Karium Ltd - Limited company accounts 23.2

REGISTERED NUMBER: 02530797 (England and Wales)

Karium Ltd

Strategic Report, Directors' Report and

Audited Financial Statements

for the Year Ended 31 March 2023

Page

Company Information

1

Strategic Report

2

Directors' Report

4

Independent Auditors' Report

6

Statement of Comprehensive Income

9

Balance Sheet

10

Statement of Changes in Equity

11

Notes to the Financial Statements

12

Directors:

J Benham

L G Gelderd

B D Hammersley

R R Otley

M S N Wright

J Green-Armytage

G Gasparini

Secretary:

B D Hammersley

Registered office:

The Capitol Building

Oldbury

Bracknell

Berkshire

RG12 8FZ

Registered number:

02530797 (England and Wales)

Auditors:

Haines Watts

Chartered Accountants and Statutory Auditor

178 Buckingham Avenue

Slough

Berkshire

SL1 4RD

The directors present their strategic report for the year ended 31 March 2023.

Principal activity and business review

The principal activity of the Company during the year was that of marketing and distribution of personal care products

Key performance indicators and business highlights

The Directors use a number of key performance indicators to monitor the Company's performance throughout the year. Primarily these are straightforward financial indicators such as sales and profit growth, alongside margins, contribution and EBITDA analysis. The Company also monitors its cash flow projections and working capital balances to provide appropriate focus on balance sheet performance.

The results for the year and financial position of the Company are as shown in the accompanying financial statements. The key KPIs for the year are as follows:

Net Sales: £33.6 million (up £1.9m (6%) versus prior year).

Profit after tax: £3.1 million (up £2.0m (154%) versus prior year).

Management measures business performance by looking at sales revenue and Operating EBITDA (earnings before interest, tax, depreciation and amortisation), this measure excludes non-recurring items classed as exceptional within the business's internal reporting. During the year, net sales grew by 6%, and Operating EBITDA by 32%. Whilst margins were initially squeezed by increased product and supply costs, Operating EBITDA growth was further supported by selective price increases to the trade and with strong cost management. Brand marketing and trade support was maintained at levels appropriate to the brand's requirements, whilst overheads were down on the prior year as the business managed resources appropriately allowing for a small reduction in total headcount. The 32% growth in the business's internal profit measurement, was before considering then impact of what the business classifies as one-off exceptional costs. During the year, these costs included some personnel restructuring and final write-downs of stock rendered obsolete by regulatory changes impacting product ingredients. The statutory operating profit which includes these impacts, still reports growth of 139%, as the prior year also had some costs impacting operating profit that were excluded from the internally reported Operating EBITDA.

Future developments

Management are confident of continuing the strong performance and growth trend from the year just gone, and have budgeted for significant sales and profit growth. Price increases on a number of the Company's brands will drive revenue growth, mitigating some of the cost challenges in the supply chain, and reversing the adverse margin impacts in 2022/23. Further profitability improvements are projected from product re-sourcing plans. Continuing new product innovation and range launches in both the UK and export markets are a further driver of sales, margin and profit growth).

Overall, the Directors believe that the Company is well positioned to continue to exploit growth opportunities across its brands both in the UK and export markets, and are confident of further strong revenue and profit growth in the upcoming year. The Company also continues to actively explore potential brand portfolio extensions to utilise the underlying strength of the platform that has been built over the last few years.

Business strategy and policies

The Company's strategy is to develop and grow its personal care brands. A key feature of the Company's strategy has been establishing and successfully managing long term mutually beneficial commercial relationships with its customers, suppliers and principal brand owners. The Company's systems are designed to discharge its financial and other regulatory obligations to stakeholders in a timely and efficient manner, whilst also ensuring the highest level of service to our customers. The Company continuously evaluates its operations and invests in people, systems and equipment in order to improve and maintain its operational capabilities. Furthermore, the Company continuously analyses the environment it operates in and takes necessary steps to ensure that insurable risks are adequately insured. The Company takes its environmental and social responsibilities seriously and actively looks for more environmentally friendly products and packaging. The Directors of the Company value providing a safe working environment to its staff and have implemented comprehensive health and safety at work procedures, with an increased focus on staff mental well-being.

Business risk management and mitigation

The Company, through its management team, will periodically review the risks facing the business and ensure that plans are in place to mitigate those risks.

The Company owns personal care brands that have been available in the UK market place for decades and in certain instances for over a century. The Company believes that these brands have a loyal consumer base, however as noted above, the Company has a process for new product development and re-launches to ensure that the Company's products continuously meet changing customer needs.

In a changing regulatory environment, the Company regularly engages external consultants with expert knowledge in technical matters related to personal care products. In addition, the Company is an active member of the Cosmetics Toiletry and Perfumery Association (CTPA).

Principal risks and uncertainties

The "cost of living crisis", the high inflationary environment and the squeeze on consumers relative wealth is a risk in the current market, across the economy as well as within the health and beauty category. However, whilst consumers in some cases are cutting back discretionary spends, the Company has found in the past, that personal care categories are less impacted than other consumer goods categories by consumer caution. In addition, the Company's broad presence across the retail categories including a strong presence in the discount channels, further mitigates risks in this area.

The health and personal care market overall remains highly competitive. However, the Directors continually monitor the market, and its risks and challenges, and the Directors maintain a focus on having a balanced portfolio of brands, customers and markets, and a supply of innovative new and updated products, to ensure the Company is not adversely impacted by the inherent risks above.

Supply side cost inflation has been a challenge, and is expected to continue to be so in the medium term. However, the Company continues to manage the cost pressures it faces, working closely with its select group of partner suppliers to mitigate costs where possible.

On behalf of the board:

B D Hammersley - Director

11 October 2023

The directors present their report with the financial statements of the Company for the year ended 31 March 2023.

Principal activity

The principal activity of the Company in the year under review was that of marketing and distribution of personal care products.

Dividends

An interim dividend of £85.75 per share was paid on 31 August 2022. The directors recommend that no final dividend be paid.

The total dividend distribution for the year ended 31 March 2023 will be £2,500,000.

Directors

The directors shown below have held office during the whole of the period from 1 April 2022 to the date of this report.

J Benham

L G Gelderd

B D Hammersley

R R Otley

M S N Wright

J Green-Armytage

G Gasparini

Donations

During the year the Company made charitable contributions of £7,210 (2022: £6,200). This was made up primarily of a donation to the CTPA's charitable arm Look Good Feel Better for £5,900. The Company made no political donations during the year.

Statement of directors' responsibilities

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 United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are 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 directors are required to:

-	select suitable accounting policies and then apply them consistently;

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

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

The 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 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.

Statement as to disclosure of information to auditors

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

On behalf of the board:

B D Hammersley - Director

11 October 2023

Opinion

We have audited the financial statements of Karium Ltd (the 'company') for the year ended 31 March 2023 which comprise the Statement of Comprehensive Income, Balance Sheet, Statement of Changes in Equity and Notes to the Financial Statements, 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 financial statements:

-	give a true and fair view of the state of the company's affairs as at 31 March 2023 and of its profit for the year then ended;

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

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

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 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 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 directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Directors' Report, but does not include the financial statements and our Auditors' Report thereon.

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.

In connection with our audit of the financial statements, 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 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 the audit:

-	the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

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 where 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 Statement of Directors' Responsibilities, the directors are 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 directors determine 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 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.

Auditors' 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 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:

We gained an understanding of the legal and regulatory framework applicable to the company and the industry in which it operates, and considered the risk of acts by the company that were contrary to applicable laws and regulations, including fraud. We discussed with the Directors the policies and procedures in place regarding compliance with laws and regulations. We discussed amongst the audit team the identified laws and regulations, and remained alert to any indications of non-compliance.

During the audit we focussed on laws and regulations which could reasonably be expected to give rise to a material misstatement in the financial statements, including, but not limited to, the Companies Act 2006 and UK tax legislation. Our tests included agreeing the financial statement disclosures to underlying supporting documentation and enquiries with management.

Our procedures in relation to fraud included but were not limited to: inquires of management whether they have any knowledge of any actual, suspected or alleged fraud, and discussions amongst the audit team regarding risk of fraud such as opportunities for fraudulent manipulation of financial statements. We determined that the principal risks related to posting manual journal entries to manipulate financial performance and management bias through judgements in accounting estimates. We also addressed the risk of management override of internal controls, including testing journals and evaluating whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud.

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

A further description of our responsibilities for the audit of the financial statements 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 company'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.

Jonathan Moughton (Senior Statutory Auditor)

for and on behalf of Haines Watts

Chartered Accountants and Statutory Auditor

178 Buckingham Avenue

Slough

Berkshire

SL1 4RD

16 October 2023

Turnover

3

33,624,984

31,600,784

Cost of sales

(21,628,217

)

(20,636,205

)

Gross profit

11,996,767

10,964,579

Sales, promotion and

distribution costs

(3,548,731

)

(4,245,234

)

Administrative expenses

(4,474,305

)

(5,014,978

)

Operating profit

3,973,731

1,704,367

Interest payable and similar expenses

6

(250,559

)

(221,052

)

Profit before taxation

7

3,723,172

1,483,315

Tax on profit

8

(632,253

)

(177,287

)

Profit for the financial year

3,090,919

1,306,028

Other comprehensive income

-

-

Total comprehensive income for the year

3,090,919

1,306,028

Fixed assets

Intangible assets

10

4,402,007

4,863,016

Tangible assets

11

298,350

312,068

Investments

12

44

3,661

4,700,401

5,178,745

Current assets

Stocks

13

9,169,929

6,573,131

Debtors

14

15,667,109

13,711,561

Cash at bank

39,618

285,756

24,876,656

20,570,448

Creditors

Amounts falling due within one year

15

13,119,521

9,884,392

Net current assets

11,757,135

10,686,056

Total assets less current liabilities

16,457,536

15,864,801

Provisions for liabilities

17

24,761

22,945

Net assets

16,432,775

15,841,856

Capital and reserves

Called up share capital

18

29,156

29,156

Share premium

19

11,321

11,321

Retained earnings

19

16,392,298

15,801,379

Shareholders' funds

16,432,775

15,841,856

The financial statements were approved by the Board of Directors and authorised for issue on 11 October 2023 and were signed on its behalf by:

B D Hammersley - Director

Called up

share

Retained

Share

Total

capital

earnings

premium

equity

£

£

£

£

Balance at 1 April 2021

29,156

16,995,351

11,321

17,035,828

Changes in equity

Dividends

-

(2,500,000

)

-

(2,500,000

)

Total comprehensive income

-

1,306,028

-

1,306,028

Balance at 31 March 2022

29,156

15,801,379

11,321

15,841,856

Changes in equity

Dividends

-

(2,500,000

)

-

(2,500,000

)

Total comprehensive income

-

3,090,919

-

3,090,919

Balance at 31 March 2023

29,156

16,392,298

11,321

16,432,775

1.	Statutory information

The Company is a private company incorporated, domiciled and registered in England and Wales. The registered number is 02530797, and the address of the registered office is The Capitol Building, Oldbury, Bracknell, Berkshire, RG12 8FZ.

The principal activity of the Company during the year was that of marketing and distribution of personal care products.

2.	Accounting policies

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

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 pound.

Going concern

The financial statements have been prepared on a going concern basis. In making their assessment, the directors have reviewed and considered relevant information, including the annual operating plan and financial budget, and the latest profit and loss forecasts and corresponding future cash flow and liquidity projections. These projections have taken due consideration of the current consumer goods market place, the challenges around rising costs, and the potential impact of cost of living increases on consumers demand. The business has plans to mitigate these potential challenges. Furthermore, the company has a strong balance sheet and maintains a good relationship with its primary funding provider, and the forward projections show sufficient available funding in place to manage the company's requirements going forward. Based on these assessments, the directors have concluded that they can continue to adopt a going concern basis in preparing the annual financial statements.

Financial Reporting Standard 102 - reduced disclosure exemptions

The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":

•

the requirements of Section 7 Statement of Cash Flows;

•

the requirements of paragraphs 11.42, 11.44, 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);

•

the requirement of paragraph 33.7.

Judgement and key sources of estimation uncertainty

In the application of the Company's accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amounts 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 if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

The key sources of estimation uncertainty that have a significant effect on the amounts recognised in the financial statements are described below:

Impairment of intangible assets

Determining whether trademarks are impaired requires an estimation of the recoverable amount. The recoverable amount calculation requires the entity to estimate future cashflows expected to arise from the trademark and a suitable discount rate in order to calculate present value.

Recoverability of debtors

Determining whether debtors are recoverable requires a review of the outstanding amounts and making a judgement on the recoverability of those amounts. The business makes a provision for any amounts that it judges to be at risk of non-recoverability.

Turnover

Turnover is measured at fair value of the consideration received or receivable and represents amounts receivable for goods supplied, stated net of trade discounts and of Value Added Tax.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have transferred to the buyer, usually on delivery of the goods, the amount of revenue can be measured reliably, it is probable that the associated economic benefits will flow to the entity, and costs incurred in respect of the transactions can be measured reliably.

Intangible assets other than goodwill

Intangible assets comprise of trademarks. Intangible assets are initially recorded at cost, and are subsequently stated at cost less any accumulated amortisation and impairment losses. Amortisation is calculated so as to write off the cost of an asset, less its estimated residual value, over the useful life of that asset as follows:

Trademarks

-

Straight line over 10 to 20 years

Tangible fixed assets

Tangible assets are initially recorded at cost, and subsequently stated at cost less any accumulated depreciation and impairment losses. Depreciation is calculated to write off the cost or valuation of an asset, less its residual value, over the useful economic life of that asset as follows:

Leasehold improvements

-

Straight line over lease period

Plant and equipment

-

Straight line over 3 to 10 years

Residual value represents the estimated amount which would currently be obtained from disposal of an asset, after deducting estimated costs of disposal, if the asset were already of the age and in the condition expected at the end of its useful life.

Investments in subsidiaries

Fixed asset investments are initially recorded at cost, and subsequently stated at cost less any accumulated impairment losses.

Stocks

Stocks are measured at the lower of cost and estimated selling price less cost to complete and sell. Cost includes all costs of purchase, cost of conversion and other costs incurred in bringing the stock to its present location and condition. Cost is based on a moving average price. A provision is made for obsolete, slow-moving or defective items where appropriate.

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.

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.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Foreign currencies

Transactions in foreign currencies are recorded in the functional currency by being translated into sterling at the rate of exchange ruling at the date of transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the exchange rate ruling at the reporting date, with any exchange differences being taken to the Statement of Comprehensive Income.

Operating leases

Rentals under operating leases are charged on a straight-line basis over the lease term, even if the payments are not made on such basis. Benefits received and receivable as an incentive to sign an operating lease are similarly spread on a straight-line basis over the lease term.

Pension costs and other post-retirement benefits

The Company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate.

Financial instruments

The Company has elected to apply the provisions of Section 11 'Basis Financial Instruments' and Section 12 'Other Financial Instruments Issues' of FRS 102 to all of its financial instruments. Financial assets and financial liabilities are recognised in the balance sheet when the Company becomes a party to the contractual provisions of the instrument.

Trade and other debtors and creditors are classified as basic financial instruments and measured at initial recognition at transaction price. Debtors and creditors are subsequently measured at amortised cost using the effective interest rate method. A provision is established when there is objective evidence that the Company will not be able to collect all amounts due.

Cash and cash equivalents are classified as basic financial instruments and comprise cash in hand and at bank which are an integral part of the Company's cash management.

Financial liabilities and equity instruments issued by the Company are classified in accordance with the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument.

An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs.

3.

Turnover

The turnover and profit before taxation are attributable to the one principal activity of the company.

An analysis of turnover by geographical market is given below:

2023

2022

£

£

United Kingdom

28,740,320

26,662,154

Europe

3,256,121

2,976,326

Asia

733,495

671,606

Africa

169,952

349,153

Australia & New Zealand

546,138

742,751

North & South America

178,958

198,794

33,624,984

31,600,784

4.	Employees and directors

2023

2022

£

£

Wages and salaries

2,939,234

3,157,567

Social security costs

347,081

345,285

Other pension costs

169,472

152,057

3,455,787

3,654,909

The average number of employees during the year was as follows:

2023

2022

Administrative staff

41

43

Management staff

6

6

47

49

5.	Directors' emoluments

2023

2022

£

£

Directors' remuneration

461,450

461,104

Directors' pension contributions to money purchase schemes

28,565

28,669

Information regarding the highest paid director is as follows:

2023

2022

£

£

Emoluments etc

176,967

176,861

Pension contributions to money purchase schemes

11,200

11,200

6.

Interest payable and similar expenses

2023

2022

£

£

Bank loan interest

250,559

223,261

Other interest payable

-

(2,209

)

250,559

221,052

7.	Profit before taxation

Operating profit is stated after charging:

2023

2022

£

£

Amortisation of intangible assets

461,009

461,009

Depreciation of tangible assets

82,255

107,660

Foreign exchange differences

13,107

460

Operating lease rentals

164,338

222,326

Auditors remuneration

30,750

28,000

8.

Taxation

Analysis of the tax charge

The tax charge on the profit for the year was as follows:

2023

2022

£

£

Current tax:

UK corporation tax

645,539

177,801

Prior year tax differences

(15,102

)

(8,552

)

Total current tax

630,437

169,249

Deferred tax

1,816

8,038

Tax on profit

632,253

177,287

Reconciliation of total tax charge included in profit and loss

The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained below:

2023

2022

£

£

Profit before tax

3,723,172

1,483,315

Profit multiplied by the standard rate of corporation tax in the UK of 19% (2022 - 19%)

707,403

281,830

Effects of:

Expenses not deductible for tax purposes

13,853

2,761

Capital allowances in excess of depreciation

(1,343

)

-

Adjustments to tax charge in respect of previous periods

(15,102

)

(8,552

)

Group relief

(73,906

)

(104,169

)

Other

1,348

5,417

Total tax charge

632,253

177,287

9.

Dividends

2023

2022

£

£

Ordinary shares of £1 each

Interim

2,500,000

2,500,000

10.	Intangible fixed assets

Trademarks

£

Cost

At 1 April 2022

and 31 March 2023

13,958,903

Amortisation

At 1 April 2022

9,095,887

Amortisation for year

461,009

At 31 March 2023

9,556,896

Net book value

At 31 March 2023

4,402,007

At 31 March 2022

4,863,016

The Soft & Gentle brand, which was purchased in 2012 is considered material to the Company. The carrying amount as at March 2023 was £4,226,036 (2022: £4,659,000) and the brand has an estimated remaining useful life of 10 years.

Amortisation cost for the year for all brands/trademarks are included within administrative expenses.

11.	Tangible fixed assets

Long

Plant and

leasehold

machinery

Totals

£

£

£

Cost

At 1 April 2022

231,304

690,006

921,310

Additions

3,530

65,007

68,537

At 31 March 2023

234,834

755,013

989,847

Depreciation

At 1 April 2022

12,167

597,075

609,242

Charge for year

23,356

58,899

82,255

At 31 March 2023

35,523

655,974

691,497

Net book value

At 31 March 2023

199,311

99,039

298,350

At 31 March 2022

219,137

92,931

312,068