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Registered number: SC388292










SOAPWORKS LIMITED










ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 29 DECEMBER 2023

 
SOAPWORKS LIMITED
 

COMPANY INFORMATION


Directors
M J Davila 
J Douglas 
S Seddon 
B Cumming 




Registered number
SC388292



Registered office
Soapworks Ltd Units 3 - 11 Block 8
Coltness Street


Glasgow


G33 4JD




Independent auditors
French Duncan LLP (trading as AAB)
Chartered Accountants & Statutory Auditor

133 Finnieston Street



Glasgow


G3 8HB




Bankers
Barclays Bank
83 Argyle Street



Glasgow


G5 8DP ·

















 
SOAPWORKS LIMITED
 

CONTENTS



Page
Strategic report
 
1 - 2
Directors' report
 
3 - 4
Independent auditors' report
 
5 - 8
Statement of income and retained earnings
 
9
Statement of financial position
 
10
Statement of cash flows
 
11 - 12
Analysis of net debt
 
13
Notes to the financial statements
 
14 - 28

 
SOAPWORKS LIMITED
 

STRATEGIC REPORT
FOR THE PERIOD ENDED 29 DECEMBER 2023

Introduction
 
The directors present the strategic report for the year ended 29 December 2023.

Business review
 
The Company experienced a minor reduction of its turnover of £34k from 2022. There was a slight contraction of domestic sales of 1% but this was offset by an increase in export turnover of 2%. The administrative burden as a result of Brexit has restricted growth opportunities with EU countries however as we become accustomed tothe new way of trading it will hopefully reduce number of barriers to entry. The change in buyers trends with more trade happening online is making the retail sector more uncertain and it is difficult for retailers to accurately forecast demand. The gross margin of the business increased from 14.8% in 2022 to 15.2% during 2023 which was a result of product mix and overhead control.

The Company continues to offer a wide selection of luxurious products to its customers and quality and delivery performance remain at the forefront of the Company's ethos. The Company believes that it has the necessary structure and experience in place to produce goods to the highest quality for its customers that will help them to stand out from their competition.

The Company continues to exceed its delivery performance and quality performance targets which are the key foundations for a successful business. Sustainability and environmental responsibilities are extremely high on the agenda for the Company and it continues to exceed targets in energy reduction and carbon footprint. The use of sustainable materials continues to increase within the Company's products which enables customers to market this in their product offerings.
 
The Company continues to focus on its Corporate Social Responsibility and along with the Company's environmental measures, the “Soap Aid” project remains an important aspect of life at Soapworks. Where possible residual materials from the end of soap products life cycles are utilised and converted into Soap Aid charity soap. Staff manufacture these products in their own time. The company works with its partner in this project Glasgow the Caring City and the soaps are distributed to areas that have suffered pandemics, natural disasters or refugee camps for example.

Principal risks and uncertainties
 
The company operates in a competitive market and the retention of key customers remains a priority as well as developing new trading partnerships and product offerings. The changing retail environment and consumer’s buying habits remain a risk to the business. The cost of living crisis over the last couple of years has impacted on consumers buying habits and trends. The company is a contract manufacturer and is reliant on its customers being successful and relevant in the ever changing landscape. The Company ensures that is up to date with the latest market trends to enable it to offer products to its customers which will help to protect demand.

Rising material costs and more lately the significant increases in energy costs provide a challenge to the Company. Measures to reduce energy consumption are high on the agenda of the Company to both reduce the impact of rising costs but also from an environmental aspect in reducing the carbon footprint. The Company is working with strategic partners in this area to help achieve its goals.

Nevertheless, after making enquiries and considering the uncertainties described above, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. For these reasons they continue to adopt the going concern basis in preparing the annual report and accounts.

The Company manages the risk of competition through product innovation in conjunction with its customers whilst providing quality products and maintaining excellent customer service.

The Company's principal financial assets are trade and other debtors. The Company's credit risk is primarily attributable to its trade debtors. The amounts presented in the balance sheet are net of allowances for doubtful receivables. The Company has no significant concentration of credit risk, with exposure spread over a large number of counterparties and customers.

Page 1

 
SOAPWORKS LIMITED
 

STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 29 DECEMBER 2023

Financial risk management objectives and policies
 
The company's principal financial instruments are cash, debt discounting and general banking facilities, all of which are used to facilitate normal trading operations. The main risks from the company's financial instruments are credit, liquidity and cash flow risk.

The company mitigates credit risk by thorough credit vetting of customers prior to commencement of trade and periodically thereafter, systematic enforcement of credit limits and agreed payment terms and insuring of trade debt.

The company mitigates liquidity risk through financing from a mix of shareholders' funds and bank borrowings. This mix of funding offers flexibility and cost effectiveness to match the needs of the Company.

The company mitigates cash flow risk by discounting debt with a third party to ensure sufficient funding to satisfy creditors as they fall due, enforcement of customer credit limits and agreed payment terms.


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



S Seddon
Director
Date: 16 January 2025
Page 2

 
SOAPWORKS LIMITED
 

 
DIRECTORS' REPORT
FOR THE PERIOD ENDED 29 DECEMBER 2023

The directors present their report and the financial statements for the period ended 29 December 2023.

Directors' responsibilities statement

The directors are responsible for preparing the Strategic report, the Directors' report and the financial statements in accordance with applicable law and regulations.

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

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


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

make judgements and accounting estimates that are reasonable and prudent;

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

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

Results and dividends

The profit for the period, after taxation, amounted to £19,486 (2022 - loss £519,965).

There are no current plans to make any dividend payments (2022 - £NIL).

Directors

The directors who served during the period were:

M J Davila (appointed 17 April 2018)
J Douglas (appointed 17 April 2018)
S Seddon (appointed 5 January 2011)
B Cumming (appointed 25 July 2022)

Future developments

The Company are looking to continue to improve their sales and customer profile.

Disclosure of information to auditors

Each of the persons who are directors at the time when this Directors' report is approved has confirmed that:

so far as the director is aware, there is no relevant audit information of which the Company's
auditors are unaware, and

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

Page 3

 
SOAPWORKS LIMITED
 

 
DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 29 DECEMBER 2023

Post balance sheet events

There have been no significant events affecting the Company since the year end.

Auditors

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

This report was approved by the board on 16 January 2025 and signed on its behalf.
 





S Seddon
Director

Page 4

 
SOAPWORKS LIMITED
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SOAPWORKS LIMITED
 

Opinion


We have audited the  of Soapworks Limited (the 'Company') for the period ended 29 December 2023,  which comprise the Statement of income and retained earnings, the Statement of financial position, the Statement of cash flow and the related notes including a summary of 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 :


give a true and fair view of the state of the Company's affairs as at 29 December 2023 and of its profit for
the period then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting
Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.


Basis for opinion


We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the  section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the  in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.


Conclusions relating to going concern


In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.


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


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


Other information


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


We have nothing to report in this regard.


Page 5

 
SOAPWORKS LIMITED
 

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


Opinion on other matters prescribed by the Companies Act 2006
 

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

the information given in the Strategic report and the Directors' report for the financial period for which the
financial statements are perepared is consistent with the financial statment; and
the Strategic report and the Directors' report have been prepared in accordance with applicable legal
requirements.


Matters on which we are required to report by exception
 

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


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


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


Responsibilities of directors
 

As explained more fully in the Directors' responsibilities statement set out on page 3, the directors are responsible for the preparation of the  and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of  that are free from material misstatement, whether due to fraud or error.


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


Page 6

 
SOAPWORKS LIMITED
 

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


Auditors' responsibilities for the audit of the financial statements
 

Our objectives are to obtain reasonable assurance about whether the as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.


Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.

The extent to which the audit was considered capable of detecting irregularities including fraud

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

the engagement partner ensured that the engagement team collectively had the appropriate competence,
capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
we identified the laws and regulations applicable to the company through discussions with directors and
other management, and from our commercial knowledge and experience;
we focused on specific laws and regulations which we considered may have a direct material effect on the
financial statements or the operations of the company, including the Companies Act 2006, taxation
legislation and data protection, anti-bribery, employment, and health and safety legislation;
we assessed thevextent of compliance with the laws and regulations identified above through making
enquiries of management; and
• identified laws and regulations were communicated within the audit team regularly and the team remained
alert to instances of non-compliance throughout the audit.

We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by: 

making enquiries of management as to where they considered there was susceptibility to fraud, their
knowledge of actual, suspected and alleged fraud; and considering the internal 
controls in place to mitigate risks of fraud and non-compliance with laws and regulations.

To address the risk of fraud through management bias and override of controls, we: 

performed high level analytical procedures to identify any unusual or unexpected relationships;
tested journal entries to identify unusual transactions;
assessed whether judgements and assumptions made in determining the accounting estimates were
indicative of potential bias; and
investigated the rationale behind significant or unusual transactions.


The extent to which the audit was considered capable of detecting irregularities including fraud (continued)

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures
which included, but were not limited to:

agreeing financial statement disclosures to underlying supporting documentation;
reading the minutes of meetings of those charged with governance; and
enquiring of management as to actual and potential litigation and claim.

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is we would become aware of non-compliance.

 
Page 7

 
SOAPWORKS LIMITED
 

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


Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of directors and other management and the inspection of regulatory and legal correspondence, if any.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.


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


Use of our report
 

This report is made solely to the Company's members, as a body,  in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Comapany's members those matters we are required to state to them in an Auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.





Antony J. Sinclair (Senior statutory auditor)
  
for and on behalf of
French Duncan LLP
 
Chartered Accountants & Statutory Auditor
  
133 Finnieston Street
Glasgow
G3 8HB

16 January 2025
Page 8

 
SOAPWORKS LIMITED
 

STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE PERIOD ENDED 29 DECEMBER 2023

2023
2022
Note
£
£

  

Turnover
 4 
11,529,755
11,563,681

Cost of sales
  
(9,774,680)
(9,857,111)

Gross profit
  
1,755,075
1,706,570

Distribution costs
  
(138,404)
(129,460)

Administrative expenses
  
(1,434,931)
(1,964,952)

Operating profit/(loss)
 5 
181,740
(387,842)

Interest payable and similar expenses
 9 
(162,254)
(132,123)

Profit/(loss) before tax
  
19,486
(519,965)

Tax on profit/(loss)
 10 
-
-

Profit/(loss) after tax
  
19,486
(519,965)

Retained earnings at the beginning of the period
  
(1,151,446)
(631,481)

Profit/(loss) for the period
  
19,486
(519,965)

Retained earnings at the end of the period
  
(1,131,960)
(1,151,446)
The notes on pages 14 to 28 form part of these financial statements.

Page 9

 
SOAPWORKS LIMITED
REGISTERED NUMBER: SC388292

STATEMENT OF FINANCIAL POSITION
AS AT 29 DECEMBER 2023

29 December
30 December
2023
2022
Note
£
£

Fixed assets
  

Tangible assets
 11 
1,849,855
1,901,056

Current assets
  

Stocks
 12 
2,742,117
2,553,193

Debtors: amounts falling due within one year
 13 
2,138,276
2,322,290

Cash at bank and in hand
 14 
223,808
188,772

  
5,104,201
5,064,255

Creditors: amounts falling due within one year
 15 
(7,005,596)
(6,881,475)

Net current liabilities
  
 
 
(1,901,395)
 
 
(1,817,220)

Total assets less current liabilities
  
(51,540)
83,836

Creditors: amounts falling due after more than one year
 16 
(389,170)
(544,032)

  

Net liabilities
  
(440,710)
(460,196)


Capital and reserves
  

Called up share capital 
 19 
688,562
688,562

Capital redemption reserve
 20 
2,688
2,688

Profit and loss account
 20 
(1,131,960)
(1,151,446)

  
(440,710)
(460,196)


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




S Seddon
Director
Date: 16 January 2025

The notes on pages 14 to 28 form part of these financial statements.

Page 10

 
SOAPWORKS LIMITED
 

STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED 29 DECEMBER 2023

29 December
30 December
2023
2022
£
£

Cash flows from operating activities

Profit/(loss) for the financial period
19,486
(519,965)

Adjustments for:

Depreciation of tangible assets
187,282
162,833

Gain on disposal of tangible assets
(83,374)
(98,196)

Interest paid
162,254
132,123

Increase in stocks
(188,924)
(556,809)

Decrease/(increase) in debtors
184,014
(424,137)

Increase in creditors
746,503
1,420,773

(Decrease)/increase in amounts owed to groups
(199,132)
49,582

Net cash generated from operating activities

828,109
166,204


Cash flows used in investing activities

Purchase of tangible fixed assets
(136,081)
(236,212)

Sale of tangible fixed assets
83,374
98,196

HP interest paid
(38,417)
(39,817)

Net cash used in investing activities

(91,124)
(177,833)
Page 11

 
SOAPWORKS LIMITED
 

STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE PERIOD ENDED 29 DECEMBER 2023

29 December
30 December

2023
2022

£
£



Cash flows used in financing activities

New secured loans
87,226
-

Repayment of loans
(3,634)
-

Repayment of finance leases
(224,956)
(190,991)

Interest paid
(123,837)
(92,306)

Net cash used in financing activities
(265,201)
(283,297)

Net increase/(decrease) in cash and cash equivalents
471,784
(294,926)

Cash and cash equivalents at beginning of period
(1,509,971)
(1,215,045)

Cash and cash equivalents at the end of period
(1,038,187)
(1,509,971)


Cash and cash equivalents at the end of period comprise:

Cash at bank and in hand
223,808
188,772

Bank overdrafts
(1,261,995)
(1,698,743)

(1,038,187)
(1,509,971)


The notes on pages 14 to 28 form part of these financial statements.

Page 12

 
SOAPWORKS LIMITED
 

ANALYSIS OF NET DEBT
FOR THE PERIOD ENDED 29 DECEMBER 2023





At 31 December 2022
Cash flows
Other non-cash changes
At 29 December 2023
£

£

£

£

Cash at bank and in hand

188,772

35,036

-

223,808

Bank overdrafts

(1,698,743)

436,748

-

(1,261,995)

Debt due within 1 year

-

(83,592)

61,785

(21,807)

Debt due after 1 year

-

-

(61,785)

(61,785)

Finance leases

(767,635)

224,956

-

(542,679)


(2,277,606)
613,148
-
(1,664,458)

The notes on pages 14 to 28 form part of these financial statements.

Page 13

 
SOAPWORKS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 29 DECEMBER 2023

1.


General information

Soapworks Limited is a private company limited by shares incorporated in Scotland. The registered office is 53 Coltness Street, Glasgow, United Kingdom, G33 4JD. The company registered number is SC388292.

The principal activity of the company is the manufacture of soap.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

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

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

The following principal accounting policies have been applied:

 
2.2

Going concern

The directors are required to prepare the statutory financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. In satisfaction of this responsibility the directors have considered the company's ability to meet its liabilities as they fall due.

The current and future financial position of the company, its cash flows and liquidity position have been reviewed by the directors. Despite having net current liabilities, the company has obtained assurances that the immediate parent company will continue to provide such financial support as necessary to facilitate the development and growth of the company and to meet its long term strategic objectives.

The directors have satisfied themselves as to the validity of these assurances and that the immediate parent company has the means and authority to provide such funding as and when it is required.

The directors acknowledge that had these assurances not been secured then uncertainty would exist which may cast doubt over the company's ability to continue as a going concern and therefore its ability to realise its assets and discharge its liabilities in the normal course of business. However, on the basis of the assurances received, the directors believe that no such material uncertainty exists.

As such, the directors consider that it is appropriate to prepare the financial statements on the going
concern basis.

Page 14

 
SOAPWORKS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 29 DECEMBER 2023

2.Accounting policies (continued)

 
2.3

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is GBP.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.

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

 
2.4

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Sale of goods

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

 
2.5

Operating leases: the Company as lessee

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

Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.

Page 15

 
SOAPWORKS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 29 DECEMBER 2023

2.Accounting policies (continued)

 
2.6

Leased assets: the Company as lessee

Assets obtained under hire purchase contracts and finance leases are capitalised as tangible fixed assets. Assets acquired by finance lease are depreciated over the shorter of the lease term and their useful lives. Assets acquired by hire purchase are depreciated over their useful lives. Finance leases are those where substantially all of the benefits and risks of ownership are assumed by the company. Obligations under such agreements are included in creditors net of the finance charge allocated to future periods. The finance element of the rental payment is charged to profit or loss so as to produce a constant periodic rate of charge on the net obligation outstanding in each period.

 
2.7

Research and development

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

 
2.8

Finance costs

Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

 
2.9

Borrowing costs

All borrowing costs are recognised in profit or loss in the period in which they are incurred.

 
2.10

Pensions

Defined contribution pension plan

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

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

  
2.11

Employee benefits

Short-term employee benefits are recognised as an expense in the period in which they are incurred.

 
2.12

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Page 16

 
SOAPWORKS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 29 DECEMBER 2023

2.Accounting policies (continued)


2.12
Tangible fixed assets (continued)

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following basis:

Asset under contruction
-
not depreciated
Plant and machinery
-
10 - 25 years
Fixtures and fittings
-
5 years
Office equipment
-
10 years
Computer equipment
-
3 years
Other fixed assets
-
5 years

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

 
2.13

Stocks

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

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

 
2.14

Debtors

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

 
2.15

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

In the Statement of cash flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Company's cash management.

 
2.16

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

Page 17

 
SOAPWORKS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 29 DECEMBER 2023

2.Accounting policies (continued)

  
2.17

Provisions for liabilities

Provisions are made where an event has taken place that gives the Company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.

Provisions are charged as an expense to profit or loss in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the balance sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.

When payments are eventually made, they are charged to the provision carried in the Balance Sheet.

  
2.18

Financial instruments

The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.

Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cashflows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of about-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan.

Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Statement of Income and Retained Earnings.


3.


Judgements in applying accounting policies and key sources of estimation uncertainty

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Provisions

Provisions are recognised where the Company has an obligation, as a result of a past event, that can be measured reliably. The recording of provisions is an area which requires the exercise of management judgement relating to the nature, timing and probability of the liability and typically the Company's Balance Sheet includes provisions for bad debts and stock.

Page 18

 
SOAPWORKS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 29 DECEMBER 2023

4.


Turnover

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


2023
2022
£
£

Turnover
11,529,755
11,563,681


Analysis of turnover by country of destination:

2023
2022
£
£

United Kingdom
8,719,867
8,827,537

Rest of Europe
2,809,888
2,736,144

11,529,755
11,563,681



5.


Operating profit/(loss)

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

2023
2022
£
£

Exchange (gains)/losses
(470,592)
186,859

Research and development costs
945
1,506

Depreciation of owned tangible fixed assets
129,214
130,885

Depreciation of tangible fixed assets held under finance leases
58,068
31,948

Profit on disposal of tangible fixed assets
(83,374)
(98,196)

Other operating lease rentals
587
(1,275)


6.


Auditors' remuneration

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


29 December
30 December
2023
2022
£
£



Fees payable to the company's auditor for the audit of the company's financial statements
18,000
21,450

Page 19

 
SOAPWORKS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 29 DECEMBER 2023

7.


Employees

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


2023
2022
£
£

Wages and salaries
2,940,179
2,807,895

Social security costs
255,972
248,532

Cost of defined contribution scheme
227,331
202,735

3,423,482
3,259,162


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


        2023
        2022
            No.
            No.







Admin
20
20



Manufacturing
83
77

103
97


8.


Directors' remuneration

2023
2022
£
£

Directors' emoluments
165,742
269,240

Company contributions to defined contribution pension schemes
18,990
26,154

184,732
295,394


During the period retirement benefits were accruing to 2 directors (2022 - 2) in respect of defined contribution pension schemes.

The highest paid director received remuneration of £116,183 (2022 - £94,283).

The value of the Company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £13,446 (2022 - £11,314).

The value of the Company's contributions paid to a defined benefit pension scheme in respect of the highest paid director amounted to £13,446 (2022 - £11,314).

The total accrued pension provision of the highest paid director at 29 December 2023 amounted to £NIL (2022 - £NIL).

The amount of the accrued lump sum in respect of the highest paid director at 29 December 2023 amounted to £NIL (2022 - £NIL).

Page 20

 
SOAPWORKS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 29 DECEMBER 2023

9.


Interest payable and similar expenses

2023
2022
£
£


Interest on bank overdrafts and loans
97,661
60,598

Interest payable to group undertakings
26,176
31,708

Interest on finance leases and hire purchase contracts
38,417
39,817

162,254
132,123

Page 21

 
SOAPWORKS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 29 DECEMBER 2023

10.


Taxation



Factors affecting tax charge for the period/year

The tax assessed for the period/year is lower than (2022 - higher than) the standard rate of corporation tax in the UK of 23.52% (2022 - 19   %). The differences are explained below:

2023
2022
£
£


Profit/(loss) on ordinary activities before tax
19,486
(519,965)


Profit/(loss) on ordinary activities multiplied by standard rate of corporation tax in the UK of 23.52% (2022 - 19   %)
4,583
(98,793)

Effects of:


Tax effect of expenses that are not deductible in determining taxable profit
9,660
2,319

Change in unrecognised deferred tax assets
(14,849)
155,904

Permanent capital allowances in excess of depreciation
(273)
(22,013)

Remeasurement of deferred tax for changes in tax rates
879
(37,417)

Total tax charge for the year
-
-

The company has an unrecognised deferred tax asset of £444,742 (2022: £447,239) in relation to unrelieved tax losses and other timing differences. The deferred tax asset has not been recognised due to uncertainty over when it will be recovered against the reversal of deferred tax liabilities or future taxable profits.


Factors that may affect future tax charges

There were no factors that may affect future tax charges.

Page 22
 


 
SOAPWORKS LIMITED


 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 29 DECEMBER 2023


11.


Tangible fixed assets









Assets under contruction
Plant and machinery
Fixtures and fittings
Office equipment
Computer equipment
Other fixed assets
Total

£
£
£
£
£
£
£



Cost or valuation


At 31 December 2022
61,145
2,906,024
50,435
2,808
138,833
139,687
3,298,932


Additions
-
38,431
72,689
1,308
6,241
17,412
136,081


Disposals
-
(37,000)
-
-
-
-
(37,000)



At 29 December 2023

61,145
2,907,455
123,124
4,116
145,074
157,099
3,398,013



Depreciation


At 31 December 2022
-
1,225,954
20,889
445
92,164
58,424
1,397,876


Charge for year
-
111,817
14,475
335
30,698
29,957
187,282


Disposals
-
(37,000)
-
-
-
-
(37,000)



At 29 December 2023

-
1,300,771
35,364
780
122,862
88,381
1,548,158



Net book value



At 29 December 2023
61,145
1,606,684
87,760
3,336
22,212
68,718
1,849,855



At 30 December 2022
61,145
1,680,070
29,546
2,363
46,669
81,263
1,901,056

The net book value of assets held under finance leases or hire purchase contracts, included above, are as follows:


Page 23
 
SOAPWORKS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 29 DECEMBER 2023

           11.Tangible fixed assets (continued)

29 December
30 December
2023
2022
£
£



Plant and machinery
1,146,419
1,261,487


12.


Stocks

29 December
30 December
2023
2022
£
£

Raw materials and consumables
2,495,654
2,187,656

Work in progress
134,613
83,688

Finished goods and goods for resale
111,850
281,849

2,742,117
2,553,193



13.


Debtors

29 December
30 December
2023
2022
£
£

Trade debtors
1,888,415
2,130,192

Amounts owed by group undertakings
10,377
10,377

Other debtors
140,895
61,503

Prepayments and accrued income
98,589
120,218

2,138,276
2,322,290



14.


Cash and cash equivalents

29 December
30 December
2023
2022
£
£

Cash at bank and in hand
223,808
188,772

Less: bank overdrafts
(1,261,995)
(1,698,743)

(1,038,187)
(1,509,971)


Page 24

 
SOAPWORKS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 29 DECEMBER 2023

15.


Creditors: Amounts falling due within one year

29 December
30 December
2023
2022
£
£

Bank overdrafts
1,261,995
1,698,743

Bank loans
21,807
-

Trade creditors
4,398,895
3,660,583

Amounts owed to group undertakings
268,002
467,134

Other taxation and social security
167,574
230,493

Obligations under finance lease and hire purchase contracts
215,294
223,603

Accruals and deferred income
672,029
600,919

7,005,596
6,881,475


Amounts owed to group undertakings are unsecured and repayable on demand.

Bank loans include funding of £87,226 loan drawn down in November 2023. The loan bears interest rate of 5%+ Bank of England base rate and is repayable in 2027.  Overdrafts represent amounts owed under an invoice finance arrangement. This is secured over the related debts and by a floating charge over all company assets in relation to any current or future liabilities.


16.


Creditors: Amounts falling due after more than one year

29 December
30 December
2023
2022
£
£

Bank loans
61,785
-

Net obligations under finance leases and hire purchase contracts
327,385
544,032

389,170
544,032


Page 25

 
SOAPWORKS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 29 DECEMBER 2023

17.


Loans


Analysis of the maturity of loans is given below:


29 December
30 December
2023
2022
£
£

Amounts falling due within one year

Bank loans
21,807
-

Amounts falling due 1-2 years

Bank loans
61,785
-

83,592
-


Bank loans include funding of £87,226 loan drawn down in November 2023. The loan bears interest rate of 5%+ Bank of England base rate and is repayable in 2027. The directors consider that the carrying amount of the loan approximates to its fair value.


18.


Hire purchase and finance leases


Minimum lease payments under hire purchase fall due as follows:

29 December
30 December
2023
2022
£
£


Within one year
215,294
223,603

Between 1-5 years
327,385
544,032

542,679
767,635

Finance lease payments represent rentals payable by the company for certain items of plant and
machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed
on the use of the assets. The average lease term is 4 years. All leases are on a fixed repayment basis
and no arrangements have been entered into for contingent rental payments.

Finance lease liabilities are secured over the assets to which they relate.

19.


Share capital

29 December
30 December
2023
2022
£
£
Allotted, called up and fully paid



688,562 (2022 - 688,562) Ordinary Shares shares of £1.00 each
688,562
688,562


Page 26

 
SOAPWORKS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 29 DECEMBER 2023

20.


Reserves

Capital redemption reserve

The capital redemption reserve is a non-distributable reserve into which amounts are transferred following the redemption or purchase of a company's own shares out of distributable profits.

Profit and loss account

The profit and loss account represents the accumulated profits and losses of the company less distributions made to shareholders.


21.


Capital commitments


At 29 December 2023 the Company had capital commitments as follows:

29 December
30 December
2023
2022
£
£


Acquisition of tangible fixed assets
102,131
256,581


22.


Pension commitments

The company contributes to personal pension plans as well as a defined contribution pension scheme.
The pension contributions payable by the company during the year amounted to £227,331 (2022 -
£202,735). There is an outstanding balance of £25,644 due to the pension provider included within other
creditors at the year end (2022 -  £22,340).


23.


Commitments under operating leases

At 29 December 2023 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

29 December
30 December
2023
2022
£
£


Not later than 1 year
212,992
205,000

Later than 1 year and not later than 5 years
825,217
820,000

Later than 5 years
67,764
273,521

1,105,973
1,298,521

Page 27

 
SOAPWORKS LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 29 DECEMBER 2023

24.


Controlling party

The immediate parent company is Cacata Investment Inc., a company incorporated in the Republic of Panama. Its registered office is Financial Park Tower - Oficina 3531, Boulevard Costa del Este, Panama City, Panama.

The ultimate parent company is South Bay Corporation, a company incorporated in the Republic of Panama.

Page 28