Caseware UK (AP4) 2023.0.135 2023.0.135 2023-12-312023-12-31true6truetruetrueThe principle activity of the company is that of wholesalers and retailers of e-ciggarette products.2023-01-01false8 11368960 2023-01-01 2023-12-31 11368960 2022-01-01 2022-12-31 11368960 2023-12-31 11368960 2022-12-31 11368960 2022-01-01 11368960 c:IncreaseDecreaseDueToTransitionFromPreviousStandard 2022-01-01 11368960 c:IncreaseDecreaseDueToTransitionFromPreviousStandard 2022-12-31 11368960 c:CurrentFinancialInstruments c:WithinOneYear c:IncreaseDecreaseDueToTransitionFromPreviousStandard 2022-01-01 11368960 c:CurrentFinancialInstruments c:WithinOneYear c:IncreaseDecreaseDueToTransitionFromPreviousStandard 2022-12-31 11368960 c:Non-currentFinancialInstruments c:AfterOneYear c:IncreaseDecreaseDueToTransitionFromPreviousStandard 2022-01-01 11368960 c:Non-currentFinancialInstruments c:AfterOneYear c:IncreaseDecreaseDueToTransitionFromPreviousStandard 2022-12-31 11368960 c:IncreaseDecreaseDueToTransitionFromPreviousStandard 2022-01-01 2022-12-31 11368960 1 2023-01-01 2023-12-31 11368960 1 2022-01-01 2022-12-31 11368960 3 2023-01-01 2023-12-31 11368960 3 2022-01-01 2022-12-31 11368960 6 2023-01-01 2023-12-31 11368960 6 2022-01-01 2022-12-31 11368960 7 2023-01-01 2023-12-31 11368960 7 2022-01-01 2022-12-31 11368960 e:Director1 2023-01-01 2023-12-31 11368960 e:Director2 2023-01-01 2023-12-31 11368960 e:Director3 2023-01-01 2023-12-31 11368960 e:Director4 2023-01-01 2023-12-31 11368960 e:Director4 2023-12-31 11368960 e:RegisteredOffice 2023-01-01 2023-12-31 11368960 c:Buildings 2023-12-31 11368960 c:Buildings 2022-12-31 11368960 c:PlantMachinery 2023-01-01 2023-12-31 11368960 c:PlantMachinery 2023-12-31 11368960 c:PlantMachinery 2022-12-31 11368960 c:PlantMachinery c:OwnedOrFreeholdAssets 2023-01-01 2023-12-31 11368960 c:PlantMachinery c:LeasedAssetsHeldAsLessee 2023-01-01 2023-12-31 11368960 c:MotorVehicles 2023-01-01 2023-12-31 11368960 c:MotorVehicles 2023-12-31 11368960 c:MotorVehicles 2022-12-31 11368960 c:MotorVehicles c:OwnedOrFreeholdAssets 2023-01-01 2023-12-31 11368960 c:MotorVehicles c:LeasedAssetsHeldAsLessee 2023-01-01 2023-12-31 11368960 c:FurnitureFittings 2023-01-01 2023-12-31 11368960 c:FurnitureFittings 2023-12-31 11368960 c:FurnitureFittings 2022-12-31 11368960 c:FurnitureFittings c:OwnedOrFreeholdAssets 2023-01-01 2023-12-31 11368960 c:FurnitureFittings c:LeasedAssetsHeldAsLessee 2023-01-01 2023-12-31 11368960 c:OfficeEquipment 2023-01-01 2023-12-31 11368960 c:ComputerEquipment 2023-01-01 2023-12-31 11368960 c:ComputerEquipment 2023-12-31 11368960 c:ComputerEquipment 2022-12-31 11368960 c:ComputerEquipment c:OwnedOrFreeholdAssets 2023-01-01 2023-12-31 11368960 c:ComputerEquipment c:LeasedAssetsHeldAsLessee 2023-01-01 2023-12-31 11368960 c:OtherPropertyPlantEquipment 2023-01-01 2023-12-31 11368960 c:OtherPropertyPlantEquipment 2023-12-31 11368960 c:OtherPropertyPlantEquipment 2022-12-31 11368960 c:OtherPropertyPlantEquipment c:OwnedOrFreeholdAssets 2023-01-01 2023-12-31 11368960 c:OtherPropertyPlantEquipment c:LeasedAssetsHeldAsLessee 2023-01-01 2023-12-31 11368960 c:OwnedOrFreeholdAssets 2023-01-01 2023-12-31 11368960 c:LeasedAssetsHeldAsLessee 2023-01-01 2023-12-31 11368960 c:CurrentFinancialInstruments 2023-12-31 11368960 c:CurrentFinancialInstruments 2022-12-31 11368960 c:Non-currentFinancialInstruments 2023-12-31 11368960 c:Non-currentFinancialInstruments 2022-12-31 11368960 c:Non-currentFinancialInstruments 3 2023-12-31 11368960 c:Non-currentFinancialInstruments 3 2022-12-31 11368960 c:CurrentFinancialInstruments c:WithinOneYear 2023-12-31 11368960 c:CurrentFinancialInstruments c:WithinOneYear 2022-12-31 11368960 c:Non-currentFinancialInstruments c:AfterOneYear 2023-12-31 11368960 c:Non-currentFinancialInstruments c:AfterOneYear 2022-12-31 11368960 c:ReportableOperatingSegment1 2023-01-01 2023-12-31 11368960 c:ReportableOperatingSegment1 2022-01-01 2022-12-31 11368960 f:UnitedKingdom 2023-01-01 2023-12-31 11368960 f:UnitedKingdom 2022-01-01 2022-12-31 11368960 f:RestEuropeOutsideUK 2023-01-01 2023-12-31 11368960 f:RestEuropeOutsideUK 2022-01-01 2022-12-31 11368960 f:RestWorldOutsideUK 2023-01-01 2023-12-31 11368960 f:RestWorldOutsideUK 2022-01-01 2022-12-31 11368960 c:UKTax 2023-01-01 2023-12-31 11368960 c:UKTax 2022-01-01 2022-12-31 11368960 c:ShareCapital 2023-12-31 11368960 c:ShareCapital 2022-12-31 11368960 c:ShareCapital 2022-01-01 11368960 c:RetainedEarningsAccumulatedLosses 2023-01-01 2023-12-31 11368960 c:RetainedEarningsAccumulatedLosses 2023-12-31 11368960 c:RetainedEarningsAccumulatedLosses 2022-01-01 2022-12-31 11368960 c:RetainedEarningsAccumulatedLosses 2022-12-31 11368960 c:RetainedEarningsAccumulatedLosses 2022-01-01 11368960 c:FinancialAssetsDesignatedFairValueThroughProfitOrLoss 2023-12-31 11368960 c:FinancialAssetsDesignatedFairValueThroughProfitOrLoss 2022-12-31 11368960 c:FinancialAssetsAmortisedCost 2023-12-31 11368960 c:FinancialAssetsAmortisedCost 2022-12-31 11368960 c:FinancialLiabilitiesAmortisedCost 2023-12-31 11368960 c:FinancialLiabilitiesAmortisedCost 2022-12-31 11368960 c:AcceleratedTaxDepreciationDeferredTax 2023-12-31 11368960 c:AcceleratedTaxDepreciationDeferredTax 2022-12-31 11368960 c:RetirementBenefitObligationsDeferredTax 2023-12-31 11368960 c:RetirementBenefitObligationsDeferredTax 2022-12-31 11368960 e:OrdinaryShareClass1 2023-01-01 2023-12-31 11368960 e:OrdinaryShareClass1 2023-12-31 11368960 e:OrdinaryShareClass1 2022-12-31 11368960 e:FRS101 2023-01-01 2023-12-31 11368960 e:Audited 2023-01-01 2023-12-31 11368960 e:FullAccounts 2023-01-01 2023-12-31 11368960 e:PrivateLimitedCompanyLtd 2023-01-01 2023-12-31 11368960 c:Subsidiary1 2023-01-01 2023-12-31 11368960 c:Subsidiary1 1 2023-01-01 2023-12-31 11368960 c:Subsidiary2 2023-01-01 2023-12-31 11368960 c:Subsidiary2 1 2023-01-01 2023-12-31 11368960 c:Subsidiary3 2023-01-01 2023-12-31 11368960 c:Subsidiary3 1 2023-01-01 2023-12-31 11368960 c:Subsidiary4 2023-01-01 2023-12-31 11368960 c:Subsidiary4 1 2023-01-01 2023-12-31 11368960 c:Subsidiary5 2023-01-01 2023-12-31 11368960 c:Subsidiary5 1 2023-01-01 2023-12-31 11368960 c:FinancialInstrumentsFairValueThroughProfitOrLoss 2023-01-01 2023-12-31 11368960 c:FinancialLiabilitiesAmortisedCost 2023-01-01 2023-12-31 11368960 c:FinancialInstrumentsDesignatedFairValueThroughProfitOrLoss 2023-01-01 2023-12-31 11368960 c:OverTime 2023-01-01 2023-12-31 11368960 c:OverTime 2022-01-01 2022-12-31 11368960 2 2023-01-01 2023-12-31 11368960 6 2023-01-01 2023-12-31 11368960 c:CurrentFinancialInstruments 7 2023-12-31 11368960 c:CurrentFinancialInstruments 7 2022-12-31 11368960 c:Buildings c:Right-of-useAssets 2023-01-01 2023-12-31 11368960 c:Buildings c:Right-of-useAssets 2022-01-01 2022-12-31 11368960 c:Right-of-useAssets 2023-01-01 2023-12-31 11368960 c:Right-of-useAssets 2022-01-01 2022-12-31 11368960 c:WithinOneYear 2023-12-31 11368960 c:WithinOneYear 2022-12-31 11368960 c:BetweenOneFiveYears 2023-12-31 11368960 c:BetweenOneFiveYears 2022-12-31 11368960 g:PoundSterling 2023-01-01 2023-12-31 iso4217:GBP xbrli:shares xbrli:pure

Registered number: 11368960









AIRSCREAM UK LIMITED









ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

 
AIRSCREAM UK LIMITED
 
 
COMPANY INFORMATION


Directors
S G Moore 
W C Ong 
K S Yeoh 
T Chin (resigned 16 October 2023)




Registered number
11368960



Registered office
Ashville Park Short Way
Thornbury

Bristol

BS35 3UU




Trading Address
Ashville Park Short Way
Thornbury

Bristol

BS35 3UU






Independent auditors
Harris & Trotter LLP
Chartered Accountants and Statutory Auditors

101 New Cavendish Street

1st Floor South

London

W1W 6XH





 
AIRSCREAM UK LIMITED
 

CONTENTS



Page
Strategic Report
1 - 5
Directors' Report
6 - 8
Independent Auditors' Report
9 - 12
Statement of Comprehensive Income
13
Statement of Financial Position
14 - 15
Statement of Changes in Equity
16
Notes to the Financial Statements
17 - 39


 
AIRSCREAM UK LIMITED
 
 
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

Introduction
 
Founded in 2018 by Yeoh Kai Shen and Sam Ong, AIRSCREAM UK has quickly risen as a dynamic force in the vaping industry. With a vision to become a leading consumer-based company, AIRSCREAM strategically chose vape products as the cornerstone of its journey. This decision was driven by a commitment to innovation and a dedication to offering high-quality, user-friendly vaping solutions.
Central to AIRSCREAM's success is its talented team of passionate professionals, who are empowered to shape the company's future and drive its mission forward. This collaborative and forward-thinking approach has enabled AIRSCREAM to expand its footprint significantly.
As of the end of 2023, AIRSCREAM's flagship product line, "AirsPops," is distributed and resold in over 80 markets worldwide. The brand's exceptional performance is particularly notable in the African and Oceanic regions, where "AirsPops" ranks among the top three vaping brands.
Over the past five years, AIRSCREAM has garnered prestigious accolades, including two reddot Design Awards and one French Design Award, underscoring its commitment to excellence in design and product quality. These achievements highlight AIRSCREAM's dedication to creating products that not only meet consumer needs but also set new standards in the industry.

Business review
 
2023 has been a challenging year for AIRSCREAM Group, marked by significant obstacles that impeded our planned growth. Regulatory and tax changes in key markets have been particularly impactful, presenting hurdles that required substantial strategic adjustments.
One of the most significant setbacks occurred in Taiwan, where the government implemented a total ban on vape products. This regulatory change resulted in a loss of nearly USD 1 million in sales for AIRSCREAM, with no viable alternative to offset this substantial decrease.
In New Zealand, the introduction of new vape product legislation in October 2023 led to considerable market confusion. The unclear implementation details caused uncertainty among retailers regarding the types of products that would remain legal. Consequently, many took the opportunity to deplete existing stock while awaiting clearer guidance from authorities. This uncertainty disrupted our sales and market positioning in the region.
Despite these challenges, we achieved a 14% growth in South Africa compared to FY22. Maintaining our leadership position in this market required relentless effort to ensure our products remained competitive and affordable, especially in light of increased taxation on nicotine vape liquids. This involved margin adjustments across the entire supply chain to absorb the additional costs.
Moreover, delays in recruiting key team members also impacted our revenue growth in 2023. These delays hindered our ability to execute strategic initiatives and fully capitalize on market opportunities.
In summary, while 2023 posed significant challenges, AIRSCREAM Group remains committed to navigating these obstacles and leveraging our strengths to achieve long-term success.

Page 1

 
AIRSCREAM UK LIMITED
 

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

Principal risks and uncertainties
 
Industry Risks and Uncertainties for AIRSCREAM UK Limited
1. Introduction
AIRSCREAM UK Limited operates in a dynamic and complex global market, spanning multiple jurisdictions with unique regulatory, economic, and socio-political environments. Under such circumstances, it does not come risk-free for our business operations. This part outlines the primary industry risks and uncertainties we may face in the various markets we operate in, including economic fluctuations, regulatory changes, market competition, and geopolitical instability.
2. Regulatory Environment
2.1 Compliance and Regulatory Changes
In every market, AIRSCREAM must navigate a complex web of local, national, and international regulations. These regulations encompass product safety, marketing practices, environmental standards, and consumer protection laws. The regulatory landscape is continuously evolving, and failure to comply with new or existing regulations could result in significant penalties and reputational damage.
2.2 Country-Specific Regulatory Risks
• European Union (Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden): The EU has stringent regulations concerning product safety, consumer rights, and environmental impact. We must stay abreast of changes to the EU Tobacco Products Directive (TPD).
• United States: The US Food and Drug Administration (FDA) regulates tobacco products under the Family Smoking Prevention and Tobacco Control Act. The FDA's Premarket Tobacco Application (PMTA) process is critical for market entry and continued sales.
• Canada: Health Canada enforces the Tobacco and Vaping Products Act (TVPA), which regulates the manufacture, sale, labelling, and promotion of tobacco and vaping products.
• Asia (Indonesia, Japan, Korea, Malaysia, Philippines, Thailand, Vietnam, Hong Kong, Cambodia): Diverse regulatory frameworks require localized strategies for compliance. For instance, Japan regulates e-cigarettes containing nicotine as pharmaceuticals, while Indonesia and Malaysia have stringent advertising restrictions. 
• Middle East and North Africa (Egypt, Jordan, Libya, Morocco, North Africa): Countries in these regions often have restrictive import regulations and varying enforcement levels, making compliance challenging. For example, Egypt has strict regulations on tobacco product sales and imports, despite that, AIRSCREAM is the first and only brand that is officially approved by the government of Egypt for sales and imports of our products in the market. 
It is important to note that despite the risks mentioned above, our strategy is to exercise flexibility for the nicotine contents in our e-liquids to ensure relevant compliances are fully met under different market regulations or circumstances.




 
Page 2

 
AIRSCREAM UK LIMITED
 

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

3. Market Risks
3.1 Economic Fluctuations
Economic conditions can greatly influence consumer spending behaviour. In times of economic downturns, discretionary spending on products like e-cigarettes may decrease, affecting sales and profitability across the industry and various other sectors.
3.2 Currency Exchange Rates
Given AIRSCREAM’s global presence, currency exchange rate fluctuations can impact financial performance. We are able to manage these risks through effective hedging strategies and financial planning.
3.3 Geopolitical Risks
Geopolitical instability can disrupt supply chains, affect consumer confidence, and lead to sudden regulatory changes. Markets in regions such as the Middle East, North Africa, and Eastern Europe (e.g., Ukraine) are particularly vulnerable to such risks.
4. Competition and Market Dynamics
4.1 Intense Competition
The e-cigarette market is highly competitive, with numerous players ranging from large multinational corporations to small local manufacturers. Maintaining market share requires continuous innovation, competitive pricing, and effective marketing strategies.
4.2 Market Saturation
In mature markets like the USA, UK, and parts of the EU, market saturation presents a challenge. Growth in these markets depends on capturing market share from competitors, high investments required on education to consumers regarding the illicit trade and convincing traditional tobacco users to switch to e-cigarettes.
4.3 The Illicit Trade
Besides a competitive landscape, the industry is constantly battling against the illicit trade in different markets, which thrives among consumers on a global scale, for example in Southeast Asia, the US, UK, Australia and more. This issue is much harder to control or restrict in countries that do not exercise or enforce effective illicit trade monitoring. Please see examples below.
1. United States: The US has seen a substantial increase in the illegal import and sale of e-cigarettes, particularly flavoured disposable ones. Despite regulatory efforts by the FDA and other agencies, thousands of new products continue to enter the market from countries like China. The FDA has created a multi-agency task force to combat this issue, but the influx of illegal e-cigarettes remains a significant challenge (FDA) (Health News Florida).
2. United Kingdom: The UK also faces issues with illicit e-cigarettes, with reports indicating that a notable portion of the e-cigarette market consists of products that do not comply with UK regulations. The Trading Standards Institute has been actively involved in seizing non-compliant products and raising awareness about the dangers of unregulated e-cigarettes.
3. Australia: In Australia, the sale of nicotine-containing e-cigarettes is illegal without a prescription, yet there is a thriving black market for these products. The Australian Border Force and state health departments frequently intercept shipments of illegal e-cigarettes, but the problem persists due to high demand.

 
Page 3

 
AIRSCREAM UK LIMITED
 

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


4. Europe: Several European countries, including France and Germany, have reported issues with illegal e-cigarettes. The European Union's Tobacco Products Directive regulates the sale of e-cigarettes, but enforcement varies across member states, leading to a patchwork of compliance and enforcement efforts.
4.4 Emerging Markets
While emerging markets (e.g., Indonesia, Pakistan, Vietnam) offer growth potential, they also present unique challenges, including lower consumer purchasing power, limited market infrastructure, and higher operational risks.
5. Technological Risks
5.1 Technological Advancements
The e-cigarette industry is characterized by rapid technological advancements. AIRSCREAM’s investment in R&D aims to stay ahead of technological trends and consumer preferences.
5.2 Cybersecurity
As a company that likely relies on digital platforms for sales, marketing, and operations, cybersecurity risks are significant. Data breaches could lead to financial losses, legal repercussions, and reputational damage, which is why we invest in appropriate measures to combat such risks.
6. Environmental and Health Risks
6.1 Environmental Regulations
Environmental regulations concerning manufacturing processes, packaging, and disposal of e-cigarettes and related products are becoming stricter globally. Compliance requires significant investment in sustainable practices. For example, the EU's Waste Electrical and Electronic Equipment (WEEE) Directive.
6.2 Health Concerns
Public health debates about the safety of e-cigarettes continue to evolve. Negative perceptions and potential health risks associated with vaping could impact consumer demand and lead to stricter regulations. For instance, the World Health Organization (WHO), American Heart Association (AHA), American Lung Association (ALA) and more have raised concerns about the unknown health impacts of e-cigarettes.

Financial key performance indicators
 
In the fiscal year ending 2023, our company demonstrated robust financial health and consistent growth across key performance metrics. Revenue increased by 15.6% from £19.1 million to £22.1 million. This growth was attributed to the company’s ability to increase its market share in key markets.
The cash and bank balance of the company increased by 22%, from £5.8 million to £7.1 million. This increase aligns with the revenue growth of £2.9 million and reflects improved management in cash flow planning and fund utilization.
Operating profit decreased by 4.4%, from £5.4 million to £5.2 million. This slight decline was due to an increase in remote support team costs, as the group underwent extensive recruitment in 2023 to support business growth.

Page 4

 
AIRSCREAM UK LIMITED
 

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

Other key performance indicators
 
Significantly, in 2023, the company made strategic investments to penetrate new markets, opening sales routes and introducing our products to 11 new markets. This expansion underlines our commitment to growth and positions us for continued success in the future.


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



W C Ong
Director

Date: 18 September 2024

Page 5

 
AIRSCREAM 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 Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations.
 
Company law requires the directors to prepare financial statements for each financial 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 101 ‘Reduced Disclosure Framework’. 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 of the profit or loss of the Company for that period.

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


select suitable accounting policies and then apply them consistently;

make judgments and accounting estimates that are reasonable and prudent;

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

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and 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 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 £4,133,581 (2022 - £4,405,679).

Directors

The directors who served during the year were:

S G Moore 
W C Ong 
K S Yeoh 
T Chin (resigned 16 October 2023)

Page 6

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

Future developments

1. Introduction of INKLORDS:
AIRSCREAM will be launching a secondary vape device brand, "INKLORDS," to address gaps in our current product portfolio. By the end of 2026, INKLORDS is projected to contribute 20% of all vape sales, providing a significant boost to our market presence and product diversity.
2. Launch of M13 Nicotine Pouches:
The upcoming launch of nicotine pouches under the brand M13 presents a significant growth opportunity as a new Nicotine Replacement Therapy (NRT) product. We aim to secure these products at optimal price levels to maximize their market potential. M13 will enable us to penetrate the saturated UK vape market and address restrictions in the US market due to PMTA requirements. By the end of 2027, M13 is expected to contribute at least 30% of our total revenue.
3. Opening of Czech Warehouse and Liquid Factory:
In Q4 2024, AIRSCREAM will open a new warehouse and liquid factory in the Czech Republic. This facility will enhance our speed to market in the EU, addressing current growth limitations. Additionally, it will offer new revenue sources through OEM production for other brands. We estimate incremental sales contributions of USD 2 million in 2025, USD 4 million in 2026, and USD 8 million by 2027 from the Czech facilities.
4. Egypt Market Entry:
We have secured the first legal permit to import our vape products into Egypt in early 2024. This milestone will allow AIRSCREAM to engage key accounts in the market, tapping into the estimated USD 0.4 billion illicit vape market in Egypt.
5. Strategic Investments in F&B Startups:
As part of our strategic plan to become a leading lifestyle consumer company, AIRSCREAM will fund two F&B startups based in Malaysia and China. These investments will provide additional revenue streams and diversify our business operations.
These strategic initiatives are designed to propel AIRSCREAM into new markets and product categories, ensuring sustained growth and innovation in the coming years.

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'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's auditors are aware of that information.

Page 7

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

Post balance sheet events

Acquisition of Shenzhen AIRSCREAM Tech Co., Ltd
Shenzhen AIRSCREAM Tech Co., Ltd. has been integrated into the group's structure. The group restructuring exercise, which began in Q2 2022, was completed on June 26, 2024, with Shenzhen AIRSCREAM now being transferred to and reported under AIRSCREAM UK Limited. Shenzhen AIRSCREAM is 100% owned by AIRSCREAM UK Limited.

Auditors

The auditorsHarris & Trotter LLPwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

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





W C Ong
Director

Date: 18 September 2024

Page 8

 
AIRSCREAM UK LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF AIRSCREAM UK LIMITED
 

Opinion


We have audited the financial statements of AIRSCREAM UK LIMITED (the 'Company') for the year ended 31 December 2023, which comprise the Statement of Comprehensive Income, the Statement of Financial Position, the 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 101 ‘Reduced Disclosure Framework’ (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 December 2023 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 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 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 9

 
AIRSCREAM UK LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF AIRSCREAM 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 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 Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.


Matters on which we are required to report by exception
 

In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors' Report.


We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:


adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.


Responsibilities of directors
 

As explained more fully in the Directors' Responsibilities Statement set out on page 6, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.


In preparing the financial statements, the directors are responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.


Page 10

 
AIRSCREAM UK LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF AIRSCREAM 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 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 objectives of our audit are to identify and assess the risks of material misstatement of the financial statements due to fraud or error; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud or error; and to respond appropriately to those risks. Owing to the inherent limitations of an audit, there is an unavoidable risk that material misstatements in the financial statements may not be detected, even though the audit is properly planned and performed in accordance with the ISAs (UK). 
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and noncompliance with laws and regulations, our procedures included the following:
• We obtained an understanding of the legal and regulatory frameworks applicable to the Company and the industry in which it operates. We determined that the following laws and regulations were most significant: FRS 101 and the Companies Act 2006.
• We obtained an understanding of how the Company is complying with those legal and regulatory frameworks by making enquiries of management.
• We challenged assumptions and judgments made by management in its significant accounting estimates; 
We did not identify any key audit matters relating to irregularities, including fraud.


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.


Other matters 
 

As this is the first time the Company has required an audit, the corresponding figures and comparative financial statements are unaudited. 


Page 11

 
AIRSCREAM UK LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF AIRSCREAM 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.





Stephen Haffner (Senior Statutory Auditor)
  
for and on behalf of
Harris & Trotter LLP
 
Chartered Accountants and Statutory Auditors
  
101 New Cavendish Street
1st Floor South
London
W1W 6XH

18 September 2024
Page 12

 
AIRSCREAM UK LIMITED
 
 
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023

2023
2022
Note
£
£

  

Turnover
 4 
22,125,957
19,138,430

Cost of sales
  
(13,209,941)
(13,263,077)

Gross profit
  
8,916,016
5,875,353

Administrative expenses
  
(3,830,596)
(2,168,940)

Other operating income
 5 
142,997
1,761,924

Operating profit
 6 
5,228,417
5,468,337

Interest receivable and similar income
 9 
174,441
1,452

Interest payable and similar expenses
 10 
(11,189)
(4,126)

Profit before tax
  
5,391,669
5,465,663

Tax on profit
 11 
(1,258,088)
(1,059,984)

Profit for the financial year
  
4,133,581
4,405,679

Other comprehensive income:
  

Total comprehensive income for the year
  
4,133,581
4,405,679

The notes on pages 17 to 39 form part of these financial statements.

Page 13

 
AIRSCREAM UK LIMITED
REGISTERED NUMBER: 11368960

STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023

2023
2022
Note
£
£

  

Fixed assets
  

Tangible assets
 13 
378,075
365,919

Investments
 14 
1,051,878
565,294

  
1,429,953
931,213

Other non current assets
  

Debtors due after more than 1 year
 16 
537,147
250,841

  
537,147
250,841

Current assets
  

Stocks
 15 
260,804
231,246

Debtors due within 1 year
 16 
2,695,646
2,153,772

Cash at bank and in hand
 17 
7,130,955
5,836,622

  
10,087,405
8,221,640

Current liabilities
  

Creditors: amounts falling due within one year
 18 
(4,086,952)
(4,264,181)

Net current assets
  
 
 
6,000,453
 
 
3,957,459

Total assets less current liabilities
  
7,967,553
5,139,513

  

Creditors: amounts falling due after more than one year
 19 
(165,095)
(171,649)

  
7,802,458
4,967,864

Provisions for liabilities
  

Deferred tax
  
(36,834)
(36,255)

  
 
 
(36,834)
 
 
(36,255)

  

Net assets
  
7,765,624
4,931,609


Capital and reserves
  

Called up share capital 
 23 
100,000
100,000

Profit and loss account
 24 
7,665,624
4,831,609

  
7,765,624
4,931,609


Page 14

 
AIRSCREAM UK LIMITED
REGISTERED NUMBER: 11368960
    
STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 DECEMBER 2023

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




W C Ong
K S Yeoh
Director
Director


Date: 18 September 2024
Date:18 September 2024

The notes on pages 17 to 39 form part of these financial statements.

Page 15

 
AIRSCREAM UK LIMITED
 

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


Called up share capital
Profit and loss account
Total equity

£
£
£


At 1 January 2022
100,000
504,561
604,561



Profit for the year
-
4,405,679
4,405,679

Dividends: Equity capital
-
(78,631)
(78,631)



At 1 January 2023
100,000
4,831,609
4,931,609



Profit for the year
-
4,133,581
4,133,581

Dividends: Equity capital
-
(1,299,566)
(1,299,566)


At 31 December 2023
100,000
7,665,624
7,765,624


The notes on pages 17 to 39 form part of these financial statements.

Page 16

 
AIRSCREAM UK LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1.


General information

AIRSCREAM UK Limited is a private company limited by shares incorporated in England and Wales. The registered office is Ashville Park, Short Way, Thornbury, Bristol, BS35 3UU. 

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 101 'Reduced Disclosure Framework'  and the Companies Act 2006.

Information on the impact of first-time adoption of FRS 101 is given in note 26.

The preparation of financial statements in compliance with FRS 101 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).

First time application of FRS 100 and FRS 101

The following principal accounting policies have been applied:

 
2.2

Financial Reporting Standard 101 - reduced disclosure exemptions

The Company has taken advantage of the following disclosure exemptions under FRS 101:
the requirements of IFRS 7 Financial Instruments: Disclosures
the requirements of IAS 7 Statement of Cash Flows
the requirements in IAS 24 Related Party Disclosures to disclose related party transactions entered into between two or more members of a group, provided that any subsidiary which is a party to the transaction is wholly owned by such a member

This information is included in the consolidated financial statements of AIRSCREAM 313 Holdings Limited as at 31 December 2023 and these financial statements may be obtained from Companies House.

 
2.3

Exemption from preparing consolidated financial statements

The Company is a parent company that is also a subsidiary included in the consolidated financial statements of a larger group by a parent undertaking established under the law of any part of the United Kingdom and is therefore exempt from the requirement to prepare consolidated financial statements under section 400 of the Companies Act 2006.

 
2.4

Going concern

The company meets its day-to-day working capital requirements through its cash reserves. The current economic conditions continue to create uncertainty and the company’s forecasts and projections, taking account of reasonably possible changes in trading performance, show that the company should be able to operate within the level of its current cash reserves. After making enquiries, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. The company therefore continues to adopt the going concern basis in preparing its financial statements.

Page 17

 
AIRSCREAM UK LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.5

Impact of new international reporting standards, amendments and interpretations

There are no amendments to accounting standards, or IFRIC interpretations that are effective for the year ended 31 December 2023 that have a material impact on the company’s financial statements.

 
2.6

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is 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 profit or loss 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 Statement of Comprehensive Income within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.

Page 18

 
AIRSCREAM UK LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.7

Revenue recognition

Revenue 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, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

The Company does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, the Company does not adjust any of the transaction prices for the time value of money.

Sale of goods

Revenue from the sale of goods is recognised on the satisfaction of performance obligations, such as the transfer of a promised good, identified in the contract between the Company and the customer.

A receivable is recognised when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.

Rendering of services

Revenue from providing services is recognised in the accounting period in which the services are rendered.

For fixed-price contracts, revenue is recognised based on the actual service provided to the end of the reporting period as a proportion of the total services to be provided because the customer receives and uses the benefits simultaneously.

 
2.8

Leases

The Company as a lessee

The Company assesses whether a contract is or contains a lease, at inception of a contract. The Company recognises a right-of-use asset and a corresponding lease liability with respect to all lease agreements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets. For these leases, the Company recognises the lease payments as an operating expense on a straight-line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Company uses its incremental borrowing rate. [Provide an explanation how the incremental borrowing rate is determined].

Lease payments included in the measurement of the lease liability comprise:

fixed lease payments (including in-substance fixed payments), less any lease incentives;


The lease liability is included in 'Creditors' on the Statement of Financial Position.
Page 19

 
AIRSCREAM UK LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)


2.8
Leases (continued)


The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made.

The Company remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:

the lease term has changed or there is a change in the assessment of exercise of a purchase option, in which case the lease liability is remeasured by discounting the revised discount rate.

The Company did not make any such adjustments during the periods presented.

The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses.

Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset. If a lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the Company expects to exercise a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation starts at the commencement date of the lease.

The right-of-use assets are included in the 'Intangible Assets', 'Tangible Fixed Assets' and 'Investment Property' lines, as applicable, in the Statement of Financial Position.

The Company applies IAS 36 to determine whether a right-of-use asset is impaired and accounts for any identified impairment loss as described in note 2.14.

As a practical expedient, IFRS 16 permits a lessee not to separate non-lease components, and instead account for any lease and associated non-lease components as a single arrangement. The Company has used this practical expedient.

 
2.9

Research and development

In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research shall be recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured. The capitalised development costs are subsequently amortised on a straight-line basis over their useful economic lives, which range from 3 to 6 years.
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.

 
2.10

Interest income

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

Page 20

 
AIRSCREAM UK LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.11

Finance costs

Finance costs are charged to profit or loss 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.

 
2.12

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.

 
2.13

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.

Page 21

 
AIRSCREAM UK LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.14

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.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the company and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred.

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.

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:

Plant and machinery
-
33%
Motor vehicles
-
20%
Fixtures and fittings
-
33%
Plant and machinery - moulds and prototypes
-
50%
Computer equipment
-
33%
Right of use assets
-
20%

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.

 
2.15

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

 
2.16

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.

Page 22

 
AIRSCREAM UK LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.17

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

 
2.18

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. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

 
2.19

Creditors

Creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers.

Creditors are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.

 
2.20

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.

Page 23

 
AIRSCREAM UK LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.21

Financial instruments


The Company recognises financial instruments when it becomes a party to the contractual arrangements of the instrument. Financial instruments are de-recognised when they are discharged or when the contractual terms expire. The Company's accounting policies in respect of financial instruments transactions are explained below:

Financial assets and financial liabilities are initially measured at fair value. 

Financial assets

All recognised financial assets are subsequently measured in their entirety at either fair value or amortised cost, depending on the classification of the financial assets.

Fair value through profit or loss

All of the Company's financial assets are subsequently measured at fair value at the end of each reporting period, with any fair value gains or losses being recognised in profit or loss to the extent they are not part of a designated hedging relationship. The net gain or loss recognised in profit or loss includes any dividend or interest earned on the financial asset. 

Impairment of financial assets

The Company always recognises lifetime ECL for trade receivables and amounts due on contracts with customers. The expected credit losses on these financial assets are estimated based on the Company's historical credit loss experience, adjusted for factors that are specific to the debtors, general economic conditions and an assessment of both the current as well as the forecast direction of conditions at the reporting date, including time value of money where appropriate. Lifetime ECL represents the expected credit losses that will result from all possible default events over the expected life of a financial instrument.

Financial liabilities

Fair value through profit or loss

Financial liabilities are classified as at fair value through profit or loss, when the financial liability is held for trading, or is designated as at fair value through profit or loss. This designation may be made if such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise, or the financial liability forms part of a group of financial instruments which is managed and its performance is evaluated on a fair value basis, or the financial liability forms part of a contract containing one or more embedded derivatives, and IFRS 9 permits the entire combined contract to be designated as at fair value through profit or loss. Any gains or losses arising on changes in fair value are recognised in profit or loss to the extent that they are not part of a designated hedging relationship.

At amortised cost

Financial liabilities which are neither contingent consideration of an acquirer in a business combination, held for trading, nor designated as at fair value through profit or loss are subsequently measured at amortised cost using the effective interest method. This is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the
Page 24

 
AIRSCREAM UK LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)


2.21
Financial instruments (continued)

expected life of the financial liability, or where appropriate a shorter period, to the amortised cost of a financial liability.

 
2.22

Dividends

Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.


3.


Judgments in applying accounting policies and key sources of estimation uncertainty

When preparing the Company’s financial statements, management makes a number of judgements, estimates and assumptions about the recognition and measurement of assets, liabilities, revenue and expenses.
The following are the judgements made by management in applying the accounting policies of the Company that have the most significant effect on these financial statements:
Recognition of deferred tax assets
The extent to which deferred tax assets can be recognised is based on an assessment of the probability that future taxable income will be available against which the deductible temporary differences and tax loss carry-forwards can be utilised. In addition, significant judgement is required in assessing the impact of any legal or economic limits or uncertainties in various tax jurisdictions. 
Useful lives and residual values of depreciable assets
Management reviews its estimate of the useful lives and residual values of depreciable assets at each reporting date, based on the expected utility of the assets. Uncertainties in these estimates relate to technological obsolescence that may change the utility of certain software and IT equipment and environmental regulations that can make polluting assets to be depreciated more quickly.
Inventories
Management estimates the net realisable values of inventories, taking into account the most reliable evidence available at each reporting date. The future realisation of these inventories may be effected by future technology or other market-driven changes that may reduce future selling prices.
Leases – determination of the appropriate discount rate to measure lease liabilities
The Company enters into leases with third-party landlords and as a consequence the rate implicit in the lease is not readily determinable. The Company uses its incremental borrowing rate as the discount rate for determining its lease liabilities at the lease commencement date. The incremental borrowing rate is the rate of interest that the Company would have to pay to borrow over similar terms which requires estimations when no observable rates are available. 

Page 25

 
AIRSCREAM UK LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

4.


Turnover

An analysis of turnover by class of business is as follows:


2023
2022
£
£

Sale of vapes
22,125,957
19,138,430

22,125,957
19,138,430


Analysis of turnover by country of destination:

2023
2022
£
£

United Kingdom
160,267
182,497

Rest of Europe
10,835
-

Rest of the world
21,954,855
18,955,933

22,125,957
19,138,430


Timing of revenue recognition:

2023
2022
£
£


Goods and services transferred at a point in time
22,125,957
19,138,430

22,125,957
19,138,430

The amount of revenue recognised in 2023 from performance obligations satisfied (or partially satisfied) in previous periods is £NIL


5.


Other operating income

2023
2022
£
£

Intercompany management charges
142,997
1,761,924

142,997
1,761,924


Page 26

 
AIRSCREAM UK LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

6.


Operating profit

The operating profit is stated after charging:

2023
2022
£
£

Staff salaries
175,021
103,527

Staff national insurance
12,130
6,205

Defined contribution pension cost
2,785
1,396

Management fees
1,519,209
399,370

Advertising and promotion
725,254
555,074

Depreciation of tangible fixed assets
80,972
20,803

Depreciation on right of use assets
55,997
41,284

Research & development expenses
3,226
92,861

Exchange differences
254,783
(39,085)

2,829,377
1,181,435


7.


Auditors' remuneration

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


2023
2022
£
£

Fees payable to the Company's auditors for the audit of the Company's financial statements
78,075
-

The Company has taken advantage of the exemption not to disclose amounts paid for non-audit services as these are disclosed in the consolidated accounts of the parent Company.

Page 27

 
AIRSCREAM UK LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

8.


Employees

Staff costs were as follows:


2023
2022
£
£

Wages and salaries
175,021
103,527

Social security costs
12,130
6,205

Cost of defined contribution scheme
2,785
1,396

189,936
111,128


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


        2023
        2022
            No.
            No.







Directors
4
4



Employees
4
2

8
6


9.


Interest receivable

2023
2022
£
£


Interest receivable from group companies
5,043
1,452

Other interest receivable
169,398
-

174,441
1,452


10.


Interest payable and similar expenses

2023
2022
£
£


Interest on lease liabilities
11,189
4,126

11,189
4,126

Page 28

 
AIRSCREAM UK LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

11.


Taxation


2023
2022
£
£

Corporation tax


Current tax on profits for the year
1,257,509
1,023,729


1,257,509
1,023,729

Total current tax
1,257,509
1,023,729

Deferred tax


Origination and reversal of timing differences
579
36,255

Total deferred tax
579
36,255


Tax on profit
1,258,088
1,059,984

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 25% (2022 - 19%). The differences are explained below:

2023
2022
£
£


Profit on ordinary activities before tax
5,391,669
5,465,663


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2022 - 19%)
1,347,917
1,038,476

Effects of:


Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
-
1,382

Capital allowances for year in excess of depreciation
(11,310)
(16,046)

Short-term timing difference leading to an increase (decrease) in taxation
579
36,255

Prior period adjustment for first-time adoption of IFRS 16
-
(83)

Apportioned increase in corporation tax rate
(79,098)
-

Total tax charge for the year
1,258,088
1,059,984

Factors that may affect future tax charges

There were no factors that may affect future tax charges.

Page 29

 
AIRSCREAM UK LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

12.


Dividends

2023
2022
£
£


Dividends paid
1,299,566
78,631

1,299,566
78,631

Page 30

 
AIRSCREAM UK LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

13.


Tangible fixed assets





Plant and machinery
Motor vehicles
Fixtures and fittings
Computer equipment
Right of Use assets
Total

£
£
£
£
£
£



Cost or valuation


At 1 January 2023
96,905
70,240
15,537
19,530
341,041
543,253


Additions
82,789
-
44,596
-
56,277
183,662


Disposals
(36,155)
-
(12,651)
(15,516)
-
(64,322)



At 31 December 2023

143,539
70,240
47,482
4,014
397,318
662,593



Depreciation


At 1 January 2023
41,255
-
7,246
8,692
120,141
177,334


Charge for the year
52,205
14,078
12,630
2,059
-
80,972


Charge for the year on right-of-use assets
-
-
-
-
55,997
55,997


Disposals
(17,189)
-
(6,521)
(7,246)
-
(30,956)


Adjustment in respect to prior period
-
1,171
-
-
-
1,171



At 31 December 2023

76,271
15,249
13,355
3,505
176,138
284,518



Net book value



At 31 December 2023
67,268
54,991
34,127
509
221,180
378,075



At 31 December 2022
55,650
70,240
8,291
10,838
220,900
365,919


The net book value of owned and leased assets included as "Tangible fixed assets" in the Statement of Financial Position is as follows:

2023
2022
£
£


Tangible fixed assets owned
156,895
145,019

Right-of-use tangible fixed assets
221,180
220,900

378,075
365,919

Page 31

 
AIRSCREAM UK LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

           13.Tangible fixed assets (continued)

Information about right-of-use assets is summarised below:

Net book value

2023
2022
£
£

Leasehold buildings
221,180
220,900

221,180
220,900

Depreciation charge for the year ended

2023
2022
£
£

Leasehold buildings
55,997
1,856

55,997
1,856


Additions to right-of-use assets

2023
2022
£
£

Additions to right-of-use assets
56,277
222,756


14.


Fixed asset investments





Investments in subsidiary companies

£



Cost or valuation


At 1 January 2023
565,294


Additions
486,584



At 31 December 2023
1,051,878




Page 32

 
AIRSCREAM UK LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

Subsidiary undertakings


The following were subsidiary undertakings of the Company:

Name

Class of shares

Holding

AIRSCREAM Australia Pty Ltd
Ordinary
100%
313-NC Limited*
Ordinary
50%
PT AIRSCREAM Three One Three Indonesia
Ordinary
90%
AIRSCREAM 313 CZ s.r.o
Ordinary
100%
AIRSCREAM NZ Limited**
Ordinary
65%

* The Company holds 50% share in 313-NC Limited and exercises control over 313-NC Limited by way of majority in the management committee.
** For AIRSCREAM NZ Limited, the effective shareholding have been disclosed as 313-NC Limited (a 50% subsidiary of AIRSCREAM UK Limited) holds 70% in AIRSCREAM NZ Limited. 


15.


Stocks

2023
2022
£
£

Raw materials and consumables
120,783
-

Finished goods and goods for resale
140,021
231,246

260,804
231,246




16.


Debtors

2023
2022
£
£

Due after more than one year

Amounts owed by group undertakings
537,147
250,841

537,147
250,841

Due within one year

Trade debtors
2,176,830
1,370,921

Amounts owed by group undertakings
-
572,206

Other debtors
494,182
201,568

Prepayments and accrued income
24,634
9,077

3,232,793
2,404,613

Page 33

 
AIRSCREAM UK LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

17.


Cash and cash equivalents

2023
2022
£
£

Cash at bank and in hand
7,130,955
5,836,622

7,130,955
5,836,622



18.


Creditors: Amounts falling due within one year

2023
2022
£
£

Trade creditors
2,637,875
2,870,798

Amounts owed to group undertakings
160,521
104,663

Corporation tax
629,509
1,023,729

Other taxation and social security
-
8,480

Lease liabilities
53,132
41,113

Other creditors
179,305
166

Accruals and deferred income
426,610
215,232

4,086,952
4,264,181



19.


Creditors: Amounts falling due after more than one year

2023
2022
£
£

Lease liabilities
165,095
171,649

165,095
171,649


Page 34

 
AIRSCREAM UK LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

20.

Leases

Company as a lessee

The company's leases are towards the warehouse and the vape store operating in Bristol. 

Lease liabilities are due as follows:

2023
2022
£
£

Not later than one year
53,132
41,113

Between one year and five years
165,095
171,649

218,227
212,762


The following amounts in respect of leases, where the Company is a lessee, have been recognised in profit or loss:

2023
2022
£
£

Interest expense on lease liabilities
11,189
4,126


21.


Financial instruments

2023
2022
£
£

Financial assets


Financial assets measured at fair value through profit or loss
1,051,878
565,294

Financial assets measured at amortised cost
10,624,552
8,472,481

11,676,430
9,037,775


Financial liabilities


Financial liabilities measured at amortised cost
(3,457,443)
(3,231,972)


Financial assets measured at fair value through profit or loss comprise of equity instruments held by the entity.


Financial assets measured at amortised cost includes cash and bank balances, trade debtors, stocks, intercompany debtors and other debtor balances


Financial liabilities measured at amortised cost comprise of trade creditors, intercompany creditors, accruals and other creditors. 

Page 35

 
AIRSCREAM UK LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

22.


Deferred taxation




2023


£






At beginning of year
(36,255)


Charged to profit or loss
(579)



At end of year
(36,834)

The provision for deferred taxation is made up as follows:

2023
2022
£
£


Accelerated capital allowances
-
(36,255)

Lease liabilities
(36,834)
-

(36,834)
(36,255)


23.


Share capital

2023
2022
£
£
Authorised



10,000,000 (2022 - 10,000,000) Ordinary shares of £0.01 each
100,000
100,000

Allotted, called up and partly paid



10,000,000 (2022 - 10,000,000) Ordinary shares of £0.01 each
100,000
100,000

There is a single class of ordinary shares. There are no restrictions on dividends and the repayment of capital. No shares were issued during the current year. 



24.


Reserves

Profit and loss account

The profit and loss account includes all current and prior period retained profits and losses. 


25.


Pension commitments

The Company operates a defined contribution scheme. The pension cost charge for the period represents contributions payable by the Company to the scheme and amounted to £2,785 (2022: £1,396).
Page 36
 


 
AIRSCREAM UK LIMITED


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

26.


First time adoption of FRS 101

The Company transitioned to FRS 101 from previously extant UK GAAP as at 1 January 2022. The impact of the transition to FRS 101 is as follows:

As previously stated
1 January
2022
Effect of transition
1 January
2022
FRS 101
(as restated)
1 January
2022
As previously stated
31 December
2022
Effect of transition
31 December
2022
FRS 101
(as restated)
31 December
2022
£
£
£
£
£
£


Fixed assets
  
114,621
39,428
154,049
700,442
230,771
931,213


Current assets
  
1,223,607
-
1,223,607
8,484,129
(11,648)
8,472,481


Creditors: amounts falling due within one year
  
(729,715)
(42,322)
(772,037)
(4,213,193)
(50,989)
(4,264,182)


Net current assets
  
 
493,892
 
(42,322)
 
451,570
 
4,270,936
 
(62,637)
 
4,208,299


Total assets less current liabilities
  
 
608,513
 
(2,894)
 
605,619
 
4,971,378
 
168,134
 
5,139,512


Creditors: amounts falling due after more than one year
  
-
-
-
-
(171,649)
(171,649)


Provisions for liabilities
  
-
-
-
(36,255)
-
(36,255)


Net  assets
  
 
608,513
 
(2,894)
 
605,619
 
4,935,123
 
(3,515)
 
4,931,608


Capital and reserves
  
608,513
(2,894)
605,619
4,935,123
(3,515)
4,931,608
Page 37

 


 
AIRSCREAM UK LIMITED


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

           26.First time adoption of FRS 101 (continued)


As previously stated
31 December
2022
Effect of transition
31 December
2022
FRS 101
(as restated)
31 December
2022

£
£
£


Turnover
  
19,138,430
-
19,138,430


Cost of sales
  
(13,177,401)
(85,676)
(13,263,077)


  
 
5,961,029
 
(85,676)
 
5,875,353


Distribution expenses
  
(85,675)
85,675
-


Administrative expenses
  
(2,173,504)
4,564
(2,168,940)


Other operating income
  
1,761,924
-
1,761,924


Operating profit
  
 
5,463,774
 
4,563
 
5,468,337


Interest receivable and similar income
  
1,452
-
1,452


Interest payable and similar charges
  
-
(4,126)
(4,126)


Taxation
  
(1,059,983)
(1)
(1,059,984)


Profit on ordinary activities after taxation and for the financial year
  
 
4,405,243
 
436
 
4,405,679

Page 38
 
AIRSCREAM UK LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

           26.First time adoption of FRS 101 (continued)

Explanation of changes to previously reported profit and equity:
The change is with respect to the accounting for leases as per IFRS 16 whereby right of use asset and lease liabilities have been created in the books. The impact to the profit is the depreciation expense on the right of use asset and finance cost on the lease liabilities.




27.


Controlling party

The immediate parent company and ultimate controlling party is AIRSCREAM 313 Holdings Limited. Copies of AIRSCREAM 313 Holdings Limited consolidated financial statements can be obtained from the Companies House.

 
Page 39