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Company registration number: 03108133







ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31 MARCH 2024


FEME LIMITED






































img22f8.png                        

 


FEME LIMITED
 


 
COMPANY INFORMATION


Director
F R Pak 




Company secretary
Y M Pak



Registered number
03108133



Registered office
6 Jubilee Way
South Wimbledon

London

SW19 3XD




Independent auditors
Menzies LLP
Chartered Accountants & Statutory Auditor

Ashcombe House

5 The Crescent

Leatherhead

Surrey

KT22 8DY




Bankers
HSBC Bank plc
5 Wimbledon Hill Road

Wimbledon

London

SW19 7NF





 


FEME LIMITED
 



CONTENTS



Page
Strategic report
1 - 2
Director's report
3 - 4
Independent auditors' report
5 - 8
Statement of income and retained earnings
9
Statement of financial position
10
Statement of cash flows
11
Analysis of net debt
12
Notes to the financial statements
13 - 22

 


FEME LIMITED
 


 
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2024

Principal activity and business review
 
The Company’s principal activities are the import and distribution of hair extensions, wigs, and beauty products.

Since the first anniversary of the Ukraine Russian War on February 2023 (Russian forces invaded Ukraine on 24 February 2022) the UK and EU retail sectors have been challenged with soaring inflation which led to the cost-of-living crisis.  Increasing and higher household costs for fuel and food has negatively affected consumer confidence/spending.  From a high of 11.1% in October 2022, the UK inflation rate is currently at 2% (as at May 2024, source:  ons.gov.uk).  And 2.5% in the Euro Area (as at May 2024, source Eurostat). 
In this challenging environment marked by a series of external pressures, the UK business reported a 5% decrease in sales in 2023-24 compared to the previous year.  The backdrop of a cost-of-living crisis, alongside a more cautious consumer when it comes to spending on non-essentials, has put a strain on retail distributor networks.

Feme has a number of long-standing vendor relationships, some of which span over 30 years.  With the strength and mutual confidence of these connections we were able to negotiate a more favourable price and terms with key suppliers.  Cost of sales reduced by 5% in the period ending March 2024 leading to an improvement of 14.5% in Gross Profit.  

Despite the improvement to Gross Profit the Company faced the challenge of a gradual but consistent increase to operating cost throughout the past 12 months.  This was mainly due to an increase in people costs, establishment costs, travel costs and bad debt.  Bad debt is a controllable cost which can be minimized through effective credit control.  Measures are being put in place to mitigate this cost from April 2024.  

Net operating profit for year ending March 2024 increased to £126K from £113K the previous year.  This was due to savings made on cost of sales.  In addition, interest income increased to £101K during this period from the previous year.  Interest income for year ending March 2023 was £10K. 

Principal risks and uncertainties
 
The process of risk management is addressed through a framework of policies, procedures, and internal controls.  All policies are subject to director and key management approval.  Compliance with regulation, legal and ethical standards continue to be of high priority for the Company.

The Company’s principal risks and uncertainties arise from rapid changes in fashion trends, increased competition in the market and trade challenges due to lingering post-Brexit export challenges, securing sufficient supply of raw materials, increase in freight charges due to the current macroeconomic climate and possible falling consumer demand.

Economic risk

The biggest risk that the company faces, particularly in the short term are global economic risks.  A combination of increase prices for stock and freight charges (which includes FX risk) along with a potential reduction in consumer demand due to the unstable economy.

The company is looking at different avenues to potentially mitigate against the FX risk it currently incurs.  This includes purchasing key currency when exchange rates turn in our favour by hedging FX risk by purchasing forward products at favourable exchange rates instead of SPOT rates.
Page 1

 


FEME LIMITED
 



STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024

Liquidity risk

This is also a key risk to the business given the large value of stock held within the balance sheet, which exposes the Company to the risk of slow moving / obsolete stock.  There is a provision in place and there has been an increase of the in inventory turnover days from 228 days in 2022-23 to 247 days in 2023-24.

To mitigate this risk, management actively monitor fashions and trends to ensure that stock is well controlled, with discounts and promotions used to effectively clear out lines at risk of becoming obsolete.  Further controls are in place for future stock purchases.

The directors also actively monitor aged receivables days which were at 48 days for the year ended 31 March 2023 to and had increased to 55 days during the year ended 31 March 2024.  The team are focused on reducing the aged receivable days and were also requiring customers to pay upfront, if their payments were slow. 

Competition risk

The director invests in maintaining positive relationships with key customers and suppliers and pays close attention to competitor’s pricing strategies to maintain market share.  By maintaining high sales volumes, the Company can take advantage of bulk discounts from suppliers which it is able to pass on to customers in order to remain competitive in the marketplace.
 
Analysis using key performance indicators ("KPI")
 
The director utilises several key performance indicators to monitor and manage the business.  They key performance indicators to the Company are Turnover, GP Margin, aged receivable days, and Inventory turnover days.  Analysis of these is included above.

Future developments

Management will continue to focus on sales mix and inventory control with the aim of continued improvement in sales whilst maintaining margins in the face of competitive pressures and the uncertain economic climate.

The director believes that continued uncertainty surrounding current economy is strongly influencing future decisions relating to the importing of goods as well as the foreign exchange movement.




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



F R Pak
Director

Date: 22 August 2024
Page 2

 


FEME LIMITED
 


 
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 MARCH 2024

The director presents his report and the financial statements for the year ended 31 March 2024.

Director's responsibilities statement

The director is responsible for preparing the Strategic Report, the Director's Report and the financial statements in accordance with applicable law and regulations.
 
Company law requires the director to prepare financial statements for each financial year. Under that law the director has elected to prepare the financial statements in accordance with 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 director must not approve the financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.

 In preparing these financial statements, the director is required to:


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

make judgements and accounting estimates that are reasonable and prudent;

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The director is responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable him to ensure that the financial statements comply with the Companies Act 2006He is also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The director is responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements and other information included in Director's Reports may differ from legislation in other jurisdictions.

Results and dividends

The profit for the year, after taxation, amounted to £136,161 (2023 -£101,672).

Charity Donations
During the year ended 31 December 2024, the Company made total donations of £10,295 (2023: £1,890) to various registered charities.

Director

The director who served during the year was:

F R Pak 

Matters covered in the Strategic Report

The Company has chosen in accordance with Section 414C(11) of the Companies Act 2006 (Strategic Report and Directors' Report) Regulations 2013 to set out within the Company's Strategic Report the Company's Strategic Report Information Required by Schedule 7 of the Large and Medium Sized Companies and Groups (Accounts and Reports) Regulation 2008. This includes information that would have been included in the business review and details of the principal risks and uncertainties.

Page 3

 


FEME LIMITED
 


 
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024

Disclosure of information to auditors

The director at the time when this Director's Report is approved has confirmed that:
 
so far as he is aware, there is no relevant audit information of which the Company's auditors are unaware, and

he has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

Auditors

Under section 487(2) of the Companies Act 2006Menzies LLP will be deemed to have been reappointed as auditors 28 days after these financial statements were sent to members or 28 days after the latest date prescribed for filing the accounts with the registrar, whichever is earlier.

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





F R Pak
Director

Date: 22 August 2024
Page 4

 


FEME LIMITED
 

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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF FEME LIMITED

Opinion


We have audited the financial statements of Feme Limited (the 'Company') for the year ended 31 March 2024, which comprise the Statement of Income and Retained Earnings, the Statement of Financial Position, the Statement of Cash Flows 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 Company's affairs as at 31 March 2024 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.


Basis for opinion


We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the 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 director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.


Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.


Our responsibilities and the responsibilities of the director with respect to going concern are described in the relevant sections of this report.


Other information


The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' Report thereon. The director is 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.


Page 5

 


FEME LIMITED


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

Opinion on other matters prescribed by the Companies Act 2006
 

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


the information given in the Strategic Report and the Director's Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the Strategic Report and the Director's 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 Director's 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 director's remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.


Responsibilities of directors
 

As explained more fully in the Director's Responsibilities Statement set out on page 3, the director is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the director determines 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 director is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the director either intends to liquidate the Company or to cease operations, or have no realistic alternative but to do so.


Page 6

 


FEME LIMITED


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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF FEME 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 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:

The Company is subject to laws and regulations that directly affect the financial statements including financial reporting legislation. We determined that the following laws and regulations that were most significant included:

The Companies Act 2006;
Financial Reporting Standard 102;
UK employment legislation;
UK health and safety legislation; and
General Data Protection Regulations

We assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.

We understood how the Company is complying with those legal and regulatory frameworks by, making inquiries to management and those responsible for legal and compliance procedures. We corroborated our inquiries through our review of relevant documentation.

The engagement partner assessed whether the engagement team collectively had the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations. The assessment did not identify any issues in this area.

We assessed the susceptibility of the Company financial statements to material misstatement, including how fraud might occur. Audit procedures performed by the engagement team included:

Identifying and assessing the design effectiveness of controls management has in place to prevent and detect fraud;
Understanding how those charged with governance considered and addressed the potential for override of controls or other inappropriate influence over the financial reporting process;
Challenging assumptions and judgments made by management in its significant accounting estimates; and
Identifying and testing journal entries, in particular any journal entries posted with unusual account combinations.

As a result of the above procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following areas:

The application of inappropriate judgements or estimation to manipulate the Company's financial position;
Posting of unusual journals and complex transactions; and
The use of management override of controls to manipulate results, or to cause the Company to enter into transactions not in its best interests;
The risk that inventories may be susceptible to misappropriation by employees; and
Management's use of judgement and estimation in determining the value of inventories at the year end, in order to manipulate the reported results.




Page 7

 


FEME LIMITED


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

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.


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.


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.





Caroline Milton FCA (Senior Statutory Auditor)
for and on behalf of
Menzies LLP
Chartered Accountants
Statutory Auditor
Ashcombe House
5 The Crescent
Leatherhead
Surrey
KT22 8DY

22 August 2024
Page 8

 


FEME LIMITED
 


 
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 MARCH 2024

2024
2023
Note
£
£

  

Turnover
 4 
16,884,018
17,799,513

Cost of sales
  
(13,421,716)
(14,776,464)

Gross profit
  
3,462,302
3,023,049

Administrative expenses
  
(3,519,709)
(3,087,724)

Other operating income
 5 
183,449
177,252

Operating profit
 6 
126,042
112,577

Interest receivable and similar income
  
101,432
10,198

Profit before tax
  
227,474
122,775

Tax on profit
 10 
(91,313)
(21,103)

Profit after tax
  
136,161
101,672

  

  

Retained earnings at the beginning of the year
  
19,427,358
19,325,686

  
19,427,358
19,325,686

Profit for the year
  
136,161
101,672

Retained earnings at the end of the year
  
19,563,519
19,427,358
There were no recognised gains and losses for 2024 or 2023 other than those included in the statement of income and retained earnings.

The notes on pages 13 to 22 form part of these financial statements.

Page 9

 


FEME LIMITED
REGISTERED NUMBER:03108133



STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2024

2024
2023
Note
£
£

Fixed assets
  

Intangible assets
 11 
35,211
73,316

Tangible assets
 12 
6,525,615
6,624,220

  
6,560,826
6,697,536

Current assets
  

Stocks
 13 
9,874,085
9,270,100

Debtors
 14 
4,169,625
2,867,128

Cash at bank and in hand
  
3,135,808
1,934,114

  
17,179,518
14,071,342

Creditors: amounts falling due within one year
 15 
(4,007,053)
(1,188,889)

Net current assets
  
 
 
13,172,465
 
 
12,882,453

Total assets less current liabilities
  
19,733,291
19,579,989

Provisions for liabilities
  

Deferred tax
 16 
(168,772)
(151,631)

  
 
 
(168,772)
 
 
(151,631)

Net assets
  
19,564,519
19,428,358


Capital and reserves
  

Called up share capital 
 17 
1,000
1,000

Profit and loss account
 18 
19,563,519
19,427,358

  
19,564,519
19,428,358


The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 




F R Pak
Director

Date: 22 August 2024

The notes on pages 13 to 22 form part of these financial statements.

Page 10

 


FEME LIMITED
 



STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2024

2024
2023
£
£

Cash flows from operating activities

Profit for the financial year
136,161
101,672

Adjustments for:

Amortisation of intangible assets
41,711
38,782

Depreciation of tangible assets
129,034
121,395

Loss on disposal of tangible assets
32,338
(4,911)

Interest received
(101,432)
(10,198)

Taxation charge
91,313
30,603

(Increase)/decrease in stocks
(603,985)
1,387,345

(Increase)/decrease in debtors
(1,271,993)
805,935

Increase/(decrease) in creditors
2,751,597
(1,955,332)

Corporate tax paid
(38,109)
(50,243)

Net cash generated from operating activities

1,166,635
465,048


Cash flows from investing activities

Purchase of intangible fixed assets
(35,944)
(6,677)

Purchase of tangible fixed assets
(30,429)
(61,883)

Sale of tangible fixed assets
-
4,911

Interest received
101,432
10,198

Net cash from investing activities

35,059
(53,451)


Net increase in cash and cash equivalents
1,201,694
411,597

Cash and cash equivalents at beginning of year
1,934,114
1,522,517

Cash and cash equivalents at the end of year
3,135,808
1,934,114


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
3,135,808
1,934,114

3,135,808
1,934,114


The notes on pages 13 to 22 form part of these financial statements.

Page 11

 


FEME LIMITED
 



ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 MARCH 2024




At 1 April 2023
Cash flows
At 31 March 2024
£

£

£

Cash at bank and in hand

1,934,114

1,201,694

3,135,808


1,934,114
1,201,694
3,135,808

The notes on pages 13 to 22 form part of these financial statements.
Page 12

 


FEME LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

1.


General information

Feme Limited is a private company limited by shares incorporated in England within the United Kingdom. Details of the Company's registered office and principle place of business can be found on the Company Information page.

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 financial statements are presented in sterling which is the functional currency of the Company rounded to the nearest pound (£).

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

The following principal accounting policies have been applied:

 
2.2

Revenue recognition

Revenue from the sale of extensions, wigs and other beauty products is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, value added tax and other sales taxes. 

 
2.3

Intangible assets

Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

All intangible assets are 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.

 The estimated useful lives range as follows:

Software
-
5
years
Website development
-
5
years

 
2.4

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.

Page 13

 


FEME LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

2.Accounting policies (continued)


2.4
Tangible fixed assets (continued)

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.

The estimated useful lives range as follows:

Freehold property
-
50
years straight line
Short-term leasehold property
-
2
years straight line
Plant and machinery
-
4
years straight line
Motor vehicles
-
4
years straight line

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.

Land and buildings are stated at cost. Freehold land is not depreciated as it is considered to have an indefinite useful life. Freehold buildings are depreciated over their expected remaining useful lives, subject to a maximum of 50 years, on a straight-line basis. 

 
2.5

Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include labour and attributable overheads.

At each reporting date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.

 
2.6

Financial instruments

The Company only enters into basic financial instruments 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 non-puttable ordinary shares.

 
2.7

Operating leases: the Company as lessee

Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.

 
2.8

Pensions

Defined contribution pension plan

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

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of Financial Position. The assets of the plan are held separately from the Company in independently administered funds.

Page 14

 


FEME LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

2.Accounting policies (continued)

 
2.9

Interest income

Interest income is recognised in profit or loss using the effective interest method.

 
2.10

Provisions for liabilities

Provisions are recognised when an event has taken place that gives rise to a legal or constructive obligation, a transfer of economic benefits is probable and a reliable estimate can be made.
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
 
Increases in provisions are generally charged as an expense to profit or loss.

 
2.11

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company operates and generates income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the reporting date, except that:
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 except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.


3.


Judgements in applying accounting policies 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. 
Determining the provision for slow moving or obsolete stock is an area of significant judgement. This stock provision is calculated when stock is older than one year, taking into consideration the number of sales in the previous six months and the popularity of the line items remaining in stock at the year end.

Page 15

 


FEME LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

4.


Turnover

The whole of the turnover is attributable to the sale of extensions, wigs and other beauty products.

Analysis of turnover by country of destination:

2024
2023
£
£

United Kingdom
8,091,603
8,543,974

Rest of the World
8,792,415
9,255,539

16,884,018
17,799,513



5.


Other operating income

2024
2023
£
£

Other operating income
7,339
1,142

Net rents receivable
20,110
20,110

Sundry income
156,000
156,000

183,449
177,252



6.


Operating profit

The operating profit is stated after charging:

2024
2023
£
£

Depreciation of tangible fixed assets
129,035
117,532

Amortisation of intangible assets, including goodwill
41,711
38,782

Exchange differences
122,040
(109,571)

Operating lease rentals - land and buildings
211,565
209,966

Loss/(Gain) on disposal of assets
20,381
(4,911)


7.


Auditors' remuneration

During the year, the Company obtained the following services from the Company's auditors:


2024
2023
£
£

Fees payable to the Company's auditors for the audit of the Company's financial statements
37,000
37,250
Page 16

 


FEME LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

8.


Employees

Staff costs, including director's remuneration, were as follows:


2024
2023
£
£

Wages and salaries
1,568,271
1,457,908

Social security costs
159,734
148,218

Cost of defined contribution scheme
53,167
49,171

1,781,172
1,655,297


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


        2024
        2023
            No.
            No.







Number of administrative staff
45
45


9.


Director's remuneration

2024
2023
£
£

Director's emoluments
203,065
201,857

Directors pension costs - defined contribution scheme
10,153
10,093

213,218
211,950


During the year retirement benefits were accruing to the director (2023 -1) in respect of defined contribution pension schemes.

The highest paid director received remuneration of £203,065 (2023 -£201,857).

The value of the Company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £10,153 (2023 -£10,093).

Page 17

 


FEME LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

10.


Taxation


2024
2023
£
£

Corporation tax


Current tax on profits for the year
81,008
30,500

Adjustments in respect of previous periods
(6,836)
1,072


Total current tax
74,172
31,572

Deferred tax


Origination and reversal of timing differences
17,141
(10,469)

Total deferred tax
17,141
(10,469)


Taxation on profit on ordinary activities
91,313
21,103

Factors affecting tax charge for the year

The tax assessed for the year is lower than (2023 -lower than) the standard rate of corporation tax in the UK of 25% (2023 -19%). The differences are explained below:

2024
2023
£
£


Profit on ordinary activities before tax
227,474
122,775


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2023 -19%)
56,869
23,327

Effects of:


Expenses not deductible for tax purposes
1,513
473

Capital allowances for year in excess of depreciation
20,637
11,776

Adjustment in respect of prior periods
(6,836)
1,072

Remeasurement of deferred tax for changes in tax rates
-
1,604

Movement in deferred tax not recognised
-
(17,149)

Adjustments to brought forward values
19,130
-

Total tax charge for the year
91,313
21,103

Page 18

 


FEME LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

11.


Intangible assets




Software
Website development
Total

£
£
£



Cost


At 1 April 2023
226,326
11,957
238,283


Additions
35,944
-
35,944


Disposals
(83,663)
(11,957)
(95,620)



At 31 March 2024

178,607
-
178,607



Amortisation


At 1 April 2023
164,967
-
164,967


Charge for the year on owned assets
41,711
-
41,711


On disposals
(63,282)
-
(63,282)



At 31 March 2024

143,396
-
143,396



Net book value



At 31 March 2024
35,211
-
35,211



At 31 March 2023
61,359
11,957
73,316



Page 19

 


FEME LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

12.


Tangible fixed assets





Freehold property
Short-term leasehold property
Plant and machinery
Motor vehicles
Total

£
£
£
£
£



Cost


At 1 April 2023
7,467,187
6,253
1,215,099
111,610
8,800,149


Additions
-
-
30,430
-
30,430



At 31 March 2024

7,467,187
6,253
1,245,529
111,610
8,830,579



Depreciation


At 1 April 2023
949,484
6,253
1,151,065
69,127
2,175,929


Charge for the year on owned assets
82,548
-
34,901
11,586
129,035



At 31 March 2024

1,032,032
6,253
1,185,966
80,713
2,304,964



Net book value



At 31 March 2024
6,435,155
-
59,563
30,897
6,525,615



At 31 March 2023
6,517,703
-
64,034
42,483
6,624,220


Included within freehold property is land held at a value of £3,339,803 (2023: £3,339,803) which is not depreciated.


13.


Stocks

2024
2023
£
£

Finished goods and goods for resale
9,874,085
9,270,100

9,874,085
9,270,100


A loss of £331,523 (2023: £142,488) was recognised in cost of sales during the year due to movement of the provision for obsolete and slow-moving stock. The closing position of the provision for obsolete and slow-moving stock is £1,560,231 (2023: £1,891,754).  

Page 20

 


FEME LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

14.


Debtors


2024
2023
£
£



Trade debtors
2,563,029
2,297,812

Other debtors
532,974
108,409

Prepayments and accrued income
1,073,622
460,907

4,169,625
2,867,128



15.


Creditors: Amounts falling due within one year

2024
2023
£
£

Trade creditors
1,345,343
259,113

Corporation tax
66,563
30,500

Other taxation and social security
38,523
39,478

Other creditors
20,140
16,574

Accruals and deferred income
2,536,484
843,224

4,007,053
1,188,889



16.


Deferred taxation




2024


£






At beginning of year
(151,631)


Charged to profit or loss
(17,141)



At end of year
(168,772)

The provision for deferred taxation is made up as follows:

2024
2023
£
£


Accelerated capital allowances
(170,496)
(172,509)

Short term timing differences
1,724
20,878

(168,772)
(151,631)

Page 21

 


FEME LIMITED
 


 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

17.


Share capital

2024
2023
£
£
Authorised, allotted, called up and fully paid



700 (2023 -700) Ordinary "A" Shares shares of £1.00 each
700
700
300 (2023 -300) Ordinary "B" Shares shares of £1.00 each
300
300

1,000

1,000


Ordinary "A" Shares carry voting rights whereas Ordinary "B" Shares do not. In all other respects the shares rank equally.


18.


Reserves

Profit and loss account

This reserve records retained earnings and accumulated losses.


19.


Commitments under operating leases

At 31 March 2024 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

2024
2023
£
£


Not later than 1 year
180,825
199,073

Later than 1 year and not later than 5 years
-
180,825

180,825
379,898


20.


Related party transactions

During the year, the Company made sales of goods totalling £3,862,707 (2023: £4,723,678) to a related party by virtue of common control. During the year the Company also charged the related party for administrative expenses and other services totalling £176,760 (2023: £176,110). At the year end the amount owed from the related party to the Company was £609,689 (2023: £284,141). Sales to the related party are not made at arm's length and are made at a standard rate of 15%.
During the year, the Company sold goods totalling £76,806 (2023: £94,174) to another related party, an entity under common control. As at the balance sheet date, the amount owed from the related party to the Company was £76,523 (2023: £76,523).


21.


Contingent liabilities

HSBC Bank Plc holds a guarantee for £70,000 (2023: £70,000) in favour of HM Revenue & Customs. 

 
Page 22