TOM_DIXON_LIMITED - Accounts

The directors present their annual report and audited financial statements for the year ended 31 March 2020.

The principal activity of the company continued to be that of specialised design activities.

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

This report has been prepared in accordance with the provisions applicable to companies entitled to the small companies exemption.

For the financial year ended 31 March 2020 the company was entitled to exemption from audit under section 477 of the Companies Act 2006 relating to small companies.

The directors acknowledge their responsibilities for complying with the requirements of the Companies Act 2006 with respect to accounting records and the preparation of financial statements.

The members have not required the company to obtain an audit of its financial statements for the year in question in accordance with section 476.

These financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.

Tom Dixon Limited is a private company limited by shares incorporated in England and Wales. The registered office is The Coal Office 1 Bagley Walk, Kings Cross, London, United Kingdom, NC1 4PQ.

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared on the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:

• Section 4 ‘Statement of Financial Position’ – Reconciliation of the opening and closing number of shares;

• Section 7 ‘Statement of Cash Flows’ – Presentation of a statement of cash flow and related notes and disclosures;

• Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’ – Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;

• Section 26 ‘Share based Payment’ – Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;

• Section 33 ‘Related Party Disclosures’ – Compensation for key management personnel.

The financial statements of the company are consolidated in the financial statements of Tom Dixon Holding Limited.These consolidated financial statements are available from its registered office, The Coal Office 1 Bagley Walk, Kings Cross, London, United Kingdom, NC1 4PQ.

In adopting the going concern basis for preparing the financial statements, the directors have considered the business activities and the company's principle risks and uncertainties, including those arising from the current Covid-19 pandemic and the government's response to it. The company meets its liabilities through intercompany transactions with Design Research Limited. Subsequent to the year-end the Group to which Tom Dixon Limited belongs, have secured an additional £3.3m provided by its shareholders and renewed its banking facilities.

In assessing the appropriateness of the going concern assumption, the directors have prepared detailed cash flow forecasts for the wider Group to which Tom Dixon Limited belongs to, in order to consider all group cash flows, extending to March 2023. In the modelled forecast scenarios the directors are satisfied that the company can continue to meets its liabilities as they fall due for the 12 months following the signing of the financial statements. However, the directors acknowledge that the environment is continuously changing and, as such, projecting the impacts of COVID-19 is challenging.

Additionally following guidelines issued by the Financial Reporting Council, the company has applied reverse stress testing to gauge the effects on its wider Group forecasts, were the pandemic to affect the retail industry into the longer term (which the guidance makes clear cannot be discounted). Due to the impact on consumer spending and the potential for further lockdowns, revenue has been identified as the key variable on which reverse stress testing has been performed. Under such analysis the directors are confident there is flexibility to adapt the wider Groups’ longer term strategy to such circumstances, including scaling its operations appropriately, along with the benefit of the resources referred to in the foregoing.

The directors have assumed in their modelling that the wider Group’s bank facilities will be renewed in April 2023 for a period of twelve months and providing this is agreed, in conjunction with the above long term strategy, the company is able to meet its liabilities as they fall due for the 12 months following the signing of the financial statements. The directors have also worked closely with Copper Holdings the parent company of Tom Dixon Holdings Limited, to obtain a letter of confirmation for the £11.8m shareholder loan payable by the Group parent company Tom Dixon Holdings Limited to which the company belongs to, supporting that the loans are designated as convertible loan notes repayable on the earlier of exit or the year 2024 with no plans to exit prior to 2023, subject to the formal completion of the loan note agreements.

The company is dependent on continued access to the wider Group’s current bank facilities which are subject to review in April 2023 and therefore there is a risk of recall, as well as the finalisation of the above mentioned loan note agreements by Tom Dixon Holdings Limited to which the company belongs. In light of this assessment, the directors have identified that a material uncertainty exists that may cast significant doubt over the company’s ability to continue as a going concern for the foreseeable future (which under current UK generally accepted accounting principles means a period of at least 12 months from the signing date of the financial statements).

The financial statements do not include adjustments that would result if the company were unable to continue as a going concern.

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.

Other Financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

Prior period adjustment

The accounts include an adjustment to the prior period to reflect the reclassification of cash and bank into amounts owed by group undertakings.

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

The immediate parent is Tom Dixon Holding Limited whose parent is Copper Holdings (Luxembourg) Sarl.

The Persons with Significant Control declaration (PSC) shows that NEO Capital Private Equity II LLP have significant control .

The Tom Dixon Holding Limited group is the smallest and largest group within which the results of the company are consolidated.

Tom Dixon Limited is part of the Tom Dixon Holding group. Group financial statements can be obtained from The Coal Office 1 Bagley Walk, Kings Cross, London, United Kingdom, N1C 4PQ.