| FONZ LEATHER STYLES LIMITED |
| Strategic Report |
|
| Fair review of business |
The company continued to increase the turnover, especially in relation to on-line sales. Unfortunately, there were reduced export sales due to uncertain market conditions in the EU. The wholesale sales continued to increase.
The increased operating profits are mainly attributable to the on-line sales. |
|
| Principal risks and uncertainties |
The United Kingdom market is the company's main market but unfortunately due to the current cost of living crisis and the very nature of the company's products the company struggles to maintain or significantly increase the turnover, especially in the retail sector via it's shop.
Also, whilst the directors aim to increase the profitability by seeking suitable suppliers the company is mindful that the merchandise are purchased from sources which meet the 'environmental' and 'ethical' standards. During the year, the company spent £5,152 on specific environmental and ethical checks on one of the major suppliers.
Much of the purchases are imports and the company is therefore subject to fluctuations in the currency exchange rates. |
|
| Future strategy |
The overall profitability is the key performance indicator and with this in mind the directors are seeking to use information technology and expand into the on-line sales.
Also, the company is attending and participating in numerous exhibitions and fairs in order to seek export markets. The company will continue to engage with sales agents to generate turnover for the company. |
|
| Internal Control |
| The directors acknowledge their responsibility for the implementation and checking effectiveness of the internal controls. The internal controls are constantly monitored to manage any operational or financial risks. |
|
| Greenhouse Effects and Energy Consumption |
| The company's annual consumption is less than 40,000kWh. |
|
|
| On behalf of the directors |
|
|
|
| MR ARSHAD HAMEED |
| 28 December 2025 |
| Director |
|
| ● |
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’s responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. |
|
| Conclusions relating to going concern |
| In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. |
| Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. |
| Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. |
|
| Other information |
| The other information comprises the information included in the annual report other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. |
| We have nothing to report in this regard. |
|
|
| Opinions on other matters prescribed by the Companies Act 2006 |
| In our opinion, based on the work undertaken in the course of the audit: |
| ● |
the information given in the strategic report and the directors’ report for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
| ● |
the strategic report and the directors’ report have been prepared in accordance with applicable legal requirements. |
|
| Matters on which we are required to report by exception |
| FONZ LEATHER STYLES LIMITED |
| Statement of Cash Flows |
| for the year ended 31 March 2025 |
|
|
|
|
2025 |
|
2024 |
| £ |
£ |
| Operating activities |
| Profit for the financial year |
532,334 |
|
1,100,485 |
|
| Adjustments for: |
| Profit on sale of fixed assets |
(15,840) |
|
- |
| Gain on revaluation of properties |
- |
|
(767,545) |
| Interest receivable |
(16,685) |
|
(9,620) |
| Depreciation |
94,439 |
|
94,668 |
| Amortisation of goodwill |
1,011 |
|
2,777 |
| (Increase)/decrease in stocks |
(106,094) |
|
109,348 |
| (Increase)/decrease in debtors |
(95,678) |
|
247,131 |
| Increase in creditors |
58,961 |
|
12,509 |
|
|
|
420,768 |
|
789,753 |
|
| Cash generated by operating activities |
420,768 |
|
789,753 |
|
|
|
|
|
|
| Investing activities |
| Payments to acquire tangible fixed assets |
(112,579) |
|
(243,876) |
| Proceeds from sale of tangible fixed assets |
34,667 |
|
- |
| Interest receivable |
16,685 |
|
9,620 |
| Cash used in investing activities |
(61,227) |
|
(234,256) |
|
|
|
|
|
|
| Financing activities |
| Equity dividends paid |
(190,800) |
|
(190,800) |
|
| Cash used in financing activities |
(190,800) |
|
(190,800) |
|
|
|
|
|
|
| Net cash generated |
| Cash generated by operating activities |
420,768 |
|
789,753 |
| Cash used in investing activities |
(61,227) |
|
(234,256) |
| Cash used in financing activities |
(190,800) |
|
(190,800) |
|
| Net cash generated |
168,741 |
|
364,697 |
|
| Cash and cash equivalents at 1 April |
2,916,164 |
|
2,551,467 |
| Cash and cash equivalents at 31 March |
3,084,905 |
|
2,916,164 |
|
|
|
|
|
|
| Cash and cash equivalents comprise: |
| Cash at bank |
3,116,585 |
|
2,916,164 |
|
|
|
Stocks |
|
Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first in first out method. The carrying amount of stock sold is recognised as an expense in the period in which the related revenue is recognised. |
|
|
Debtors |
|
Short term debtors are measured at transaction price (which is usually the invoice price), less any impairment losses for bad and doubtful debts. Loans and other financial assets are initially recognised at transaction price including any transaction costs and subsequently measured at amortised cost determined using the effective interest method, less any impairment losses for bad and doubtful debts. |
|
|
Creditors |
|
Short term creditors are measured at transaction price (which is usually the invoice price). Loans and other financial liabilities are initially recognised at transaction price net of any transaction costs and subsequently measured at amortised cost determined using the effective interest method. |
|
|
Taxation |
|
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. used.
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. 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. |
|
|
Provisions |
|
Provisions (i.e. liabilities of uncertain timing or amount) are recognised when there is an obligation at the reporting date as a result of a past event, it is probable that economic benefit will be transferred to settle the obligation and the amount of the obligation can be estimated reliably. |
|
|
Foreign currency translation |
|
Transactions in foreign currencies are initially recognised at the rate of exchange ruling at the date of the transaction.
At the end of each reporting period foreign currency monetary items are translated at the closing rate of exchange. Non-monetary items that are measured at historical cost are translated at the rate ruling at the date of the transaction. All differences are charged to profit or loss. |
|
|
|
Leased assets |
|
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. |
|
|
Pensions |
|
Contributions to pension plans are expensed in the period to which they relate. |
|
| 2 |
Critical accounting estimates and judgements |
|
|
The land and buildings are disclosed at the market valuation in January 2024 and no depreciation charge has been made in the year. The directors have estimated the depreciation charge for other non-current assets taking into consideration the net book value at 31st March 2025. |
|
|
| 3 |
Analysis of turnover |
2025 |
|
2024 |
| £ |
£ |
|
|
Sale of goods |
12,828,527 |
|
11,356,361 |
|
|
|
|
|
|
|
|
|
|
By geographical market: |
|
|
UK |
11,256,097 |
|
9,306,200 |
|
Europe |
623,638 |
|
870,964 |
|
Rest of world |
948,792 |
|
1,179,196 |
|
|
|
|
|
|
12,828,527 |
|
11,356,361 |
|
|
|
|
|
|
|
|
|
|
| 4 |
Operating profit |
2025 |
|
2024 |
| £ |
£ |
|
This is stated after charging: |
|
|
Depreciation of owned fixed assets |
94,439 |
|
94,668 |
|
Amortisation of goodwill |
1,011 |
|
2,777 |
|
Operating lease rentals - plant and machinery |
39,308 |
|
39,148 |
|
Auditors' remuneration for audit services |
4,500 |
|
4,000 |
|
Exchange differences |
|
|
|
|
120 |
|
9,488 |
|
Carrying amount of stock sold |
8,231,355 |
|
7,307,145 |
|
|
|
|
|
|
|
|
|
|
| 5 |
Directors' emoluments |
2025 |
|
2024 |
| £ |
£ |
|
|
Emoluments |
62,000 |
|
62,000 |
|
|
|
|
|
|
|
|
|
|
Highest paid director: |
|
Emoluments |
12,000 |
|
12,000 |
|
|
|
|
|
|
|
|
|
|
|
Highest paid director: |
12,000 |
|
12,000 |
|
| 6 |
Staff costs |
2025 |
|
2024 |
| £ |
£ |
|
|
Wages and salaries |
1,192,115 |
|
1,038,228 |
|
Social security costs |
85,485 |
|
74,557 |
|
Other pension costs |
18,574 |
|
16,478 |
|
|
|
|
|
|
1,296,174 |
|
1,129,263 |
|
|
|
|
|
|
|
|
|
|
Average number of employees during the year |
Number |
Number |
|
|
Administration |
12 |
|
12 |
|
Sales |
46 |
|
46 |
|
|
|
|
|
|
58 |
|
58 |
|
|
|
|
|
|
|
|
|
|
| 7 |
Interest payable |
2025 |
|
2024 |
| £ |
£ |
|
|
Finance charges |
282 |
|
109 |
|
|
|
|
|
|
|
|
|
|
| 8 |
Taxation |
2025 |
|
2024 |
| £ |
£ |
|
Analysis of charge in period |
|
Current tax: |
|
UK corporation tax on profits of the period |
183,259 |
|
148,278 |
|
|
|
|
|
|
|
|
|
|
Deferred tax: |
|
Origination and reversal of timing differences |
- |
|
166,886 |
|
|
|
|
|
|
|
|
|
|
|
Tax on profit on ordinary activities |
183,259 |
|
315,164 |
|
|
|
|
|
|
|
|
|
|
|
Factors affecting tax charge for period |
|
The differences between the tax assessed for the period and the standard rate of corporation tax are explained as follows: |
|
|
|
|
|
|
|
2025 |
|
2024 |
| £ |
£ |
|
Profit on ordinary activities before tax |
715,793 |
|
648,104 |
|
|
|
|
|
|
|
|
|
|
Standard rate of corporation tax in the UK |
25% |
|
25% |
|
| £ |
£ |
|
Profit on ordinary activities multiplied by the standard rate of corporation tax |
|
178,948 |
|
162,026 |
|
|
Effects of: |
|
Expenses not deductible for tax purposes |
(2,137) |
|
1,723 |
|
Capital allowances for period in excess of depreciation |
6,448 |
|
(15,471) |
|
|
Current tax charge for period |
183,259 |
|
148,278 |
|
|
|
|
|
|
|
|
|
|
|
Factors that may affect future tax charges |
|
The company's corporation rate is expected to be 25% in the foreseeable future. |
|
|
| 9 |
Intangible fixed assets |
£ |
|
Licences |
|
|
Cost |
|
At 1 April 2024 |
81,076 |
|
At 31 March 2025 |
81,076 |
|
|
|
|
|
|
|
|
|
|
Amortisation |
|
At 1 April 2024 |
77,531 |
|
Provided during the year |
1,011 |
|
At 31 March 2025 |
78,542 |
|
|
|
|
|
|
|
|
|
|
Carrying amount |
|
At 31 March 2025 |
2,534 |
|
At 31 March 2024 |
3,545 |
|
|
|
|
|
|
|
|
|
|
Goodwill is being written off in equal annual instalments over its estimated economic life of 5 years. |
|
|
| 10 |
Tangible fixed assets |
|
|
Land and buildings |
|
Plant and machinery |
|
Fixtures, fittings, tools and equipment |
|
Total |
|
|
Valuation |
|
At cost |
|
At cost |
| £ |
£ |
£ |
£ |
|
Cost or valuation |
|
At 1 April 2024 |
2,100,000 |
|
448,080 |
|
462,923 |
|
3,011,003 |
|
Additions |
- |
|
64,000 |
|
48,579 |
|
112,579 |
|
Disposals |
- |
|
(72,802) |
|
- |
|
(72,802) |
|
At 31 March 2025 |
2,100,000 |
|
439,278 |
|
511,502 |
|
3,050,780 |
|
|
|
|
|
|
|
|
|
|
Depreciation |
|
At 1 April 2024 |
- |
|
293,206 |
|
333,795 |
|
627,001 |
|
Charge for the year |
- |
|
50,012 |
|
44,427 |
|
94,439 |
|
On disposals |
- |
|
(53,975) |
|
- |
|
(53,975) |
|
At 31 March 2025 |
- |
|
289,243 |
|
378,222 |
|
667,465 |
|
|
|
|
|
|
|
|
|
|
Carrying amount |
|
At 31 March 2025 |
2,100,000 |
|
150,035 |
|
133,280 |
|
2,383,315 |
|
At 31 March 2024 |
2,100,000 |
|
154,874 |
|
129,128 |
|
2,384,002 |
|
|
|
|
|
|
|
|
|
|
The land and buildings were valued in January 2024 by Property Link, Chartered Surveyors and Valuers. The basis used is the current market valuation.
The directors feel that the valuation is the fair value of the land and buildings and feel that any depreciation charge is not appropriate for the year. |
|
| 11 |
Stocks |
2025 |
|
2024 |
| £ |
£ |
|
Finished goods and goods for resale |
1,295,712 |
|
1,189,618 |
|
|
|
|
|
|
|
|
|
|
| 12 |
Debtors |
2025 |
|
2024 |
| £ |
£ |
|
|
Trade debtors |
1,367,948 |
|
1,237,106 |
|
Other debtors |
2,150 |
|
12,000 |
|
Prepayments and accrued income |
9,200 |
|
34,514 |
|
|
|
|
|
|
1,379,298 |
|
1,283,620 |
|
|
|
|
|
|
|
|
|
|
| 13 |
Creditors: amounts falling due within one year |
2025 |
|
2024 |
| £ |
£ |
|
|
Trade creditors |
590,750 |
|
462,428 |
|
Corporation tax |
183,452 |
|
148,278 |
|
Other taxes and social security costs |
(118,881) |
|
(22,156) |
|
Other creditors |
85,894 |
|
96,731 |
|
Accruals and deferred income |
23,714 |
|
20,687 |
|
|
|
|
|
|
764,929 |
|
705,968 |
|
|
|
|
|
|
|
|
|
|
| 14 |
Deferred taxation |
2025 |
|
2024 |
| £ |
£ |
|
|
Accelerated capital allowances |
- |
|
166,886 |
|
|
|
|
|
|
|
2025 |
|
2024 |
| £ |
£ |
|
|
Charged to the profit and loss account |
- |
|
166,866 |
|
|
at 31st March |
166,866 |
|
166,866 |
|
|
|
|
|
|
|
|
|
| 15 |
Share capital |
Nominal |
|
2025 |
|
2025 |
|
2024 |
| value |
Number |
£ |
£ |
|
Allotted, called up and fully paid: |
|
Ordinary shares |
£1 each |
|
7,600 |
|
7,600 |
|
7,600 |
|
|
|
|
|
|
|
|
|
|
| 16 |
Profit and loss account |
2025 |
|
2024 |
| £ |
£ |
|
|
At 1 April |
6,128,710 |
|
5,219,025 |
|
Profit for the financial year |
532,334 |
|
1,100,485 |
|
Dividends |
(190,800) |
|
(190,800) |
|
|
At 31 March |
6,470,244 |
|
6,128,710 |
|
|
|
|
|
|
|
|
|
|
| 17 |
Dividends |
2025 |
|
2024 |
| £ |
£ |
|
|
Dividends on ordinary shares (note 16) |
190,800 |
|
190,800 |
|
|
|
|
|
|
|
|
|
|
| 18 |
Other financial commitments |
|
|
Total future minimum lease payments under non-cancellable operating leases
are:- |
|
|
Land and buildings |
|
Land and buildings |
Other |
Other |
|
|
2025 |
|
2024 |
|
2025 |
|
2024 |
| £ |
£ |
£ |
£ |
|
Falling due: |
|
within one year |
- |
|
- |
|
28,478 |
|
28,478 |
|
|
|
|
|
|
|
|
|
|
| 19 |
Related party transactions |
|
|
The company paid £37,750 for computer maintenance and software development costs to a company controlled by one of the company director's brother. No amounts were outstanding at 31st March 2025.
Also included in rents payable are payments of £36,000 for a business property which belongs to the parents of the shareholders. The property ceased to be rented by the company during the year. There were no amounts outstanding at 31st March 2025. |
|
| 20 |
Controlling party |
|
|
The company is a wholly owned subsidiary of JH1 Group Limited (registered in England No.14718914). |
|
|
| 21 |
Presentation currency |
|
|
The financial statements are presented in Sterling. |
|
| 22 |
Legal form of entity and country of incorporation |
|
|
FONZ LEATHER STYLES LIMITED is a private company limited by shares and incorporated in England. |
|
| 23 |
Principal place of business |
|
|
The address of the company's principal place of business and registered office is: |
|
|
45, Lord Street |
|
Birmingham |
|
B7-4DQ |