Company registration number 03251952 (England and Wales)
SMILEYWORLD LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
SMILEYWORLD LIMITED
COMPANY INFORMATION
Director
Mr Nicolas Loufrani
Secretary
Praxis Secretaries (UK) Limited
Company number
03251952
Registered office
120-122 Webber Street
London
SE1 0QL
Auditor
Candour Advisory LLP
85 Great Portland Street
London
W1W 7LT
SMILEYWORLD LIMITED
CONTENTS
Page
Strategic report
1
Director's report
2
Director's responsibilities statement
3
Independent auditor's report
4 - 6
Profit and loss account
7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Statement of cash flows
11
Notes to the financial statements
12 - 24
SMILEYWORLD LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

The director presents the strategic report for the year ended 31 December 2023.

Review of the business

Smileyworld's brand has demonstrated resilience and growth over the years and although sales have fallen this year following the exceptional year in 2022 following the 50th Anniversary the company anticipates continued growth for the brand in the markets it operates.

 

Despite a loss in the year of £514k the Company has net assets of £5.985m and contributes to the overall group profits, this coupled with expected future profits means that the company should have sufficient reserves and liquidity to continue for the foreseeable future.

Principal risks and uncertainties

Economic uncertainties and fashion trends could potentially impact the sales. Recognising the volatility that characterises these dynamics, the company has implemented a comprehensive approach to budgeting and forecasting keeping these factors in mind. The Company also has a wide geographical customer base reducing the impacts of changes in one area. The large portfolio of licences and continued development and marketing activities reduces the risk of a sudden change in the market.

 

Unauthorised usage of the Smiley brand remains a constant risk to the business which when the company becomes aware of will actively seek to resolve.

Development and performance

With a solid foundation established in the markets we operate in, the director envisions that the brand will continue to garner recognition and prominence among its customers. This outlook is rooted in the brand's consistent delivery of quality, its responsiveness to market dynamics, its alignment with emerging fashion trends.

 

As part of our performance-focused approach, we are steadfast in maintaining our marketing investment. This commitment underscores our dedication to sustaining brand visibility and consumer engagement even in times of uncertainty. Furthermore, we are keenly poised to expand into new markets, leveraging our existing successes as a foundation for growth. By diversifying our market presence, we enhance revenue streams and broaden our consumer base, thus fortifying our performance resilience.

Key performance indicators

Following the 50th Anniversary year in 2022 sales have settled at £10.7m in 2023 down from the exceptional amount of £13.7m in 2022 with gross profit margins up slightly in 2023 to 49% compared to 44% in 2022. An increase in overhead expenses in the 2023 from £5.2m to £6.38m has led to a loss before tax of £514k compared to profits in 2022 of £906k.

 

On behalf of the board

Mr Nicolas Loufrani
Director
8 August 2025
SMILEYWORLD LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -

The director presents his annual report and financial statements for the year ended 31 December 2023.

Principal activities

The principal activity of the company continued to be that of the licensing of trademarks.

Results and dividends

The results for the year are set out on page 7.

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 Nicolas Loufrani
Auditor

The auditor, Candour Advisory LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

 

Medium-sized companies exemption

This report has been prepared in accordance with the provisions applicable to companies entitled to the small companies exemption.

On behalf of the board
Mr Nicolas Loufrani
Director
8 August 2025
SMILEYWORLD LIMITED
DIRECTOR'S RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -

The director is responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

Company law requires the director to prepare financial statements for each financial year. Under that law the director has elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law, the director must not approve the financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period.

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

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

SMILEYWORLD LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF SMILEYWORLD LIMITED
- 4 -
Opinion

We have audited the financial statements of Smileyworld Limited (the 'company') for the year ended 31 December 2023 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including 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:

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 Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

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

 

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

 

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

Other information

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.

SMILEYWORLD LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF SMILEYWORLD LIMITED (CONTINUED)
- 5 -

Opinions on other matters prescribed by the Companies Act 2006

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

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the director's report.

 

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

Responsibilities of director

As explained more fully in the director's responsibilities statement, the director is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the director determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the director is responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the director either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.

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.

SMILEYWORLD LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF SMILEYWORLD LIMITED (CONTINUED)
- 6 -

 

 

 

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.

Stephen Terence Costar FCCA (Senior Statutory Auditor)
For and on behalf of Candour Advisory LLP, Statutory Auditor
Chartered Certified Accountants
85 Great Portland Street
London
W1W 7LT
8 August 2025
SMILEYWORLD LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 7 -
2023
2022
Notes
£
£
Turnover
2
10,750,719
13,736,768
Cost of sales
(5,446,256)
(7,632,957)
Gross profit
5,304,463
6,103,811
Administrative expenses
(6,380,680)
(5,254,986)
Other operating income
561,474
57,458
Operating (loss)/profit
3
(514,743)
906,283
Interest receivable and similar income
6
438
-
0
Interest payable and similar expenses
7
-
0
(2,153)
(Loss)/profit before taxation
(514,305)
904,130
Tax on (loss)/profit
8
(26,087)
(252,798)
(Loss)/profit for the financial year
(540,392)
651,332

The profit and loss account has been prepared on the basis that all operations are continuing operations.

SMILEYWORLD LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
2023
2022
£
£
(Loss)/profit for the year
(540,392)
651,332
Other comprehensive income
-
-
Total comprehensive income for the year
(540,392)
651,332
SMILEYWORLD LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
9
1,369,904
1,552,611
Tangible assets
10
67,485
69,901
Investments
11
81,519
-
0
1,518,908
1,622,512
Current assets
Debtors
13
10,562,185
9,307,869
Cash at bank and in hand
159,345
3,707,124
10,721,530
13,014,993
Creditors: amounts falling due within one year
14
(6,238,416)
(8,109,128)
Net current assets
4,483,114
4,905,865
Total assets less current liabilities
6,002,022
6,528,377
Provisions for liabilities
Deferred tax liability
16
16,472
2,435
(16,472)
(2,435)
Net assets
5,985,550
6,525,942
Capital and reserves
Called up share capital
18
11,500,100
11,500,100
Profit and loss reserves
(5,514,550)
(4,974,158)
Total equity
5,985,550
6,525,942

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.

The financial statements were approved and signed by the director and authorised for issue on 8 August 2025
Mr Nicolas Loufrani
Director
Company registration number 03251952 (England and Wales)
SMILEYWORLD LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 January 2022
10,000,100
(5,625,490)
4,374,610
Year ended 31 December 2022:
Profit and total comprehensive income
-
651,332
651,332
Issue of share capital
18
1,500,000
-
1,500,000
Balance at 31 December 2022
11,500,100
(4,974,158)
6,525,942
Year ended 31 December 2023:
Loss and total comprehensive income
-
(540,392)
(540,392)
Balance at 31 December 2023
11,500,100
(5,514,550)
5,985,550
SMILEYWORLD LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash (absorbed by)/generated from operations
22
(3,492,633)
1,204,876
Interest paid
-
0
(2,153)
Income taxes refunded/(paid)
20,195
(437,428)
Net cash (outflow)/inflow from operating activities
(3,472,438)
765,295
Investing activities
Purchase of intangible assets
-
0
(32,634)
Proceeds from disposal of intangibles
32,499
-
0
Purchase of tangible fixed assets
(28,985)
(45,223)
Proceeds from disposal of investments
(81,519)
-
0
Repayment of loans
-
0
1,318,881
Interest received
438
-
0
Net cash (used in)/generated from investing activities
(77,567)
1,241,024
Financing activities
Proceeds from issue of shares
-
0
1,500,000
Net cash generated from financing activities
-
1,500,000
Net (decrease)/increase in cash and cash equivalents
(3,550,005)
3,506,319
Cash and cash equivalents at beginning of year
3,707,124
200,805
Cash and cash equivalents at end of year
157,119
3,707,124
Relating to:
Cash at bank and in hand
159,345
3,707,124
Bank overdrafts included in creditors payable within one year
(2,226)
-
0
SMILEYWORLD LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
1
Accounting policies
Company information

Smileyworld Limited is a private company limited by shares incorporated in England and Wales. The registered office is 120-122 Webber Street, London, SE1 0QL.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention, modified to include the revaluation of investments at fair value. The principal accounting policies adopted are set out below.

1.2
Going concern

Atruet the time of approving the financial statements, the director has a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the director continues to adopt the going concern basis of accounting in preparing the financial statements.

1.3
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for trademarks and licences provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

The nature, timing of satisfaction of performance obligations and significant payment terms of the company's major sources of revenue are as follows:

Licence sales are recognised when the licence period starts and when collection is reasonably assured and at the point all service obligations are judged to have been delivered in accordance with the terms of the contract with each customer.

1.4
Intangible fixed assets other than goodwill

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Copyrights
over 20 years
NFT's
At valuation
1.5
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

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:

Fixtures, fittings & equipment
15% reducing balance method
SMILEYWORLD LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

1.6
Fixed asset investments

Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.

Entities in which the company has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.

1.7
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

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
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

SMILEYWORLD LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
1.9
Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, 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.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

SMILEYWORLD LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Other financial liabilities

Derivatives, including interest rate swaps and 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.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.10
Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

1.11
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

SMILEYWORLD LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
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.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.12
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

 

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.

1.13
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.14
Leases
As lessee

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

1.15
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

2
Turnover and other revenue
2023
2022
£
£
Turnover analysed by geographical market
UK
740,982
1,667,492
Europe
5,911,853
8,570,306
US
3,149,235
2,400,242
Other
948,649
1,098,728
10,750,719
13,736,768
SMILEYWORLD LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
2
Turnover and other revenue
(Continued)
- 17 -
2023
2022
£
£
Other revenue
Interest income
438
-
3
Operating (loss)/profit
2023
2022
Operating (loss)/profit for the year is stated after charging/(crediting):
£
£
Exchange losses/(gains)
166,657
(230,011)
Fees payable to the company's auditor for the audit of the company's financial statements
17,500
24,030
Depreciation of owned tangible fixed assets
31,401
12,335
Amortisation of intangible assets
150,208
150,208
Operating lease charges
286,506
233,197
4
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2023
2022
Number
Number
40
35

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
2,806,418
2,415,972
Social security costs
315,532
274,642
Pension costs
65,108
57,710
3,187,058
2,748,324
5
Director's remuneration
2023
2022
£
£
Remuneration for qualifying services
102,000
87,595
SMILEYWORLD LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
6
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
438
-
0
2023
2022
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
438
-
0
7
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
-
2,153
8
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
-
0
99,089
Adjustments in respect of prior periods
12,050
(12,050)
Double tax relief
-
0
(99,089)
Total UK current tax
12,050
(12,050)
Foreign current tax on profits for the current period
-
0
99,089
Total current tax
12,050
87,039
Deferred tax
Origination and reversal of timing differences
14,037
165,759
Total tax charge
26,087
252,798
SMILEYWORLD LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
8
Taxation
(Continued)
- 19 -

The actual charge for the year can be reconciled to the expected (credit)/charge for the year based on the profit or loss and the standard rate of tax as follows:

2023
2022
£
£
(Loss)/profit before taxation
(514,305)
904,130
Expected tax (credit)/charge based on the standard rate of corporation tax in the UK of 25.00% (2022: 19.00%)
(128,576)
171,785
Tax effect of expenses that are not deductible in determining taxable profit
111,220
89,849
Unutilised tax losses carried forward
17,358
(63,457)
Double tax relief
-
0
(99,089)
Permanent capital allowances in excess of depreciation
14,036
165,759
Under/(over) provided in prior years
12,049
(12,049)
Taxation charge for the year
26,087
252,798
9
Intangible fixed assets
Copyrights
NFT's
Total
£
£
£
Cost
At 1 January 2023
3,024,819
32,499
3,057,318
Transfers
-
0
(32,499)
(32,499)
At 31 December 2023
3,024,819
-
0
3,024,819
Amortisation and impairment
At 1 January 2023
1,504,707
-
0
1,504,707
Amortisation charged for the year
150,208
-
0
150,208
At 31 December 2023
1,654,915
-
0
1,654,915
Carrying amount
At 31 December 2023
1,369,904
-
0
1,369,904
At 31 December 2022
1,520,112
32,499
1,552,611

At each balance sheet date,the Company reviews the carrying amounts of its intangible assets to determine whether there is any indication that those have suffered an impairment loss. If any such indication exist, the recoverable amount is estimated to determine the extent of the impairment loss (if any). All intangible assets are carried at cost less any impairment to date.

 

 

During the year, the Company transferred artwork of £32,499 to Investments.

SMILEYWORLD LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
10
Tangible fixed assets
Fixtures, fittings & equipment
£
Cost
At 1 January 2023
96,621
Additions
28,985
At 31 December 2023
125,606
Depreciation and impairment
At 1 January 2023
26,720
Depreciation charged in the year
31,401
At 31 December 2023
58,121
Carrying amount
At 31 December 2023
67,485
At 31 December 2022
69,901
11
Fixed asset investments
2023
2022
£
£
Unlisted investments
81,519
-
0
Movements in fixed asset investments
Investments
£
Cost or valuation
At 1 January 2023
-
Additions
49,020
Transfers
32,499
At 31 December 2023
81,519
Carrying amount
At 31 December 2023
81,519
At 31 December 2022
-

Investments represents artwork purchased in the current year and prior year. The value of the artwork has been assessed by the director and is not considered to be significantly different from the cost price and therefore no adjustment to the value has been made at the 31 December 2023.

SMILEYWORLD LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
12
Financial instruments
2023
2022
£
£
Carrying amount of financial assets include:
Instruments measured at fair value through profit or loss
81,519
-
13
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
608,181
774,978
Corporation tax recoverable
-
0
32,245
Amounts owed by group undertakings
4,155,983
3,118,309
Amounts owed by undertakings in which the company has a participating interest
2,673,488
2,683,249
Other debtors
51,986
-
0
Prepayments and accrued income
3,072,547
2,699,088
10,562,185
9,307,869
14
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans and overdrafts
15
2,226
-
0
Trade creditors
626,504
342,355
Taxation and social security
163,572
118,003
Other creditors
25,136
7,407
Accruals and deferred income
5,420,978
7,641,363
6,238,416
8,109,128
15
Loans and overdrafts
2023
2022
£
£
Bank overdrafts
2,226
-
0
Payable within one year
2,226
-
0

Nicolas Loufrani has provided a personal guarantee limited to £50,000 as a security to Barclays Bank Plc against the overdraft facility of £50,000 provided by the bank to the company.

SMILEYWORLD LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
16
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
16,472
14,318
Tax losses
-
(11,883)
16,472
2,435
2023
Movements in the year:
£
Liability at 1 January 2023
2,435
Charge to profit or loss
14,037
Liability at 31 December 2023
16,472

The deferred tax liability set out above is expected to reverse within 5 years and relates to accelerated capital allowances that are expected to mature within the same period.

17
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
65,108
57,710

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

18
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
11,500,100
11,500,100
11,500,100
11,500,100
SMILEYWORLD LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
19
Operating lease commitments
Lessee

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

2023
2022
£
£
Within one year
124,020
120,358
Between two and five years
14,456
20,052
Between one and five years
138,476
140,410
20
Related party transactions
Transactions with related parties

During the year the company entered into the following transactions with related parties:

Royalties payable
2023
2022
£
£
Entities with control, joint control or significant influence over the company
5,121,195
5,689,084

The following amounts were outstanding at the reporting end date:

2023
2022
Amounts due to related parties
£
£
Entities with control, joint control or significant influence over the company
5,121,195
6,496,171

The above amounts are interest free, unsecured and repayable on demand.

The following amounts were outstanding at the reporting end date:

2023
2022
Amounts due from related parties
£
£
Entities with control, joint control or significant influence over the company
4,155,983
3,118,309
Fellow subsidiary
2,106,789
2,049,645
Companies under similar control
566,698
633,604

The above amounts are interest free, unsecured and repayable on demand.

Other information
SMILEYWORLD LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
21
Ultimate controlling party

The ultimate parent company is The Smiley Company SPRL, a company incorporated in Belgium.

22
Cash (absorbed by)/generated from operations
2023
2022
£
£
(Loss)/profit after taxation
(540,392)
651,332
Adjustments for:
Taxation charged
26,087
252,798
Finance costs
-
0
2,153
Investment income
(438)
-
0
Amortisation and impairment of intangible assets
150,208
150,208
Depreciation and impairment of tangible fixed assets
31,401
12,335
Decrease in provisions
-
0
(79,857)
Movements in working capital:
Increase in debtors
(1,286,561)
(1,658,039)
(Decrease)/increase in creditors
(1,872,938)
1,873,946
Cash (absorbed by)/generated from operations
(3,492,633)
1,204,876
23
Analysis of changes in net funds
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
3,707,124
(3,547,779)
159,345
Bank overdrafts
-
0
(2,226)
(2,226)
3,707,124
(3,550,005)
157,119
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