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COMPANY REGISTRATION NUMBER: 06224812
FM Cosmetics UK Ltd
Financial Statements
31 October 2022
FM Cosmetics UK Ltd
Financial Statements
Period from 1 May 2021 to 31 October 2022
Contents
Page
Officers and professional advisers
1
Strategic report
2
Directors' report
4
Independent auditor's report to the members
6
Statement of comprehensive income
9
Statement of financial position
10
Statement of changes in equity
11
Statement of cash flows
12
Notes to the financial statements
13
FM Cosmetics UK Ltd
Officers and Professional Advisers
The board of directors
Ms A Sieniuc
Mr K Sieniuc
Company secretary
Anita Sieniuc
Registered office
Unit 28, Metropolitan Park
Tauton Road
Greenford
UB6 8UQ
Company number 06224812
Auditor
Chowdhary & Co
Chartered accountants & statutory auditor
46 Syon Lane
Osterley
Middlesex
TW7 5NQ
Bankers
National Westminster
Western Avenue
Chatham Maritime
Chatham
Kent
ME4 4RT
FM Cosmetics UK Ltd
Strategic Report
Period from 1 May 2021 to 31 October 2022
The directors present the strategic report for the period ended 31 October 2022.
Fair review of the business After previous successful years of growing market share and applying cost control procedures, the company started facing aggressive demands for further growth from the franchisor and producer. The terms of franchise agreement renewal which was in negotiations at the beginning of 2022 was perceived by directors as reduction in freedom of decision making, product choice and even levels of stock required. It was therefore decided that renewal would not be signed and that the company would stop trading. Also, the original franchise deal precluded the company from seeking any alternative supplier/brand, making it impossible to change direction and continue trading with any potential new partner. Principal risks and uncertainties Principal risks The directors have considered the exposure of the company to risks. The principal risk is that an investment will decline in value below the amount invested. The company therefore uses short term fixed treasury reserve deposits. Financial risks The company is exposed to direct currency risks since its products are imported from Europe and paid for in foreign currencies. The company maintains currency bank accounts, yet all invoicing is in sterling. The company has policies in place such that credit checks are made on all potential business customers as part of the set new account procedures. Retail clients pay for the orders in advance of delivery. Key suppliers are subject to credit checks in order to mitigate supply chain failure. Future developments The directors decided not to extend the franchise agreement and as a consequence, will liquidate the company, when all the leases are expired. They do not expect to have any turnover in year 2022-2023, but should continue having interest income from deposits and investments. Key performance indicators The key financial performance indicators of the company are sales £58 million (2021 - £116 million), gross profit of £7 million (2021 - £28 million), gross profit percentage 12% (2021 - 24%) and balance sheet with net assets of £13 million (2021 - £13 million) The non-financial performance indicators are customer service and satisfaction and stakeholder relationship. The directors review the performance with constant feedback from customers and stakeholders.
This report was approved by the board of directors on 13 October 2023 and signed on behalf of the board by:
Ms A Sieniuc
Director
Registered office:
Unit 28, Metropolitan Park
Tauton Road
Greenford
UB6 8UQ
FM Cosmetics UK Ltd
Directors' Report
Period from 1 May 2021 to 31 October 2022
The directors present their report and the financial statements of the company for the period ended 31 October 2022 .
Principal activities
The principal activity of the company during the year was sole franchisee of UK for online wholesale of cosmetics , confectioneries , household chemicals , gifts and food items. The company ceased trading in October 2022 and is currently in the process of winding its affairs.
Directors
The directors who served the company during the period were as follows:
Ms A Sieniuc
Mr K Sieniuc
Dividends
Particulars of recommended dividends are detailed in note 13 to the financial statements.
Directors' responsibilities statement
The directors are responsible for preparing the strategic report, 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 period. Under that law the directors have 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 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 the profit or loss of the company for that period. In preparing these financial statements, the directors are required to: - select suitable accounting policies 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 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.
Auditor
Each of the persons who is a director at the date of approval of this report confirms that:
- so far as they are aware, there is no relevant audit information of which the company's auditor is unaware; and - they have taken all steps that they ought to have taken as a director to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information.
This report was approved by the board of directors on 13 October 2023 and signed on behalf of the board by:
Ms A Sieniuc
Director
Registered office:
Unit 28, Metropolitan Park
Tauton Road
Greenford
UB6 8UQ
FM Cosmetics UK Ltd
Independent Auditor's Report to the Members of FM Cosmetics UK Ltd
Period from 1 May 2021 to 31 October 2022
Opinion
We have audited the financial statements of FM Cosmetics UK Ltd (the 'company') for the period ended 31 October 2022 which comprise the statement of comprehensive income, statement of financial position, statement of changes in equity, statement of cash flows 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 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 October 2022 and of its profit for the period then ended; - have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; - 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.
Emphasis of matter
We draw attention to Note 3 to the financial statements which explains that the directors intend to liquidate the company and therefore do not consider it to be appropriate to adopt the going concern basis of accounting in preparing the financial statements. Accordingly the financial statements have been prepared on a basis other than going concern as described in Note 3. Our opinion is not modified in respect of this matter.
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. 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.
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 strategic report and the directors' report for the financial period 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.
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 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 - the financial statements are not in agreement with the accounting records and returns; or - certain disclosures of directors' remuneration specified by law are not made; or - we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, 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 either intend 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. 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: We have worked on the audit using recognised audit programmes which are relevant for client's nature of business. We consider that these programmes are sufficient for our scope of work. As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. We also: - Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. - Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control. - Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. - Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the company to cease to continue as a going concern. - Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. 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 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.
Mr Bhupindar Chowdhary FCA
(Senior Statutory Auditor)
For and on behalf of
Chowdhary & Co
Chartered accountants & statutory auditor
46 Syon Lane
Osterley
Middlesex
TW7 5NQ
13 October 2023
FM Cosmetics UK Ltd
Statement of Comprehensive Income
Period from 1 May 2021 to 31 October 2022
Period from
1 May 21 to
Year to
31 Oct 22
30 Apr 21
Note
£
£
Turnover
4
58,344,215
116,085,220
Cost of sales
51,358,791
87,971,556
-------------
--------------
Gross profit
6,985,424
28,113,664
Administrative expenses
7,081,259
5,970,039
Other operating income
5
25,000
------------
-------------
Operating (loss)/profit
6
( 95,835)
22,168,625
Other interest receivable and similar income
10
224,343
1,459
Interest payable and similar expenses
11
238
575
------------
-------------
Profit before taxation
128,270
22,169,509
Tax on profit
12
62,390
4,198,487
---------
-------------
Profit for the financial period and total comprehensive income
65,880
17,971,022
---------
-------------
All the activities of the company are from continuing operations.
FM Cosmetics UK Ltd
Statement of Financial Position
31 October 2022
31 Oct 22
30 Apr 21
Note
£
£
Fixed assets
Tangible assets
14
330,607
Current assets
Stocks
15
5,236,955
Debtors
16
12,492,232
1,950,691
Cash at bank and in hand
3,727,312
14,297,569
-------------
-------------
16,219,544
21,485,215
Creditors: amounts falling due within one year
17
2,964,078
8,608,871
-------------
-------------
Net current assets
13,255,466
12,876,344
-------------
-------------
Total assets less current liabilities
13,255,466
13,206,951
Provisions
17,365
-------------
-------------
Net assets
13,255,466
13,189,586
-------------
-------------
Capital and reserves
Called up share capital
21
100
100
Profit and loss account
13,255,366
13,189,486
-------------
-------------
Shareholders funds
13,255,466
13,189,586
-------------
-------------
These financial statements were approved by the board of directors and authorised for issue on 13 October 2023 , and are signed on behalf of the board by:
Ms A Sieniuc
Director
Company registration number: 06224812
FM Cosmetics UK Ltd
Statement of Changes in Equity
Period from 1 May 2021 to 31 October 2022
Called up share capital
Profit and loss account
Total
£
£
£
At 1 May 2020
100
3,258,464
3,258,564
Profit for the period
17,971,022
17,971,022
----
-------------
-------------
Total comprehensive income for the period
17,971,022
17,971,022
Dividends paid and payable
13
( 8,040,000)
( 8,040,000)
----
-------------
-------------
Total investments by and distributions to owners
( 8,040,000)
( 8,040,000)
At 30 April 2021
100
13,189,486
13,189,586
Profit for the period
65,880
65,880
----
-------------
-------------
Total comprehensive income for the period
65,880
65,880
----
-------------
-------------
At 31 October 2022
100
13,255,366
13,255,466
----
-------------
-------------
FM Cosmetics UK Ltd
Statement of Cash Flows
Period from 1 May 2021 to 31 October 2022
31 Oct 22
30 Apr 21
£
£
Cash flows from operating activities
Profit for the financial period
65,880
17,971,022
Adjustments for:
Depreciation of tangible assets
94,246
83,190
Government grant income
( 25,000)
Other interest receivable and similar income
( 224,343)
( 1,459)
Interest payable and similar expenses
238
575
Loss on disposal of tangible assets
191,356
Tax on profit
62,390
4,198,487
Accrued (income)/expenses
( 590,529)
858,671
Changes in:
Stocks
5,236,955
( 3,122,755)
Trade and other debtors
1,930,184
( 1,162,579)
Trade and other creditors
( 2,986,881)
678,975
------------
-------------
Cash generated from operations
3,779,496
19,479,127
Interest paid
( 238)
( 575)
Interest received
224,343
1,459
Tax paid
( 4,198,768)
( 644,418)
------------
-------------
Net cash (used in)/from operating activities
( 195,167)
18,835,593
------------
-------------
Cash flows from investing activities
Purchase of tangible assets
( 7,828)
( 137,918)
Proceeds from sale of tangible assets
32,738
------------
-------------
Net cash from/(used in) investing activities
24,910
( 137,918)
------------
-------------
Cash flows from financing activities
Government grant income
25,000
Dividends paid
( 8,040,000)
Amounts withdrawn by directors
( 10,400,000)
-------------
-------------
Net cash used in financing activities
( 10,400,000)
( 8,015,000)
-------------
-------------
Net (decrease)/increase in cash and cash equivalents
( 10,570,257)
10,682,675
Cash and cash equivalents at beginning of period
14,297,569
3,614,894
-------------
-------------
Cash and cash equivalents at end of period
3,727,312
14,297,569
-------------
-------------
FM Cosmetics UK Ltd
Notes to the Financial Statements
Period from 1 May 2021 to 31 October 2022
1. General information
The company is a private company limited by shares, registered in England and Wales. The address of the registered office is Unit 28, Metropolitan Park, Tauton Road, Greenford, UB6 8UQ.
2. Statement of compliance
These financial statements have been prepared in compliance with FRS 102, 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland'.
3. Accounting policies
Basis of preparation
The financial statements have been prepared on a basis other than that of the going concern basis. The company ceased trading on 31st October 2022.
Cash and cash equivalent
Cash and cashequivalents are basic financial assets and include cash in hand, deposit 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.
Going concern
The directors of the business decided to stop trading given the unacceptable conditions imposed by the main franchisor. Indeed, the main franchisor started dictating the sales levels as well as the products to retail. In additions, the main franchisor started requesting the payment of products up front before any delivery is made. As such, the directors considered the prevailing trading conditions were unacceptable for the company to trade and despite numerous efforts by the directors to secure work, the unfavourable trading circumstances forced them to terminate the contract with the main franchisor and ceased trading on 31 October 2022. The financial statements have been prepared on a basis other than that of the going concern. This basis includes writing the company's assets down to net realisable value. Provisions have been made in respect of known future committed costs of terminating the business at the reporting date.
Judgements and key sources of estimation uncertainty
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
Revenue recognition
Turnover is measured at the fair value of the consideration received or receivable for goods supplied and services rendered, net of discounts and Value Added Tax. Revenue from the sale of goods is recognised when the significant risks and rewards of ownership have transferred to the buyer (usually on despatch of the goods); the amount of revenue can be measured reliably; it is probable that the associated economic benefits will flow to the entity; and the costs incurred or to be incurred in respect of the transactions can be measured reliably. Commission is received from the franchisor for participation in their marketing plan as per the agreement.
Income tax
The taxation expense represents the aggregate amount of current and deferred tax recognised in the reporting period. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, tax is recognised in other comprehensive income or directly in equity, respectively. Current tax is recognised on taxable profit for the current and past periods. Current tax is measured at the amounts of tax expected to pay or recover using the tax rates and laws that have been enacted or substantively enacted at the reporting date.
Deferred tax is recognised in respect of all timing differences at the reporting date. Unrelieved tax losses and other deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date that are expected to apply to the reversal of the timing difference.
Foreign currencies
Foreign currency transactions are initially recorded in the functional currency, by applying the spot exchange rate as at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the exchange rate ruling at the reporting date, with any gains or losses being taken to the profit and loss account.
Operating leases
Lease payments are recognised as an expense over the lease term on a straight-line basis. The aggregate benefit of lease incentives is recognised as a reduction to expense over the lease term, on a straight-line basis.
Tangible assets
Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and impairment losses. Any tangible assets carried at revalued amounts are recorded at the fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. An increase in the carrying amount of an asset as a result of a revaluation, is recognised in other comprehensive income and accumulated in equity, except to the extent it reverses a revaluation decrease of the same asset previously recognised in profit or loss. A decrease in the carrying amount of an asset as a result of revaluation, is recognised in other comprehensive income to the extent of any previously recognised revaluation increase accumulated in equity in respect of that asset. Where a revaluation decrease exceeds the accumulated revaluation gains accumulated in equity in respect of that asset, the excess shall be recognised in profit or loss.
Depreciation
Depreciation is calculated so as to write off the cost or valuation of an asset, less its residual value, over the useful economic life of that asset as follows:
Improvement to leasehold property
-
10% straight line
Plant and machinery
-
25% reducing balance
Motor vehicles
-
20% reducing balance
Impairment of fixed assets
A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date. For the purposes of impairment testing, when it is not possible to estimate the recoverable amount of an individual asset, an estimate is made of the recoverable amount of the cash-generating unit to which the asset belongs. The cash-generating unit is the smallest identifiable group of assets that includes the asset and generates cash inflows that largely independent of the cash inflows from other assets or groups of assets. For impairment testing of goodwill, the goodwill acquired in a business combination is, from the acquisition date, allocated to each of the cash-generating units that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the company are assigned to those units.
Stocks
Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell. Cost includes all costs of purchase, costs of conversion and other costs incurred in bringing the stock to its present location and condition.
Government grants
Government grants are recognised at the fair value of the asset received or receivable. Grants are not recognised until there is reasonable assurance that the company will comply with the conditions attaching to them and the grants will be received. Government grants are recognised using the accrual model and the performance model. Under the accrual model, government grants relating to revenue are recognised on a systematic basis over the periods in which the company recognises the related costs for which the grant is intended to compensate. Grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the entity with no future related costs are recognised in income in the period in which it becomes receivable. Grants relating to assets are recognised in income on a systematic basis over the expected useful life of the asset. Where part of a grant relating to an asset is deferred, it is recognised as deferred income and not deducted from the carrying amount of the asset. Under the performance model, where the grant does not impose specified future performance-related conditions on the recipient, it is recognised in income when the grant proceeds are received or receivable. Where the grant does impose specified future performance-related conditions on the recipient, it is recognised in income only when the performance-related conditions have been met. Where grants received are prior to satisfying the revenue recognition criteria, they are recognised as a liability.
Financial instruments
A financial asset or a financial liability is recognised only when the company becomes a party to the contractual provisions of the instrument. Basic financial instruments are initially recognised at the transaction price, unless the arrangement constitutes a financing transaction, where it is recognised at the present value of the future payments discounted at a market rate of interest for a similar debt instrument. Debt instruments are subsequently measured at amortised cost. Where investments in non-convertible preference shares and non-puttable ordinary shares or preference shares are publicly traded or their fair value can otherwise be measured reliably, the investment is subsequently measured at fair value with changes in fair value recognised in profit or loss. All other such investments are subsequently measured at cost less impairment. Other financial instruments, including derivatives, are initially recognised at fair value, unless payment for an asset is deferred beyond normal business terms or financed at a rate of interest that is not a market rate, in which case the asset is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument. Other financial instruments are subsequently measured at fair value, with any changes recognised in profit or loss, with the exception of hedging instruments in a designated hedging relationship.
Financial assets that are measured at cost or amortised cost are reviewed for objective evidence of impairment at the end of each reporting date. If there is objective evidence of impairment, an impairment loss is recognised in profit or loss immediately. For all equity instruments regardless of significance, and other financial assets that are individually significant, these are assessed individually for impairment. Other financial assets are either assessed individually or grouped on the basis of similar credit risk characteristics. Any reversals of impairment are recognised in profit or loss immediately, to the extent that the reversal does not result in a carrying amount of the financial asset that exceeds what the carrying amount would have been had the impairment not previously been recognised.
Defined contribution plans
Contributions to defined contribution plans are recognised as an expense in the period in which the related service is provided. Prepaid contributions are recognised as an asset to the extent that the prepayment will lead to a reduction in future payments or a cash refund. When contributions are not expected to be settled wholly within 12 months of the end of the reporting date in which the employees render the related service, the liability is measured on a discounted present value basis. The unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.
4. Turnover
Turnover arises from:
Period from
1 May 21 to
Year to
31 Oct 22
30 Apr 21
£
£
Sale of goods
46,235,351
90,693,759
Commissions
12,108,864
25,391,461
-------------
--------------
58,344,215
116,085,220
-------------
--------------
The whole of the turnover is attributable to the principal activity of the company wholly undertaken in the United Kingdom.
5. Other operating income
Period from
1 May 21 to
Year to
31 Oct 22
30 Apr 21
£
£
Government grant income
25,000
----
--------
6. Operating profit
Operating profit or loss is stated after charging/crediting:
Period from
1 May 21 to
Year to
31 Oct 22
30 Apr 21
£
£
Depreciation of tangible assets
94,246
83,190
Loss on disposal of tangible assets
191,356
Foreign exchange differences
297,134
( 73,071)
---------
--------
7. Auditor's remuneration
Period from
1 May 21 to
Year to
31 Oct 22
30 Apr 21
£
£
Fees payable for the audit of the financial statements
10,000
10,000
--------
--------
8. Staff costs
The average number of persons employed by the company during the period, including the directors, amounted to:
31 Oct 22
30 Apr 21
No.
No.
Distribution staff
46
80
Administrative staff
3
5
----
----
49
85
----
----
The aggregate payroll costs incurred during the period, relating to the above, were:
Period from
1 May 21 to
Year to
31 Oct 22
30 Apr 21
£
£
Wages and salaries
2,873,237
2,989,847
Social security costs
324,570
305,803
Other pension costs
44,175
146,553
------------
------------
3,241,982
3,442,203
------------
------------
9. Directors' remuneration
The directors' aggregate remuneration in respect of qualifying services was:
Period from
1 May 21 to
Year to
31 Oct 22
30 Apr 21
£
£
Remuneration
434,880
336,000
---------
---------
Remuneration of the highest paid director in respect of qualifying services:
Period from
1 May 21 to
Year to
31 Oct 22
30 Apr 21
£
£
Aggregate remuneration
184,000
192,000
---------
---------
10. Other interest receivable and similar income
Period from
1 May 21 to
Year to
31 Oct 22
30 Apr 21
£
£
Interest on cash and cash equivalents
224,343
1,459
---------
-------
11. Interest payable and similar expenses
Period from
1 May 21 to
Year to
31 Oct 22
30 Apr 21
£
£
Interest on banks loans and overdrafts
238
575
----
----
12. Tax on profit
Major components of tax expense
Period from
1 May 21 to
Year to
31 Oct 22
30 Apr 21
£
£
Current tax:
UK current tax expense
75,764
4,194,777
Adjustments in respect of prior periods
( 2,867)
--------
------------
Total current tax
72,897
4,194,777
--------
------------
Deferred tax:
Origination and reversal of timing differences
( 10,507)
3,710
--------
------------
Tax on profit
62,390
4,198,487
--------
------------
Reconciliation of tax expense
The tax assessed on the profit on ordinary activities for the period is higher than (2021: lower than) the standard rate of corporation tax in the UK of 19 % (2021: 19 %).
Period from
1 May 21 to
Year to
31 Oct 22
30 Apr 21
£
£
Profit on ordinary activities before taxation
128,270
22,169,509
---------
-------------
Profit on ordinary activities by rate of tax
24,371
4,212,202
Adjustment to tax charge in respect of prior periods
( 2,867)
Effect of expenses not deductible for tax purposes
37,686
( 216)
Effect of capital allowances and depreciation
3,200
( 13,499)
---------
-------------
Tax on profit
62,390
4,198,487
---------
-------------
13. Dividends
31 Oct 22
30 Apr 21
£
£
Dividends paid during the period (excluding those for which a liability existed at the end of the prior period )
8,040,000
----
------------
14. Tangible assets
Short leasehold property
Plant and machinery
Motor vehicles
Total
£
£
£
£
Cost
At 1 May 2021
15,500
231,465
285,950
532,915
Additions
7,828
7,828
Disposals
( 15,500)
( 239,293)
( 285,950)
( 540,743)
--------
---------
---------
---------
At 31 October 2022
--------
---------
---------
---------
Depreciation
At 1 May 2021
1,550
116,957
83,801
202,308
Charge for the period
1,550
40,310
52,386
94,246
Disposals
( 3,100)
( 157,267)
( 136,187)
( 296,554)
--------
---------
---------
---------
At 31 October 2022
--------
---------
---------
---------
Carrying amount
At 31 October 2022
--------
---------
---------
---------
At 30 April 2021
13,950
114,508
202,149
330,607
--------
---------
---------
---------
15. Stocks
31 Oct 22
30 Apr 21
£
£
Goods for resale
5,236,955
----
------------
Closing stock represents finished goods for resale.
16. Debtors
31 Oct 22
30 Apr 21
£
£
Trade debtors
1,864,613
Prepayments and accrued income
243,316
86,078
Other debtors
12,248,916
-------------
------------
12,492,232
1,950,691
-------------
------------
Included in other debtors is an advance of £3,120,000 made to K Mieloch, Interest is charged at 2% per annum and no specific terms of repayment exist.
17. Creditors: amounts falling due within one year
31 Oct 22
30 Apr 21
£
£
Trade creditors
1,411
641,279
Accruals and deferred income
1,049,675
1,411,074
Corporation tax
1,898,264
4,194,777
Social security and other taxes
6,678
2,182,757
Other creditors
8,050
178,984
------------
------------
2,964,078
8,608,871
------------
------------
18. Deferred tax
The deferred tax included in the statement of financial position is as follows:
31 Oct 22
30 Apr 21
£
£
Included in provisions
17,365
----
--------
The deferred tax account consists of the tax effect of timing differences in respect of:
31 Oct 22
30 Apr 21
£
£
Accelerated capital allowances
17,365
----
--------
19. Employee benefits
Defined contribution plans
The amount recognised in profit or loss as an expense in relation to defined contribution plans was £ 44,175 (2021: £ 146,553 ).
20. Government grants
The amounts recognised in the financial statements for government grants are as follows:
31 Oct 22
30 Apr 21
£
£
Recognised in other operating income:
Government grants recognised directly in income
25,000
----
--------
21. Called up share capital
Issued, called up and fully paid
31 Oct 22
30 Apr 21
No.
£
No.
£
Ordinary shares of £ 1 each
100
100
100
100
----
----
----
----
22. Ultimate conrolling party
Mr. Krzysztof Mieloch and Mrs. Anita Sieniuc are the ultimate controlling parties by virtue of their joint shareholding.
23. Analysis of changes in net debt
At 1 May 2021
Cash flows
At 31 Oct 2022
£
£
£
Cash at bank and in hand
14,297,569
(10,570,257)
3,727,312
-------------
-------------
------------
FM Cosmetics UK Ltd
Notes to the Financial Statements (continued)
Period from 1 May 2021 to 31 October 2022
24. Operating leases
The total future minimum lease payments under non-cancellable operating leases are as follows:
31 Oct 22
30 Apr 21
£
£
Later than 1 year and not later than 5 years
398,217
2,079,810
---------
------------
25. Directors' advances, credits and guarantees
Included within other debtors are amounts of £7,280,000 due from directors. Interest is charged at 2% per annum. No specific terms of repayment exist.