1.
General Information
Kaizen Furniture Makers Limited
is a private company, limited by shares, incorporated in England & Wales, registered number
02945685
. The registered office is The Mint Shed, Great Myles Farm, Ongar Road , Ongar, Essex, CM15 0LB.
2.
Accounting Policies
2.1.
Basis of Preparation of Financial Statements
The financial statements have been prepared under the historical cost convention and in accordance with Financial Reporting Standard 102 section 1A Small Entities "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006.
2.2.
Turnover
Turnover is measured at the fair value of consideration received or receivable, net of discounts and value-added tax. It includes revenue from the sale of goods and the rendering of services, and is reduced for estimated customer returns, rebates, and other similar allowances.
Sale of goods
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership transfer to the customer, which is usually on delivery and acceptance of the goods.
Rendering of services
Revenue from services is recognised by reference to the stage of completion of the contract. Stage of completion is measured by comparing costs incurred to date with total estimated contract costs. Where the outcome of a contract cannot be estimated reliably, revenue is recognised only to the extent of recoverable expenses.
2.3.
Tangible Fixed Assets and Depreciation
Tangible fixed assets are stated at cost less accumulated depreciation and any impairment losses. Depreciation is provided to write off the cost, less estimated residual value, evenly over the expected useful life of each asset:
| Leasehold Improvements |
|
| Fixtures & Fittings |
|
| Computer Equipment |
|
2.4.
Investments
Investments are held at cost less any provision for impairment.
2.5.
Leasing and Hire Purchase Contracts
Assets held under finance leases are capitalised and depreciated over the shorter of the lease term and their useful lives. Obligations under finance leases are included within creditors, net of the finance charge allocated to future periods. The finance element of lease payments is charged to the profit and loss account using the effective interest method.
Payments under operating leases, where substantially all risks and rewards remain with the lessor, are charged to the profit and loss account on a straight-line basis over the lease term.
2.6.
Stocks and Work in Progress
Stocks and work in progress are stated at the lower of cost and net realisable value, after allowance for obsolete or slow-moving items. Cost includes all direct costs and a proportion of fixed and variable overheads. Work-in-progress for long-term contracts is recognised on a contract-by-contract basis, with turnover and related costs recorded as the contract progresses.
Kaizen Furniture Makers Limited
Notes to the Financial Statements (continued)
For The Year Ended 31 July 2025
2.7.
Financial Instruments
Debtors
Short- and long-term debtors are initially recognised at the transaction price, less any provision for doubtful debts.
Amounts recoverable on long-term contracts include the gross billed amount for work performed to date, including any contract retentions withheld, and are measured at cost plus profit recognised to date, less progress billings and any provision for foreseeable losses. Debtors are subsequently measured at amortised cost using the effective interest method, less any impairment losses.
Loans and other financial assets
Initially recognised at transaction price including transaction costs and subsequently measured at amortised cost using the effective interest method, less impairment losses.
Creditors
Short-term creditors are measured at transaction price.
Loans and other financial liabilities are initially recognised at proceeds received, net of transaction costs, and subsequently measured at amortised cost using the effective interest method. Loans are classified as current where due within 12 months, and non-current where due after more than 12 months.
2.8.
Foreign Currencies
Transactions in foreign currencies are initially recognised at the exchange rate at the transaction date. Monetary items are translated at the closing rate at each reporting date. Non-monetary items measured at historical cost are translated at the rate on the transaction date. Exchange differences are recognised in profit or loss.
2.9.
Taxation
Current tax
Current tax liabilities are recognised for tax payable on taxable profits of the current and past periods. Current tax assets are recognised for recoverable tax losses carried back
Deferred tax
Deferred tax is recognised on all timing differences between accounting and tax treatment of income and expenses. Deferred tax assets, including unrelieved tax losses, are recognised only to the extent that recovery is probable against future taxable profits or the reversal of deferred tax liabilities. Deferred tax is measured using tax rates and laws enacted or substantively enacted at the reporting date. Deferred tax is not discounted.
2.10.
Provisions and Contingencies
Provisions
Provisions are recognised for liabilities of uncertain timing or amount when a present obligation exists as a result of a past event, an outflow of resources is probable, and the amount can be reliably estimated.
Onerous contracts are recognised when unavoidable costs of meeting contractual obligations exceed the expected economic benefits.
Contingent liabilities and Contingent assets
Contingent liabilities are not recognised. They arise from past events when either (i) it is not probable that there will be an outflow of resources or the amount cannot be reliably measured at the reporting date, or (ii) their existence will be confirmed only by the occurrence or non-occurrence of uncertain future events not wholly within the company’s control. Contingent liabilities are disclosed in the financial statements unless the probability of an outflow of resources is remote.
Contingent assets are not recognised. They are disclosed in the financial statements when an inflow of economic benefits is probable.
2.11.
Pensions
The company operates a defined contribution pension scheme. Contributions are charged to the profit and loss account as they become payable under the scheme rules.
Kaizen Furniture Makers Limited
Notes to the Financial Statements (continued)
For The Year Ended 31 July 2025
2.12.
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.
Assets held under finance leases are initially recognised as assets, and the corresponding obligations as liabilities, at an amount equal to the fair value of the leased asset, or if lower, the present value of the minimum lease payments.
Minimum lease payments are apportioned between the finance charge and the reduction of the outstanding liability using the effective interest method. The finance charge is allocated to each period 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. Where there is no reasonable certainty that ownership will be obtained at the end of the lease term, the asset is depreciated over the shorter of the lease term and its useful life.
Payments under operating leases are recognised as an expense in the periods in which they are incurred.
2.13.
Equity settled share based payments
The company operates an approved Enterprise Management Incentive (EMI) scheme, which allows key employees to acquire shares in the company. The fair value of employee services received in exchange for the grant of shares is measured at the grant date and recognised as an expense in the profit and loss account, with a corresponding increase in equity.
The charge is calculated based on the market value of the shares at the grant date, or, where appropriate, the underlying fair value at the reporting date, and is recognised over the vesting period of the options.
3.
Average Number of Employees
Average number of employees, including directors, during the year was: 37 (2024: 36)
4.
Tangible Assets
| Land & Property | ||||
|---|---|---|---|---|
| Leasehold Improvements | Fixtures & Fittings | Computer Equipment | Total | |
| £ | £ | £ | £ | |
| Cost | ||||
| As at 1 August 2024 |
|
|
|
|
| Additions |
|
|
|
|
| As at 31 July 2025 |
|
|
|
|
| Depreciation | ||||
| As at 1 August 2024 |
|
|
|
|
| Provided during the period |
|
|
|
|
| As at 31 July 2025 |
|
|
|
|
| Net Book Value | ||||
| As at 31 July 2025 |
|
|
|
|
| As at 1 August 2024 |
|
|
|
|
Kaizen Furniture Makers Limited
Notes to the Financial Statements (continued)
For The Year Ended 31 July 2025
5.
Investments
| Unlisted | |
|---|---|
| £ | |
| Cost or Valuation | |
| As at 1 August 2024 |
|
| Additions |
|
| As at 31 July 2025 |
|
| Provision | |
| As at 1 August 2024 |
|
| As at 31 July 2025 |
|
| Net Book Value | |
| As at 31 July 2025 |
|
| As at 1 August 2024 |
|
The net book value of £50,000 represents the Company’s 20% equity investment in MW2.0 Limited, an unlisted private company. The investment is measured at cost less any provision for impairment. No impairment provision was required during the year.
The investee company has not traded during the year and no share of profit or loss has been recognised.
6.
Stocks
| 2025 | 2024 | ||
|---|---|---|---|
| £ | £ | ||
| Stock available for resale |
|
|
|
| Long term contract balances |
|
|
|
|
|
|
||
7.
Debtors
| 2025 | 2024 | ||
|---|---|---|---|
| £ | £ | ||
| Due within one year | |||
| Trade debtors |
|
|
|
| Amounts recoverable on long term contracts |
|
|
|
| Other debtors |
|
|
|
|
|
|
||
| Due after more than one year | |||
| Amounts recoverable on long term contracts. |
|
|
|
| Net deferred tax asset |
|
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||
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Kaizen Furniture Makers Limited
Notes to the Financial Statements (continued)
For The Year Ended 31 July 2025
8.
Creditors: Amounts Falling Due Within One Year
| 2025 | 2024 | ||
|---|---|---|---|
| £ | £ | ||
| Net obligations under finance lease and hire purchase contracts | - |
|
|
| Trade creditors |
|
|
|
| Other loans |
|
|
|
| Other taxes and social security |
|
|
|
| Other creditors |
|
|
|
| Advance payments on long term contracts |
|
|
|
|
|
|
||
9.
Creditors: Amounts Falling Due After More Than One Year
| 2025 | 2024 | ||
|---|---|---|---|
| £ | £ | ||
| Other loans | - |
|
|
10.
Loans
An analysis of the maturity of principal balances of loans is given below
| 2025 | 2024 | ||
|---|---|---|---|
| £ | £ | ||
| Amounts falling due within one year or on demand: | |||
| Other loans |
|
|
|
| 2025 | 2024 | ||
|---|---|---|---|
| £ | £ | ||
| Amounts falling due between one and five years: | |||
| Other loans | - |
|
|
The loans are:
- At commercial rates of interest
- Unsecured
11.
Obligations Under Finance Leases and Hire Purchase
| 2025 | 2024 | ||
|---|---|---|---|
| £ | £ | ||
| The future minimum finance lease payments are as follows: | |||
| Not later than one year | - |
|
|
The company had previously entered into finance lease agreements. All obligations under these leases were fully paid off during the year, and no balances are outstanding at the balance sheet date.
Kaizen Furniture Makers Limited
Notes to the Financial Statements (continued)
For The Year Ended 31 July 2025
12.
Deferred Taxation
The net deferred tax asset included in note 7 relates to the following temporary differences:
|
2025
|
2024
|
||
|
£
|
£
|
||
|
Losses carried forward
|
77,871
|
76,143
|
|
|
Accelerated capital allowances
|
(24,238)
![1](data:image/svg+xml;utf8,<svg xmlns="http://www.w3.org/2000/svg" viewBox="0 0 80 2" preserveAspectRatio="none"> <line x1="0" y1="1" x2="80" y2="1" stroke="black" shape-rendering="crispEdges"/> </svg>){kind=small}
|
(33,945)
|
|
|
53,633
![1](data:image/svg+xml;utf8,<svg xmlns="http://www.w3.org/2000/svg" viewBox="0 0 80 5" preserveAspectRatio="none"> <line x1="0" y1="1" x2="80" y2="1" stroke="black" shape-rendering="crispEdges"/> <line x1="0" y1="4" x2="80" y2="4" stroke="black" shape-rendering="crispEdges"/> </svg>){kind=small}
|
42,198
|
The net deferred tax asset of £53,633 (2024: £42,198) arises from the offset of deductible temporary differences against taxable temporary differences. The asset is expected to be recoverable in future periods as profits arise.
13.
Provisions for Liabilities
| Onerous Loss Provision | Total | |
|---|---|---|
| £ | £ | |
| As at 1 August 2024 |
|
51,704 |
| Additions |
|
154,121 |
| Utilised |
( |
(51,704) |
| Balance at 31 July 2025 |
|
154,121 |
Nature of the provision:
The provision relates to expected losses on two long-term projects that were at various stages of completion at the balance sheet date. The amounts recognised represent management’s best estimate of the expected net losses on these projects.
The timing of any outflows depends on the completion of the projects, and the provision will be utilised as the losses are incurred in the following accounting period.
14.
Other Commitments
The total of future minimum lease payments under non-cancellable operating leases are as following:
| 2025 | 2024 | ||
|---|---|---|---|
| £ | £ | ||
| Not later than one year |
|
|
|
| Later than one year and not later than five years |
|
|
|
| Later than five years | - |
|
|
|
|
|
||
15.
Pension Commitments
The Company operates a defined contribution pension scheme for its directors and employees. Under the scheme, the Company makes contributions to individual pension accounts on behalf of the participants. The assets of the scheme are held separately from the Company’s assets and are independently administered.
During the year ended 31 July 2025, the Company made contributions totalling £212,438 (2024: £135,272). These contributions have been recognised as an expense in the profit and loss account in the year in which they were payable.
16.
Approved enterprise management incentive (emi ) scheme
Kaizen Furniture Makers Limited
Notes to the Financial Statements (continued)
For The Year Ended 31 July 2025
The Company operates an Approved Enterprise Management Incentive (“EMI”) Share Option Scheme to encourage key employees to take a long-term interest in the Company’s future. Under the scheme:
- Share options are granted subject to the condition that the individual remains in employment for five years from the date of grant.
- The options can only be exercised and realised in an exit event, such as a management buyout or trade sale of the business.
The initial grant of options was made on 29 June 2019, with subsequent tranches issued on 28 February 2021 and 30 June 2022, under the same terms.
As at 31 July 2025, all options have fully vested, and no further expense has been recognised in the current year. The total cumulative charge recognised in the profit and loss account in prior periods was £77,314