INC. Design Limited |
Notes to the Accounts |
for the year ended 31 October 2023 |
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1 |
Accounting policies |
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Basis of preparation |
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The accounts have been prepared under the historical cost convention as modified by the revaluation of certain assets and in accordance with FRS 102, The Financial Reporting Standard applicable in the UK and Republic of Ireland (as applied to small entities by section 1A of the standard). |
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Turnover |
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Turnover is measured at the fair value of the consideration received or receivable, net of discounts and value added taxes. Turnover includes revenue earned from the sale of goods and from the rendering of services. Turnover from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have transferred to the buyer. Turnover from the rendering of services is recognised by reference to the stage of completion of the contract. The stage of completion of a contract is measured by comparing the costs incurred for work performed to date to the total estimated contract costs. |
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Tangible fixed assets |
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Tangible fixed assets are measured at cost less accumulative depreciation and any accumulative impairment losses or at revalued amount.Depreciation is provided on all tangible fixed assets, other than freehold land, at rates calculated to write off the cost or revalued amount, less estimated residual value, of each asset evenly over its expected useful life, as follows: |
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Office |
over 45 years |
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Computer equipment |
over 3 years |
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Plant and machinery |
25% reducing balance |
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Fixtures, fittings, and office equipment |
25% reducing balance |
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Investment properties |
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The investment property has been measured at fair value which is the open market value of the |
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property The fair value adjustment has been taken through the profit and loss account. |
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Fair value is determined by the directors by reference to a report procured from an independent |
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qualified valuer. |
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Debtors |
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Short term debtors are measured at transaction price (which is usually the invoice price), less any impairment losses for bad and doubtful debts. Loans and other financial assets are initially recognised at transaction price including any transaction costs and subsequently measured at amortised cost determined using the effective interest method, less any impairment losses for bad and doubtful debts. |
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Creditors |
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Short term creditors are measured at transaction price (which is usually the invoice price). Loans and other financial liabilities are initially recognised at transaction price net of any transaction costs and subsequently measured at amortised cost determined using the effective interest method. |
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Taxation |
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A current tax liability is recognised for the tax payable on the taxable profit of the current and past periods. A current tax asset is recognised in respect of a tax loss that can be carried back to recover tax paid in a previous period. Deferred tax is recognised in respect of all timing differences between the recognition of income and expenses in the financial statements and their inclusion in tax assessments. Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference, except for revalued land and investment property where the tax rate that applies to the sale of the asset is used. Current and deferred tax assets and liabilities are not discounted. |
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Leased assets |
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A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. All other leases are classified as operating leases. The rights of use and obligations under finance leases are initially recognised as assets and liabilities at amounts equal to the fair value of the leased assets or, if lower, the present value of the minimum lease payments. Minimum lease payments are apportioned between the finance charge and the reduction in the outstanding liability using the effective interest rate method. The finance charge is allocated to each period during the lease so as to produce a constant periodic rate of interest on the remaining balance of the liability. Leased assets are depreciated in accordance with the company's policy for tangible fixed assets. If there is no reasonable certainty that ownership will be obtained at the end of the lease term, the asset is depreciated over the lower of the lease term and its useful life. Operating lease payments are recognised as an expense on a straight line basis over the lease term. |
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Pensions |
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Contributions to defined contribution plans are expensed in the period to which they relate. |
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2 |
Employees |
2023 |
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2022 |
Number |
Number |
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Average number of persons employed by the company |
5 |
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6 |
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3 |
Tangible fixed assets |
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Land and buildings |
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Property, plant and machinery etc |
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Motor vehicles |
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Total |
£ |
£ |
£ |
£ |
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Cost / Fair Value |
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At 1 November 2022 |
208,000 |
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154,892 |
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- |
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362,892 |
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Additions |
- |
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78,709 |
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78,035 |
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156,744 |
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Reclassification |
(75,000) |
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- |
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- |
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(75,000) |
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At 31 October 2023 |
133,000 |
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233,601 |
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78,035 |
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444,636 |
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Depreciation |
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At 1 November 2022 |
- |
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148,352 |
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- |
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148,352 |
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Charge for the year |
- |
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4,093 |
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3,251 |
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7,344 |
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At 31 October 2023 |
- |
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152,445 |
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3,251 |
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155,696 |
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Net book value |
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At 31 October 2023 |
133,000 |
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81,156 |
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74,784 |
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288,940 |
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At 31 October 2022 |
208,000 |
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6,540 |
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- |
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214,540 |
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In November 2022 the company started to use part of the investment property as an owner |
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occupied office. Therefore part of the investment property has been reclassified to property, |
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plant and machinery. The part of the investment property reclassified to property, plant and |
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machinery was valued at £75,000 in November 2022 by Mark Warren RICS who is an |
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independent qualified valuer.The historical cost of the part of the investment property |
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reallocated in November 2022 was £66,700. As at 31 October 2023 the net book value of the |
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owner occupied office under the revaluation method is £73,333 and £65,218 under the |
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historical cost method. |
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4 |
Debtors |
2023 |
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2022 |
£ |
£ |
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Trade debtors |
170,955 |
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263,923 |
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Other debtors |
51,624 |
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34,206 |
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222,579 |
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298,129 |
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5 |
Creditors: amounts falling due within one year |
2023 |
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2022 |
£ |
£ |
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Bank loans and overdrafts |
91,608 |
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94,244 |
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Obligations under finance lease and hire purchase contracts |
12,254 |
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- |
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Trade creditors |
53,317 |
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44,051 |
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Taxation and social security costs |
6,684 |
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40,227 |
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Other creditors |
39,114 |
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52,986 |
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202,977 |
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231,508 |
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6 |
Creditors: amounts falling due after one year |
2023 |
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2022 |
£ |
£ |
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Bank loans |
17,566 |
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27,621 |
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Obligations under finance lease and hire purchase contracts |
60,315 |
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- |
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77,881 |
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27,621 |
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The company obtained a loan of £50,000 under the Bounce Back |
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Loan Scheme on the 02 June 2020. The loan is for a period of 6 |
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years with repayments commencing on the 02 June 2021. |
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The rate of interest payable on the loan is fixed at 2.5%. |
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There is a mortgage debenture over all of the assets of the company in favour of the |
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National Westminster Bank Plc which was created on the 21 March 1997. |
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There is a legal charge over the property at 184a Eaves Lane, |
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Chorley, Lancashire, PR6 0AU in favour of the National Westminster Bank Plc which was |
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created on the 27 November 2017. |
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7 |
Revaluation reserve |
2023 |
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2022 |
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8 |
Other financial commitments |
2023 |
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2022 |
£ |
£ |
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Total future minimum payments under non-cancellable operating leases |
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18,612 |
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34,723 |
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9 |
Other information |
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INC. Design Limited is a private company limited by shares and incorporated in England. Its registered office is: |
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184a Eaves Lane |
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Chorley |
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Lancashire |
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PR6 0AU |
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10 |
Dividends |
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Dividends totalling £65,000 ( 2022: £20,000 ) were paid in the year in respect of shares held by |
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the company's directors. |