non financial asset is impaired where there is objective evidence that, as a result of one or more events that occurred after initial recognition, the estimated recoverable value of the asset has been reduced. The recoverable amount of an asset is the higher of its fair value less costs to sell and its value in use.

 

Furndeco Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

Where indicators exist for a decrease in impairment loss, the prior impairment loss is tested to determine reversal. An impairment loss is reversed on an individual impaired asset to the extent that the revised recoverable value does not lead to a revised carrying amount higher than the carrying value had no impairment been recognised.

For financial assets carried at amortised cost, the amount of an impairment is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s original effective interest rate.

For financial assets carried at cost less impairment, the impairment loss is the difference between the asset’s carrying amount and the best estimate of the amount that would be received for the asset if it were to be sold at the reporting date.

Where indicators exist for a decrease in impairment loss, and the decrease can be related objectively to an event occurring after the impairment was recognised, the prior impairment loss is tested to determine reversal. An impairment loss is reversed on an individual impaired financial asset to the extent that the revised recoverable value does not lead to a revised carrying amount higher than the carrying value had no impairment been recognised.


Derivative financial instruments
The company uses derivative financial instruments to reduce exposure to foreign exchange risk. The company does not hold or issue derivative financial instruments for speculative purposes.

Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to their fair value at each reporting date. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.

 

3

Turnover

The analysis of the company's revenue for the year from continuing operations is as follows:

2023
£

2022
£

Sale of goods

13,790,774

19,750,880

The analysis of the company's turnover for the year by market is as follows:

2023
£

2022
£

UK

13,318,230

19,245,373

Europe

403,161

456,478

Rest of world

69,383

49,029

13,790,774

19,750,880

 

4

Operating profit

Arrived at after charging/(crediting):

2023
 £

2022
 £

Depreciation expense

228,212

230,651

Amortisation expense

39,369

28,916

Foreign exchange losses/(gains)

19,996

(12,501)

Operating lease expense - property

580,000

580,000

Operating lease expense - other

63,079

40,885

Profit on disposal of property, plant and equipment

(10,292)

(46,291)

 

Furndeco Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

 

5

Other interest receivable and similar income

2023
£

2022
£

Interest income on bank deposits

17,439

2,519

 

6

Interest payable and similar expenses

2023
£

2022
£

Interest on bank overdrafts and borrowings

1

1,076

 

7

Staff costs

The aggregate payroll costs (including directors' remuneration) were as follows:

2023
 £

2022
 £

Wages and salaries

3,572,251

4,013,653

Social security costs

353,925

419,032

Pension costs, defined contribution scheme

106,579

83,199

4,032,755

4,515,884

The average number of persons employed by the company (including directors) during the year, analysed by category was as follows:

2023
 No.

2022
 No.

Administration, distribution and warehouse

88

100

 

8

Directors' remuneration

The directors' remuneration for the year was as follows:

2023
£

2022
£

Remuneration

27,197

76,763

 

9

Auditors' remuneration

2023
£

2022
£

Audit of the financial statements

26,000

25,000

 

Furndeco Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

 

10

Taxation

Tax charged/(credited) in the profit and loss account

2023
 £

2022
 £

Current taxation

UK corporation tax

37,057

180,333

UK corporation tax adjustment to prior periods

(92,900)

(676)

(55,843)

179,657

Deferred taxation

Arising from origination and reversal of timing differences

(28,080)

16,533

Arising from changes in tax rates and laws

(825)

-

Total deferred taxation

(28,905)

16,533

Tax (receipt)/expense in the profit and loss account

(84,748)

196,190

The tax on profit before tax for the year is lower than the standard rate of corporation tax in the UK (2022 - lower than the standard rate of corporation tax in the UK) of 23.52% (2022 - 19%).

The differences are reconciled below:

2023
£

2022
£

Profit before tax

20,018

1,057,056

Corporation tax at standard rate

4,708

200,841

Effect of expense not deductible in determining taxable profit (tax loss)

2,269

2,967

Deferred tax expense from unrecognised tax loss or credit

-

1,211

Movement in deferred tax not recognised

(825)

-

Decrease in UK and foreign current tax from adjustment for prior periods

(92,900)

(676)

Tax increase/(decrease) from effect of capital allowances and depreciation

3,661

(11,830)

Remeasurement in deferred tax for changes in tax rates

(1,661)

3,677

Total tax (credit)/charge

(84,748)

196,190

A change in the UK corporation tax rate was announced in the March 2021 Budget, increasing the current rate of 19% to 25% with effect from 1 April 2023. Deferred income balances have been calculated at the rate of 25%.

Deferred tax

Deferred tax assets and liabilities

2023

Liability
£

Fixed asset timing differences

215,980

Short term timing differences

(2,692)

213,288

2022

Liability
£

Fixed asset timing differences

244,064

Short term timing differences

(1,871)

242,193

 

Furndeco Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

 

11

Intangible assets

Computer software
 £

Cost or valuation

At 1 January 2023

176,297

Additions acquired separately

78,860

At 31 December 2023

255,157

Amortisation

At 1 January 2023

28,916

Amortisation charge

39,369

At 31 December 2023

68,285

Carrying amount

At 31 December 2023

186,872

At 31 December 2022

147,381

 

12

Tangible assets

Leasehold improvements
£

Plant, machinery and office equipment
 £

Motor vehicles
 £

Total
£

Cost

At 1 January 2023

829,093

780,934

151,380

1,761,407

Additions

6,649

25,059

35,604

67,312

Disposals

-

(3,250)

(45,769)

(49,019)

At 31 December 2023

835,742

802,743

141,215

1,779,700

Depreciation

At 1 January 2023

174,581

267,977

122,106

564,664

Charge for the year

83,148

128,027

17,037

228,212

Eliminated on disposal

-

(1,192)

(36,827)

(38,019)

At 31 December 2023

257,729

394,812

102,316

754,857

Carrying amount

At 31 December 2023

578,013

407,931

38,899

1,024,843

At 31 December 2022

654,512

512,957

29,274

1,196,743

 

13

Stocks

2023
£

2022
£

Inventory

3,898,029

4,405,040

 

Furndeco Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

 

14

Debtors

Note

2023
 £

2022
 £

Trade debtors

 

787,511

1,455,898

Amounts owed by related parties

22

217,840

-

Other debtors

 

238,234

782,888

Prepayments

 

214,880

202,331

Total current trade and other debtors

 

1,458,465

2,441,117

 

15

Creditors

2023
 £

2022
 £

Due within one year

Trade creditors

473,425

963,374

Social security and other taxes

87,779

193,853

Other creditors

174,041

303,931

Accrued expenses

293,286

1,138,554

Corporation tax liability

37,057

181,113

1,065,588

2,780,825

 

16

Pension and other schemes

Defined contribution pension scheme

The company operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the company to the scheme and amounted to £106,579 (2022 - £83,199).

Contributions totalling £12,629 (2022 - £7,920) were payable to the scheme at the end of the year and are included in creditors.

 

17

Dividends

2023
 £

2022
 £

Dividends paid

338,628

188,680

Dividends of £312,523 (2022 - £136,215) and £26,105 (2022 - £52,465) were paid to directors of the company and their close family respectively.

 

Furndeco Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

 

18

Share capital

Allotted, called up and fully paid shares

 

2023

2022

 

No.

£

No.

£

X Ordinary Shares of £0.01 each

850

8.50

850

8.50

W Ordinary Shares of £0.01 each

50

0.50

50

0.50

Y Ordinary Shares of £0.01 each

50

0.50

50

0.50

Z Ordinary Shares of £0.01 each

50

0.50

50

0.50

Preference Shares of £1 each

2,230,000

2,230,000

2,350,000

2,350,000

 

2,231,000

2,230,010

2,351,000

2,350,010

The different classes of Ordinary shares rank pari passu in all respects to voting and dividends, which are declared at the discretion of the Board. These are non-redeemable shares.

The preference shares have no voting rights or dividend rights attached to them. The preference shares have priority on winding up. Upon winding up of the company any amounts distributed to the members would firstly be used to repay amounts paid up on the preference shares. Secondly, amounts paid up on the Ordinary X shares would repaid and finally, amounts paid up on the Ordinary W, Y and Z shares would be repaid.

During the year, 120,000 preference shares were redeemed for their nominal value of £1 per share.

 

19

Reserves

Called up share capital
This represents the nominal value of the issued share capital of the company.

Profit and loss account
This reserve includes all current and prior period retained profits and losses, net of dividends paid and other adjustments.

 

20

Obligations under leases and hire purchase contracts

Operating leases

The total of future minimum lease payments is as follows:

2023
£

2022
£

Not later than one year

650,958

623,027

Later than one year and not later than five years

2,414,052

2,359,919

Later than five years

1,160,000

1,740,000

4,225,010

4,722,946

The amount of non-cancellable operating lease payments recognised as an expense during the year was £643,079 (2022 - £620,885).

 

21

Commitments

Capital commitments

The total amount contracted for but not provided in the financial statements was £Nil (2022 - £181,546).

 

Furndeco Limited

Notes to the Financial Statements for the Year Ended 31 December 2023

 

22

Related party transactions

Companies under common control of the directors
During the year the company was charged £Nil (2022 - £144,000) and £580,000 (2022 - £580,000) for consultancy services and property rental respectively by companies under common control of the directors.

At the balance sheet date there were no outstanding balances with companies under common control (2022 - amount due to companies under common control of £24,000).

Transactions with directors
Motor vehicles with net book balue (NBV) of £8,942 were sold to directors for proceeds equal to the NBV.

Included in debtors in note 15 is an amount owing to the company by the directors. This was an advance of £217,840 to the directors for the purchase of the company's shares.

 

23

Parent and ultimate parent undertaking

The company's immediate parent was Callow Investments Limited (incorporated in the United Kingdom) up until 28 February 2024, after which, the immediate parent company was Furndeco Holdings Limited (incorporated in the United Kingdom). The ultimate parent company is Callow Investments Limited which remains unchanged.

The most senior parent entity producing publicly available financial statements is Callow Investments Limited. These financial statements are available upon request from the company's registered office.

The ultimate controlling party is B Doouss, a director of the company.