Registered number:
FOR THE YEAR ENDED 31 MARCH 2021
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NATIVE DESIGN LIMITED
COMPANY INFORMATION
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NATIVE DESIGN LIMITED
CONTENTS
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NATIVE DESIGN LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2021
Native Design Ltd is a fully integrated design company working across both digital and physical disciplines. The Company’s principal activity is consultancy across all industry sectors both in the UK and overseas.
2020/21 represented a challenging year for the business. COVID-19 and Brexit impacted upon client demand for design services and consultancy. The impact was felt globally which resulted in a slowdown of new business opportunities and a more stringent procurement approach when investing in design services. This had a knock-on effect to our own business growth, so our focus shifted to preserving our excellent team, maintaining existing relationships and turning a profit.
Our company objective for the year, was to further diversify our client portfolio whilst expanding on existing relationships. Unfortunately, the global pandemic hampered our ability to grow, however, we were able to navigate our way through the period in a profitable position. This has put us in a strong position to continue to push forward with our growth strategy and invest where necessary. We go into the new financial year with a clear growth plan and business strategy. Our approach remains flexible whilst we continue to monitor the economic environment.
Economic Conditions
Brexit has not made an impact from a cost perspective, but it started to impact on client demand. The outbreak of COVID-19 had the biggest impact on our ability to win new work as client budgets were closed for several months to circumvent unpredictable losses elsewhere. When the budgets did open, there was a more competitive procurement process which provides a new challenge to the industry. Our business has started to see more traction in new client opportunities, but the environment remains highly competitive, which requires a new approach. Competition The Company operates in a highly competitive market with most of the players operating at a much larger scale. Being one of the few privately owned independent companies in the marketplace has advantages but requires a greater effort in networking and client engagement from its management team. We have continued to invest in our Commercial team over the period, to improve our ability to compete for new innovative work. This also plays into our PR strategy and helps us stay no. 1 in terms of the commercial value add we bring to our global client base. This in turn helps us constantly refine and communicate our brand values..
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NATIVE DESIGN LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
The Company considers the key financial indicators to be turnover and profit before tax.
For the year ended 31 March 2021 the turnover was £6,616,740 (2020: £7,829,264) representing a 15% decrease in turnover from the prior year. Profit before tax for the year was £697,594 (2020: £191,671). A significant increase on 2020, due to our management of costs and reduction in our commitment of resource supporting a new product from internal development. The fall in turnover was a direct result of the economic backdrop impacting our clients’ demand for innovative work. Fortunately, we were able to manage costs effectively to ensure the business remained profitable. Another key financial indicator that the business uses to monitor performance is the level of current assets. The Company maintains a high level of asset cover at all times to ensure the long-term financial stability of the Company. Furthermore, the cash position of the Company continues to be strong.
The Company considers the ability to retain high quality clients a strong indicator of its performance. This was borne out by our portfolio of blue-chip clients retained and won during the year ended 31 March 2021.
This report was approved by the board on 16 December 2021
and signed on its behalf.
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NATIVE DESIGN LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2021
The directors present their report and the financial statements for the year ended 31 March 2021.
The directors are responsible for preparing the Strategic Report, the 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 for the Company's financial statements and then apply them consistently;
∙
make judgments 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 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 to 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.
The profit for the year, after taxation, amounted to £
493,818
(2020 -
£
553,791
)
.
There were dividends proposed and paid of £2,032,886 (2020: £1,000,000) in the year.
The directors who served during the year were:
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NATIVE DESIGN LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2021
The Company plans to continue in the same course of business.
There have been no significant events affecting the Company since the year end.
The auditors, Haysmacintyre LLP, will be proposed for reappointment in accordance with
section 485 of the Companies Act 2006.
This report was approved by the board on
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NATIVE DESIGN LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF NATIVE DESIGN LIMITED
We have audited the financial statements of Native Design Limited (the 'Company') for the year ended 31 March 2021, which comprise the Statement of Comprehensive Income, the Balance Sheet, the Statement of Changes in Equity
and the related notes, 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).
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 Auditors' 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 United Kingdom, including the Financial Reporting Council'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.
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.
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NATIVE DESIGN LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF NATIVE DESIGN LIMITED (CONTINUED)
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' 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.
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.
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 or the Directors' Report.
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NATIVE DESIGN LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF NATIVE DESIGN LIMITED (CONTINUED)
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 Auditors' 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. 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:
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud Based on our understanding of the company and industry, we identified that the principal risks of non-compliance with laws and regulations related to regulatory requirements for the business and trade regulations, and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006, income tax, payroll tax and sales tax.
We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries to revenue and management bias in accounting estimates. Audit procedures performed by the engagement team included:
∙
Inspecting correspondence with regulators and tax authorities;
∙
Discussions with management including consideration of known or suspected instances of non-compliance with laws and regulation and fraud;
∙
Evaluating management’s controls designed to prevent and detect irregularities;
∙
Identifying and testing journals, in particular journal entries posted with unusual account combinations, postings by unusual users or with unusual descriptions; and
∙
Challenging assumptions and judgements made by management in their critical accounting estimates.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at:
www.frc.org.uk/auditorsresponsibilities
. This description forms part of our Auditors' 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 Auditors' 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.
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NATIVE DESIGN LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF NATIVE DESIGN LIMITED (CONTINUED)
for and on behalf of
Statutory Auditors
10 Queen Street Place
EC4R 1AG
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NATIVE DESIGN LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2021
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NATIVE DESIGN LIMITED
REGISTERED NUMBER:
03703075
BALANCE SHEET
AS AT
31 MARCH 2021
The financial statements were approved and authorised for issue by the board and were signed on its behalf on
The notes on pages 12 to 23 form part of these financial statements.
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NATIVE DESIGN LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED
31 MARCH 2021
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NATIVE DESIGN LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
The Company is a private company limited by shares, registered in England and Wales. The address of the registered office and trading address is 5 Garden Walk, London, EC2A 3EQ. The Company's registration number is 03703075.
2.
Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in
the UK and the Republic of Ireland and the Companies Act 2006
.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:
The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
∙
the requirements of Section 7 Statement of Cash Flows;
∙
the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
∙
the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
∙
the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
∙
the requirements of Section 26 Share-based Payment paragraphs 26.18(b), 26.19 to 26.21 and 26.23;
∙
the requirements of Section 33 Related Party Disclosures paragraph 33.7.
This information is included in the consolidated financial statements of Auralia Ltd as at 31 March 2020 and these financial statements may be obtained from Companies House.
The accounts have been prepared on a going concern basis. The directors in their assessment of going concern have reviewed forecasts and projections of this company, the parent company and the wider group, to confirm the appropriateness and validity of the support provided for the foreseeable future. They believe they are able to meet any obligations as and when they fall due and as such have prepared the accounts on a going concern basis.
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NATIVE DESIGN LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
2.
Accounting policies (continued)
Functional and presentation currency
Transactions and balances
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NATIVE DESIGN LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
2.
Accounting policies (continued)
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NATIVE DESIGN LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
2.
Accounting policies (continued)
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, on a straight line and reducing balance method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
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NATIVE DESIGN LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
(i) Significant judgements No critical accounting judgement were made by management in the process of applying the company’s accounting policies that have a significant effect on amounts recognised in the financial statements. (ii) Key sources of estimation uncertainty. No critical sources of estimation uncertainty were made by management in the process of applying the company’s accounting policies that have a significant effect on the amounts recognised in the financial statements, other than the following: R&D tax credits have been accounted for on the accruals basis. Where the tax return has not been submitted at the time of preparing the financial statements, a provision is made for the expected R&D tax credit receivable.
Analysis of turnover by country of destination:
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NATIVE DESIGN LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
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NATIVE DESIGN LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
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NATIVE DESIGN LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
10.
Taxation (continued)
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NATIVE DESIGN LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
10.
Taxation (continued)
There were no factors that may affect future tax charges.
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NATIVE DESIGN LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
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NATIVE DESIGN LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
Profit and loss account
Profit and loss account – this reserve records retained earnings and accumulated losses.
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NATIVE DESIGN LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
The immediate and ultimate parent company is Auralia Limited, a company registered in England and Wales, in which these accounts are consolidated within.
The largest and smallest group in which the results of the Company are consolidated is Auralia Limited, the ultimate parent company. The consolidated financial statements of Auralia Limited may be obtained from Companies House. The ultimate controlling party is the managing director M V Warren.
At 31 March 2021, Native Design Limited owed £19,659 (2020: £20,670) to a defined contribution pension scheme. This was subsequently paid post year-end.
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