FD Europe Limited
Registered number: 11335227
Annual Report
For the year ended 31 December 2021
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FD EUROPE LIMITED
COMPANY INFORMATION
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Chartered Accountants
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Statutory Auditor
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FD EUROPE LIMITED
CONTENTS
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Independent Auditor's Report
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Statement of Comprehensive Income
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Statement of Financial Position
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Statement of Changes in Equity
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Notes to the Financial Statements
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FD EUROPE LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
The directors present their Annual report and the audited financial statements for FD Europe Limited ('the Company') for the year ended
31 December 2021
.
The Company’s principal activity during the year was the provision of advertising, fashion marketing, sales agency, public relations support and administrative services to fellow group company, Frame LA Brands LLC, a company incorporated in the USA.
The Company's registered address changed on 26 April 2021 from Stephen Building, 30 Gresse Street, London, W1T 1QR to 1-4 King Street, London, WC2E 8HH.
The profit for the year, after taxation, amounted to £
747,374
(2020:
profit of £
22,787
)
.
The directors do not recommend the payment of a dividend (2020: £nil).
The directors who served during the year and up to the date of this report
were:
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H I Soroca
(resigned
8 April 2021
)
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FD EUROPE LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
Directors' responsibilities statement
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The directors are responsible for preparing the Directors' Report and the
audited financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare audited financial statements for each financial year
. Under that law the directors have elected to prepare the audited 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 audited 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 audited financial statements, the directors are required to:
∙
select suitable accounting policies for the Company's financial statements and then apply them consistently;
∙
make judgements and accounting estimates that are reasonable and prudent;
∙
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
∙
prepare the audited 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 audited 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.
Qualifying third party indemnity provisions
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The Company has indemnified the directors and officers in respect of proceedings which may be brought by third parties and such indemnification was in place throughout the year, which is a qualifying third party indemnity for the purposes of the Companies Act 2006. Neither the Company’s indemnity nor insurance provides cover in the event that a director or officer is proved to have acted fraudulently or dishonestly.
The withdrawal of the United Kingdom from the European Union
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New trading arrangements between the United Kingdom and the European Union took effect on 31 December 2020. In general, tariffs and quotas on trade have not been introduced, although administrative complications and regulatory restrictions have reduced the freedom of cross-border trade. The Company is carefully monitoring the practical application of the new trading arrangements by regulatory authorities, to better understand what the eventual impact on its business will be. The process of determining these effects is ongoing, and has also been delayed by the suspension of certain sectors of economic activity in response to the COVID-19 pandemic.
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FD EUROPE LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
Economic impact of the COVID-19 pandemic
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The COVID-19 pandemic continues to affect the UK and global economies adversely. At the time of signing this report there are indications from the government that social restrictions which have suppressed economic activity during 2020 and 2021 are likely to be lifted in the foreseeable future. If this does happen the directors expect to see the UK and global economies return to growth in due course, but it is not possible to predict how quickly and to what degree this may happen. The priorities of the directors remain to comply with all regulatory requirements to the fullest extent possible, and to maintain the safety and well-being of the Company's personnel.
The financial statements have been prepared on a going concern basis. In making this assessment the directors have considered the continued trading activity of the group. They have also taken into consideration the positive cash balances and net assets, the forecasts for the business and the ability of the directors to manage their working capital requirements and meet their debts as they fall due.
After the difficult loss making year of 2020, which can be directly attributed to the Covid-19 pandemic, 2021 saw the Company return to being profitable. The net sales increased by 14% in comparison to 2019 (54% in comparison to 2020) with profitability increasing by 363% in comparison to 2019. The year still brought with it uncertainty and volatility with lockdowns still happening globally in 2021, effecting the supply chain as well as global sales. The Company continued to closely monitor inventory levels, whilst strategically placing bulk orders on fabrics that were in short supply. The lockdowns and uncertainty meant that customers were still cautious of shopping in person, and the Company shifted focus to E Commerce and growing online sales.
The Company continues to be very positive about the future and continues to push for growth and to seize global opportunities- focusing on their fastest growing regions of China and the UK.
Provision of information to auditor
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Each of the persons who are
directors at the time when this Directors' Report is approved has confirmed that:
∙
so far as the director is aware, there is no relevant audit information of which the Company's auditor is unaware; and
∙
the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditor is aware of that information.
Post balance sheet events
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On 24 February 2022 Russian Forces entered Ukraine, resulting in Western Nation reactions including announcements of sanctions against Russia and Russian interests worldwide and an economic ripple effect on the global economy. The directors have carried out an assessment of the potential impact of Russian Forces entering Ukraine on the business, including the impact of mitigation measures and uncertainties, and have concluded that this is a non-adjusting post balance sheet event.
The auditor, Mazars LLP, will be proposed for reappointment in accordance with
section 485 of the Companies Act 2006.
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FD EUROPE LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
In preparing this report, the directors have taken advantage of the small companies exemptions provided by section 415A of the Companies Act 2006.
This report was approved by the board and signed on its behalf by:
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FD EUROPE LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF FD EUROPE LIMITED
Opinion
We have audited the financial statements of FD Europe Limited (the ‘Company’) for the year ended 31 December 2021 which comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Changes in Equity and notes to the financial statements, 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 FRS 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 2021 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.
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.
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FD EUROPE LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF FD EUROPE LIMITED
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 Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙
the Directors' Report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In 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 Directors' 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
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the financial statements are not in agreement with the accounting records and returns; or
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certain disclosures of directors' remuneration specified by law are not made; or
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we have not received all the information and explanations we require for our audit.
∙
the directors were 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.
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FD EUROPE LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF FD EUROPE LIMITED
Responsibilities of Directors
As explained more fully in the Directors' Responsibilities Statement set out on page 2, the directors are 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 directors determine 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 directors are 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 directors intend either to liquidate the Company or to cease operations, or have 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.
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.
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.
Based on our understanding of the Company and its industry, we considered that non-compliance with the following laws and regulations might have a material effect on the financial statements:
anti-money laundering regulation, non-compliance with implementation of government support schemes relating to COVID-19.
To help us identify instances of non-compliance with these laws and regulations, and in identifying and assessing the risks of material misstatement in respect to non-compliance, our procedures included, but were not limited to:
∙
Inquiring of management and, where appropriate, those charged with governance, as to whether the Company is in compliance with laws and regulations, and discussing their policies and procedures regarding compliance with laws and regulations;
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Inspecting correspondence, if any, with relevant licensing or regulatory authorities;
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Communicating identified laws and regulations to the engagement team and remaining alert to any indications of non-compliance throughout our audit; and
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Considering the risk of acts by the Company which were contrary to applicable laws and regulations, including fraud.
We also considered those laws and regulations that have a direct effect on the preparation of the financial statements, such as
tax legislation, pension legislation, the Companies Act 2006.
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FD EUROPE LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF FD EUROPE LIMITED
In addition, we evaluated the directors' and 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 manual journal entries to manipulate financial performance, management bias through judgements and assumptions in significant accounting estimates, and significant one-off or unusual transactions.
Our audit procedures in relation to fraud included but were not limited to:
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Making enquiries of the directors and management on whether they had knowledge of any actual, suspected or alleged fraud;
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Gaining an understanding of the internal controls established to mitigate risks related to fraud;
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Discussing amongst the engagement team the risks of fraud; and
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Addressing the risks of fraud through management override of controls by performing journal entry testing.
There are inherent limitations in the audit procedures described above and the primary responsibility for the prevention and detection of irregularities including fraud rests with management. As with any audit, there remained a risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal controls.
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 auditor’s report.
Use of the audit 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 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.
Yuvan Deena
(Senior statutory auditor)
for and on behalf of Mazars LLP
Chartered Accountants and Statutory Auditor
30 Old Bailey
London
EC4M 7AU
21 December 2022
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FD EUROPE LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2021
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Interest payable and similar expenses
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Profit for the financial year
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Other comprehensive income
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Total comprehensive income for the year
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The Statement of Comprehensive Income has been prepared on the basis that all operations are continuing operations.
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The notes on pages 12 to 20 form part of these financial statements.
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FD EUROPE LIMITED
REGISTERED NUMBER:
11335227
STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2021
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Debtors: amounts falling due within one year
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Cash and cash equivalents
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Provisions for liabilities
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The
financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime and in accordance with the provisions of FRS 102 Section 1A - small entities.
The financial statements were approved and authorised for issue by the board and were signed on its behalf by
:
The notes on pages 12 to 20 form part of these financial statements.
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FD EUROPE LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED
31 DECEMBER 2021
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Comprehensive income for the year
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Other comprehensive income for the year
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Total comprehensive income for the year
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Comprehensive income for the year
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Other comprehensive income for the year
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Total comprehensive income for the year
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The notes on pages 12 to 20 form part of these financial statements.
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FD EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
FD Europe Limited is a private company, limited by shares, registered and incorporated in England & Wales. The registered office is 1-4 King Street, London, England, WC2E 8HH (registered number 11335227).
The Company’s principal activity during the year was the provision of advertising, fashion marketing, sales agency, public relations support and administrative services to fellow group company, Frame LA Brands LLC, a company incorporated in the USA.
2.
Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Section 1A of
Financial Reporting Standard 102, the Financial Reporting Standard applicable in
the UK and the Republic of Ireland and the Companies Act 2006
.
These financial statements have been presented in Pounds Sterling and rounded to the nearest pound as this is the Company’s functional currency, being the currency of the primary economic environment in which the Company operates.
The following principal accounting policies have been applied:
The financial statements have been prepared on a going concern basis. In making this assessment the directors have considered the continued trading activity of the group. They have also taken into consideration the positive cash balances and net assets, the forecasts for the business and the ability of the directors to manage their working capital requirements and meet their debts as they fall due.
After the difficult loss making year of 2020, which can be directly attributed to the Covid-19 pandemic, 2021 saw the Company return to being profitable. The net sales increased by 14% in comparison to 2019 (54% in comparison to 2020) with profitability increasing by 363% in comparison to 2019. The year still brought with it uncertainty and volatility with lockdowns still happening globally in 2021, effecting the supply chain as well as global sales. The Company continued to closely monitor inventory levels, whilst strategically placing bulk orders on fabrics that were in short supply. The lockdowns and uncertainty meant that customers were still cautious of shopping in person, and the Company shifted focus to E Commerce and growing online sales
The Company continues to be very positive about the future and continues to push for growth and to seize global opportunities- focusing on their fastest growing regions of China and the UK.
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FD EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
2.
Accounting policies (continued)
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Foreign currency translation
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Functional and presentation currency
The Company's functional and presentation currency is Pounds Sterling.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.
All foreign exchange gains and losses are presented in the Statement of Comprehensive Income within ''administrative expenses'.
Revenues from service agreements are generally recognised at the time the service is delivered, provided that persuasive evidence of an arrangement exists, the sales price is fixed or determinable, and collection of the related receivable is reasonably assured.
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Operating leases: the Company as lessee
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Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.
Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.
The UK government has offered a range of financial support packages to help companies, including government backed financing arrangements, furlough schemes, deferment of VAT payments and, for some sectors, business rates holidays. Of the offered schemes, the Company used the furlough scheme and deferral of VAT payments. The income from the furlough scheme has been recognised within 'Other operating income'. Government grants are recognised under the accruals model when the entity has reasonable assurance that they will comply with the conditions attached to the grant, and that the grant will be received.
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FD EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
2.
Accounting policies (continued)
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Interest payable and similar expenses
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Interest payable and similar expenses are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
Defined contribution pension plan
The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.
The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in other creditors as a liability in the Statement of Financial Position. The assets of the plan are held separately from the Company in independently administered funds.
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Current and deferred taxation
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The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company operates and generates income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the reporting date, except that:
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The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
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Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.
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FD EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
2.
Accounting policies (continued)
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
At each reporting date the Company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line 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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Debtors: amounts falling due within one year
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Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
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Cash and cash equivalents
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Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
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Creditors: amounts falling due within one year
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Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
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FD EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
2.
Accounting policies (continued)
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Provisions for liabilities
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Provisions are made where an event has taken place that gives the Company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to profit or loss in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the reporting date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Statement of Financial Position.
The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties and loans to related parties.
Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan.
Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Statement of Comprehensive Income.
For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.
For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the Company would receive for the asset if it were to be sold at the reporting date.
Financial assets and liabilities are offset and the net amount reported in the Statement of Financial Position when there is an 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.
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FD EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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The average number of employees including directors during the year was
16
(2020:
22
)
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Certain directors of the Company are remunerated by another entity within the group, FD London Limited, as they are also directors of that entity. There is no allocation of their remuneration to the Company for their services to the Company. Their remuneration is disclosed within the FD London Limited financial statements.
The highest paid director received remuneration of £nil (2020: £341,836).
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FD EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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Debtors: amounts falling due within one year
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Amounts owed by group undertakings
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Prepayments and accrued income
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Amounts owed by group undertakings are unsecured, interest free and payable on demand.
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Creditors: amounts falling due within one year
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Amounts owed to related parties
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Other taxation and social security
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Accruals and deferred income
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Amounts owed to related parties are unsecured, interest free and repayable on demand.
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FD EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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Charged to the Statement of Comprehensive Income
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The provision for deferred taxation is made up as follows:
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Accelerated capital allowances
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Allotted, called up and unpaid
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1,000
(2020:
1,000
)
Ordinary
shares of £
0.10
each
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The Company has one class of ordinary shares; each share carries one voting right per share but no right
to fixed income.
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The Company operates a defined contribution pension plan for its employees. The assets of the scheme are held separately from those of the Company in an independent administered fund. Contributions amounting to £8,576 (2020: £7,728) were payable at the balance sheet date and are included within creditors.
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FD EUROPE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
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Commitments under operating leases
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At 31 December 2021 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
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Later than 1 year and not later than 5 years
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Related party transactions
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At 31 December 2021 an amount of £nil (2020: £528) was due from Saturday Brand Holdings Limited, a company with common directors to the Company.
At 31 December 2021 an amount of £nil (2020: £528) was due from Saturday Group Ltd (formerly Popular Culture Ltd), a company with common directors to the Company.
At 31 December 2021 an amount of £38,884 (2020: £9,000) was due from FD London Limited, the ultimate parent company.
At 31 December 2021 an amount of £nil (2020: £10,056) was due to Denim Lab LLC, a company with common directors to the Company.
During the year the Company made sales to Frame LA Brands LLC, the immediate parent company of the Company, of £3,369,308 (2020: £2,206,838). At the year end an amount of £596,204 (2020: £45,002) was owed by the Company to Frame LA Brands LLC.
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Post balance sheet events
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On 24 February 2022 Russian Forces entered Ukraine, resulting in Western Nation reactions including announcements of sanctions against Russia and Russian interests worldwide and an economic ripple effect on the global economy. The directors have carried out an assessment of the potential impact of Russian Forces entering Ukraine on the business, including the impact of mitigation measures and uncertainties, and have concluded that this is a non-adjusting post balance sheet event.
The immediate parent company is
Frame LA Brands LLC
, a company incorporated in the United States.
The ultimate parent company and group in which the results of the Company are consolidated is that headed by
FD London Limited
. The consolidated financial statements of FD London Limited are publicly available and may be obtained from Companies House.
However, the directors do not believe there to be one ultimate controlling party.
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