REGISTERED NUMBER: 02004364 (England and Wales)

STRATEGIC REPORT, REPORT OF THE DIRECTOR AND

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 JULY 2018

FOR

2 HEADS GLOBAL DESIGN LIMITED

Page

Company Information

1

Strategic Report

2

Report of the Director

4

Report of the Independent Auditors

6

Income Statement

8

Other Comprehensive Income

9

Balance Sheet

10

Statement of Changes in Equity

12

Cash Flow Statement

13

Notes to the Cash Flow Statement

14

Notes to the Financial Statements

15

DIRECTOR:

Mr P Parra

REGISTERED OFFICE:

Crosby House

Meadowbank

Furlong Road

Bourne End

Buckinghamshire

SL8 5AJ

REGISTERED NUMBER:

02004364 (England and Wales)

AUDITORS:

Haines Watts

Chartered Accountants and Statutory Auditors

Advantage

87 Castle Street

Reading

Berkshire

RG1 7SN

The director presents his Strategic Report for the year ended 31 July 2018.

REVIEW OF BUSINESS

The company's principal activity is the creation of meaningful brand experiences for its clients across the

globe. The company's work spans strategy and branding, content and video, branded environments,

exhibitions and tradeshows, live events and event technology. The company created and delivered over 180

brand experiences on behalf of clients in the year ended 31st July 2018, working across every continent

worldwide.

For the eighth successive year, the company continued to grow its gross profit, being up 50.9% (2017:

+4.6%%) whilst increasing turnover by 49.3% (2017: +4.2%) to £22,786,936. Continued tight control of the

company's supply chain helped drive the gross profit result for the year.

The combined turnover by event location which shows a well diversified client base, for the company and its

associate 2heads Design Inc, was:

2018

2017

£

£

United Kingdom

6,374,033

2,062,574

Europe

9,450,289

9,291,572

USA and South America

5,800,310

4,627,550

Asia and ROW

1,875,024

641,039

Middle East

857,050

328,941

Total

24,356,706

16,951,677

£1,569,770 (2017 - £1,691,736) of income is in relation to 2heads Design Inc.

Alongside our strong growth, last year also saw 2Heads continue to reinforce our position as the experiential

agency of choice for leading global brands. Outstanding work for clients including Disney, Airbus and

Playtech continues to help ambitious businesses establish and shore up competitive advantage in difficult

markets.

As an agency, our offer continues to be powered by our core promise of 'meaningful experiences'. In reality,

activating this promise means consistent focus on three strategic pillars. The first is developing content and

digital innovation that helps brands build credible, relevant and distinct associations with their audiences.

This is enhanced by our second strategic pillar - namely ongoing investment into technology-powered

innovation that enhances the brand experience at every turn. Finally, as even the best strategy is only as

good as our ability to execute, the third pillar involves continuing to build the reputation for outstanding

security, delivery and trust that we have cultivated over 30 years.

This continued focus on earnings before interest, tax, depreciation and amortisation amounted to

£2,101,389 (2017 - £1,369,227).

The company measures both financial and non-financial key performance indicators (KPIs) to monitor its

performance. The key financial KPIs include:

2018

2017

£

£

Gross profit

7,193,096

4,766,871

Gross profit percentage

31.6%

31.2%

Operating profit

1,975,639

1,233,963

Operating profit percentage

8.7%

8.1%

Net current assets

4,326,381

2,948,975

PRINCIPAL RISKS AND UNCERTAINTIES

The principal risks facing the company include the uncertain global economic climate which can potentially

affect customers. The director and senior management monitor and review the performance of the company

using, amongst other metrics, the financial KPIs outlined in the previous section of this report.

The company's activities expose it to several financial risks that are inherent within its global market place

such as cashflow risk and credit risk.

The company's activities make it susceptible to the financial risk of changes in foreign currency exchange

rates which in turn is a risk to cashflow. The company manages this risk by currency hedging and continues

to monitor potential exposure in this area.

The company's main financial assets are cash, trade receivables and amounts owed by related

undertakings. Therefore the company's main credit risk is attributable to its trade receivables and amounts

owed by related undertakings. These amounts are stated in the Balance Sheet at their net realisable value

and no provisions or impairment were required in this or the previous financial year. An impairment would

be made where there is an identified loss event which had an effect on the recoverability of the asset.

The company has no significant credit risk exposure as a result of rigorous credit control policies and

because the receivables balance is spread over a variety of clients.

FINANCIAL INSTRUMENTS

The company operates on a day to day basis with working capital facilities including cash and hire purchase

facilities. The company does not utilise any long or short term debt instruments. The company does not use

financial instruments in its day to day operations or financing.

ON BEHALF OF THE BOARD:

Mr P Parra - Director

27 March 2019

The director presents his report with the financial statements of the company for the year ended 31 July 2018.

DIVIDENDS

No interim dividend was paid during the year. The director recommends a final dividend of 12.205754 per share.

The total distribution of dividends for the year ended 31 July 2018 will be £ 140,000 .

FUTURE DEVELOPMENTS

The director expects the company to continue its annual growth trend as a result of net new client wins,

retention and growth of existing clients, rigorous supply chain control and further investment in the senior

management team with strategic hires. The company continues to develop its in-house technology

solutions for clients which provide invaluable key analytics to aid clients in their business development and

brand experience strategies.

DIRECTOR

Mr P Parra held office during the whole of the period from 1 August 2017 to the date of this report.

DISABLED EMPLOYEES

The company is committed to employment practices based on equal opportunities for all employees

irrespective of sex, race, colour, disability or marital status. The company gives full and fair consideration to

applications for employment for disabled persons, having regard to their particular aptitudes and abilities.

EMPLOYEE INVOLVEMENT

Amongst other initiatives, the company periodically holds company-wide meetings to update employees on

corporate developments. Employee involvement is encouraged as maintaining employee awareness of

factors affecting the company continues to help drive the future success of the business.

STATEMENT OF DIRECTOR'S RESPONSIBILITIES

The director is responsible for preparing the Strategic Report, the Report of the Director and the financial

statements in accordance with applicable law and regulations.

Company law requires the director to prepare financial statements for each financial year. Under that law

the director has elected to prepare the financial statements in accordance with United Kingdom Generally

Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company

law the director must not approve the financial statements unless he is 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 director is required to:

-	select suitable accounting policies and then apply them consistently;

-	make judgements 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 director is 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 enable him to ensure that the financial statements comply with the Companies Act 2006. He

is 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.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the director is aware, there is no relevant audit information (as defined by Section 418 of the

Companies Act 2006) of which the company's auditors are unaware, and he has taken all the steps that he

ought to have taken as a director in order to make himself aware of any relevant audit information and to

establish that the company's auditors are aware of that information.

ON BEHALF OF THE BOARD:

Mr P Parra - Director

27 March 2019

Opinion

We have audited the financial statements of 2 Heads Global Design Limited (the 'company') for the year

ended 31 July 2018 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet,

Statement of Changes in Equity, Cash Flow Statement and Notes to the Cash Flow Statement, 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 Financial Reporting Standard 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 July 2018 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 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 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

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to

report to you where:

-	the director's use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

-

the director has not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

Other information

The director is responsible for the other information. The other information comprises the information in the

Strategic Report and the Report of the Director, but does not include the financial statements and our

Report of the Auditors thereon.

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.

In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we

identify such material inconsistencies or apparent material misstatements, we are required to determine

whether there is a material misstatement in the financial statements or a material misstatement of the other

information. 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.

Opinion on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

-	the information given in the Strategic Report and the Report of the Director for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Strategic Report and the Report of the Director have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

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 Report of the

Director.

We have nothing to report in respect of the following matters where 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

-	the financial statements are not in agreement with the accounting records and returns; or

-	certain disclosures of director's remuneration specified by law are not made; or

-	we have not received all the information and explanations we require for our audit.

Responsibilities of director

As explained more fully in the Statement of Director's Responsibilities set out on page four, the director is

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 director determines 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 director is 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 director either intends to liquidate the company or to cease

operations, or has no realistic alternative but to do so.

Auditors' 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 a Report of the Auditors 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.

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 Report of the Auditors.

Use of our 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 a Report of the Auditors 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.

Ben Loveday FCCA (Senior Statutory Auditor)

for and on behalf of Haines Watts

Chartered Accountants and Statutory Auditors

Advantage

87 Castle Street

Reading

Berkshire

RG1 7SN

27 March 2019

TURNOVER

4

22,786,936

15,259,941

Cost of sales

15,593,840

10,493,070

GROSS PROFIT

7,193,096

4,766,871

Administrative expenses

5,296,946

3,646,743

1,896,150

1,120,128

Other operating income

79,489

113,835

OPERATING PROFIT

6

1,975,639

1,233,963

Interest receivable and similar income

7

16,597

37,075

1,992,236

1,271,038

Interest payable and similar expenses

8

2,553

6,544

PROFIT BEFORE TAXATION

1,989,683

1,264,494

Tax on profit

9

373,785

246,365

PROFIT FOR THE FINANCIAL YEAR

1,615,898

1,018,129

PROFIT FOR THE YEAR

1,615,898

1,018,129

OTHER COMPREHENSIVE INCOME

Employee Benefit Trust Income

-

57,437

Income tax relating to other comprehensive income

-

-

OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX

-

57,437

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

1,615,898

1,075,566

FIXED ASSETS

Tangible assets

11

277,837

180,023

Investments

12

-

-

277,837

180,023

CURRENT ASSETS

Stocks

13

866,755

319,850

Debtors

14

7,684,921

4,064,218

Cash at bank and in hand

15

2,683,219

2,762,927

11,234,895

7,146,995

CREDITORS

Amounts falling due within one year

16

6,908,514

4,198,020

NET CURRENT ASSETS

4,326,381

2,948,975

TOTAL ASSETS LESS CURRENT LIABILITIES

4,604,218

3,128,998

CREDITORS

Amounts falling due after more than one year

17

(28,776

)

(35,534

)

PROVISIONS FOR LIABILITIES

20

(27,218

)

(21,138

)

NET ASSETS

4,548,224

3,072,326

CAPITAL AND RESERVES

Called up share capital

21

11,470

11,470

Share premium

22

21,036

21,036

Retained earnings

22

4,515,718

3,039,820

SHAREHOLDERS' FUNDS

4,548,224

3,072,326

The financial statements were approved and authorised for issue by the director on 27 March 2019 and were signed by:

Mr P Parra - Director

Called up

share

Retained

Share

Other

Total

capital

earnings

premium

reserves

equity

£

£

£

£

£

Balance at 1 August 2016

11,470

2,113,563

21,036

-

2,146,069

Changes in equity

Dividends

-

(149,309

)

-

-

(149,309

)

Total comprehensive income

-

1,075,566

-

-

1,075,566

Balance at 31 July 2017

11,470

3,039,820

21,036

-

3,072,326

Changes in equity

Dividends

-

(140,000

)

-

-

(140,000

)

Total comprehensive income

-

1,615,898

-

-

1,615,898

Balance at 31 July 2018

11,470

4,515,718

21,036

-

4,548,224

Cash flows from operating activities

Cash generated from operations

1

573,982

638,903

Interest paid

-

(2,640

)

Interest element of hire purchase payments paid

(2,553

)

(3,904

)

Tax paid

(321,473

)

(385,958

)

Net cash from operating activities

249,956

246,401

Cash flows from investing activities

Purchase of tangible fixed assets

(224,235

)

(42,137

)

Sale of tangible fixed assets

24,732

12,132

Interest received

16,597

37,075

Net cash from investing activities

(182,906

)

7,070

Cash flows from financing activities

Capital repayments in year

(6,758

)

(19,301

)

Employee Benefit Trust

-

57,437

Equity dividends paid

(140,000

)

(149,309

)

Net cash from financing activities

(146,758

)

(111,173

)

(Decrease)/increase in cash and cash equivalents

(79,708

)

142,298

Cash and cash equivalents at beginning of year

2

2,762,927

2,620,629

Cash and cash equivalents at end of year

2

2,683,219

2,762,927

1.	RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

2018

2017

£

£

Profit before taxation

1,989,683

1,264,494

Depreciation charges

109,336

99,020

Profit on disposal of fixed assets

(7,647

)

(12,132

)

Finance costs

2,553

6,544

Finance income

(16,597

)

(37,075

)

2,077,328

1,320,851

Increase in stocks

(546,905

)

(65,231

)

Increase in trade and other debtors

(3,620,703

)

(1,086,835

)

Increase in trade and other creditors

2,664,262

470,118

Cash generated from operations

573,982

638,903

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in

respect of these Balance Sheet amounts:

Year ended 31 July 2018

31.7.18

1.8.17

£

£

Cash and cash equivalents

2,683,219

2,762,927

Year ended 31 July 2017

31.7.17

1.8.16

£

£

Cash and cash equivalents

2,762,927

2,620,629

1.	GENERAL INFORMATION

2 Heads Global Design Limited ("the company") creates and delivers meaningful client experiences

and related products. The company operates primarily in the UK, Europe and USA.

2.	STATUTORY INFORMATION

2 Heads Global Design Limited is a private company, limited by shares , registered in England and

Wales. The company's registered number and registered office address can be found on the

Company Information page.

3.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Preparation of consolidated financial statements

The financial statements contain information about 2 Heads Global Design Limited as an individual

company and do not contain consolidated financial information as the parent of a group. The

company is exempt under Section 400 of the Companies Act 2006 from the requirements to prepare

consolidated financial statements as it and its subsidiary undertaking are included by full

consolidation in the consolidated financial statements of its parent, 2 Heads Global Holdings Limited,

.

Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable and represents the

amount receivable for services rendered, excluding Value Added Tax (VAT).

The company recognises revenue by reference to the stage of completion and as detailed below:

i. Sale of services

The company creates and delivers meaningful client experiences and related products. Revenue is

recognised once the service or product has been delivered.

ii. Rental income

The company earns rental income from the subletting of its leased property. Rental income is

recognised in the period to which it relates.

iii. Interest income

Interest income is recognised when the right to receive payment is established.

Tangible fixed assets

Work in progress

Work in progress is valued on the basis of direct costs plus attributable overheads based on normal

level of activity. Provision is made for any foreseeable losses where appropriate. No element of

profit is included in the valuation of work in progress.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement,

except to the extent that it relates to items recognised in other comprehensive income or directly in

equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been

enacted or substantively enacted by the balance sheet date.

Deferred taxation

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at

the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods

different from those in which they are recognised in financial statements. Deferred tax is measured

using tax rates and laws that have been enacted or substantively enacted by the year end and that

are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is

probable that they will be recovered against the reversal of deferred tax liabilities or other future

taxable profits.

Foreign currencies

The company's functional and presentation currency is pounds sterling.

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.

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 the Income Statement.

Hire purchase and leasing commitments

At inception the company assesses agreements that transfer the right to use assets. The assessment

considers whether the arrangement is, or contains, a lease based on the substance of the agreement.

i. Finance leased assets

Leases of assets that transfer substantially all the risks and rewards incidental to ownership are

classified as finance leases.

Finance leases are capitalised at commencement of the lease as assets at the fair value of the

leased asset or, if lower, the present value of the minimum lease payments calculated using the

interest rate implicit in the lease. Where the implicit rate cannot be determined the company's

incremental borrowing rate is used.

The capital element of lease obligations is recorded as a liability on inception of the agreement.

Lease payments are apportioned between capital repayment and finance charge, using the effective

interest rate method, to produce a constant rate of charge on the balance of the capital repayments

outstanding.

ii. Operating leased assets

Leases that do not transfer all the risks and rewards of ownership are classified as operating leases.

Payments under operating leases are charged to the Income Statement on a straight line basis over

the period of the lease.

iii. Lease incentives

Incentives received to enter into an operating lease are credited to the Income Statement, to reduce

the lease expense, on a straight line basis over the period of the lease.

Employee benefits

The company provides a range of benefits to employees, including annual bonus arrangements and

defined contribution pension plans.

i. Short term benefits

Short term benefits, including holiday pay, are recognised as an expense in the period in which the

service is received.

ii. Defined contribution pension plans

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 when they are due. Amounts not paid are shown in accruals in the balance

sheet. The assets of the plan are held separately from the company in independently administered

funds.

iii. Annual bonus plan

The company operates an annual bonus plan for employees. An expense is recognised in the profit

and loss accounts when the company has a legal or constructive obligation to make payments under

the plan as a result of past events and a reliable estimate of the obligation can be made.