Company Registration No. 10136462 (England and Wales)
AXEL ARIGATO LONDON LIMITED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31 DECEMBER 2024
Star House
Star Hill
Rochester
Kent
ME1 1UX
AXEL ARIGATO LONDON LIMITED
CONTENTS
Page
Company information
1
Strategic report
2
Director's report
3 - 4
Independent auditor's report
5 - 8
Statement of comprehensive income
9
Statement of financial position
10 - 11
Statement of cash flows
12
Notes to the financial statements
13 - 25
AXEL ARIGATO LONDON LIMITED
COMPANY INFORMATION
- 1 -
Director
Mr A Johansson
Company number
10136462
Registered office
20-22 Wenlock Road
London
N1 7GU
Auditor
TC Group
Star House
Star Hill
Rochester
Kent
ME1 1UX
Business address
57A Farringdon Road
London
EC1M 3JB
AXEL ARIGATO LONDON LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
- 2 -
The director presents the strategic report for the year ended 31 December 2024.
The principal activity of the company continued to be that of the sale of textiles, clothing, fur, footwear and leather goods in the United Kingdom. The company is a wholly owned subsidiary of Axel Arigato AB, which is the supplier of the products for sale.
Axel Arigato London Limited markets its products for sale through the company’s website, own stores in London (Soho, Covent Garden), and Bicester, as well as through the external wholesale partners.
Axel Arigato London Limited provides Business Support services and Design & Development services on behalf of the affiliated company, Axel Arigato AB.
Fair review of the business
The turnover during 2024 amounted to £19.5 million compared to £20.2 million the previous year, corresponding to a decrease of 4%. The turnover was negatively impacted by reduced sales to wholesale partners following general wholesale industry headwinds and consolidation activities. The decline was partially offset by increased sales in the company’s own stores including the contribution from the new Axel Arigato flagship store in London Earlham, which opened during the second half of 2024.
Principal risks and uncertainties
The principal risks and uncertainties that the company faces primarily relate to the market demand for the company´s products. The risks are amongst others related to the attractiveness of the Axel Arigato brand, the UK consumers’ purchasing power, the effectiveness of the company’s own distribution channels as well as the health of our wholesale partners. The company strives to mitigate these risks amongst others through marketing initiatives and the use of different channels.
Key performance indicators
Mr A Johansson
Director
15 April 2025
AXEL ARIGATO LONDON LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
- 3 -
The director presents his annual report and financial statements for the year ended 31 December 2024.
Principal activities
The principal activity of the company continued to be that of the sale of textiles, clothing, fur, footwear and leather goods.The company is a wholly owned subsidiary of Axel Arigato AB, which is the supplier of the products for sale.
Results and dividends
The results for the year are set out on page 9.
No ordinary dividends were paid. The director does not recommend payment of a final dividend.
Director
The director who held office during the year and up to the date of signature of the financial statements was as follows:
Mr A Johansson
Mr M S Svardh
(Resigned 26 April 2024)
Future developments
The company's future developments, including strategic objectives and growth plans, are outlined in the strategic report.
Auditor
The auditor, TC Group, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of director's responsibilities
The director is responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless he is 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 director is required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The director is 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. He is 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.
AXEL ARIGATO LONDON LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 4 -
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
Mr A Johansson
Director
15 April 2025
AXEL ARIGATO LONDON LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF AXEL ARIGATO LONDON LIMITED
- 5 -
Opinion
We have audited the financial statements of Axel Arigato London Limited (the 'company') for the year ended 31 December 2024 which comprise the statement of comprehensive income, the statement of financial position, the statement of cash flows 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:
give a true and fair view of the state of the company's affairs as at 31 December 2024 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.
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 director's 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 director with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The director is 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.
AXEL ARIGATO LONDON LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF AXEL ARIGATO LONDON LIMITED
- 6 -
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the director's report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report and the director's 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:
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 director's remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit; or
the director was not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemption in preparing the directors' report and from the requirement to prepare a strategic report.
Responsibilities of director
As explained more fully in the director's responsibilities statement, the director is 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 director determines 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 director is 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 director either intends to liquidate the company or to cease operations, or has 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. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
AXEL ARIGATO LONDON LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF AXEL ARIGATO LONDON LIMITED
- 7 -
Extent to which the audit was considered capable of detecting irregularities, including fraud
The objectives of our audit, in respect to fraud, are: to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses; and to respond appropriately to fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and its management.
Our approach was as follows:
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial and sector experience, and through discussion with the directors and other management (as required by auditing standards), and discussed with the directors and other management the policies and procedures regarding compliance with laws and regulations;
We considered the legal and regulatory frameworks directly applicable to the financial statements reporting framework (FRS 102 and the Companies Act 2006) and the relevant tax compliance regulations in the UK;
We considered the nature of the industry, the control environment and business performance, including the key drivers for management’s remuneration;
We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit;
We considered the procedures and controls that the company has established to address risks identified, or that otherwise prevent, deter and detect fraud; and how senior management monitors those programmes and controls.
Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations. Where the risk was considered to be higher, we performed audit procedures to address each identified fraud risk. These procedures included: testing manual journals; reviewing the financial statement disclosures and testing to supporting documentation; performing analytical procedures; and enquiring of management, and were designed to provide reasonable assurance that the financial statements were free from fraud or error.
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.
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.
AXEL ARIGATO LONDON LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF AXEL ARIGATO LONDON LIMITED
- 8 -
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.
Sally Meah FCCA (Senior Statutory Auditor)
For and on behalf of TC Group
Statutory Auditor
28 April 2025
Star House
Star Hill
Rochester
Kent
ME1 1UX
AXEL ARIGATO LONDON LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024
- 9 -
2024
2023
Notes
£
£
Turnover
3
19,465,889
20,226,799
Cost of sales
(16,246,839)
(17,363,391)
Gross profit
3,219,050
2,863,408
Administrative expenses
(8,226,493)
(7,348,097)
Other operating income
5,977,917
5,418,583
Operating profit
5
970,474
933,894
Interest receivable and similar income
8
299
9,895
Interest payable and similar expenses
9
(86,600)
(111,662)
Profit before taxation
884,173
832,127
Tax on profit
10
(205,408)
(177,179)
Profit for the financial year
678,765
654,948
The income statement has been prepared on the basis that all operations are continuing operations.
The notes on pages 13 to 25 form part of these financial statements.
AXEL ARIGATO LONDON LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2024
31 December 2024
- 10 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
11
1,653,541
826,219
Current assets
Stocks
12
518,715
687,527
Debtors
13
2,004,764
3,363,149
Cash at bank and in hand
50,661
53,308
2,574,140
4,103,984
Creditors: amounts falling due within one year
14
(2,147,806)
(2,330,081)
Net current assets
426,334
1,773,903
Total assets less current liabilities
2,079,875
2,600,122
Creditors: amounts falling due after more than one year
15
(1,319,026)
Provisions for liabilities
Deferred tax liability
16
243,202
123,188
(243,202)
(123,188)
Net assets
1,836,673
1,157,908
Capital and reserves
Called up share capital
18
100
100
Profit and loss reserves
1,836,573
1,157,808
Total equity
1,836,673
1,157,908
The notes on pages 13 to 25 form part of these financial statements.
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
AXEL ARIGATO LONDON LIMITED
STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT
31 DECEMBER 2024
31 December 2024
- 11 -
The financial statements were approved by the board of directors and authorised for issue on 15 April 2025 and are signed on its behalf by:
Mr A Johansson
Director
Company registration number 10136462 (England and Wales)
AXEL ARIGATO LONDON LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2024
- 12 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
22
1,279,298
(1,326,147)
Interest paid
(86,600)
(111,662)
Income taxes (paid)/refunded
(176,740)
21,397
Net cash inflow/(outflow) from operating activities
1,015,958
(1,416,412)
Investing activities
Purchase of tangible fixed assets
(1,018,904)
(114,774)
Proceeds from disposal of tangible fixed assets
76,012
Interest received
299
9,895
Net cash used in investing activities
(1,018,605)
(28,867)
Net decrease in cash and cash equivalents
(2,647)
(1,445,279)
Cash and cash equivalents at beginning of year
53,308
1,498,587
Cash and cash equivalents at end of year
50,661
53,308
The notes on pages 13 to 25 form part of these financial statements.
AXEL ARIGATO LONDON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
- 13 -
1
Accounting policies
Company information
Axel Arigato London Limited is a private company limited by shares incorporated in England and Wales. The registered office is 20-22 Wenlock Road, London, N1 7GU.
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.
1.2
Going concern
Atruet the time of approving the financial statements, the director has a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the director continues 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, net of discounts and value added taxes. Turnover includes revenue earned from sale of goods and from the rendering of services. Turnover is reduced for estimated customer returns, rebates and other similar allowances.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer. This is usually at the point that the customer has signed from the delivery of the goods.
Revenue from business support services and business contractual services are recognised using the transactional net margin method, any business support as well as design and development costs have been uplifted based on the value added to the group.
1.4
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost less accumulated depreciation and any accumulated 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
10% straight line
Fixtures and fittings
20% straight line
Computers
20% straight line
AXEL ARIGATO LONDON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 14 -
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.
1.5
Stocks
Stocks are valued at the lower of cost and net realisable value after making due allowance for obsolete and slow-moving stocks. Cost includes all direct costs and an appropriate proportion of fixed and variable overheads.
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.
1.6
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 statement of financial position 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.
AXEL ARIGATO LONDON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 15 -
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.
AXEL ARIGATO LONDON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 16 -
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.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.7
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 income statement 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 income statement, 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.
Current or deferred tax for the year is recognised in profit or loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax is also recognised in other comprehensive income or directly in equity respectively.
AXEL ARIGATO LONDON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 17 -
1.8
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.9
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.
1.10
Foreign exchange
Monetary assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the statement of financial position date. Transactions in foreign currencies are translated into sterling at the rate ruling on the date of the transaction. Exchange differences are taken into account in arriving at the operating profit.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the director is 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.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Leases
Management exercise judgement in determining the classification of leases as finance or operating leases at the inception of leases. Management consider the likelihood of exercising the break clauses or extension options in determining the lease term. Where the lease terms constitutes substantially all the economic life of the asset, or where the present value of minimum lease payments amount to substantially all the fair value of the property, the lease is classified as a finance lease. All other leases are classified as operating leases.
Transfer pricing
The arm's length principle is applied in determining transfer pricing for the intercompany transactions, ensuring compliance with OECD guidelines and local regulations. Judgement is required in selecting appropriate transfer pricing methods, conducting comparability analyses, and allocation of profits for services that the entity provides. The company maintains comprehensive transfer pricing documentation, including master files, local files and specific intercompany agreements to support its approach and manage tax compliance risks.
AXEL ARIGATO LONDON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
2
Judgements and key sources of estimation uncertainty
(Continued)
- 18 -
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.
Depreciation of property plant and equipment
Depreciation is provided so as to write down the asset to residual values over their estimated useful lives. The selection of these residual values and estimated lives requires the exercise of management judgement.
Impairment of assets
Where there are indicators of impairment, management perform an impairment test. Recoverable amounts for cash-generating units are the higher of fair value less costs of disposal, and value in use.
Stock
Inventories are stated at the lower of costs and net realisable value. Provisions are recognised where the value is assessed to be lower than cost.
3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by geographical market
United Kingdom
19,465,889
20,226,799
2024
2023
£
£
Other revenue
Interest income
299
9,895
4
Exceptional item
2024
2023
£
£
Expenditure
Non recoverable payment made in error
-
56,862
AXEL ARIGATO LONDON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 19 -
5
Operating profit
2024
2023
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses/(gains)
11,538
(1,591)
Depreciation of owned tangible fixed assets
188,739
72,374
Loss on disposal of tangible fixed assets
2,843
-
Operating lease charges
1,511,092
1,362,337
6
Auditor's remuneration
2024
2023
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
28,346
30,982
7
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Store
26
68
Administrative
39
-
Total
65
68
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
3,338,391
2,984,196
Social security costs
354,815
323,440
Pension costs
88,698
74,935
3,781,904
3,382,571
AXEL ARIGATO LONDON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 20 -
8
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
299
9,895
2024
2023
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
299
9,895
9
Interest payable and similar expenses
2024
2023
£
£
Other finance costs:
Other interest
86,600
111,662
10
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
85,394
176,840
Adjustments in respect of prior periods
(21,497)
Total current tax
85,394
155,343
Deferred tax
Origination and reversal of timing differences
120,014
21,836
Total tax charge
205,408
177,179
AXEL ARIGATO LONDON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
10
Taxation
(Continued)
- 21 -
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:
2024
2023
£
£
Profit before taxation
884,173
832,127
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 25.00%)
221,043
208,032
Tax effect of expenses that are not deductible in determining taxable profit
(9,976)
17,301
Tax effect of utilisation of tax losses not previously recognised
(18,095)
Adjustments in respect of prior years
(21,497)
Effect of change in corporation tax rate
(11,016)
Permanent capital allowances in excess of depreciation
(172,858)
(36,924)
Depreciation on assets not qualifying for tax allowances
47,185
17,542
Movement in deferred taxation
120,014
21,836
Taxation charge for the year
205,408
177,179
AXEL ARIGATO LONDON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 22 -
11
Tangible fixed assets
Leasehold improvements
Fixtures and fittings
Computers
Total
£
£
£
£
Cost
At 1 January 2024
965,814
163,029
55,250
1,184,093
Additions
787,508
227,210
4,186
1,018,904
Disposals
(20,159)
(20,159)
At 31 December 2024
1,753,322
390,239
39,277
2,182,838
Depreciation and impairment
At 1 January 2024
282,136
51,180
24,558
357,874
Depreciation charged in the year
122,273
48,484
17,982
188,739
Eliminated in respect of disposals
(17,316)
(17,316)
At 31 December 2024
404,409
99,664
25,224
529,297
Carrying amount
At 31 December 2024
1,348,913
290,575
14,053
1,653,541
At 31 December 2023
683,678
111,849
30,692
826,219
12
Stocks
2024
2023
£
£
Finished goods and goods for resale
518,715
687,527
13
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
1,017,981
1,287,281
Other debtors
750,008
1,623,427
Prepayments and accrued income
236,775
452,441
2,004,764
3,363,149
AXEL ARIGATO LONDON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 23 -
14
Creditors: amounts falling due within one year
2024
2023
£
£
Trade creditors
290,856
113,602
Corporation tax
85,394
176,740
Other taxation and social security
843,295
965,128
Other creditors
1,992
2,505
Accruals and deferred income
926,269
1,072,106
2,147,806
2,330,081
Axel Arigato London Limited is the guarantor of the Global Cash Pool held by Axel Arigato AB, with Nordea Bank Abp.
15
Creditors: amounts falling due after more than one year
2024
2023
£
£
Amounts owed to group undertakings
1,319,026
16
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2024
2023
Balances:
£
£
Accelerated capital allowances
243,202
123,188
2024
Movements in the year:
£
Liability at 1 January 2024
123,188
Charge to profit or loss
120,014
Liability at 31 December 2024
243,202
AXEL ARIGATO LONDON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 24 -
17
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
88,698
74,935
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.
18
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
100
100
100
100
19
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:
2024
2023
£
£
Within one year
1,285,925
1,227,551
Between two and five years
5,219,460
5,188,777
In over five years
3,741,383
5,057,991
10,246,768
11,474,319
20
Capital commitments
Amounts contracted for but not provided in the financial statements:
2024
2023
£
£
Acquisition of tangible fixed assets
-
117,341
21
Ultimate controlling party
The parent company of Axel Arigato London Limited is Axel Arigato Ab and its registered office is 5-6, Skeppsbron, Gothenburg, Sweden, 41121.
AXEL ARIGATO LONDON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 25 -
22
Cash generated from/(absorbed by) operations
2024
2023
£
£
Profit for the year after tax
678,765
654,948
Adjustments for:
Taxation charged
205,408
177,179
Finance costs
86,600
111,662
Investment income
(299)
(9,895)
Loss on disposal of tangible fixed assets
2,843
-
Depreciation and impairment of tangible fixed assets
188,739
72,374
Movements in working capital:
Decrease/(increase) in stocks
168,812
(509,644)
Decrease/(increase) in debtors
1,358,385
(90,250)
Decrease in creditors
(1,409,955)
(1,732,521)
Cash generated from/(absorbed by) operations
1,279,298
(1,326,147)
23
Analysis of changes in net funds
1 January 2024
Cash flows
31 December 2024
£
£
£
Cash at bank and in hand
53,308
(2,647)
50,661
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