Company registration number 09495730 (England and Wales)
MALLET. FOOTWEAR LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
MALLET. FOOTWEAR LTD
COMPANY INFORMATION
Director
E Ozkarakasli
Company number
09495730
Registered office
Unit 2
53 Tabernacle Street
London
EC2A 4AA
Auditor
Hart Shaw LLP
Europa Link
Sheffield Business Park
Sheffield
S9 1XU
MALLET. FOOTWEAR LTD
CONTENTS
Page
Strategic report
1
Director's report
2 - 3
Independent auditor's report
4 - 7
Statement of income and retained earnings
8
Balance sheet
9
Statement of cash flows
10
Notes to the financial statements
11 - 22
MALLET. FOOTWEAR LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 31 JANUARY 2024
- 1 -
The director presents the strategic report for the year ended 31 January 2024.
Fair review of the business
The company's key performance indicators during the year were as follows:
£
£
Change
Turnover
8,483,972
17,486,411
51%
Gross profit
3,422,126
6,442,415
47%
Operating (loss)/profit
(1,792,126)
1,180,778
252%
Current ratio
340%
387%
Business Overview for the Year Ended 31st January 2024
The business reported a turnover of £8.5 million for the year ended 31st January 2024, driven by significant growth in online and international sales channels compared to the prior year. Notably, sales of men’s footwear rose by 36.4%. Our revamped digital marketing strategies, particularly in direct-to-consumer (DTC) channels, delivered a 9% increase in DTC sales. Additionally, our investment in the Middle Eastern region led to an impressive 86.56% growth, underscoring our strong connection with consumers in this market.
Strategic Developments and Product Expansion
We strengthened our marketing approach by revising inflated spending and expanding into previously underutilised commercial channels, allowing us to tap into new customer segments and diversify revenue streams. As part of our strategic development, Mallet broadened its product range to include clothing, accessories, and both formal and casual footwear, creating new opportunities across a diverse and evolving market.
Product Line and Wholesale Performance
The wholesale side of the business faced challenges due to the consolidation of the UK retail market, where larger retailers have captured increased market share, reducing the number of wholesale customers transacting with Mallet, this also resulted in overstocking and discounting, reducing wholesale orders in the period. As a result of this, we streamlined our distribution to focus on key partners, fostering sustainable growth both financially and in terms of brand visibility. This shift has positively adjusted our distribution ratio to 50% wholesale and 50% DTC (previously 70%/30%), establishing a stronger foundation for brand margin growth. This positioning supports the brand’s growth into Phase 2, where we will focus on targeted strategic points and enhance international perception to drive awareness and DTC margin growth.
Principal risks and uncertainties
Mallet faces several specific risks, including:
Macroeconomic factors affecting consumer spending and social uncertainties impacting turnover
Consolidation within the UK retail market, leading to fewer independent retailers
Changes in national laws and regulations related to imports into the UK
Political instability and government changes affecting market conditions
E Ozkarakasli
Director
29 October 2024
MALLET. FOOTWEAR LTD
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 JANUARY 2024
- 2 -
The director presents his annual report and financial statements for the year ended 31 January 2024.
Principal activities
The principal activity of the company continued to be that of the wholesale and retail sales of footwear and apparel operating across the UK and globally.
Results and dividends
The results for the year are set out on page 8.
Ordinary dividends were paid amounting to £130,586 (2023 - £5,500,000).The directors do not recommend payment of a final dividend.
Director
The director who held office during the year and up to the date of signature of the financial statements was as follows:
T Fordham
(Resigned 31 October 2023)
E Ozkarakasli
C Stephenson
(Appointed 31 October 2023 and resigned 1 February 2024)
Auditor
The auditor, Hart Shaw LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of director's responsibilities
The director is responsible for preparing the annual 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 United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the director must not approve the financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the director is required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The director is responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. He is also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Strategic report
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report.
MALLET. FOOTWEAR LTD
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 3 -
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
On behalf of the board
E Ozkarakasli
Director
31 October 2024
MALLET. FOOTWEAR LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF MALLET. FOOTWEAR LTD
- 4 -
We have audited the financial statements of Mallet. Footwear Ltd (the 'company') for the year ended 31 January 2024 which comprise the statement of income and retained earnings, the balance sheet, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion, except for the possible effects on the corresponding figures of the matters described in the Basis for qualified opinion paragraph, the financial statements:
give a true and fair view of the state of the company's affairs as at 31 January 2024 and of its loss 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 qualified opinion
We were appointed as auditors during the period ended 31 January 2022. The opening balance sheet had not been audited for that period and we were unable to carry out procedures to audit the opening balance sheet. Therefore we are unable to determine whether any adjustments to the Statement of income and retained earnings might have been necessary in the prior period. Our audit opinion in the financial statements to 31 January 2022 was modified accordingly. Our audit opinion on the current year financial statements is also modified because of the possible effect of this matter on the comparability of the statement of cash flows and corresponding notes.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
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.
MALLET. FOOTWEAR LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF MALLET. FOOTWEAR LTD
- 5 -
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The director is responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. 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.
As described in the basis for qualified opinion section of our report, we were unable to carry out procedures to audit the opening balance sheet in the period ended 31 January 2022 and therefore, we were unable to determine whether any adjustments to the statement of income and retained earnings might have been necessary. We have concluded that where the other information refers to the transactions within the statement of cashflows for the comparative period, it may not be comparable for this reason.
Basis for qualified opinion on other matters prescribed by the Companies Act 2006
Except for the possible effects of the matter described in the basis for qualified opinion section of our report, 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
Except for the matter described in the basis for qualified opinion section of our report, in 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.
In respect solely of the limitation on our work relating to corresponding figures described above:
we have not obtained all the information and explanations that we considered necessary for the purpose of our audit; and
we were unable to determine whether adequate accounting records had been maintained.
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:
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 remuneration specified by law are not made.
Responsibilities of director
As explained more fully in the director's responsibilities statement, 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 has no realistic alternative but to do so.
MALLET. FOOTWEAR LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF MALLET. FOOTWEAR LTD
- 6 -
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Extent to which the audit was considered capable of detecting irregularities, including fraud and the audit response
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.
At the planning stage we identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial and sector experience and through discussion with the directors and other management, as required by auditing standards. The potential effect of any laws and regulation on the financial statements can vary considerably. There are laws and regulations that directly affect the financial statements (e.g. the Companies Act) as well as many other operational laws and regulations where the consequences of non-compliance could have a material effect on amounts or disclosures in the financial statements. Owing to the size, nature and complexity of the organisation and the applicable laws and regulations to which it must adhere, the risk of material misstatement was deemed to be low, therefore the procedures performed by the audit team were limited to:
Communicating identified laws and regulations at planning throughout the audit team to remain alert to any indications of non-compliance throughout the audit.
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as non-compliance with laws and regulations.
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.
We have assessed the overall susceptibility of the financial statements to material misstatement due to fraud. Management override is the most common way in which fraud might present itself and is therefore inherently high risk on any audit. Management override which may cause there to be a material misstatement within the financial statements may present itself in a number of ways, for example:
Override of internal controls (e.g. segregation of duties)
Entering into transactions outside the normal course of business, especially with related parties
Fraudulent revenue recognition, including fictitious sales and sales being recorded in the wrong period
Presenting bias in accounting judgements and estimates.
In order to reduce the risk of material misstatement to an acceptable level, numerous audit procedures were performed including:
Enquiries of management as to whether they had any knowledge of any actual or suspected fraud
Review of material journal entries made throughout the year as well as those made to prepare the financial statements
Reviewing underlying rationale behind transactions in order to assess whether they were outside the normal course of business
Increased substantive testing across all material income streams
Assessing whether management's judgements and estimates indicated potential bias.
MALLET. FOOTWEAR LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF MALLET. FOOTWEAR LTD
- 7 -
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected material
misstatements in the financial statements, even though we have performed our audit in accordance with auditing
standards. Furthermore, as with all audits, there is a higher risk of irregularities (especially those relating to
fraud) being undetected, as these may involve the override of internal controls, collusion, intentional omissions
and misrepresentations etc. We are not responsible for preventing non-compliance or fraud and therefore cannot
be expected to detect all instances of such. Our audit was not designed to identify misstatements or other
irregularities that would not be considered to be material to the financial statements. The further removed noncompliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Adam Shield
Senior Statutory Auditor
For and on behalf of Hart Shaw LLP
31 October 2024
2024-10-31
Chartered Accountants
Statutory Auditor
Europa Link
Sheffield Business Park
Sheffield
S9 1XU
MALLET. FOOTWEAR LTD
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 JANUARY 2024
- 8 -
2024
2023
Notes
£
£
Turnover
3
8,483,972
17,486,411
Cost of sales
(5,061,846)
(11,043,996)
Gross profit
3,422,126
6,442,415
Distribution costs
(3,903,654)
(3,904,029)
Administrative expenses
(1,310,598)
(1,357,608)
Operating (loss)/profit
4
(1,792,126)
1,180,778
Interest receivable and similar income
7
32,203
8,826
Interest payable and similar expenses
8
(41)
(7,315)
(Loss)/profit before taxation
(1,759,964)
1,182,289
Tax on (loss)/profit
9
240,022
(226,658)
(Loss)/profit for the financial year
(1,519,942)
955,631
Retained earnings brought forward
4,533,005
9,077,374
Dividends
10
(130,586)
(5,500,000)
Retained earnings carried forward
2,882,477
4,533,005
The profit and loss account has been prepared on the basis that all operations are continuing operations. There are no items what would be included in other comprehensive income, and therefore profit for the year is the same as total comprehensive income.
MALLET. FOOTWEAR LTD
BALANCE SHEET
AS AT
31 JANUARY 2024
31 January 2024
- 9 -
2024
2023
Notes
£
£
£
£
Fixed assets
Intangible assets
12
5,535
8,302
Tangible assets
13
205,358
230,448
210,893
238,750
Current assets
Stocks
14
1,044,045
1,750,909
Debtors
15
1,207,076
1,964,762
Cash at bank and in hand
1,532,446
2,125,590
3,783,567
5,841,261
Creditors: amounts falling due within one year
16
(1,111,883)
(1,507,606)
Net current assets
2,671,684
4,333,655
Total assets less current liabilities
2,882,577
4,572,405
Provisions for liabilities
Deferred tax liability
17
39,300
-
(39,300)
Net assets
2,882,577
4,533,105
Capital and reserves
Called up share capital
19
100
100
Profit and loss reserves
2,882,477
4,533,005
Total equity
2,882,577
4,533,105
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved by the board of directors and authorised for issue on 29 October 2024 and are signed on its behalf by:
E Ozkarakasli
Director
Company registration number 09495730 (England and Wales)
MALLET. FOOTWEAR LTD
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 JANUARY 2024
- 10 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash absorbed by operations
22
(683,435)
(527,229)
Interest paid
(41)
(7,315)
Income taxes refunded/(paid)
267,118
(1,340,545)
Net cash outflow from operating activities
(416,358)
(1,875,089)
Investing activities
Purchase of tangible fixed assets
(78,403)
(148,557)
Interest received
32,203
8,826
Net cash used in investing activities
(46,200)
(139,731)
Financing activities
Dividends paid
(130,586)
(5,500,000)
Net cash used in financing activities
(130,586)
(5,500,000)
Net decrease in cash and cash equivalents
(593,144)
(7,514,820)
Cash and cash equivalents at beginning of year
2,125,590
9,640,410
Cash and cash equivalents at end of year
1,532,446
2,125,590
MALLET. FOOTWEAR LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2024
- 11 -
1
Accounting policies
Company information
Mallet. Footwear Ltd is a private company, limited by shares and incorporated in England and Wales. The registered office is Unit 2, 53 Tabernacle Street, London, EC2A 4AA.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
1.2
Going concern
Given the results for the year ended 31 January 2024 and as part of making their assessment the Director has prepared forecasts for at least 12 months from the date of approving the financial statements. These forecast show that the company has sufficient net assets and cash reserves to continue trading at current turnover levels for the foreseeable future. Furthermore, there have been operational changes made within the business to reduce overheads and improve current performance whilst reducing reliance on the wholesale side of the business. true
As a result, at the time of approving the financial statements, the director has a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the director continues to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
1.4
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Patents & licences
5 years straight line
1.5
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
MALLET. FOOTWEAR LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
1
Accounting policies
(Continued)
- 12 -
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Leasehold improvements
Over life of the lease
Fixtures and fittings
15% reducing balance
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.6
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
1.7
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to sell.
Cost is calculated using the weighted average method.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.8
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.9
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
MALLET. FOOTWEAR LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
1
Accounting policies
(Continued)
- 13 -
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors and bank loans, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.10
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.11
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
MALLET. FOOTWEAR LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
1
Accounting policies
(Continued)
- 14 -
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit..
1.12
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.14
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
1.15
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the director is required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The directors are of the opinion that there are no key estimates or assumptions which have a significant risk of causing a material misstatement.
3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by class of business
Sale of footwear and apparel
8,483,972
17,486,411
MALLET. FOOTWEAR LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
3
Turnover and other revenue
(Continued)
- 15 -
2024
2023
£
£
Turnover analysed by geographical market
United Kingdom
6,918,158
16,167,269
Europe
720,778
852,762
Rest of the World
845,036
466,380
8,483,972
17,486,411
4
Operating (loss)/profit
2024
2023
Operating (loss)/profit for the year is stated after charging/(crediting):
£
£
Exchange losses/(gains)
14,534
(81,747)
Fees payable to the company's auditor for the audit of the company's financial statements
16,590
15,295
Depreciation of owned tangible fixed assets
40,297
33,692
Impairment of owned tangible fixed assets
63,196
Amortisation of intangible assets
2,767
2,768
Operating lease charges
191,702
247,442
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Office and administration
5
5
Sales, marketing and distribution
18
15
Total
23
20
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
1,281,994
1,135,611
Social security costs
125,390
115,597
Pension costs
21,622
18,068
1,429,006
1,269,276
MALLET. FOOTWEAR LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 16 -
6
Director's remuneration
2024
2023
£
£
Remuneration for qualifying services
280,341
311,894
Company pension contributions to defined contribution schemes
991
1,321
281,332
313,215
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2023 - 1).
Remuneration disclosed above include the following amounts paid to the highest paid director:
2024
2023
£
£
Remuneration for qualifying services
167,841
161,894
7
Interest receivable and similar income
2024
2023
£
£
Interest income
Other interest income
32,203
8,826
8
Interest payable and similar expenses
2024
2023
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
16
-
Other finance costs:
Other interest
25
7,315
41
7,315
9
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
(200,255)
200,722
Adjustments in respect of prior periods
(467)
7,536
Total current tax
(200,722)
208,258
MALLET. FOOTWEAR LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
9
Taxation
2024
2023
£
£
(Continued)
- 17 -
Deferred tax
Origination and reversal of timing differences
(39,300)
18,400
Total tax (credit)/charge
(240,022)
226,658
The actual (credit)/charge for the year can be reconciled to the expected (credit)/charge for the year based on the profit or loss and the standard rate of tax as follows:
2024
2023
£
£
(Loss)/profit before taxation
(1,759,964)
1,182,289
Expected tax (credit)/charge based on the standard rate of corporation tax in the UK of 19.00% (2023: 19.00%)
(334,393)
224,635
Tax effect of expenses that are not deductible in determining taxable profit
1,425
(798)
Change in unrecognised deferred tax assets
91,511
Depreciation on assets not qualifying for tax allowances
(119)
(230)
Amortisation on assets not qualifying for tax allowances
525
525
Under/(over) provided in prior years
(467)
7,536
Deferred tax adjustments in respect of prior years
1,577
1,472
Capital allowances in respect of superdeductions
(81)
(6,482)
Taxation (credit)/charge for the year
(240,022)
226,658
10
Dividends
2024
2023
£
£
Interim paid
130,586
5,500,000
MALLET. FOOTWEAR LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 18 -
11
Impairments
Impairment tests have been carried out where appropriate and the following impairment losses have been recognised in profit or loss:
2024
2023
Notes
£
£
In respect of:
Property, plant and equipment
13
63,196
Recognised in:
Administrative expenses
63,196
-
12
Intangible fixed assets
Patents & licences
£
Cost
At 1 February 2023 and 31 January 2024
13,838
Amortisation and impairment
At 1 February 2023
5,536
Amortisation charged for the year
2,767
At 31 January 2024
8,303
Carrying amount
At 31 January 2024
5,535
At 31 January 2023
8,302
MALLET. FOOTWEAR LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 19 -
13
Tangible fixed assets
Leasehold improvements
Fixtures and fittings
Total
£
£
£
Cost
At 1 February 2023
243,237
33,445
276,682
Additions
68,126
10,277
78,403
At 31 January 2024
311,363
43,722
355,085
Depreciation and impairment
At 1 February 2023
37,846
8,388
46,234
Depreciation charged in the year
35,580
4,717
40,297
Impairment losses
63,196
63,196
At 31 January 2024
136,622
13,105
149,727
Carrying amount
At 31 January 2024
174,741
30,617
205,358
At 31 January 2023
205,391
25,057
230,448
More information on impairment movements in the year is given in note 11.
14
Stocks
2024
2023
£
£
Finished goods and goods for resale
1,044,045
1,750,909
Included in the cost of stocks is an impairment provision of £301,168 (2023 - £222,571).
15
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
417,332
999,572
Corporation tax recoverable
200,255
266,651
Other debtors
538,943
492,477
Prepayments and accrued income
50,546
206,062
1,207,076
1,964,762
MALLET. FOOTWEAR LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 20 -
16
Creditors: amounts falling due within one year
2024
2023
£
£
Trade creditors
823,220
952,300
Taxation and social security
87,831
33,979
Other creditors
24,220
160,511
Accruals and deferred income
176,612
360,816
1,111,883
1,507,606
17
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2024
2023
Balances:
£
£
Accelerated capital allowances
-
39,300
2024
Movements in the year:
£
Liability at 1 February 2023
39,300
Credit to profit or loss
(39,300)
Liability at 31 January 2024
-
Deferred tax is not recognised in respect of tax losses of £650,000
18
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
21,622
18,068
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
MALLET. FOOTWEAR LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 21 -
19
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares class A of 50p each
200
150
100
75
Ordinary shares class B of 50p each
-
50
-
25
200
200
100
100
In the year, Ordinary B shares were automatically redesignated as Ordinary A shares under the company's Articles of Association, as a result of the shares being purchased by Ordinary A shareholders.
20
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2024
2023
£
£
Within one year
136,708
191,581
Between two and five years
26,897
163,605
163,605
355,186
21
Related party transactions
Remuneration of key management personnel
Key management personnel are considered to be the directors of the company.
Transactions with related parties
During the year the company entered into the following transactions with related parties:
Sales
Purchases
2024
2023
2024
2023
£
£
£
£
Group companies of an entity with signifcant influence
4,673,074
-
558
There is £nil disclosure of transactions with group companies of an entity with significant influence as the company was no longer associated in the year.
During the year dividends of; £nil (2023 - £1,750,000) were paid to a company which has significant influence over the company, £65,293 (2023 - £1,875,000) were paid to a director of the company and £65,293 (2023 - £1,875,000) were paid to a company controlled by a director of the company.
Interest free loans of £2,796 (2023 - £114,488) were granted by the directors to the company. Loans are unsecured and repayable on demand.
MALLET. FOOTWEAR LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JANUARY 2024
- 22 -
22
Cash absorbed by operations
2024
2023
£
£
(Loss)/profit for the year after tax
(1,519,942)
955,631
Adjustments for:
Taxation (credited)/charged
(240,022)
226,658
Finance costs
41
7,315
Investment income
(32,203)
(8,826)
Amortisation and impairment of intangible assets
2,767
2,768
Depreciation and impairment of tangible fixed assets
103,493
33,692
Movements in working capital:
Decrease/(increase) in stocks
706,864
(719,582)
Decrease in debtors
691,290
151,207
Decrease in creditors
(395,723)
(1,176,092)
Cash absorbed by operations
(683,435)
(527,229)
23
Analysis of changes in net funds
1 February 2023
Cash flows
31 January 2024
£
£
£
Cash at bank and in hand
2,125,590
(593,144)
1,532,446
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