Company registration number 10435405 (England and Wales)
SMALLWORLD ACCESSORIES HOLDINGS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 29 FEBRUARY 2024
SMALLWORLD ACCESSORIES HOLDINGS LIMITED
COMPANY INFORMATION
Director
Mr P D Galvin
Company number
10435405
Registered office
Griffin House
135 High Street
Crawley
West Sussex
RH10 1DQ
Auditor
Sumer Audit
Amelia House
Crescent Road
Worthing
West Sussex
BN11 1RL
Business address
New Barn
Brighton Road
Newtimber
Hassocks
West Sussex
BN6 9BS
SMALLWORLD ACCESSORIES HOLDINGS LIMITED
CONTENTS
Page
Strategic report
1 - 3
Director's report
4 - 5
Director's responsibilities statement
6
Independent auditor's report
7 - 9
Group statement of comprehensive income
10
Group balance sheet
11
Company balance sheet
12
Group statement of changes in equity
13
Company statement of changes in equity
14
Group statement of cash flows
15
Notes to the financial statements
16 - 30
SMALLWORLD ACCESSORIES HOLDINGS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 1 -
The director presents the strategic report for the year ended 29 February 2024.
Strategy
The group consists of Smallworld Accessories Holdings Limited, a non-trading holding company, and Smallworld Accessories Limited, an accessories supplier. The group, through Smallworld Accessories Limited, operates concessions with major UK retailers providing fully merchandised end-to-end solutions in adults’ and children’s accessories across jewellery, hair, gifting, bags, cold weather and event categories. It also operates its own direct online sales channels.
The strategy of the business is:
To grow by supplying sustainably-sourced accessory ranges to customers that enhance their brand positioning and clothing offer.
To grow online sales through existing customers, marketplaces and directly through our own branded sustainably sourced product.
To develop profitable product extension opportunities within the accessories category to expand the width of the business's offer and grow the customer base both in the UK and internationally.
Business review
The business delivered turnover of £15.5m and a profit before tax of £0.3m for the year. Turnover was -7.8% down year on year as a result of the challenging UK market conditions present throughout the year as customer spending was impacted by high levels of inflation which impacted on people’s disposable income. The business expected this impact, and a core focus was placed on minimising the impact on the gross profit margin during this period, maintaining our strong in store service reputation and sustaining a strong balance sheet position in order to enable the business to maximise its performance as the market conditions became more favourable. In addition, the business faced major operational challenges due to the volatile inbound freight sector which disrupted the timing of product deliveries. The teams managed this very effectively again limiting the impact on sales and stock.
This was done without sacrificing the main fundamentals of our business: the continued strength of our customer relationships; the focus of the business on maintaining strong and relevant sustainably-sourced product ranges whilst retailing these at affordable price points for the customer base; a focus on in store servicing and delivery in order to maximise returns for both the business and its retail partners.
From a product perspective, the Hair and Jewellery categories across Adults and Kids remain a core strength of the business and continue to be key sales drivers throughout the year, whilst the business continues to offer strong Gifting and Events product ranges which support our retail partners through their key seasonal selling periods.
From a customer perspective the business added a new concession partner with a major UK retailer in the year. This resulted in an increase in administrative costs as the business invested in resources to support an instore launch in Q3 2024. This will increase the number of stores we operate in from 1,039 to 1,586. This is expected to strengthen the business going forward, enabling it to diversify its revenue streams, as well as to further strengthen its UK market position.
The operating structure and processes of the company are such that it underpins the continued use of sustainably sourced raw materials and sustainable supply chain practices in the manufacture of the company’s products, providing our retail partners with ranges that meet the requirement of the increasingly conscious consumer base. The company continue to be a leader in this area.
SMALLWORLD ACCESSORIES HOLDINGS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 2 -
Management KPIs
The following are the financial key performance indicators (‘KPIs’) used by management to assess and regulate the group and company’s performance:
Contribution per customer contract - these measures are not disclosed externally, but are used internally to ensure each contract delivers a sustainable level of contribution to support the ongoing profitability of the business.
Gross profit as a % of turnover – 30.6% for the period, down -0.3% on the previous years’ accounts.
Trade debtor days: 17 days, up from 16 days last year.
Administrative expenses as a % of turnover – 28.2% for the period, up 3% from the previous year.
Principle risks and uncertainties
Market risk
The main Market risk is the potential impact if there is a return of the high-cost inflationary pressures that were present in the UK market during 2022 and 2023. From a business perspective the risk would be that this could drive up the cost base of the business and negatively impact on customer’s disposable income.
In order to mitigate this risk, the business continues to focus on the following areas which have ensured that it has maintained profitability in the year:
Continue to ensure that the product mix and value for money offering is aligned with customer demand.
Development of both existing sales channels and potential new channels - leveraging our strengths in product design across Adults and Children’s accessories.
Drive our Own brand sales growth organically. The business continues to develop new sales channels for these brands, building on the growing brand equity.
Tightly managing the stock critical path to ensure that the business does not over invest in stocks too early, whilst ensuring that it protects the peak sales periods. This ensures that the business is able to maintain flexibility in order to invest in growth areas and new opportunities as they arise. Having very strong stock management processes, including stock allocations, placement of stock in stores, and visual merchandising of product, are key factors in enabling the business to manage its stocks effectively in this operating environment.
Focus on mitigating overheads price increases as a result of the inflationary cost pressures in the UK, with special focus on where contractual arrangements come up for renewal to ensure that the cost base of the business is tightly controlled, and that cost efficiencies are made where possible.
Foreign exchange risk
The business imports the majority of its products from the Far East, with this largely being paid for in Chinese Rmb, along with a smaller USD currency requirement. The company regularly reviews the current exchange situation, and the potential economic indicators which could cause weakness in the pound, and places forward currency contracts in order to manage and mitigate the potential impact of currency fluctuations on its cost of product.
Regulatory risk
The business designs, manufactures and tests its products to ensure that they meet all legal requirements for the market it operates in. The business is a full member of the Ethical Trading Initiative.
SMALLWORLD ACCESSORIES HOLDINGS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 3 -
Mr P D Galvin
Director
21 November 2024
SMALLWORLD ACCESSORIES HOLDINGS LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 4 -
The director presents his annual report and financial statements of the group and company for the year ended 29 February 2024.
Principal activities
Smallworld Accessories Holdings Limited continued to be that of a non-trading holding company.
The principal activity of the group continued to be that of a supplier of adults' and children's fashion jewellery, accessories and event merchandise.
Results and dividends
The results for the year are set out on page 10.
No ordinary dividends were paid. The director does 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:
Mr P D Galvin
Financial instruments
Liquidity risk
The group manages its cash and borrowing requirements in order to maximise interest income and minimise interest expense, whilst ensuring it has sufficient liquid resources to meet the operating needs of the group.The ultimate controlling entity has provided finance to assist cash flow and liquidity management.
Credit risk
All customers who wish to trade on credit terms are subject to credit verification procedures. The concession stands are operated from the premises of large supermarket chains and some high street stores and sales are reported by the stores themselves based upon the goods passing through the tills. Due to the customer mix the group has not experienced debtor recovery issues but trade debtors are monitored on an ongoing basis and provision will be made for doubtful debts where necessary.
Auditor
The auditor, Sumer Audit, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Strategic report
The truegroup has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the group'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. It has done so in respect of future developments and foreign exchange risk.
Statement of disclosure to auditor
So far as the sole director at the date of approving this report is aware, there is no relevant audit information of which the auditor of the company and group is unaware. Additionally, the director has taken all the necessary steps that he ought to have taken as a director in order to make himself aware of all relevant audit information and to establish that the auditor of the company and group is aware of that information.
SMALLWORLD ACCESSORIES HOLDINGS LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 5 -
On behalf of the board
Mr P D Galvin
Director
21 November 2024
SMALLWORLD ACCESSORIES HOLDINGS LIMITED
DIRECTOR'S RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 6 -
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 group and company, and of the profit or loss of the group 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;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the ;
prepare the on the going concern basis unless it is inappropriate to presume that the group and company will continue in business.
The director is responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
SMALLWORLD ACCESSORIES HOLDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF SMALLWORLD ACCESSORIES HOLDINGS LIMITED
- 7 -
Opinion
We have audited the financial statements of Smallworld Accessories Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 29 February 2024 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group 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 Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the group's and the parent company's affairs as at 29 February 2024 and of the group's profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
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 group and parent 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 group's and parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the director with respect to going concern are described in the relevant sections of this report.
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.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the director's report have been prepared in accordance with applicable legal requirements.
SMALLWORLD ACCESSORIES HOLDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SMALLWORLD ACCESSORIES HOLDINGS LIMITED
- 8 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the director's report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of 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 parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the director either intends to liquidate the parent company or to cease operations, or has no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, our procedures included the following:
Obtaining an understanding of the legal and regulatory framework that the group operates in, focusing on those laws and regulations that had a direct effect on the financial statements and operations;
Obtaining an understanding of the group’s policies and procedures on fraud risks, including knowledge of any actual, suspected or alleged fraud; and
Discussing among the engagement team how and where fraud might occur in the financial statements and any potential indicators of fraud through our knowledge and understanding of the group and our sector-specific experience.
As a result of these procedures, we considered the opportunities and incentives that may exist within the group for fraud. We are also required to perform specific procedures to respond to the risk of management override. As a result of performing the above, we identified the following areas as those most likely to have an impact on the financial statements: health & safety, employment law and compliance with the UK Companies Act.
In addition to the above, our procedures to respond to risks identified included the following:
Making enquiries of management about any known or suspected instances of non-compliance with laws and regulations and fraud;
Challenging assumptions and judgements made by management in their significant accounting estimates, in particular in relation to stock provisions and write offs, goodwill fair value of forward contracts; and
Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness.
SMALLWORLD ACCESSORIES HOLDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF SMALLWORLD ACCESSORIES HOLDINGS LIMITED
- 9 -
Due to the inherent limitations of an audit, there is an unavoidable risk that some 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). For instance, the further removed non-compliance is from the events and transactions reflected in the financial statements, the less likely the auditor is to become aware of it or to recognise the non-compliance.
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.
Kristina Perry FCCA (Senior Statutory Auditor)
For and on behalf of Sumer Audit
21 November 2024
Chartered Accountants
Statutory Auditor
Worthing
Sumer Audit is the trading name of Sumer Auditco Limited
SMALLWORLD ACCESSORIES HOLDINGS LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 10 -
2024
2023
Notes
£
£
Turnover
3
15,505,005
16,807,812
Cost of sales
(10,763,913)
(11,612,182)
Gross profit
4,741,092
5,195,630
Administrative expenses
(4,374,469)
(4,234,837)
Other operating income
3,689
6,968
Operating profit
4
370,312
967,761
Interest receivable and similar income
15,022
843
Interest payable and similar expenses
7
(99,161)
(93,553)
Profit before taxation
286,173
875,051
Tax on profit
8
(235,477)
(31,137)
Profit for the financial year
50,696
843,914
Other comprehensive income
Fair value gains / (losses) on foreign exchange contracts
97,899
(117,230)
Tax relating to other comprehensive income
(24,475)
30,332
Total comprehensive income for the year
124,120
757,016
Profit for the financial year is all attributable to the owners of the parent company.
Total comprehensive income for the year is all attributable to the owners of the parent company,
SMALLWORLD ACCESSORIES HOLDINGS LIMITED
GROUP BALANCE SHEET
AS AT
29 FEBRUARY 2024
29 February 2024
- 11 -
2024
2023
Notes
£
£
£
£
Fixed assets
Goodwill
9
223,066
297,421
Tangible assets
10
68,205
85,637
291,271
383,058
Current assets
Stocks
14
2,826,337
2,460,205
Debtors
15
1,603,268
1,727,601
Cash at bank and in hand
1,097,349
1,172,788
5,526,954
5,360,594
Creditors: amounts falling due within one year
16
(1,574,072)
(1,430,852)
Net current assets
3,952,882
3,929,742
Total assets less current liabilities
4,244,153
4,312,800
Creditors: amounts falling due after more than one year
17
(2,597,435)
(2,785,902)
Provisions for liabilities
19
(16,100)
(20,400)
Net assets
1,630,618
1,506,498
Capital and reserves
Called up share capital
21
1
1
Hedging reserve
22
(27,301)
(100,725)
Profit and loss reserves
1,657,918
1,607,222
Total equity
1,630,618
1,506,498
The financial statements were approved and signed by the director and authorised for issue on 21 November 2024
21 November 2024
Mr P D Galvin
Director
SMALLWORLD ACCESSORIES HOLDINGS LIMITED
COMPANY BALANCE SHEET
AS AT 29 FEBRUARY 2024
29 February 2024
- 12 -
29 February 2024
28 February 2023
Notes
£
£
£
£
Fixed assets
Investments
11
1
1
Current assets
Debtors
15
1
1
Creditors: amounts falling due within one year
16
(1)
(1)
Net current assets
-
-
Net assets
1
1
Capital and reserves
Called up share capital
21
1
1
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the period was £0 (2023 - £0 profit).
The financial statements were approved and signed by the director and authorised for issue on 21 November 2024
21 November 2024
Mr P D Galvin
Director
Company registration number 10435405 (England and Wales)
SMALLWORLD ACCESSORIES HOLDINGS LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 13 -
Share capital
Hedging reserve
Profit and loss reserves
Total
£
£
£
£
Balance at 1 March 2022
1
(13,827)
763,308
749,482
Year ended 28 February 2023:
Profit for the year
-
-
843,914
843,914
Other comprehensive income:
Fair value losses on foreign exchange contracts
-
(117,230)
-
(117,230)
Tax relating to other comprehensive income
-
30,332
-
30,332
Total comprehensive income for the year
-
(86,898)
843,914
757,016
Balance at 28 February 2023
1
(100,725)
1,607,222
1,506,498
Year ended 29 February 2024:
Profit for the year
-
-
50,696
50,696
Other comprehensive income:
Fair value gains on foreign exchange contracts
-
97,899
-
97,899
Tax relating to other comprehensive income
-
(24,475)
-
(24,475)
Total comprehensive income for the year
-
73,424
50,696
124,120
Balance at 29 February 2024
1
(27,301)
1,657,918
1,630,618
SMALLWORLD ACCESSORIES HOLDINGS LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 14 -
Share capital
£
Balance at 1 March 2022
1
Year ended 28 February 2023:
Profit and total comprehensive income for the year
-
Balance at 28 February 2023
1
Year ended 29 February 2024:
Profit and total comprehensive income
-
Balance at 29 February 2024
1
SMALLWORLD ACCESSORIES HOLDINGS LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 15 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
27
385,972
637,397
Interest paid
(100,141)
(90,756)
Income taxes paid
(181,066)
(15,916)
Net cash inflow from operating activities
104,765
530,725
Investing activities
Purchase of tangible fixed assets
(35,213)
(36,189)
Interest received
15,022
308
Net cash used in investing activities
(20,191)
(35,881)
Financing activities
Repayment of bank loans
(150,000)
(150,000)
Net cash used in financing activities
(150,000)
(150,000)
Net (decrease)/increase in cash and cash equivalents
(65,426)
344,844
Cash and cash equivalents at beginning of year
1,172,788
819,919
Effect of foreign exchange rates
(10,013)
8,025
Cash and cash equivalents at end of year
1,097,349
1,172,788
SMALLWORLD ACCESSORIES HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 16 -
1
Accounting policies
Company information
Smallworld Accessories Holdings Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Griffin House, 135 High Street, Crawley, West Sussex, RH10 1DQ.
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 £1.
The financial statements have been prepared under the historical cost convention adjusted for certain financial instruments measured at fair value. The principal accounting policies adopted are set out below.
The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’: Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income.
1.2
Basis of consolidation
In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued, and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date.
The group consists of Smallworld Accessories Holdings Limited and its subsidiary, Smallworld Accessories Limited. Upon the incorporation of the subsidiary, the company subscribed for its share capital, which is recorded within the fixed asset investments of the company's balance sheet.
Smallworld Accessories Limited has been included in the group financial statements using the purchase method of accounting. Accordingly, the group statement of comprehensive income and statement of cash flows include the results and cash flows of Smallworld Accessories Limited for the year.
1.3
Going concern
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. The financial statements have therefore been prepared on the going concern basis. The director has considered relevant information, including the annual budget, forecast future cash flows and the impact of subsequent events in making their assessment.true
SMALLWORLD ACCESSORIES HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 FEBRUARY 2024
1
Accounting policies
(Continued)
- 17 -
The business has continued to be profitable in the year, despite reduced Year on Year sales as a result of the impact of high inflationary pressures in the UK which reduced customers disposable income. As a result of maintaining profitability, the company is on a solid financial footing in order to maximise sales and growth opportunities going forward as the inflationary cost pressures on the UK customer have started to ease.true
The two main potential risk factors to the business would be Market Risk if the inflationary pressures on the UK customer were to significantly increase from the current state and have a negative sales impact as a result of reducing customers disposable income further, or Foreign Exchange Risk if there was a significant weakening of sterling with regard to our foreign currency stock purchases which would impact the businesses’ intake and profit margins.
The director has performed a robust analysis of forecast future cash flows, taking into account the potential impact on the business of possible future scenarios arising from the impact of the current economic operating environment. This analysis also considers the effectiveness of available measures to assist in mitigating the impact.
Based on these assessments and having regard to the resources available to the entity, the director has concluded that there is no material uncertainty in relation to the appropriateness of continuing to adopt the going concern basis in preparing the annual report and accounts.
1.4
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 customer returns, VAT and other sales related taxes. It is shown prior to any commissions paid.
1.5
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 10 years.
The goodwill amortisation charge is included within administrative expenses in the Group Statement of Comprehensive Income.
1.6
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.
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
Straight line over the term of the lease
Plant and equipment
15% diminishing balance
Fixtures and fittings
Straight line over 5 years
Computers
Straight line over 3 years
1.7
Impairment of fixed assets
At each reporting period end date, the group 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.
SMALLWORLD ACCESSORIES HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 FEBRUARY 2024
1
Accounting policies
(Continued)
- 18 -
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.8
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell after making allowances for obsolete and slow moving stock.
1.9
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include deposits held at call with banks and bank overdrafts.
1.10
Financial instruments
The group 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 group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and 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 are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost.
Other financial assets
Other financial assets are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
SMALLWORLD ACCESSORIES HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 FEBRUARY 2024
1
Accounting policies
(Continued)
- 19 -
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 group 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.
Basic financial liabilities
Basic financial liabilities 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.
Other financial liabilities
Derivatives, including forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
For derivatives that are designated and qualify as cash flow hedges, the effective portion of changes in the fair value of the hedge is recognised in other comprehensive income. The gain or loss relating to the ineffective portion is recognised immediately in profit or loss. Any gain or loss previously recognised in other comprehensive income is reclassified to profit or loss when the hedge relationship ends. This occurs when the hedging instrument expires or no longer meets the hedging criteria, the forecast transaction is no longer highly probable, the hedged debt instrument is derecognised, or the hedging instrument is terminated.
A derivative with a positive fair value is recognised as a financial asset, whereas a derivative with a
negative fair value is recognised as a financial liability.
Derecognition of financial liabilities
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
1.11
Equity instruments
Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs.
1.12
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
SMALLWORLD ACCESSORIES HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 FEBRUARY 2024
1
Accounting policies
(Continued)
- 20 -
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 group’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.
1.13
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.14
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.15
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.
1.16
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 group’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.
SMALLWORLD ACCESSORIES HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 FEBRUARY 2024
2
Judgements and key sources of estimation uncertainty
(Continued)
- 21 -
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Stocks
The group monitors stock levels and impairment on an ongoing basis. Units held on concession stands are vulnerable to damage, pilfering and misplacement within the stores and provisions are maintained to reflect this. At the end of a season the group writes off the bulk of the remaining goods as new product lines are introduced. The estimation includes judgement on a number of factors including historical sales patterns, expected sales profiles and potential obsolescence. At the reporting date, the carrying amount of inventory was £2,826,337 (2023 - £2,460,205).
Intangible assets (goodwill)
The director has estimated the useful life of goodwill to be 10 years. The useful life of goodwill may vary depending on a number of factors including timing of future returns and market demands. The director has reviewed the estimated useful life of goodwill and determined that goodwill should continue to be amortised over 10 years from the inception date, with no impairment of goodwill required to be recognised.
3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by class of business
Concessions
15,294,339
16,498,264
Wholesale
210,666
309,548
15,505,005
16,807,812
All turnover is derived from the sale of goods.
2024
2023
£
£
Turnover analysed by geographical market
United Kingdom
15,494,983
16,798,929
United States if America
10,022
8,883
15,505,005
16,807,812
4
Operating profit
2024
2023
£
£
Operating profit for the year is stated after charging:
Depreciation of owned tangible fixed assets
52,645
49,009
Amortisation of intangible assets
74,355
74,355
Operating lease charges
124,828
128,395
Exchange differences recognised in profit or loss during the year, except for those arising on financial instruments measured at fair value through profit or loss, amounted to £298,260 (2023 - £111,092).
SMALLWORLD ACCESSORIES HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 22 -
5
Auditor's remuneration
2024
2023
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company's subsidiaries
22,750
21,650
Costs in relation to the audit of the group financial statements are encapsulated within the fees payable by the subsidiary.
6
Employees
The average monthly number of persons (including directors) employed by the group and company during the year was:
Group
Company
2024
2023
2024
2023
Number
Number
Number
Number
Head office / Distribution / Field management
43
47
-
-
Visual merchandisers
198
200
-
-
Total
241
247
Their aggregate remuneration comprised:
Group
Company
2024
2023
2024
2023
£
£
£
£
Wages and salaries
2,703,484
2,553,689
Social security costs
220,524
217,803
-
-
Pension costs
43,756
40,647
2,967,764
2,812,139
7
Interest payable and similar expenses
2024
2023
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
41,160
35,710
Interest payable to group undertakings
58,001
57,843
Total finance costs
99,161
93,553
SMALLWORLD ACCESSORIES HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 23 -
8
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
93,000
181,000
Adjustments in respect of prior periods
146,777
(146,563)
Total current tax
239,777
34,437
Deferred tax
Origination and reversal of timing differences
(4,300)
(3,300)
Total tax charge
235,477
31,137
The actual charge for the year can be reconciled to the expected charge/(credit) for the period based on the profit or loss and the standard rate of tax as follows:
2024
2023
£
£
Profit before taxation
286,173
875,051
Expected tax charge based on the standard rate of corporation tax in the UK of 24.49% (2023: 19.00%)
70,084
166,260
Tax effect of expenses that are not deductible in determining taxable profit
929
317
Adjustments in respect of prior years
146,777
(146,563)
Permanent capital allowances in excess of depreciation
-
(2,064)
Depreciation on assets not qualifying for tax allowances
63
49
Amortisation on assets not qualifying for tax allowances
18,210
14,127
Effect of rounding to the nearest £1,000
(498)
(189)
Effect of change in local deferred tax rate
(88)
(800)
Taxation charge
235,477
31,137
In addition to the amount charged to the profit and loss account, the following amounts relating to tax have been recognised directly in other comprehensive income:
2024
2023
£
£
Deferred tax arising on:
Fair value adjustments on foreign exchange contracts
24,475
(29,308)
Reclassifications from equity to profit or loss:
Relating to cash flow hedges
-
(1,024)
SMALLWORLD ACCESSORIES HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 24 -
9
Intangible fixed assets
Group
Goodwill
£
Cost
At 1 March 2023 and 29 February 2024
762,410
Amortisation and impairment
At 1 March 2023
464,989
Amortisation charged for the year
74,355
At 29 February 2024
539,344
Carrying amount
At 29 February 2024
223,066
At 28 February 2023
297,421
The company had no intangible fixed assets at 29 February 2024 or 28 February 2023.
10
Tangible fixed assets
Group
Leasehold improvements
Plant and equipment
Fixtures and fittings
Computers
Total
£
£
£
£
£
Cost
At 1 March 2023
33,470
1,212
157,527
139,852
332,061
Additions
138
29,829
5,246
35,213
At 29 February 2024
33,470
1,350
187,356
145,098
367,274
Depreciation and impairment
At 1 March 2023
33,171
663
111,168
101,422
246,424
Depreciation charged in the year
257
687
29,459
22,242
52,645
At 29 February 2024
33,428
1,350
140,627
123,664
299,069
Carrying amount
At 29 February 2024
42
46,729
21,434
68,205
At 28 February 2023
299
549
46,359
38,430
85,637
The company had no tangible fixed assets at 29 February 2024 or 28 February 2023.
11
Fixed asset investments
Group
Company
2024
2023
2024
2023
Notes
£
£
£
£
Investments in subsidiaries
12
-
-
1
1
SMALLWORLD ACCESSORIES HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 FEBRUARY 2024
11
Fixed asset investments
(Continued)
- 25 -
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 1 March 2023 and 29 February 2024
1
Carrying amount
At 29 February 2024
1
At 28 February 2023
1
12
Subsidiaries
Details of the company's subsidiaries at 29 February 2024 are as follows:
Name of undertaking
Registered
Nature of business
Class of
% Held
office
shares held
Direct
Indirect
Smallworld Accessories Limited
Note 1
Supplier of adults' and children's fashion jewellery, accessories and event merchandise
Ordinary Shares
100
Note 1: Griffin House, 135 High Street, Crawley, West Sussex, RH10 1DQ.
13
Financial instruments
Group
Company
2024
2023
2024
2023
£
£
£
£
Carrying amount of financial liabilities
Measured at fair value through other comprehensive income
- Other financial liabilities
36,402
134,301
-
-
14
Stocks
Group
Company
2024
2023
2024
2023
£
£
£
£
Finished goods and goods for resale
2,826,337
2,460,205
SMALLWORLD ACCESSORIES HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 26 -
15
Debtors
Group
Company
2024
2023
2024
2023
Amounts falling due within one year:
£
£
£
£
Trade debtors
356,910
430,776
Unpaid share capital
1
1
1
1
Other debtors
171,991
202,042
Prepayments and accrued income
185,909
143,225
714,811
776,044
1
1
Amounts falling due after more than one year:
Other debtors
879,356
917,982
Deferred tax asset (note 19)
9,101
33,575
888,457
951,557
-
-
Total debtors
1,603,268
1,727,601
1
1
Other debtors falling due after more than one year includes a deposit of £879,356 (2023: £917,982) with a key supplier to provide security on orders placed by the group. This is funded by a loan from the ultimate controlling entity of the same amount, which is recorded in creditors: amounts falling due after more than one year within other borrowings.
16
Creditors: amounts falling due within one year
Group
Company
2024
2023
2024
2023
Notes
£
£
£
£
Bank loans
18
158,227
159,366
Trade creditors
489,851
313,983
Amounts owed to group undertakings
-
-
1
1
Corporation tax payable
239,712
181,000
Other taxation and social security
326,427
431,337
Derivative financial instruments
36,402
134,301
Accruals and deferred income
323,453
210,865
1,574,072
1,430,852
1
1
SMALLWORLD ACCESSORIES HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 27 -
17
Creditors: amounts falling due after more than one year
Group
Company
2024
2023
2024
2023
Notes
£
£
£
£
Bank loans and overdrafts
18
262,500
412,500
Other borrowings
18
2,334,935
2,373,402
2,597,435
2,785,902
Other borrowings relates to a loan from the ultimate controlling entity, which has been subordinated to the loan received under the UK Government-backed Coronavirus Business Interruption Loan Scheme ("CBILS") received in 2021.
18
Loans and overdrafts
Group
Company
2024
2023
2024
2023
£
£
£
£
Bank loans
420,727
571,866
Loans from group undertakings
2,334,935
2,373,402
2,755,662
2,945,268
-
-
Payable within one year
158,227
159,366
Payable after one year
2,597,435
2,785,902
As disclosed within note 15, the ultimate controlling entity has provided a loan to the group to fund a deposit that is held with a key supplier.
In the 2021, the group obtained a bank loan under the UK Government-backed Coronavirus Business Interruption Loan Scheme ("CBILS"). The loan is subject to interest charges at a rate of 3.8% above the Bank of England base rate per annum, with the Government providing a Business Interruption payment to cover the first 12 months of interest payments. The loan is repayable over 6 years, with a repayment holiday in place for the first 12 months of the loan.
The loan is secured by fixed and floating charges over the company's assets and has external guarantees.
SMALLWORLD ACCESSORIES HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 28 -
19
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
Liabilities
Liabilities
Assets
Assets
2024
2023
2024
2023
Group
£
£
£
£
Accelerated capital allowances
16,100
20,400
-
-
Fair value loss on foreign exchange contracts
-
-
9,101
33,575
16,100
20,400
9,101
33,575
The company has no deferred tax assets or liabilities.
Group
Company
2024
2024
Movements in the year:
£
£
Asset at 1 March 2023
(13,175)
-
Charge to other comprehensive income
20,174
-
Liability at 29 February 2024
6,999
-
The timing of the expected reversal of the deferred tax asset is expected to be in the next 12 months. The deferred tax liability is expected to reverse over the useful lives of the tangible fixed assets.
20
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
43,756
40,647
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
21
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and not fully paid
Ordinary shares of 1p each
100
100
1
1
Ordinary shares have attached to them full voting, dividend and capital distribution (including on winding up) rights.
SMALLWORLD ACCESSORIES HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 29 -
22
Hedging reserve
Group
Company
2024
2023
2024
2023
£
£
£
£
At beginning of year
(100,725)
(13,827)
Gains and losses on cash flow hedges
97,899
(117,230)
Deferred tax on gains and losses on cash flow hedges
(24,475)
29,308
Effect of change in deferred tax rate
-
1,024
At end of year
(27,301)
(100,725)
The group entered into forward foreign exchange contracts to mitigate exchange rate risk for foreign currency payments, all contracts mature within 12 months of the reporting date.
23
Operating lease commitments
Lessee
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
Group
Company
2024
2023
2024
2023
£
£
£
£
Within one year
118,661
102,059
Between two and five years
44,652
92,855
163,313
194,914
24
Events after the reporting date
Since the reporting date, the group has opened and invoice financing facility, capped at £2,000,000.
Since the reporting date, the group has also agreed a trade financing facility of up to £1,400,000, which is subject to interest charges of 4% above the Sterling Overnight Index Average ("SONIA"). The facility is secured by fixed and floating charges over the group's assets and has external guarantees.
25
Related party transactions
Group and company
At the reporting date, the group had loans outstanding with the ultimate controlling entity amounting to £2,334,935 (2023: £2,373,402), included within non-current liabilities. The loan interest paid during the year was £58,001 (2023: £57,843) and was charged at a rate of 4% (2023: 4%) on the interest bearing loan.
At the reporting date, the group had a year-end trade creditor balance outstanding with an other trading related party of £341,174(2023: £178,776), and a debtor balance due in more than one year of £879,356 (2023: £917,982). During the year, purchases with that related party amounted to £3,382,571 (2023: £3,621,439).
SMALLWORLD ACCESSORIES HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 30 -
26
Controlling party
The ultimate controlling entity is Chuan Men Investment Inc, a company incorporated in Taiwan.
27
Cash generated from group operations
2024
2023
£
£
Profit for the year after tax
50,696
843,914
Adjustments for:
Taxation charged
235,477
31,137
Finance costs
99,161
93,553
Investment income
(15,022)
(843)
Amortisation and impairment of intangible assets
74,355
74,355
Depreciation and impairment of tangible fixed assets
52,645
49,009
Unrealised currency translation (gains) / losses on long-term loans
(38,626)
90,814
Foreign exchange losses / (gains) on cash equivalents
10,013
(8,025)
Movements in working capital:
(Increase)/decrease in stocks
(366,132)
264,698
Decrease/(increase) in debtors
99,859
(133,834)
Increase/(decrease) in creditors
183,546
(667,381)
Cash generated from operations
385,972
637,397
28
Analysis of changes in net debt - group
1 March 2023
Cash flows
Market value movements
Exchange rate movements
29 February 2024
£
£
£
£
£
Cash at bank and in hand
1,172,788
(65,426)
-
(10,013)
1,097,349
Borrowings excluding overdrafts
(2,945,268)
190,586
(980)
-
(2,755,662)
(1,772,480)
125,160
(980)
(10,013)
(1,658,313)
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