The director presents the strategic report for the year ended 28 February 2026.

Smallworld Accessories Limited supplies adults’ and children’s accessories through concessions operated with major UK retailers. The company provides fully merchandised, end-to-end solutions across jewellery, hair, gifting, sunglasses, belts, bags, cold weather, beauty and event categories.

The strategy of the business is:

• To grow by supplying sustainably-sourced accessory ranges to customers that enhance their brand positioning and clothing offer.

• To develop profitable product extension opportunities within the accessories category to expand the width of the company's offer and grow the customer base both in the UK and internationally.

The business delivered turnover of £20.2m and a loss before tax of £0.6m for the year. Turnover increased by 1.1% year on year despite continued cost-of-living pressures and their effect on consumers’ disposable income.

The year’s loss was impacted by the continued investment and upfront costs to support future growth. Improving and scaling our logistics capabilities and additional trading expertise strengthened the foundations for future performance. These changes are designed to increase flexibility, accelerate growth from new product categories, and sustain strong operational performance for existing and new customers.

As part of these operational changes, the business decided to withdraw from the Direct-to-Consumer service model at the end of the year and focus on its core concession business. This resulted in one-off stock write-off costs during the year. Despite this impact, the business protected its gross profit margin, which increased from 32.4% in the previous year to 33.3%.

The benefit of these changes is already being seen by the business, with growth across new accessory categories, such as Sunglasses and Belts.

The business has continued to place a core focus on sustaining a strong balance sheet position which has enabled it to invest to deliver on these business growth opportunities.

Hair and Jewellery across the Adults and Kids ranges remain core strengths and key sales drivers throughout the year. The company also offers strong Gifting and Events ranges that support its retail partners during key seasonal selling periods. Growth in new categories, Sunglasses and Belts, is expected to generate returns from the upfront investment made during the year and provide greater stability as the company’s revenue streams become less seasonally weighted.

The company’s operating structure and processes support the continued use of sustainably sourced raw materials and sustainable supply-chain practices in the manufacture of its products. This enables the company to provide its retail partners with ranges that respond to increasing consumer expectations regarding sustainability.

Since the end of the financial year, the company has launched two new product categories with existing concession partners. This expansion supports the company’s strategic objective of developing profitable product extensions within the accessories category and broadens its market presence. The company now operates in 1,738 stores.

Management KPIs

The following are the financial key performance indicators (‘KPIs’) used by management to assess and regulate the company’s performance:

• Contribution per customer contract - these measures are not disclosed externally, but are used internally to ensure each contract delivers a sustainable level of contribution to support the ongoing profitability of the business.

• Gross profit as a percentage of turnover – 33.3% for the period, an increase of 0.9 percentage points from the previous year.

• Trade debtor days: 22 days, up from 20 days last year.

• Administrative expenses as a % of turnover – 35.7% for the period, up +5.8% from the previous year.

The main Market risk is the potential impact of continuing cost inflationary pressures. From a business perspective the risk would be that this could drive up the cost base of the business and negatively impact on customer’s disposable income.

To mitigate this risk, the business has and will continue to focus on the following areas:

• Continue to ensure that the product mix and value for money offering is aligned with customer demand.

• Development of both existing sales channels and potential new channels - leveraging our strengths in in-store servicing and product design across Adults and Children’s accessories.

• Tightly manage the stock critical path to avoid investing in stock too early while protecting availability during peak sales periods. Strong allocation, store placement and visual-merchandising processes enable the business to manage stock effectively, retain flexibility and invest in growth areas and new opportunities as they arise.

• Focus on mitigating overheads price increases to ensure that the cost base of the business is tightly controlled, and that cost efficiencies are made where possible.

The company imports most of its products from the Far East and pays for the majority in Chinese renminbi, with a smaller requirement for US dollars. It regularly reviews exchange rates and economic indicators that could weaken sterling and uses forward currency contracts to manage the potential effect of currency fluctuations on product costs.

The company designs, manufactures and tests its products to ensure that they meet all legal requirements for the markets it operates in. The company is a full member of the Ethical Trading Initiative.

On behalf of the board

The director presents his annual report and financial statements for the year ended 28 February 2026.

The principal activity is that of a supplier of adults' and children's fashion jewellery, accessories and event merchandise.

The results for the year are set out on page 9.

No ordinary dividends were paid. The director does not recommend payment of a final dividend.

The director who held office during the year and up to the date of signature of the financial statements was as follows:

The company manages its cash and borrowing requirements in order to maximise interest income and minimise interest expense, whilst ensuring the company has sufficient liquid resources to meet the operating needs of the business. The ultimate controlling entity has provided finance to assist cash flow and liquidity management.

All customers who wish to trade on credit terms are subject to credit verification procedures. The concession stands are operated from the premises of large supermarket chains and some high street stores and sales are reported by the stores themselves based upon the goods passing through the tills. Due to the customer mix the company has not experienced debtor recovery issues but trade debtors are monitored on an ongoing basis and provision will be made for doubtful debts where necessary.

Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the company continues and that the appropriate training is arranged. It is the policy of the company that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.

The company's policy is to consult and discuss with employees, through staff councils and at meetings, matters likely to affect employees' interests.

Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the company's performance.

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

The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of future developments and foreign exchange risk.

So far as the sole 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 director has taken all the necessary steps that he ought to have taken as a director in order to make himself aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

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

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

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

• select suitable accounting policies and then apply them consistently;

• make judgements and accounting estimates that are reasonable and prudent; and

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

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

We have audited the financial statements of Smallworld Accessories Limited (the 'company') for the year ended 28 February 2026 which comprise 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:

• give a true and fair view of the state of the company's affairs as at 28 February 2026 and of its loss for the year then ended;

• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

• have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for 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.

Opinions on other matters prescribed by the Companies Act 2006

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

• the information given in the strategic report and the director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

• the strategic report and the director's report have been prepared in accordance with applicable legal requirements.

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:

• 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 director's remuneration specified by law are not made; or

• we have not received all the information and explanations we require for our audit.

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.

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

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, our procedures included the following:

• Obtaining an understanding of the legal and regulatory framework that the company operates in, focusing on those laws and regulations that had a direct effect on the financial statements and operations;

• Obtaining an understanding of the company’s policies and procedures on fraud risks, including knowledge of any actual, suspected or alleged fraud; and

• Discussing among the engagement team how and where fraud might occur in the financial statements and any potential indicators of fraud through our knowledge and understanding of the company and our sector-specific experience.

As a result of these procedures, we considered the opportunities and incentives that may exist within the company for fraud. We are also required to perform specific procedures to respond to the risk of management override. As a result of performing the above, we identified the following areas as those most likely to have an impact on the financial statements: health & safety, employment law and compliance with the UK Companies Act.

In addition to the above, our procedures to respond to risks identified included the following:

• Making enquiries of management about any known or suspected instances of non-compliance with laws and regulations and fraud;

• Challenging assumptions and judgements made by management in their significant accounting estimates, in particular in relation to stock provisions and write offs, goodwill and fair value of forward contracts; and

• Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness.

Due to the inherent limitations of an audit, there is an unavoidable risk that some material misstatements in the financial statements may not be detected, even though the audit is properly planned and performed in accordance with the ISAs (UK). For instance, the further removed non-compliance is from the events and transactions reflected in the financial statements, the less likely the auditor is to become aware of it or to recognise the non-compliance.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

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 company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

The Statement of Comprehensive Income has been prepared on the basis that all operations are continuing operations.

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

Smallworld Accessories Limited is a private company limited by shares incorporated in England and Wales. The registered office is 3 Bell Lane, Lewes, East Sussex, BN7 1JU.

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 company has early adopted the 2024 FRS 102 periodic review amendments with the amendment being applied retrospectively subject to exceptions set out in the standard. In accordance with the transitional provisions of the standard, comparatives have not been restated. The accounting policies for leases have been impacted as a result of the adoption of amendments to FRS 102 (2024).

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £1.

The financial statements have been prepared under the historical cost convention adjusted for certain financial instruments measured at fair value. The principal accounting policies adopted are set out below.

At the time of approving the financial statements, the director has a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Accordingly, the financial statements have been prepared on a going concern basis. In reaching this conclusion, the director considered relevant information, including the annual budget, forecast future cash flows and the impact of subsequent events.true

The losses for the year ended 28 February 2026 were driven in large part by the decision to maintain and increase investment to support the future growth of the business and strengthen the critical fundamentals that the company considers to be its foundation. The business is already seeing benefits from this investment through growth in new accessory categories, including sunglasses, belts and beauty. This growth is expected to support a return to profitability, notwithstanding the continuing effects of a challenging inflationary environment in the UK and the resulting pressure on consumers' disposable income. The company therefore considers that it has a foundation from which to pursue future sales and growth opportunities.

The two principal potential risks to the business are market risk and foreign exchange risk. Market risk could arise if inflationary pressures on UK consumers increased significantly from current levels, further reducing customers' disposable income and adversely affecting sales. Foreign exchange risk could arise if sterling weakened significantly against the currencies used for overseas stock purchases, increasing intake costs and reducing profit margins.

The director performed a robust analysis of forecast future cash flows, including scenarios reflecting the potential effects of the current economic environment on the business. The analysis also assessed the effectiveness of the measures available to mitigate those effects.

Based on these assessments and the resources available to the company, the director has concluded that there is no material uncertainty that may cast significant doubt on the company's ability to continue as a going concern. The director therefore considers the adoption of the going concern basis in preparing the annual report and accounts to be appropriate.

Revenue comprises sales of goods provided to customers net of value added tax and other sales taxes. Revenue is recognised when performance obligations are satisfied and the control of goods is transferred to the buyer. The sale of goods is the only source of revenue.

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

Revenue is derived from the sale of accessories. The sale of these products is considered one performance obligation and accounted for as a product sale. There are no contracts whose performance obligations are satisfied over time. Revenue is recognised when the products are delivered to the customer or when they are purchased by the customer in stores where the company has concessionary stands. The company considers itself the principal in these sales. There are no financing components nor any element of variable considerations.

Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 10 years.

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:

For leasehold land and buildings and motor vehicles, which are held as right-of-use assets, the right-of-use asset is initially measured at an amount equal to the corresponding lease liability, plus lease payments made on or before the commencement day, less any lease incentives received and plus any initial direct costs. The right-of-use asset is subsequently measured at cost less accumulated depreciation and impairment losses. Depreciation on the right-of-use asset is recognised using the straight-line basis and starts at the commencement date of the lease.

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.

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell after making allowances for obsolete and slow moving stock, on a first-in first-out basis.

Cash at bank and in hand are basic financial assets and include deposits held at call with banks and bank overdrafts.

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 are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost.

Other financial assets are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

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.

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.

Basic financial liabilities are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Derivatives, including forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

For derivatives that are designated and qualify as cash flow hedges, the effective portion of changes in the fair value of the hedge is recognised in other comprehensive income. The gain or loss relating to the ineffective portion is recognised immediately in profit or loss. Any gain or loss previously recognised in other comprehensive income is reclassified to profit or loss when the hedge relationship ends. This occurs when the hedging instrument expires or no longer meets the hedging criteria, the forecast transaction is no longer highly probable, the hedged debt instrument is derecognised, or the hedging instrument is terminated.

A derivative with a positive fair value is recognised as a financial asset, whereas a derivative with a negative fair value is recognised as a financial liability.

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

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs.

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

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

Deferred tax 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 costs of short-term employee benefits are recognised as a liability and an expense.

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

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

At the inception of the contract, the company assesses whether a contract is, or contains, a lease. It recognises a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for those which are short-term or low-value leases as explained below. The right-of-use assets and the lease liabilities are presented as separate line items in the balance sheet.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the rate implicit in the lease. If this rate cannot be readily determined, the company uses its incremental or obtainable borrowing rate. The lease liability is subsequently measured by increasing the carrying amount to reflect interest in the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made.

The company takes advantage of the practical expedients available in respect of leases of low-value items and short-term leases. This means that short-term leases less than 12 months and low-value asset leases are not recognised as lease liabilities and right-of-use asset but are recognised as an expense on a straight-line basis over the lease term. Low-value assets are any assets below £10,000 but excluding all cars, vans, lorries, land and buildings and production line equipment. The expenses are recognised within administrative expenses.

In the comparative period, the company classified leases as finance leases whenever the terms of the lease transferred substantially all the risks and rewards of ownership to the lessees. All other leases were classified as operating leases. Assets held under finance leases were recognised as assets at the lower of the assets' fair value at the date of inception and the present value of the minimum lease payments. The related liability was included in the balance sheet as a finance lease obligation. Lease payments were treated as consisting of capital and interest elements and the interest was charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability. Rentals payable under operating leases, less any lease incentives received, were charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis was more representative of the time pattern in which economic benefits from the leased asset were consumed.

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 are included in the profit and loss account for the period.

In the application of the company’s accounting policies, the director is required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

The company entered into leases previously that are now recorded on the balance sheet. The lease liability is initially measured at present value of the lease payments which are discounted using an incremental borrowing rate. The incremental borrowing rate has been assessed by the director to be 6%.

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

The company monitors stock levels and impairment on an ongoing basis. Units held on concession stands are vulnerable to damage, pilfering and misplacement within the stores and provisions are maintained to reflect this. At the end of a season the company writes off the bulk of the remaining goods as new product lines are introduced. This estimation includes judgement on a number of factors including historical sales patterns, expected sales profiles and potential obsolescence. The cost of these write-offs is included within cost of sales.

At the reporting date, the carrying amount of inventory was £4,424,080 (2025 - £2,985,652).

The director has estimated the useful life of goodwill to be 10 years. The useful life of goodwill may vary depending on a number of factors including timing of future returns and market demands. The director has reviewed the estimated useful life of goodwill and determined that goodwill should continue to be amortised over 10 years from the inception date, with no impairment of goodwill required to be recognised.

All turnover is derived from the sale of goods.

Exchange differences recognised in profit or loss during the year, except for those arising on financial instruments measured at fair value through profit or loss, amounted to a £374,038 gain (2025 - £130,584 gain).

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

Their aggregate remuneration comprised:

The director is also considered to represent the key management personnel of the company.

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

In addition to the amount (credited)/charged to the profit and loss account, the following amounts relating to tax have been recognised directly in other comprehensive income:

Included within tangible fixed assets are right-of-use assets, as follows:

At the reporting date, the replacement cost of stock was £4,743,000 (2025 - £3,194,000).

Other debtors falling due after more than one year includes a deposit of £823,438 (2025: £881,211) with a key supplier to provide security on orders placed by the company. This is funded by a loan from the ultimate controlling entity of the same amount, which is recorded in creditors: amounts falling due after more than one year within other borrowings.

Other borrowings relates to a loan from the ultimate controlling entity, which has been subordinated to the loan received under the UK Government-backed Coronavirus Business Interruption Loan Scheme ("CBILS") received in 2021.

As disclosed within note 14, the ultimate controlling entity has provided a loan to the company to fund a deposit that is held with a key supplier.

In 2021, the company obtained a bank loan under the UK Government-backed Coronavirus Business Interruption Loan Scheme ("CBILS"). The loan is subject to interest charges at a rate of 3.8% above the Bank of England base rate per annum, with the Government providing a Business Interruption payment to cover the first 12 months of interest payments. The loan is repayable over 6 years, with a repayment holiday in place for the first 12 months of the loan.

The loan is secured by fixed and floating charges over the company's assets and has external guarantees.

Finance lease obligations relate to the right-of-use assets recognised as part of the early adoption of the amendments to FRS 102 issued in March 2024.

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

The timing of the expected reversal of the deferred tax asset is expected to be in the next 12 months. The deferred tax liability is expected to reverse over the useful lives of the tangible fixed assets.

Ordinary shares have attached to them full voting, dividend and capital distribution (including on winding up) rights.

The company entered into forward foreign exchange contracts to mitigate exchange rate risk for foreign currency payments, all contracts mature within 12 months of the reporting date.

At the reporting date, the company had loans outstanding with the ultimate controlling entity amounting to £2,278,858 (2025: £2,336,631), included within non-current liabilities. The loan interest expense during the year was £57,843 (2025: £57,843) and was charged at a rate of 4% (2025: 4%) on the interest bearing loan. The loans are unsecured, and are subordinated to the company's other financing facilities.

At the reporting date, the company had a year-end trade creditor balance outstanding with another trading related party of £410,151 (2025: £111,925), and a debtor balance due in more than one year of £823,438 (2025: £881,211). During the year, purchases with that related party amounted to £5,225,410 (2025: £4,418,275).

The immediate parent company is Smallworld Accessories Holdings Limited, a company incorporated in England and Wales. Smallworld Accessories Holdings Limited prepares consolidated financial statements, which include the results of the company, copies of which are available from Companies House.

The ultimate controlling entity is Chuan Men Investment Inc, a company incorporated in Taiwan.

Changes to lease accounting

The early adoption of FRS 102 (2024) this year resulted in the recognition of right-of-use assets and lease liabilities. Until 28 February 2025, the company recognised lease payments as expenses in the period to which they related. The company adopted the modified retrospective approach, determining right-of-use assets and lease liabilities starting from the date of initial application of 1 March 2025. The cumulative effect of the initial application is recognised as an adjustment to the opening balance sheet. There is no restatement of comparative information.

The company had one lease relating to the office premises and one lease relating to a motor vehicle, which the company previously treated as an operating lease under FRS 102 (2022). The right-of-use asset is calculated at an amount equal to the lease liability that would have been recognised in the balance sheet at 1 March 2025 (initial application date). The company applied a 6% discount rate, the incremental borrowing rate, to calculate the present value of the remaining lease payments.

As a result of the change in accounting for leases, the company has recognised, at the start of the period, a right-of-use asset amounting to £827,168 and lease liabilities amounting to £827,168. The impact on the balance sheet at 1 March 2025 is to increase fixed assets and creditors by these amounts.

The overall impact on the profit and loss account of recognising the previous operating lease on the balance sheet as at 28 February 2026 is a depreciation charge of £90,381, interest payable of £48,441 which a total impact of £138,822. The impact on the profit and loss if leases were still recognised as operating leases would be lease rental expenses of £68,970. The overall impact is a lower profit before tax of £69,852 in the year ended 28 February 2026.

Changes in revenue recognition policy

The early adoption of FRS 102 (2024) this year, resulted in applying the five-step model approach, similar to IFRS 15 for revenue recognition. There has been no change to the recognition of income under this model and so no transition adjustment are applicable.

Other

No other periodic review amendments have had a material impact on the financial statements.