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Registered number: 03885013




 





BRANDALLEY UK LIMITED
 
ANNUAL REPORT AND CONSOLIDATED FINANCIAL STATEMENTS
 
FOR THE YEAR ENDED 31 DECEMBER 2023

 
BRANDALLEY UK LIMITED
 

COMPANY INFORMATION


Directors
M Feldmann 
R Feldmann 
R Clacher 
T Feldmann 
S M Smith 




Registered number
03885013



Registered office
Telephone House
69-77 Paul Street

London

EC2A 4NW




Independent auditors
Wilder Coe Ltd
Chartered Accountants & Statutory Auditors

1st Floor Sackville House

143-149 Fenchurch Street

London

EC3M 6BL





 
BRANDALLEY UK LIMITED
 

CONTENTS



Page
Group Strategic Report
 
1 - 4
Directors' Report
 
5 - 7
Independent Auditors' Report
 
8 - 11
Consolidated Statement of Comprehensive Income
 
12
Consolidated Balance Sheet
 
13
Company Balance Sheet
 
14
Consolidated Statement of Changes in Equity
 
15
Company Statement of Changes in Equity
 
16
Consolidated Statement of Cash Flows
 
17
Consolidated Analysis of Net Debt
 
18
Notes to the Financial Statements
 
19 - 42


 
BRANDALLEY UK LIMITED
 

GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

Introduction
The directors present their Group Strategic Report for the year ended 31 December 2023.
The Group, comprised of BrandAlley UK Limited and BrandAlley France SAS, is a leading online retailer of luxury fashion, homeware, accessories and beauty products made available exclusively to registered members at competitive discounts. The Group runs flash sales of leading brands throughout the year, while maintaining a permanent designer catalogue via its online outlet store.
Business review
The Group is the off-price sales partner of first choice for over 1,000 brands across the premium clothing, footwear, accessories, homeware and beauty product sectors, sourced largely from the UK and mainland Europe.
After a challenging 2022, BrandAlley has seen strong growth in 2023 with sales 19% up on last year, with substantial growth in the last quarter at 45% up on last year. This has been driven by better stock availability from brand partners and changes made to the customer journey. This increase in sales has been delivered without having to sacrifice margin which is consistent on last year. The large growth in sales bucks the trend seen across the majority of retail businesses in 2023 who have experienced a challenging year with the BRC reporting that non-food sales were down 0.1%, as weak consumer confidence continued to hold back spending, and therefore retail businesses had to heavily rely on discounting to drive sales. 
In April 2023 BrandAlley purchased the intellectual property, the logistics operation and customer service division of the multi-platform online business Internet Fusion Group (IFG), welcoming an additional 125 staff through TUPE. This strategic acquisition marked a significant milestone, bringing logistics and customer service in-house to drive operational efficiency and elevate customer experience and satisfaction as well as purchasing some well-known lifestyle brands.
Due to this transaction, the business has incurred one off exceptional costs of £2.5m in relation to running two warehouses for part of the year, but going forward this will deliver significant costs savings and improved customer experience. These savings, combined with other cost efficiencies and strong revenue growth, has given the business an EBITDA of £4.6m in 2023 compared to £0.8m in 2022. EBITDA as a % of sales is up 3.7%, from 0.95% in 2022 to 4.7% in 2023.
Additionally in 2023, the Group made minority investments in circular fashion business Sign Of The Times and e-mobility business Electroheads. These investments align with the Group’s strategy in relation to growing the business in a sustainable and circular way. The Group has invested £4.3m in upgrading legacy IT systems and driving further automation in the warehouse. This will transform the back and front end operations and will drive future profit of the business.
This is the fourth full year of consolidation of BrandAlley France SAS, which BrandAlley UK bought out of administration in December 2019. Since then, a staggered turnaround plan has been in place and this completed in 2023. The financial underlying losses in 2023 remained in line with 2022. The launch of new IT systems, which will create a channel for future growth within the international market, coupled with further cost savings, will enable the business to move into a profitable position in 2024. Indeed, the French business was profitable for the first time in Q1 2024.
 

Page 1

 
BRANDALLEY UK LIMITED
 

GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Financial performance for the period

Group GMV increased 17.6% in 2023 from £123.2m to £144.9m, Group net sales increased by 19.0% in 2023 from £81.8m to £97.4m. Gross profit margin remained consistent at 34.1% compared to 34.9% in 2022. Despite the lift in sales volume distribution costs fell by 2.1% due to cost savings made from bringing the logistics function in house instead of using a 3rd party provider. Administrative expenses increased by 13.1% to £14.6m due to one off exceptional costs of £2.5m from the dual running of warehouses, offset by savings made through the restructuring of the French business.
Operating profit has moved from being a loss of £2.0m in 2022 to a £1.3m operating profit in 2023 which includes £2.5m of one-off exceptional costs from running two warehouses during 2023. Removing these costs gives the business an underlining operating profit of £3.8m. This £5.8m swing is due to an increase in sales and cost savings.
The Group’s post-operating exceptional EBITDA was £4.6m (£0.8m in 2022), with BrandAlley UK achieving an EBITDA of £6.1m which was partly offset by the EBITDA loss of £1.5m from the French business. 
The Balance Sheet remains in a strong position at December 2023, with cash at bank of £4.7m and net assets of £9.5m. The Group has invested in stock following the transition to having its own in-house warehousing facility, resulting in closing stock of £13.8m compared to £11.1m in 2022. 

Post year-end trading update

In terms of the post year-end trading environment, 2024 has started strongly with Q1 GMV being up 19% on 2023, with suppliers having large amounts of excess stock and the business has benefited from a great line up of brands. Investment is being made into systems to address legacy tech issues, future proof the business and improve the customer’s journey and experience. 2024 will see the introduction of a “market place” drop shipping solution which allows the business to diversify in terms of both the products and the brands sold.
In January 2024 BrandAlley purchased a majority stake in the limited-edition sneaker and streetwear platform The Edit Ldn, giving the group the opportunity to tap into a more youthful customer demographic and their substantial community of engaged followers.
Whilst the directors are confident in the Group strategy for growth they also remain focused on the potential risks ahead due to the current economic climate, the cost of living crisis and the conflicts in the Far East and Ukraine. However, through strong engagement with suppliers, on-going system upgrades and investment in customer engagement and satisfaction, they believe that 2024 will be a year of strong sales growth and increased profitability for the business.   

Principal risks and uncertainties
 
The principal risks and uncertainties facing the Group are outlined below:

Financial risk management objectives and policies
 
BrandAlley has a £4m revolving Trade Finance facility.  The Group has no other external debt.
The Group has a multi-currency banking facility to minimise currency exposure when purchasing stock for resale in other currencies.
The Group’s principal assets are intellectual property, stock and bank balances. The valuation for stock in the Balance Sheet is presented net of a conservative provision for impairment where required.
Credit risk on liquid funds is limited because these are held with a bank with a high credit rating assigned by international credit rating agencies.
In order to maintain liquidity to ensure that sufficient funds are available for ongoing operations and future developments, the Group maintains careful working capital management.

Page 2

 
BRANDALLEY UK LIMITED
 

GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Other key performance indicators
 
The directors monitor company performance using financial and non-financial indicators including turnover, gross profit, operating profit, new members, new customers, member conversion and number of orders.  These indicators are monitored daily, weekly and monthly
Section 172 Companies Act 2006
This report sets out how the directors comply with the requirements of Section 172 Companies Act 2006 and how these requirements have impacted BrandAlley Board’s decision making throughout the financial year 2023.
The likely consequences of any decision in the long term
Board and management decisions have consistently been taken with the long-term perspective focused on creating, first, the UK’s, and then one of mainland Europe’s, leading online flash sales retailer of premium fashion, homeware and related product sectors.
The Board has continued to deploy a long-term perspective throughout 2023, evidenced in particular by the approach to BrandAlley France. The French business held key Group intellectual property assets and is the designated platform for the rollout of the BrandAlley business model to the mainland European market, which is many times the size of the UK market. Consequently, the Board has supported the operating losses of the French business and investment in its staff, IT platform and logistics operations whilst implementing a turnaround plan for this business.
Furthermore, the Board takes a long-term perspective on colleagues who work for the the Group - they are our most important asset. Decisions about retention, motivation, remuneration and career development of all employees are taken with the long-term in mind.
The interests of the Group’s employees
As mentioned above, the Board considers that the employees of the company are its principal asset. The directors recognise that the employees are at the heart of all operations at BrandAlley and the success of the business is dependent on attracting, training and motivating them. This is a particular focus for the business in 2023 having doubled the workforce.
Colleagues have regular one-to-ones and annual reviews with an opportunity to build a career within the Group. The senior management team actively promote an open and inclusive culture where colleagues are encouraged to raise concerns they have regarding the business or their own wellbeing.
The Group has a heightened focus on employee wellbeing offering support for both physical and mental health with free access to counselling, virtual GP appointments and financial wellbeing support. The Group offers longer flexible lunch breaks, reduced working hours on Fridays and flexible working policies to support a healthy work life balance.
The need to foster the Group’s business relationships with suppliers, customers and others
The directors delegate the day-to-day responsibility for the company’s business relationships with suppliers, customer and other stakeholders to the executive management of the business. However, this delegation is within the clear long-term orientated framework which requires that all relationships are sustainable and based on the principle of mutual benefit and partnership. Periodically the Board will review key issues and key performance indicators to assess the status and approach being taken. Furthermore, the approach to board level decision making is consistent with this.
The Board acknowledges that the long-term success of BrandAlley will depend on sustainable long term business relationships.
 
Page 3

 
BRANDALLEY UK LIMITED
 

GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

The critical brand supplier relationships already in place have been built over multi-year periods during which trust and confidence has been established. Core to this is both the excellent customer service levels that the business has put in place and the inter-personal relationships that specific members of the management team have with key suppliers, based on professional competence and a track record of delivering consistently against common goals.
Equally important are the relationships with hundreds of thousands of active members and customers. The Board and the executive management are aligned on a vision of long-term customer relationships which means, where necessary, short-term costs are incurred and investments are made to ensure customer retention and satisfaction. This culture underpins the growth of the business. 
Section 172 Statement (continued)
The impact of the Group’s operations on the community and the environment
The directors are committed to supporting local businesses and being environmentally responsible from the packaging used to the way in which goods are transported to customers.
The desirability of the Group maintaining a reputation for high standards of business conduct
BrandAlley’s Board of Directors is absolutely committed to the highest levels of ethical and compliant business dealings with all stakeholders. The long-term nature of the business relationships that the business is built on with all stakeholders demands and necessitates this and the Board seeks to ensure this is maintained at all times, with the avoidance of any reputational damage an absolute priority.
The need to act fairly between members of the Group
BrandAlley operates with regular board meetings in place to ensure members of the Board are updated and communicated to regularly on business performance.
Quarterly board meetings take place with clear agendas to ensure no key areas or stakeholders are overlooked.
Monthly management accounts are prepared for the board to enable review of key performance metrics of the business. An annual budget is prepared and approved, after which quarterly forecasts are prepared highlighting any movements or significant changes throughout the year.


This report was approved by the board on 17 May 2024 and signed on its behalf.



R Feldmann
Director

Page 4

 
BRANDALLEY UK LIMITED
 

 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

The directors present their report and the financial statements for the year ended 31 December 2023.

Directors' responsibilities statement

The directors are responsible for preparing the Group Strategic Report, the Directors' Report and the consolidated financial statements in accordance with applicable law and regulations.
 
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and the Group and of the profit or loss of the Group for that period.

 In preparing these financial statements, the directors are required to:


select suitable accounting policies for the Group's financial statements and then apply them consistently;

make judgments 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 financial statements on the going concern basis unless it is inappropriate to presume that the Group 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 the Group and to enable them to ensure that the financial statements comply with the Companies Act 2006They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Results and dividends

The profit for the year, after taxation, amounted to £150,000 (2022 - loss £1,763,000).

No interim dividend was paid during the period and the directors do not recommend the payment of a final dividend.

Directors

The directors who served during the year were:

M Feldmann 
R Feldmann 
R Clacher 
T Feldmann 
S M Smith (appointed 17 July 2023)
T R Pickles (resigned 27 February 2023)
 

Future developments

Details relating to future developments are addressed in the Group Strategic Report.

Financial instruments

The risks in relation to the use of financial instruments are addressed in the Group Strategic Report.

Page 5

 
BRANDALLEY UK LIMITED
 

 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Engagement with suppliers, customers and others in a business relationship with the Group

Details relating to engagement with suppliers, customers and others in a business relationship with the Group are addressed in the Group Strategic Report.

Energy and carbon report

BrandAlley is monitoring its electricity usage and continuously seeks ways to reduce its carbon footprint.
UK Government GHG Conversion Factors for Company Reporting 2022 guidelines and factors have been applied in calculation of Scope 2 consumptions and CO2 emission data.



   2023
   2022
      £000  
     £000   

UK Electricity usage kWh

233,654

111,836

Associated Greenhouse gas emissions



kg CO2e

48,384

21,627

kg CO2

47,890

21,384

kg CH4

209

89

kg N2O

285

153

Intensity ratio CO2e per £m sales

0.0005

0.0003


The increase in 2023 is due to the business bringing the logistics operations in house. In prior years, this was done by a third party and therfore was not included.

Disclosure of information to auditors

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 and the Group's auditors are 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 and the Group's auditors are aware of that information.

Post balance sheet events

In January 2024 BrandAlley UK purchased a majority stake in the limited edition sneaker and streetwear marketplace The Edit Ldn which will operate within the BrandAlley Group.

Page 6

 
BRANDALLEY UK LIMITED
 

 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023


Auditors

The auditorsWilder Coe Ltdwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board on 17 May 2024 and signed on its behalf.
 





R Feldmann
Director

Page 7

 
BRANDALLEY UK LIMITED
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF BRANDALLEY UK LIMITED
 

Opinion


We have audited the financial statements of BrandAlley UK Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2023, which comprise the Consolidated Statement of Comprehensive Income, the Consolidated Balance Sheet, the Company Balance Sheet, the Consolidated Statement of Cash Flows, the Consolidated Statement of Changes in Equity, the Company Statement of Changes in Equity and the related notes, including a summary of significant accounting policiesThe 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 Group's and of the parent Company's affairs as at 31 December 2023 and of the Group's 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 Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.


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 Group's or the parent 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.


Page 8

 
BRANDALLEY UK LIMITED
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF BRANDALLEY UK LIMITED (CONTINUED)


Other information


The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' Report thereon. The directors are responsible for the other information contained within the Annual ReportOur opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.


We have nothing to report in this regard.


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 Group Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the Group 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 Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group 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 by the parent Company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent Company 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 set out on page 5, 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 Group's and the parent 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 Group or the parent Company or to cease operations, or have no realistic alternative but to do so.


Page 9

 
BRANDALLEY UK LIMITED
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF BRANDALLEY UK LIMITED (CONTINUED)


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 an Auditors' Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Group 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:

Discussions with and enquiries of management and those charged with governance were held with a view to identifying those laws and regulations that could be expected to have a material impact on the financial statements. During the engagement team briefing, the outcomes of these discussions and enquiries were shared with the team, as well as consideration as to where and how fraud may occur in the entity.
The following laws and regulations were identified as being of significance to the entity:
 
Those laws and regulations considered to have a direct effect on the financial statements include UK financial reporting standards, Company Law, Tax and Pensions legislation and distributable profits legislation.
Those laws and regulations for which non-compliance may be fundamental to the operating aspects of the
business and therefore may have a material effect on the financial statements.
 
Audit procedures undertaken in response to the potential risks relating to irregularities (which include fraud and non-compliance with laws and regulations) comprised of: enquiries of management and those charged with governance as to whether the entity complies with such laws and regulations; enquiries with the same concerning any actual or potential litigation or claims; inspection of relevant legal correspondence; review of board minutes; testing the appropriateness of journal entries; and the performance of analytical review to identify unexpected movements in account balances which may be indicative of fraud.
No instances of material non-compliance were identified. However, the likelihood of detecting irregularities, including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the entity’s controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. As explained above, there is an unavoidable risk that material misstatements may not be detected, even though the audit has been planned and performed in accordance with ISAs (UK).


A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' Report.


Page 10

 
BRANDALLEY UK LIMITED
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF BRANDALLEY UK LIMITED (CONTINUED)


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 2006Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditors' Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.





Bee-Lean Chew MSc BA (Hons) FCA (Senior Statutory Auditor)
for and on behalf of
 
 
 
 
 
 
Wilder Coe Ltd
Chartered Accountants & Statutory Auditors
1st Floor Sackville House
143-149 Fenchurch Street
London
EC3M 6BL

 
Date: 
21 May 2024
Page 11

 
BRANDALLEY UK LIMITED
 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023

2023
2022
Note
£000
£000



Gross Merchandise Value ("GMV")*
144,875
123,202


  

Turnover
 4 
97,359
81,791

Cost of sales
  
(64,132)
(53,208)

Gross profit
  
33,227
28,583

Distribution costs
  
(17,350)
(17,720)

Administrative expenses
  
(14,559)
(12,869)

Operating profit/(loss)
 5 
1,318
(2,006)

Interest receivable and similar income
 9 
4
2

Interest payable and similar expenses
 10 
(71)
-

Profit/(loss) on ordinary activites before taxation
  
1,251
(2,004)

Taxation on profit/(loss) on ordinary activities
 11 
(1,101)
241

Profit/(loss) for the financial year
  
150
(1,763)

  

Foreign exchange differences
  
(81)
(113)

Total comprehensive income/(loss) for the year
  
69
(1,876)

Profit/(loss) for the year attributable to:
  

Owners of the parent Company
  
150
(1,763)

Total comprehensive income/(loss) for the year attributable to:
  

Owners of the parent Company
  
69
(1,876)

EBITDA, adjusted for rounding, foreign exchange differences, 
finance costs and exceptional items**

4,554

780
 

*Gross Merchandise Value ("GMV") is defined by the total value of orders processed on the website which is inclusive of product value, shipping, sales taxes and returns.
**EBITDA for BrandAlley UK was £6.1m and EBITDA loss for BrandAlley France SAS was £1.5m.
There were no recognised gains or losses for 2023 or 2022 other than those included in the Consolidated Statement of Comprehensive Income.
The notes on pages 19 to 42 form part of these financial statements. 

Page 12

 
BRANDALLEY UK LIMITED
REGISTERED NUMBER: 03885013

CONSOLIDATED BALANCE SHEET
AS AT 31 DECEMBER 2023

2023
2022
Note
£000
£000

Fixed assets
  

Intangible fixed assets
 13 
12,565
3,081

Tangible fixed assets
 14 
430
77

Fixed asset investments
 15 
538
-

  
13,533
3,158

Current assets
  

Stocks
 16 
13,844
11,094

Debtors
 17 
925
2,056

Cash at bank and in hand
 18 
4,689
9,163

  
19,458
22,313

Creditors: amounts falling due within one year
 19 
(23,014)
(18,626)

Net current (liabilities)/assets
  
 
 
(3,556)
 
 
3,687

Total assets less current liabilities
  
9,977
6,845

Provisions for liabilities
  

Other provisions
 22 
(438)
(433)

Net assets
  
9,539
6,412


Capital and reserves
  

Called up share capital 
 23 
1
1

Share premium account
 24 
22,456
22,453

Revaluation reserve
 24 
3,055
-

Capital redemption reserve
 24 
7,567
7,567

Foreign exchange reserve
 24 
(31)
50

Profit and loss account
 24 
(23,509)
(23,659)

Equity attributable to owners of the parent Company
  
9,539
6,412

Equity shareholders' funds
  
9,539
6,412


The financial statements were approved and authorised for issue by the board and were signed on its behalf on 
17 May 2024.




R Feldmann
Director

The notes on pages 19 to 42 form part of these financial statements.

Page 13

 
BRANDALLEY UK LIMITED
REGISTERED NUMBER: 03885013

COMPANY BALANCE SHEET
AS AT 31 DECEMBER 2023

2023
2022
Note
£000
£000

Fixed assets
  

Intangible fixed assets
 13 
11,460
2,753

Tangible assets
 14 
427
73

Investments
 15 
539
1

  
12,426
2,827

Current assets
  

Stocks
 16 
13,844
10,170

Debtors
 17 
8,700
8,442

Cash at bank and in hand
 18 
4,629
8,767

  
27,173
27,379

Creditors: amounts falling due within one year
 19 
(22,542)
(16,125)

Net current assets
  
 
 
4,631
 
 
11,254

Total assets less current liabilities
  
17,057
14,081

Provisions for liabilities
  

Other provisions
 22 
(438)
(394)

Net assets
  
16,619
13,687


Capital and reserves
  

Called up share capital 
 23 
1
1

Share premium account
 24 
22,456
22,453

Capital redemption reserve
 24 
7,567
7,567

Profit and loss account brought forward
  
(16,334)
(16,855)

Profit for the year
  
2,929
521

Profit and loss account carried forward
  
(13,405)
(16,334)

Equity shareholders' funds
  
16,619
13,687


The financial statements were approved and authorised for issue by the board and were signed on its behalf on 
17 May 2024.
 


R Feldmann
Director

The notes on pages 19 to 42 form part of these financial statements.

Page 14

 

 
BRANDALLEY UK LIMITED


 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023



Called up share capital
Share premium account
Capital redemption reserve
Revaluation reserve
Foreign exchange reserve
Profit and loss account
Total equity


£000
£000
£000
£000
£000
£000
£000



At 1 January 2022
1
22,450
7,567
-
163
(21,896)
8,285



Comprehensive income for the year


Loss for the year
-
-
-
-
-
(1,763)
(1,763)


Foreign exchange differences
-
-
-
-
(113)
-
(113)


Share options granted
-
3
-
-
-
-
3





At 1 January 2023
1
22,453
7,567
-
50
(23,659)
6,412



Comprehensive income for the year


Profit for the year
-
-
-
-
-
150
150


Foreign exchange difference
-
-
-
-
(81)
-
(81)


Revaluation of IPR
-
-
-
3,055
-
-
3,055


Share options granted
-
3
-
-
-
-
3



At 31 December 2023
1
22,456
7,567
3,055
(31)
(23,509)
9,539



The notes on pages 19 to 42 form part of these financial statements.

Page 15

 

 
BRANDALLEY UK LIMITED


 

COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023



Called up share capital
Share premium account
Capital redemption reserve
Profit and loss account
Total equity


£000
£000
£000
£000
£000



At 1 January 2022
1
22,450
7,567
(16,855)
13,163



Comprehensive income for the year


Profit for the year
-
-
-
521
521


Share options granted
-
3
-
-
3





At 1 January 2023
1
22,453
7,567
(16,334)
13,687



Comprehensive income for the year


Profit for the year
-
-
-
2,929
2,929


Share options granted
-
3
-
-
3



At 31 December 2023
1
22,456
7,567
(13,405)
16,619



The notes on pages 19 to 42 form part of these financial statements.

Page 16

 
BRANDALLEY UK LIMITED
 

CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023

2023
2022
£000
£000

Cash flows from operating activities

Profit/(loss) for the financial year
150
(1,763)

Adjustments for:

Amortisation of intangible assets
708
902

Depreciation of tangible assets
48
94

Interest paid
71
-

Interest received
(4)
(2)

Taxation charge
1,101
(241)

(Increase)/decrease in stocks
(2,750)
1,441

Decrease in debtors
74
393

Increase in creditors
4,367
1,493

Increase/(decrease) in provisions
5
(202)

Impairment of intangible fixed assets
-
811

Corporation tax paid
(22)
(10)

Foreign exchange movement
(81)
(113)

Net cash generated from operating activities

3,667
2,803


Cash flows from investing activities

Purchase of intangible fixed assets
(7,137)
(1,547)

Deposits received for capitalised intangible fixed assets
-
42

Purchase of tangible fixed assets
(401)
(30)

Purchase of unlisted and other investments
(538)
-

Interest received
4
2

Net cash from investing activities

(8,072)
(1,533)

Cash flows from financing activities

Share options granted
2
-

Interest paid
(71)
-

Net cash generated in financing activities
(69)
-

Net (decrease)/increase in cash and cash equivalents
(4,474)
1,270

Cash and cash equivalents at beginning of year
9,163
7,893

Cash and cash equivalents at the end of year
4,689
9,163


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
4,689
9,163


Page 17

 
BRANDALLEY UK LIMITED
 

CONSOLIDATED ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 DECEMBER 2023




At 1 January 2023
Cash flows
At 31 December 2023
£000

£000

£000

Cash at bank and in hand

9,163

(4,474)

4,689


The notes on pages 19 to 42 form part of these financial statements.

Page 18

 
BRANDALLEY UK LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1.


General information

BrandAlley UK Limited ("the Company") (Company number: 03885013), having its registered office and trading address at Telephone House, 69-77 Paul Street, London, EC2A 4NW, is a private limited company incorporated in England and Wales.
The Company and the Group's principal activity is the retail of luxury fashion accessories, homeware and beauty products made available only to registered members at competitive discounts. The Company and the Group run flash sales of leading brands throughout the year while maintaining permanent designer catalogue in their online outlet stores.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgment in applying the Group's accounting policies (see note 3).

The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements.

The following principal accounting policies have been applied:

 
2.2

Basis of consolidation

The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance Sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Statement of Comprehensive Income from the date on which control is obtained. They are deconsolidated from the date control ceases.
FRS 102 allows a qualifying entity certain disclosure exemptions, subject to conditions. 
The Company has taken advantage of the following exemptions in its individual financial statements:
- from preparing a statement of cash flows, on the basis that it is a qualifying entity and the consolidated statement of cashflows, included in these financial statements, includes the Company's cash flows; and
- from the financial instrument disclosures, required under FRS 102 paragraphs 11.4(b), 11.41(c), 11.41(e), 11.41(f), 11.42, 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b), 12.26, 12.27, 12.29(a), 12.29(b) and 12.29A, as the information is provided in the consolidated financial statement disclosures.
Except where stated, information reported in the notes to the financial statements relate to the Group.

Page 19

 
BRANDALLEY UK LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.3

Turnover

The Company and Group's turnover is derived from online flash sales of discounted luxury fashion and homeware products to its registered members database.
Turnover is the net amount receivable by the Company and Group in the ordinary course of its business excluding trade discounts, value added tax and other sales related taxes. Turnover is recognised at the point of despatch from the Group's third party stock holder and deferred income relates to the orders that have been placed but not dispatched as at 31 December 2023.
Turnover is recognised to the extent that it is probable that the economic benefits will flow to the Group and the turnover can be reliably measured. Turnover is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before turnover is recognised:

Sale of goods

Turnover from the sale of goods is recognised when all of the following conditions are satisfied:
the Group has transferred the significant risks and rewards of ownership to the buyer;
the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
the amount of turnover can be measured reliably;
it is probable that the Group will receive the consideration due under the transaction; and
the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Page 20

 
BRANDALLEY UK LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

  
2.4

Intangible assets

Intangible assets comprise software licences, IT systems, goodwil and intellectual property rights ('IPR').
The software licences and IT systems are initially recognised at cost. After initial recognition, under the cost model, these assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.
Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer's interest in the fair value of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets have not been recognised separately where they do not arise from contractual or other legal rights.
Goodwill is considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
IPR, licenses and IT systems are amortised straight-line over their expected useful economic lives or anticipated length of use by the Company in order to write off their costs less estimated residual value. These are stated at cost, net of amortisation and any provision for impairment. The principal rates are as follows:
 Licenses - 33% on a straight-line basis
 IT System - 20% on cost
 Goodwill - 10% on a straight-line basis
 IPR       - 10% on a straight-line basis
The amortisation of intangible assets is recognised in administrative expenses on the Statement of Comprehensive Income.
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.

Page 21

 
BRANDALLEY UK LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.5

Tangible fixed assets

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.

The Group adds to the carrying amount of an item of fixed assets the cost of replacing part of such an item when that cost is incurred, if the replacement part is expected to provide incremental future benefits to the Group. The carrying amount of the replaced part is derecognised. Repairs and maintenance are charged to profit or loss during the period in which they are incurred.

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:

Furniture, fittings and equipment
-
20% on cost
Computer equipment
-
20% on cost
IT Systems
-
20% on cost

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.

 
2.6

Operating leases: the Group as lessee

Rentals paid under operating leases are charged to the Consolidated Statement of Comprehensive Income on a straight-line basis over the lease term.

  
2.7

Stock

Stocks are stated at the lower of cost and net realisable value.
The net realisable value is based on an estimated selling price, less further costs expected to be incurred to completion and disposal. A provision is made for obsolete, slow moving or defective items where appropriate.

 
2.8

Debtors

Short-term debtors are measured at transaction price, less any impairment. 

 
2.9

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours.

Page 22

 
BRANDALLEY UK LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.10

Financial instruments

The Group 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, loans to related parties and investments in ordinary shares.
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.
Investments in non-derivative instruments that are equity to the issuer are measured:
 
at fair value with changes recognised in the Consolidated Statement of Comprehensive Income if the shares are publicly traded or their fair value can otherwise be measured reliably;
 
at cost less impairment for all other investments.

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 Group would receive for the asset if it were to be sold at the Balance Sheet date.

 
2.11

Creditors

Short-term creditors are measured at the transaction price. 

  
2.12

Business combinations

Business combinations are accounted for by applying the purchase method.
The cost of a business combination is the fair value of the consideration given, liabilities incurred or assumed and of equity instruments issued plus the costs directly attributable to the business combination.

Page 23

 
BRANDALLEY UK LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.13

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is British Pound Sterling (GBP).

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 the Consolidated Statement of Comprehensive Income  except when deferred in other comprehensive income as qualifying cash flow hedges.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Consolidated Statement of Comprehensive Income within 'finance income or costs'. All other foreign exchange gains and losses are presented in the Consolidated Statement of Comprehensive Income within 'other operating income'.

On consolidation, the results of overseas operations are translated into British Pound Sterling at rates approximating to those ruling when the transactions took place. All assets and liabilities of overseas operations are translated at the rate ruling at the reporting date. Exchange differences arising on translating the opening net assets at opening rate and the results of overseas operations at actual rate are recognised in other comprehensive income.

 
2.14

Finance costs

Finance costs are charged to the Consolidated Statement of Comprehensive Income 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.

 
2.15

Pensions

Defined contribution pension plan

The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations.

The contributions are recognised as an expense in the Consolidated Statement of Comprehensive Income when they fall due. Amounts not paid are shown in accruals as a liability in the Balance Sheet. The assets of the plan are held separately from the Group in independently administered funds.

Page 24

 
BRANDALLEY UK LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.16

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. 

The current corporation tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the Balance Sheet date in the countries where the Company and the Group operate and generate income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the Balance Sheet date, except that:
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
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. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the Balance Sheet date.

 
2.17

Research and development

Expenditure on research and development is written off in the year in which it is incurred, except for those items relating to the IT systems referred to above.

 
2.18

Interest income

Interest income is recognised in the Consolidated Statement of Comprehensive Income using the effective interest method.

  
2.19

Impairment of fixed assets and goodwill

Assets that are subject to depreciation or amortisation are assessed at each Balance Sheet date to determine whether there is any indication that the assets are impaired. Where there is any indication that an asset may be impaired, the carrying value of the asset (or cash-generating unit to which the asset has been allocated) is tested for impairment. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's (or CGU's) fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (CGUs). Non-financial assets that have been previously impaired are reviewed at each Balance Sheet date to assess whether there is any indication that the impairment losses recognised in prior periods may no longer exist or may have decreased.

 
2.20

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.
Other fixed asset investments are masured at fair value with changes recognised in other comprehensive income.

Page 25

 
BRANDALLEY UK LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.21

Provisions for liabilities

Provisions are made when an event has taken place that gives the Group 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 oblgation.
Provisions are charged as an expense to the Consolidated Statement of Comprehensive Income in the year that the group becomes aware of the obligation, and are measured at the best estimate aty the balance sheet date of the expenditure required to settle the obligation, taking into accounts relevant risks and uncertainties.
 
When payments are eventually made, they are charged to the provision carried in the Balance Sheet.

 
2.22

Share-based payments

Where share options are awarded to employees, the fair value of the options at the date of grant is charged to profit or loss over the vesting period. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each Balance Sheet date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options that eventually vest. Market vesting conditions are factored into the fair value of the options granted. The cumulative expense is not adjusted for failure to achieve a market vesting condition.
The fair value of the award also takes into account non-vesting conditions. These are either factors beyond the control of either party (such as a target based on an index) or factors which are within the control of one or other of the parties (such as the Group keeping the scheme open or the employee maintaining any contributions required by the scheme).
Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to profit or loss over the remaining vesting period.
Where equity instruments are granted to persons other than employees, profit or loss is charged with fair value of goods and services received.

Page 26

 
BRANDALLEY UK LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

3.


Judgments in applying accounting policies and key sources of estimation uncertainty

Stock Provisions
Stock comprises items subject to changing consumer demands and fashion trends. As a result it is necessary to consider the recoverability of the cost of stock and the associated provisioning required. When calculating the stock provisions, management considers the nature and condition of the stock, as well as applying assumptions around anticipated saleability of goods for resale. See note 16 for the net carrying amount of the stock with associated provision.
Useful economic lives of tangible and intangible assets
The annual depreciation and amortisation charges for tangible and intangible assets are sensitive to changes in the estimated useful economic lives and residual values of the assets. The useful economic lives and residual values are re-assessed annually. They are amended when necessary to reflect current estimates, based on technological advancement, future investments, economic utilisation and the physical condition of the assets. See notes 13 and 14 for the carrying amount of the intangible and tangible assets respectively, and notes 2.4 and 2.5 for the useful economic lives of intangible and tangible assets respectively.
Returns Provision
The Returns Provision comprises a provision for sales, based on the estimate of the calculated expected returns less the actual returns excluding provisions. These estimates are based on industry and the Company's own historic averages.


4.


Turnover

The whole of the turnover is attributable to the principal activity of the business, being that of the retail of luxury fashion, accessories, homeware and beauty made available only to registered members at competitive discounts. BrandAlley runs flash sales of leading brands throughout the year and also has a permanent designer catalogue in its online outlet store.
The directors consider that the disclosure of turnover per geographic location is seriously prejudicial to the interests of the Group and the Company and have thus not disclosed this information.

All turnover arose within the United Kingdom.


5.


Operating profit/(loss)

The operating profit/(loss) is stated after charging:

2023
2022
£000
£000

Depreciation - owned assets
48
94

Intangible fixed asset amortisation
708
902

Auditor's remuneration
46
56

Exchange differences
(44)
(127)

Other operating lease rentals
348
292

Impairment of intangible fixed assets
-
811

Page 27

 
BRANDALLEY UK LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

6.


Auditors' remuneration

2023
2022
£000
£000

Fees payable to the Group's auditors and their associates for the audit of the Group's annual financial statements
46
38

Fees payable to the Group's auditor and their associates in respect of:

Audit-related assurance services
43
36

Taxation compliance services

3
2

46
38


7.


Employees

Staff costs, including directors' remuneration, were as follows:


Group
Group
Company
Company
2023
2022
2023
2022
£000
£000
£000
£000


Wages and salaries
5,840
4,843
5,011
3,929

Social security costs
565
724
521
455

Cost of defined contribution scheme
352
453
352
324

6,757
6,020
5,884
4,708

The average number of employees, including the directors, during the year was as follows:


Group
Group
Company
Company
2023
2022
2023
2022
No.
No.
No.
No.


Sales
57
78
44
59

Administration
100
67
96
55

Warehouse
76
-
76
-

233
145
216
114

Page 28

 
BRANDALLEY UK LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

8.


Directors' remuneration

2023
2022
£000
£000



Directors' emoluments
363
31

Company contributions to defined contribution pension schemes
26
2

389
33

The highest paid director received remuneration of £207,000 (2022: £16,000).


9.


Interest receivable and similar income

2023
2022
£000
£000


Other interest receivable
4
2


10.


Interest payable and similar charges

2023
2022
£000
£000


Other loan interest payable
71
-

Page 29

 
BRANDALLEY UK LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

11.


Taxation


2023
2022
£000
£000

Corporation tax


Current tax on profits/(loss) for the year
44
22

Deferred tax


Origination and reversal of timing differences
1,057
(263)


Taxation on profit/(loss) on ordinary activities
1,101
(241)

Factors affecting tax charge for the year

The tax assessed for the year is higher than (2022 - higher than) the standard rate of corporation tax in the UK of 23.5% (2022 - 19%). The differences are explained below:

2023
2022
£000
£000


Profit/(loss) on ordinary activities before tax
1,251
(2,004)


Profit/(loss) on ordinary activities multiplied by standard rate of corporation tax in the UK of 23.5% (2022 - 19%)
294
(381)

Effects of:


Expenses not deductible for tax purposes
738
6

Capital allowances for year in excess of depreciation
(60)
3

Intangible asset amortisation
131
168

Trade intangible fixed assets allowance on capitalised amounts
(104)
(300)

Intangible asset impairment losses
-
154

(Utilisation)/creation of tax losses
(955)
372

Deferred taxation
1,057
(263)

Total tax charge for the year
1,101
(241)


Factors that may affect future tax charges

The Company has £1,372,863 (2022: £5,132,715) of trading losses to carry forward and offset against future taxable trading profits.
The standard rate of Corporation Tax in the United Kingdom has increased to 25%, effective 1 April 2023. As a result, a blended rate of Corporation Tax at 23.5% has been applied on a pro-rata basis.

Page 30

 
BRANDALLEY UK LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

12.


Parent company profit for the year

The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements. The profit after tax of the parent Company for the year was £2,929,000 (2022 - £521,000).


13.


Intangible assets

Group





Licences
IT system
IPR
Goodwill
Total

£000
£000
£000
£000
£000



Cost


At 1 January 2023
13
6,790
-
2,373
9,176


Additions
-
4,272
5,920
-
10,192



At 31 December 2023

13
11,062
5,920
2,373
19,368



Amortisation


At 1 January 2023
11
5,043
-
1,041
6,095


Charge for the year on owned assets
1
486
-
221
708



At 31 December 2023

12
5,529
-
1,262
6,803



Net book value



At 31 December 2023
1
5,533
5,920
1,111
12,565



At 31 December 2022
2
1,747
-
1,332
3,081

In the year ended 31 December 2019, additions were made to goodwill of £1,539,000, relating to the purchase of Cocosa Lifestyle Limited, and £162,000 relating to the purchase of the trade and assets by BrandAlley France SAS.
In the year ended 31 December 2020, the Company acquired the Lombok trademarks and related assets from Angora Retail Limited for consideration of £30,000, including related legal costs. The assets were all internally generated intangible assets inseparable from goodwill. As such, these assets cannot be attributed with an individual and distinguishable fair value.
In the year ended 31 December 2023, the Company acquired the intellectual property, logistics operation and customer service division of the multi-platform online business, Internet Fusion Group (IFG). Further details of this acquisition are included in note 25.



Page 31

 
BRANDALLEY UK LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
 
           13.Intangible assets (continued)

Company




Licences
IT system
IPR
Goodwill
Total

£000
£000
£000
£000
£000



Cost


At 1 January 2023
13
6,437
-
2,211
8,661


Additions
-
3,347
5,920
-
9,267



At 31 December 2023

13
9,784
5,920
2,211
17,928



Amortisation


At 1 January 2023
11
5,018
-
879
5,908


Charge for the year
1
338
-
221
560



At 31 December 2023

12
5,356
-
1,100
6,468



Net book value



At 31 December 2023
1
4,428
5,920
1,111
11,460



At 31 December 2022
2
1,419
-
1,332
2,753

The IT System relates to the platform on which the online outlet store operates. Development costs are capitalised where the system is demonstrably improved.

Page 32

 
BRANDALLEY UK LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

14.


Tangible fixed assets

Group






IT systems
Fixtures and fittings
Computer equipment
Total

£000
£000
£000
£000



Cost 


At 1 January 2023
1,239
366
168
1,773


Additions
-
82
319
401



At 31 December 2023

1,239
448
487
2,174



Depreciation


At 1 January 2023
1,239
327
130
1,696


Charge for the year
-
28
20
48



At 31 December 2023

1,239
355
150
1,744



Net book value



At 31 December 2023
-
93
337
430



At 31 December 2022
-
39
38
77

Page 33

 
BRANDALLEY UK LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

           14.Tangible fixed assets (continued)


Company






IT Systems
Fixtures and fittings
Computer equipment
Total

£000
£000
£000
£000

Cost 


At 1 January 2023
1,239
344
161
1,744


Additions
-
82
319
401



At 31 December 2023

1,239
426
480
2,145



Depreciation


At 1 January 2023
1,239
305
127
1,671


Charge for the year on owned assets
-
28
19
47



At 31 December 2023

1,239
333
146
1,718



Net book value



At 31 December 2023
-
93
334
427



At 31 December 2022
-
39
34
73






Page 34

 
BRANDALLEY UK LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

15.


Fixed asset investments

Company





Investments in subsidiary companies
Unlisted investments
Total

£000
£000
£000



Cost or valuation


At 1 January 2023
1
-
1


Additions
-
538
538



At 31 December 2023
1
538
539





Subsidiary undertaking


The following was a subsidiary undertaking of the Company:

Name

Registered office

Class of shares

Holding

BrandAlley France SAS
7 rue Paul Louis
Courier 75007
Paris, France
Ordinary
100%

The aggregate of the share capital and reserves as at 31 December 2023 and the profit or loss for the year ended on that date for the subsidiary undertaking were as follows:

Name
Aggregate of share capital and reserves
£000
Profit/(Loss)
£000

BrandAlley France SAS

(7,070)
285


16.


Stocks

Group
Group
Company
Company
2023
2022
2023
2022
£000
£000
£000
£000

Goods for resale
13,844
11,094
13,844
10,170


Page 35

 
BRANDALLEY UK LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

17.


Debtors

Group
Group
Company
Company
2023
2022
2023
2022
£000
£000
£000
£000

Due within one year

Trade debtors
177
31
177
31

Amounts owed by group undertakings
-
-
7,847
6,573

Other debtors
129
185
67
105

Prepayments and accrued income
355
519
345
412

Deferred taxation
264
1,321
264
1,321

925
2,056
8,700
8,442


Amounts owed by group undertakings are unsecured, carry an interest rate of 2.87% (2022: 2.87%), have no fixed date of repayment and are repayable on demand.
Included within amounts owed by group undertakings at the year-end is £7,847,000 due from BrandAlley France SAS to BrandAlley UK. Whilst BrandAlley France has continued to generate losses in 2023, it completed its turnaround plan during the year including the launch of new IT systems, to create a channel for future growth within the international market, coupled with further cost savings to enable the business to move into a profitable position from 2024 onwards. On this basis, no provision against amounts due from BrandAlley France SAS to BrandAlley UK has been made in the Company’s 2023 accounts. The Company’s management continue to review the position on a regular basis.


18.


Cash and cash equivalents

Group
Group
Company
Company
2023
2022
2023
2022
£000
£000
£000
£000

Cash at bank and in hand
4,689
9,163
4,629
8,767



19.


Creditors: Amounts falling due within one year

Group
Group
Company
Company
2023
2022
2023
2022
£000
£000
£000
£000

Trade creditors
9,784
6,495
9,598
5,814

Corporation tax
44
22
44
22

Other taxation and social security
2,593
1,843
2,539
1,120

Other creditors
107
158
-
1

Accruals and deferred income
10,486
10,108
10,361
9,168

23,014
18,626
22,542
16,125


The Company has a trade finance facility with HSBC with a limit of £4,000,000 (2022: £2,000,000), used to pay suppliers, and repayable within 90 days from the shipping date. This facility is secured by way of fixed and floating charges over the whole of the undertaking and assets of the Company.

Page 36

 
BRANDALLEY UK LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

20.


Financial instruments

Group
Group
Company
Company
2023
2022
2023
2022
£000
£000
£000
£000

Financial assets

Financial assets measured at amortised cost
4,995
8,308
12,720
15,476


Financial liabilities

Other financial liabilities measured at amortised cost
20,377
14,937
19,959
14,983


Financial assets measured at amortised cost through the Statement of Comprehensive Income comprise trade debtors, other debtors and cash at bank and in hand. For the Company, they also include amounts owed by group undertakings.


Other financial liabilities measured at amortised cost through the Statement of Comprehensive Income comprise trade creditors, other creditors, accruals and deferred income.

Page 37

 
BRANDALLEY UK LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

21.


Deferred taxation


Group



2023


£000






At beginning of year
1,321


Charged to profit or loss
(1,057)



At end of year
264

Company


2023


£000






At beginning of year
1,321


Charged to profit or loss
(1,057)



At end of year
264

The deferred tax asset is made up as follows:

Group
Group
Company
Company
2023
2022
2023
2022
£000
£000
£000
£000

Accelerated capital allowances
(38)
36
(38)
36

Tax losses carried forward
302
1,285
302
1,285

264
1,321
264
1,321

Page 38

 
BRANDALLEY UK LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

22.


Provisions


Group



Returns Provision

£000





At 1 January 2023
433


Charged to profit or loss
47


Utilised in year
(42)



At 31 December 2023
438

Company


Returns Provision
Total

£000
£000





At 1 January 2023
394
394


Charged to profit or loss
44
44



At 31 December 2023
438
438


23.


Called up share capital

2023
2022
£000
£000
Allotted, called up and fully paid



666,898 (2022 - 666,898) A Ordinary shares of £0.001000- each
1
1
1,806,955 (2022 - 1,806,955 1,810,000) A Preferred shares of £0.000001 each
-
-
5,000 (2022 - 5,000 ) B Ordinary shares of £0.100000 each
-
-
270,286 (2022 - 270,286 ) Preferred shares of £0.001000 each
-
-

1

1

The holders of the A Ordinary shares have rights to dividends and rights to vote.
Holders of Preferred shares are subject to the payment of a preferred dividend. The Preferred shares have a right to vote and a right to a preferred dividend of an equal amount to 10% of the original Preferred share subscription price and are non-redeemable.
The A Preferred shares and B Ordinary shares have no voting rights and are non-redeemable.


Page 39

 
BRANDALLEY UK LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

24.


Reserves

Revaluation reserve

The profit and loss account is split between distributable and non-distributable reserves. Distributable reserves are accumulated profits generated from trading activities, that are funds available for distribution. Non-distributable reserves are made of unrealised gains and losses accumulated, that do not crystalise such funds that are available for distributions.
The revaluation reserve includes the fair value recognised in relation to the Trademark and Intellectual Property Rights of the subsidiary, BrandAlley France, which were transferred to BrandAlley UK in the year.


25.


Share-based payments

The Company has an Enterprise Management Incentive Share Option Scheme in place, under which three tranches have been granted. In all tranches the options lapse on termination of employment.
The first and third tranches of options have vesting conditions spread across 4 years from the date of grant, and vested options may be exercised at any point after vesting.
The terms of the second tranche of options are that shares vest in line with agreed performance targets over a specified vesting period, and that vested options may not be exercised before the occurrence of a specified exit event.

Weighted average exercise price (pence)
2023
Number
2023
Weighted average exercise price
(pence)
2022
Number
2022

Outstanding at the beginning of the year

40

25,375

51
 
30,375
 
Granted during the year


-

 
-
 
Forfeited during the year

(1)

(250)

(11)
 
(5,000)
 
Outstanding at the end of the year
39

25,125

40
 
25,375
 



2023
2022
£000
£000

Fair value at date of grant


Equity-settled schemes
9,929
10,054

Page 40

 
BRANDALLEY UK LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

26.
 

Business combinations

On 28 April 2023, the Company acquired certain assets and businesses of members of the Internet Fusion Group for consideration of £1,755,006, plus directly attributable acquisition costs of £1,242,610.
Business combinations are accounted for by applying the purchase method.
The cost of a business combination is the fair value of the consideration given, liabilities incurred or assumed and of equity instruments issued plus the costs directly attributable to the business combination.
Contingent consideration is initially recognised at estimated amount where the consideration is probably and can be measured reliably.  Where contingent consideration previously measured is adjusted, the amounts are recognised as an adjustment to the cost of the business combination.
On acquisition of a business, fair values are attributed to the identifiable assets, liabilities and contingent liabilities unless the fair value cannot be measured reliably, in which case the value is incorporated in goodwill.  Where the fair value of contingent liabilities cannot be reliably measured they are disclosed on the same basis as other contingent liabilities.

Acquisition of Internet Fusion Group

Recognised amounts of identifiable assets acquired and liabilities assumed

Book value
Fair value
£000
£000

Fixed Assets

Tangible
133
133

Intangible
1,622
1,622

Total Identifiable net assets
1,755
1,755


Consideration

£000


Cash
1,755

Cash outflow on acquisition

£000


Purchase consideration settled in cash, as above
1,755

Legal, consultancy and other acquisition costs
1,243

2,998


27.


Pension commitments

The Group operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Group in an independently administered fund. The pension cost charge represents contributions payable by the Group to the fund and amounted to £352,000 (2022: £453,000).

Page 41

 
BRANDALLEY UK LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

28.


Commitments under operating leases

At 31 December 2023 the Group and the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:


Group
Group
Company
Company
2023
2022
2023
2022
£000
£000
£000
£000

Not later than 1 year
219
202
215
161

Later than 1 year and not later than 5 years
54
219
54
215

273
421
269
376


29.


Transactions with directors

Included in Other Debtors at the year-end is a balance of £Nil (2022: £1,143) due from a former director and shareholder of the Company.


30.


Related party transactions

The Group has taken advantage of the exemptions in FRS 102, Section 33.1A in respect of disclosing transactions between wholly-owned members of a group.
Amounts due at the year-end are disclosed in detail in note 17.


31.


Controlling party

As at 31 December 2023 and 31 December 2022, M Feldmann, a director, held ultimate control over the Company by virtue of his shareholding.

Page 42