Company Registration No. 09347088 (England and Wales)
iSmash UK Trading Limited
Annual report and
group financial statements
for the year ended 31 December 2021
iSmash UK Trading Limited
Company information
Directors
Julian Shovlin
Dermot O'rourke
Richard Walker
Fiona Hornsby
Elizabeth Wynn
Timothy Mcguire
(Appointed 17 September 2021)
Mario Mele
(Appointed 25 May 2022)
James Senko
(Appointed 28 October 2022)
Company number
09347088
Registered office
Greenhill House
90-93 Cowcross Street
London
EC1M 6BF
Independent auditor
Saffery Champness LLP
71 Queen Victoria Street
London
EC4V 4BE
iSmash UK Trading Limited
Contents
Page
Strategic report
1 - 2
Directors' report
3 - 5
Independent auditor's report
6 - 9
Income statement
10
Group statement of comprehensive income
11
Group statement of financial position
12 - 13
Company statement of financial position
14 - 15
Group statement of changes in equity
16
Company statement of changes in equity
17
Group statement of cash flows
18
Company statement of cash flows
19
iSmash UK Trading Limited
Contents
Notes to the financial statements
20 - 39
iSmash UK Trading Limited
Strategic report
For the year ended 31 December 2021
Page 1
The directors present the strategic report for the year ended 31 December 2021.
Fair review of the business
Like most retail business in the UK, iSmash has faced a turbulent year as a result of the coronavirus pandemic which impacted consumer confidence and foot fall.
Notwithstanding the ongoing impact to the business of the pandemic, iSmash reported year on year growth, although our trading performance continued to underperform versus 2019.
The company made an operating loss of £2,617k (2020: £2,602k) during the year, falling back from a loss of £1,506k in 2019. This reflects the impact of the coronavirus pandemic, although its affects were partially mitigated as the company availed itself with significant amounts of Government Support via the Coronavirus Job Retention Scheme, Rates Relief and via council grants for smaller rateable properties. These have delivered a large cash injection into the business, whilst allowing iSmash to flex its cost base, which enabled the business to adapt in real time to changes in demand.
In addition, efficiencies delivered through our store cost base, as well as a focus on head office costs provided further benefits, learnings of which are a material benefit to the business, and we believe the savings will be achievable in future years.
The business completed a significant capital raise in Q3 2021, led by Telus Ventures, which has put the business in a far stronger financial position, strengthen the company balance sheet and enabling pay down of all long-term loan facilities. The investment will allow iSmash to expand its customer offering and continue the service centre roll-out programme, which combined with the work already undertaken to forge even stronger relationships with large Insurance administrators and OEMs, provides a strong opportunity for growth.
Principal Risks and Uncertainties
The company reviews its risks regularly and considers its principal risks to be the wider macro economy, changes in consumer behaviour following the coronavirus pandemic and in particular the increased pressure on household expenditure due to a sharp increase inflation and interest rates.
The macro economy factors and current cost of living crises will continue to play a significant role for the foreseeable future, with the Bank of England forecasting a recession in Quarter 4 2022 in the UK. The business continues to be able to adapt to changes in consumer behaviour and whilst recovery has been gradual, the business is well placed to adapt to consumer needs, diversifying its proposition and continuing to offer affordable alternatives, e.g. repair, refurbished devices.
Key performance indicators
The key KPIs that the business monitors are revenue, gross profit and repair numbers. These are monitored daily.
Trading performance and repair numbers continued to grow during the year following the end of the government mandated restrictions in February 2021, delivering a £591k uplift in revenue year-on-year, whilst Gross Profit also reported an increase, ending 2021 at £5,565K.
iSmash UK Trading Limited
Strategic report (continued)
For the year ended 31 December 2021
Page 2
Outlook
At the point of writing this report in December 2022, whilst the company has seen some recovery in traffic and demand for repair services, these metrics remain below the levels seen in 2019, and it is expected that further recovery will be gradual, nevertheless the board remains optimistic for the future.
Ismash achieved the best Retail Repair and Service business at the 2022
Mobile News Awards and continues to be the market leader in UK for phone repairs within Retail.
Given the investment in late 2021, iSmash has opened several new service centres across the UK and continues to develop new propositions. Furthermore, in August 2022 the business has acquired Samsung accreditation and is now an approved partner through their online channel.
2023 will continue to see the business diversify its revenue profile through growth in Samsung, whilst taking advantage of growing markets, such as refurbished devices with the support of shareholder base.
Julian Shovlin
Director
28 December 2022
iSmash UK Trading Limited
Directors' report
For the year ended 31 December 2021
Page 3
The directors present their annual report and financial statements for the year ended 31 December 2021.
Principal activities
The principal activity of the company and group continued to be that of repair of communication equipment.
Results and dividends
The results for the year are set out on page 10.
No ordinary dividends were paid. The directors do not recommend payment of a further dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Julian Shovlin
Dermot O'rourke
Richard Walker
Fiona Hornsby
Christopher Murton
(Resigned 17 September 2021)
Elizabeth Wynn
Timothy Mcguire
(Appointed 17 September 2021)
Mario Mele
(Appointed 25 May 2022)
Jonathan Wolkin
(Appointed 17 September 2021 and resigned 8 May 2022)
Matthew Price
(Resigned 17 September 2021)
Max Price
(Resigned 17 September 2021)
James Senko
(Appointed 28 October 2022)
Financial instruments
Liquidity risk
The Group manages its cash flows in order to maximise interest income and minimise interest expense, whilst ensuring the Group has enough liquid resources to meet the operating needs of the business.
Interest rate risk
Whilst the Group does not have any debt apart from leased in the normal course of business, the Group will manage its cash and borrowings in the most effective way possible to minimise any actual or potential interest rate cost.
Credit risk
The Group has at present substantial cash surpluses, the use of which must be cleared by the Board but are held are held wholly and exclusively for the benefit of the Group's operating companies.
Price risk
This is continually evaluated by the Board and management of the Group's companies.
iSmash UK Trading Limited
Directors' report (continued)
For the year ended 31 December 2021
Page 4
Future developments
The business expects to continue its growth plans and expects to open further stores during the 2021 and 2022 calendar year.
Auditor
In accordance with the company's articles, a resolution proposing that Saffery Champness LLP be reappointed as auditor of the group will be put at a General Meeting.
Energy and carbon report
As the group has not consumed more than 40,000 kWh of energy in this reporting period, it qualifies as a low energy user under these regulations and is not required to report on its emissions, energy consumption or energy efficiency activities.
Statement of directors' responsibilities
The directors are responsible for preparing the Annual 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 group and company, and of the profit or loss of the group 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;
-
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the
;
-
prepare the
on the going concern basis unless it is inappropriate to presume that the
group and
company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
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 auditor
of the
company 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 auditor
of the
company
is
aware of that information.
iSmash UK Trading Limited
Directors' report (continued)
For the year ended 31 December 2021
Page 5
Going concern
Despite future optimism, iSmash is forecasting trading will continue to be adversely impacted for the foreseeable future due to the exceptional circumstances caused by the global pandemic and the ongoing headwinds faced in the UK.
In the strategic report the board has reported on the TELUS Ventures investment, which has put the business in a far stronger financial position as a result, although to continue to progress and deliver its strategic initiatives the board have committed to further funding through the issue of convertible loan notes that can be drawn upon as and when the business requires to meet its ongoing obligations throughout 2023.
The board of iSmash UK Trading Limited have reviewed and signed off the budget for 2023 with downside sensitivities, and having acquired the necessary funding, it believes the business is a going concern.
The board acknowledges that iSmash UK Trading Limited has total net liabilities of £13,529k (2020: £10,290k) at a group level. However it has an amount outstanding to its parent company iSmash Group Limited of £23,427k (2020: £16,741k). This amount is recorded as a current liability, but the board has obtained support from the parent company with regards to future repayment of this balance.
On behalf of the board
Julian Shovlin
Director
28 December 2022
iSmash UK Trading Limited
Independent auditor's report
To the members of iSmash UK Trading Limited
Page 6
Opinion
We have audited the
financial statements of
iSmash UK Trading Limited
(the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2021 which comprise the group income statement, the group statement of comprehensive income, the group statement of financial position, the company statement of financial position, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows, the company statement of cash flows and notes to the financial statements,
including
significant accounting policies.
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102
The Financial Reporting Standard applicable in the UK and Republic of Ireland
(United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
-
give a true and fair view of the state of the group and of the parent company's affairs as at 31 December 2021 and of the group's 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.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the
Auditor's
responsibilities for the audit of the
financial statements
section of our report. We are independent of the
group and
parent company
in accordance with the ethical requirements that are relevant to our audit of the
financial statements
in the UK, including the FRC’s Ethical Standard
, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the 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
group's and
parent
company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
iSmash UK Trading Limited
Independent auditor's report (continued)
To the members of iSmash UK Trading Limited
Page 7
The directors are responsible for the other information. The other information comprises the information included in the annual report other than the financial statements and our auditor's 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.
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
the
audit
:
-
the information given in the strategic report and the directors'
r
eport 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
group and the parent
company and
their
environment obtained in the course of the audit, we have not identifie
d
material misstatements in the strategic report or the directors'
r
eport
.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
-
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
-
the parent company financial statements are not in agreement with the accounting records and returns; or
-
certain disclosures of directors' remuneration specified by law are not made; or
-
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors'
r
esponsibilities
s
tatement, 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 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
directors are
responsible for assessing the
parent
company
'
s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the parent company or to cease operations, or have
no realistic alternative but to do so.
iSmash UK Trading Limited
Independent auditor's report (continued)
To the members of iSmash UK Trading Limited
Page 8
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
.
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 specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud are detailed below.
Identifying and assessing risks related to irregularities:
We assessed the susceptibility of the group and parent company’s financial statements to material misstatement and how fraud might occur, including through discussions with the directors, discussions within our audit team planning meeting, updating our record of internal controls and ensuring these controls operated as intended. We evaluated possible incentives and opportunities for fraudulent manipulation of the financial statements. We identified laws and regulations that are of significance in the context of the group and parent company by discussions with directors and by updating our understanding of the sector in which the group and parent company operates.
Laws and regulations of direct significance in the context of the group and parent company include The Companies Act 2006 and UK Tax legislation.
Audit response to risks identified
We considered the extent of compliance with these laws and regulations as part of our audit procedures on the related financial statement items including a review of group and parent company financial statement disclosures. We reviewed the parent company's records of breaches of laws and regulations, minutes of meetings and correspondence with relevant authorities to identify potential material misstatements arising. We discussed the parent company's policies and procedures for compliance with laws and regulations with members of management responsible for compliance.
During the planning meeting with the audit team, the engagement partner drew attention to the key areas which might involve non-compliance with laws and regulations or fraud. We enquired of management whether they were aware of any instances of non-compliance with laws and regulations or knowledge of any actual, suspected or alleged fraud. We addressed the risk of fraud through management override of controls by testing the appropriateness of journal entries and identifying any significant transactions that were unusual or outside the normal course of business. We assessed whether judgements made in making accounting estimates gave rise to a possible indication of management bias. At the completion stage of the audit, the engagement partner’s review included ensuring that the team had approached their work with appropriate professional scepticism and thus the capacity to identify non-compliance with laws and regulations and fraud.
iSmash UK Trading Limited
Independent auditor's report (continued)
To the members of iSmash UK Trading Limited
Page 9
As group auditors, our assessment of matters relating to non-compliance with laws or regulations and fraud differed at group and component level according to their particular circumstances. Our communications included a request to identify instances of non-compliance with laws and regulations and fraud that could give rise to a material misstatement of the group financial statements in addition to our risk assessment.
There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
This report is made solely to the parent 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 parent 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 parent company and the parent company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Lucy Brennan (Senior Statutory Auditor)
For and on behalf of Saffery Champness LLP
30 December 2022
Chartered Accountants
Statutory Auditors
71 Queen Victoria Street
London
EC4V 4BE
iSmash UK Trading Limited
Group income statement
For the year ended 31 December 2021
Page 10
2021
2020
Notes
£
£
Turnover
3
10,570,047
9,979,077
Cost of sales
(5,005,166)
(4,648,992)
Gross profit
5,564,881
5,330,085
Administrative expenses
(8,979,558)
(9,247,803)
Other operating income
797,638
1,315,516
Operating loss
4
(2,617,039)
(2,602,202)
Interest payable and similar expenses
8
(468,110)
(622,618)
Other gains and losses
9
(3,619)
Loss before taxation
(3,085,149)
(3,228,439)
Tax on loss
10
Loss for the financial year
(3,085,149)
(3,228,439)
Loss for the financial year is all attributable to the owner of the parent company.
iSmash UK Trading Limited
Group statement of comprehensive income
For the year ended 31 December 2021
Page 11
2021
2020
£
£
Loss for the year
(3,085,149)
(3,228,439)
Other comprehensive income
-
-
Total comprehensive income for the year
(3,085,149)
(3,228,439)
Total comprehensive income for the year is all attributable to the owners of the parent company.
iSmash UK Trading Limited
Group statement of financial position
As at 31 December 2021
Page 12
2021
2020
as restated
Notes
£
£
£
£
Fixed assets
Intangible assets
12
196,132
182,773
Tangible assets
13
2,371,059
2,205,669
2,567,191
2,388,442
Current assets
Stocks
17
1,633,725
1,347,735
Debtors
18
4,875,591
5,560,776
Cash at bank and in hand
4,789,576
496,283
11,298,892
7,404,794
Creditors: amounts falling due within one year
19
(27,186,165)
(20,083,446)
Net current liabilities
(15,887,273)
(12,678,652)
Total assets less current liabilities
(13,320,082)
(10,290,210)
Creditors: amounts falling due after more than one year
20
(209,076)
(153,799)
Net liabilities
(13,529,158)
(10,444,009)
Capital and reserves
Called up share capital
24
1,072,509
1,072,509
Profit and loss reserves
(14,601,667)
(11,516,518)
Total equity
(13,529,158)
(10,444,009)
Ismash Limited, Ismash Canary Wharf Limited and Ismash Ken High Limited are exempt from audit for the financial period ended 31 December 2021 pursuant to section 479A of the Companies Act 2006.
iSmash UK Trading Limited
Group statement of financial position (continued)
As at 31 December 2021
Page 13
The financial statements were approved by the board of directors and authorised for issue on 28 December 2022 and are signed on its behalf by:
Julian Shovlin
Director
iSmash UK Trading Limited
Company statement of financial position
As at 31 December 2021
31 December 2021
Page 14
2021
2020
as restated
Notes
£
£
£
£
Fixed assets
Intangible assets
12
196,132
182,773
Tangible assets
13
2,303,447
2,103,682
Investments
14
61,656
61,656
2,561,235
2,348,111
Current assets
Stocks
17
1,633,725
1,347,735
Debtors
18
4,985,614
5,696,677
Cash at bank and in hand
4,789,257
495,964
11,408,596
7,540,376
Creditors: amounts falling due within one year
19
(27,382,389)
(20,271,173)
Net current liabilities
(15,973,793)
(12,730,797)
Total assets less current liabilities
(13,412,558)
(10,382,686)
Creditors: amounts falling due after more than one year
20
(209,076)
(153,799)
Net liabilities
(13,621,634)
(10,536,485)
Capital and reserves
Called up share capital
24
1,072,509
1,072,509
Profit and loss reserves
(14,694,143)
(11,608,994)
Total equity
(13,621,634)
(10,536,485)
As permitted by s408 Companies Act 2006, the
c
ompany has not presented its own profit and loss account and related notes. The
c
ompany’s loss for the year was £3,085,149 (2020 - £3,228,345 loss).
These financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.
iSmash UK Trading Limited
Company statement of financial position (continued)
As at 31 December 2021
31 December 2021
Page 15
The financial statements were approved by the board of directors and authorised for issue on 28 December 2022 and are signed on its behalf by:
Julian Shovlin
Director
Company Registration No. 09347088
iSmash UK Trading Limited
Group statement of changes in equity
For the year ended 31 December 2021
Page 16
Share capital
Profit and loss reserves
Total
£
£
£
As restated for the year ended 31 December 2020:
Balance at 1 January 2020
1,072,509
(8,288,080)
(7,215,571)
Year ended 31 December 2020:
Loss and total comprehensive income for the year
-
(3,228,439)
(3,228,439)
Balance at 31 December 2020
1,072,509
(11,516,519)
(10,444,010)
Year ended 31 December 2021:
Loss and total comprehensive income for the year
-
(3,085,149)
(3,085,149)
Balance at 31 December 2021
1,072,509
(14,601,668)
(13,529,159)
iSmash UK Trading Limited
Company statement of changes in equity
For the year ended 31 December 2021
Page 17
Share capital
Profit and loss reserves
Total
£
£
£
As restated for the year ended 31 December 2020:
Balance at 1 January 2020
1,072,509
(8,380,649)
(7,308,140)
Year ended 31 December 2020:
Loss and total comprehensive income for the year
-
(3,228,345)
(3,228,345)
Balance at 31 December 2020
1,072,509
(11,608,994)
(10,536,485)
Year ended 31 December 2021:
Loss and total comprehensive income for the year
-
(3,085,149)
(3,085,149)
Balance at 31 December 2021
1,072,509
(14,694,143)
(13,621,634)
iSmash UK Trading Limited
Group statement of cash flows
For the year ended 31 December 2021
Page 18
2021
2020
as restated
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
29
5,589,146
1,310,553
Interest paid
(468,110)
(916,695)
Income taxes refunded
20,312
Net cash inflow from operating activities
5,141,348
393,858
Investing activities
Purchase of intangible assets
(47,993)
(47,027)
Proceeds on disposal of intangibles
-
(6,459)
Purchase of tangible fixed assets
(793,312)
(110,150)
Proceeds on disposal of tangible fixed assets
-
10,079
Proceeds on disposal of investments
-
(3,619)
Net cash used in investing activities
(841,305)
(157,176)
Financing activities
Proceeds from issue of shares
-
111
Repayment of borrowings
(6,750)
(6,750)
Net cash used in financing activities
(6,750)
(6,639)
Net increase in cash and cash equivalents
4,293,293
230,043
Cash and cash equivalents at beginning of year
496,058
266,015
Cash and cash equivalents at end of year
4,789,351
496,058
Relating to:
Cash at bank and in hand
4,789,576
496,283
Bank overdrafts included in creditors payable within one year
(225)
(225)
iSmash UK Trading Limited
Company statement of cash flows
For the year ended 31 December 2021
Page 19
2021
2020
as restated
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
30
5,589,146
1,310,553
Interest paid
(468,110)
(916,695)
Income taxes refunded
20,312
Net cash inflow from operating activities
5,141,348
393,858
Investing activities
Purchase of intangible assets
(47,993)
(47,027)
Proceeds on disposal of intangibles
(6,459)
Purchase of tangible fixed assets
(793,312)
(110,150)
Proceeds on disposal of tangible fixed assets
10,079
Proceeds on disposal of investments
(3,619)
Net cash used in investing activities
(841,305)
(157,176)
Financing activities
Proceeds from issue of shares
-
111
Repayment of borrowings
(6,750)
(6,750)
Net cash used in financing activities
(6,750)
(6,639)
Net increase in cash and cash equivalents
4,293,293
230,043
Cash and cash equivalents at beginning of year
495,964
265,921
Cash and cash equivalents at end of year
4,789,257
495,964
iSmash UK Trading Limited
Notes to the financial statements
For the year ended 31 December 2021
Page 20
1
Accounting policies
Company information
iSmash UK Trading Limited (“the company”)
is a
private
limited company incorporated in
England and Wales
.
The registered office is
Suite 3.08, 20 Procter Street, London, WC1V 6NX.
The group consists of iSmash UK Trading Limited and all of its subsidiaries.
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 a
mounts
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 freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
The group follows a 4-4-5 accounting calendar, as such the financial statements are prepared to 2 January 2022.
1.2
Basis of consolidation
In the parent company
financial statements, t
he cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date.
Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date.
I
nvestments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.
The consolidated group financial statements consist of the financial statements of the parent company
iSmash UK Trading Limited
together with
all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates
.
All
financial statements
are made up to 31 December 2021
.
Where necessary, adjustments are made to the
financial statements
of subsidiaries to bring the accounting policies used into line with those used by other members of the
g
roup.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
iSmash UK Trading Limited
Notes to the financial statements (continued)
For the year ended 31 December 2021
1
Accounting policies (continued)
Page 21
1.3
Going concern
The directors acknowledge the company is in a net liability position due to investment in the company's growth to date. As described in the directors' report on page 6 the group has the support of its parent company shareholders and the director's have an expectation that further funds will be available in order to continue the groups growth plans. As a result, the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.4
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
1.5
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.
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date
where
it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the
fair
value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.
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:
Website
3 or 10 years straight line
1.6
Tangible fixed assets
Tangible fixed assets
are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
iSmash UK Trading Limited
Notes to the financial statements (continued)
For the year ended 31 December 2021
1
Accounting policies (continued)
Page 22
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Leasehold land and buildings
10 years straight line
Fixtures and fittings
3 or 5 years straight line
Computers
3 years straight line
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 recognised in the
income statement
.
1.7
Fixed asset investments
Equity in
vest
ments are measured at fair value through profit or loss
,
except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably
,
which are recognised at cost less impairment until a reliable measure of fair value becomes available.
I
n the parent company
financial statements,
investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the
group. Control is
the power to govern the financial and operating policies of
the
entity so as to obtain benefits from its activities.
1.8
Impairment of fixed assets
At each reporting
period
end date, the
group
reviews the carrying amounts of its tangible
and intangible
assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the
company
estimates the recoverable amount of the cash-generating unit to which the asset belongs.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
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.
iSmash UK Trading Limited
Notes to the financial statements (continued)
For the year ended 31 December 2021
1
Accounting policies (continued)
Page 23
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.
1.9
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition
.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.10
Cash at bank and in hand
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.
1.11
Financial instruments
The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the group's
statement of financial position
when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors, 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.
iSmash UK Trading Limited
Notes to the financial statements (continued)
For the year ended 31 December 2021
1
Accounting policies (continued)
Page 24
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.
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 group after deducting all of its liabilities.
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
paymen
ts 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.
1.12
Equity instruments
Equity instruments issued by the group 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 group.
1.13
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.
1.14
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
iSmash UK Trading Limited
Notes to the financial statements (continued)
For the year ended 31 December 2021
1
Accounting policies (continued)
Page 25
1.15
Leases
Rentals payable under operating leases,
including
any lease incentives received, are charged to
profit or loss
on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the lease
d
asset are consumed.
1.16
Government grants
Government grants are recognised at the fair value of the asset receive
d
or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
Government grants relating to turnover are recognised as income over the periods when the related costs are incurred
. Grants relating to an asset are recognised in income systematically over the asset's expected useful life. If part of such a grant is deferred it is recognised as deferred income rather than being deducted from the asset's carrying amount.
The government grants included in the Profit and Loss Account for the year ended 31 December 2020 and 2021 relate to business support issued by the UK government in response to the Covid-19 pandemic.
2
Critical accounting judgements and key sources of estimation uncertainty
In the application of the group’s accounting policies, the directors are 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.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Stock valuation
Stock is carried at the lower of cost and net realisable value. Realisable value includes, where necessary, provisions for slow moving and obsolete stock. The calculation of these provisions require judgements to be made, which include using the ageing profile of the stock on hand, historical sales patterns, post year end trading patterns and forecast consumer demand.
At the year end there was a closing provision against stock of £361,388 (2020: £181,013).
iSmash UK Trading Limited
Notes to the financial statements (continued)
For the year ended 31 December 2021
Page 26
3
Turnover and other revenue
2021
2020
£
£
Other revenue
Grants received
797,638
1,315,516
4
Operating loss
2021
2020
£
£
Operating loss for the year is stated after charging/(crediting):
Government grants
(797,638)
(1,315,516)
Depreciation of owned tangible fixed assets
500,976
484,318
Impairment of owned tangible fixed assets
126,946
-
Amortisation of intangible assets
34,634
29,379
Cost of stocks recognised as an expense
4,824,791
4,525,979
Stocks impairment losses recognised or reversed
180,375
123,013
5
Auditor's remuneration
2021
2020
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
34,500
31,500
Audit of the financial statements of the company's subsidiaries
2,350
2,000
36,850
33,500
For other services
Taxation compliance services
7,700
7,000
All other non-audit services
8,000
6,000
15,700
13,000
iSmash UK Trading Limited
Notes to the financial statements (continued)
For the year ended 31 December 2021
Page 27
6
Employees
The average monthly number of persons (including directors) employed by the group and company during the year was:
Group
Company
2021
2020
2021
2020
Number
Number
Number
Number
Average number of employees
165
171
165
171
Their aggregate remuneration comprised:
Group
Company
2021
2020
2021
2020
£
£
£
£
Wages and salaries
4,019,364
4,361,682
4,019,364
4,361,682
Social security costs
353,905
360,163
353,905
360,163
Pension costs
55,328
72,566
55,328
72,566
4,428,597
4,794,411
4,428,597
4,794,411
7
Directors' remuneration
2021
2020
£
£
Remuneration for qualifying services
376,650
461,366
Remuneration disclosed above includes the following amounts paid to the highest paid director:
2021
2020
£
£
Remuneration for qualifying services
138,931
177,707
Company pension contributions to defined contribution schemes
-
2,449
iSmash UK Trading Limited
Notes to the financial statements (continued)
For the year ended 31 December 2021
Page 28
8
Interest payable and similar expenses
2021
2020
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
468,110
619,577
Other finance costs:
Other interest
-
3,041
Total finance costs
468,110
622,618
9
Other gains and losses
2021
2020
£
£
Amounts written back to/(written off) financial assets held at cost
-
(3,619)
iSmash UK Trading Limited
Notes to the financial statements (continued)
For the year ended 31 December 2021
Page 29
10
Taxation
The actual charge for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
2021
2020
£
£
Loss before taxation
(3,085,149)
(3,228,439)
Expected tax credit based on the standard rate of corporation tax in the UK of 19.00% (2020: 19.00%)
(586,178)
(613,403)
Unutilised tax losses carried forward
586,178
613,403
Taxation charge
-
-
11
Impairments
Impairment tests have been carried out where appropriate and the following impairment losses have been recognised in profit or loss:
2021
2020
Notes
£
£
In respect of:
Property, plant and equipment
13
126,946
-
Stocks
17
180,375
123,013
Recognised in:
Cost of sales
180,375
123,013
Administrative expenses
126,946
-
The impairment losses in respect of financial assets are recognised in other gains and losses in the income statement.
iSmash UK Trading Limited
Notes to the financial statements (continued)
For the year ended 31 December 2021
Page 30
12
Intangible fixed assets
Group
Website
£
Cost
At 1 January 2021
273,096
Additions
47,993
At 31 December 2021
321,089
Amortisation and impairment
At 1 January 2021
90,323
Amortisation charged for the year
34,634
At 31 December 2021
124,957
Carrying amount
At 31 December 2021
196,132
At 31 December 2020
182,773
Company
Website
£
Cost
At 1 January 2021
273,096
Additions
47,993
At 31 December 2021
321,089
Amortisation and impairment
At 1 January 2021
90,323
Amortisation charged for the year
34,634
At 31 December 2021
124,957
Carrying amount
At 31 December 2021
196,132
At 31 December 2020
182,773
iSmash UK Trading Limited
Notes to the financial statements (continued)
For the year ended 31 December 2021
Page 31
13
Tangible fixed assets
Group
Leasehold land and buildings
Fixtures and fittings
Computers
Total
£
£
£
£
Cost
At 1 January 2021
3,342,268
728,827
123,757
4,194,852
Additions
664,592
56,803
71,917
793,312
At 31 December 2021
4,006,860
785,630
195,674
4,988,164
Depreciation and impairment
At 1 January 2021
1,350,265
529,320
109,598
1,989,183
Depreciation charged in the year
382,342
103,190
15,444
500,976
Impairment losses
122,984
3,874
88
126,946
At 31 December 2021
1,855,591
636,384
125,130
2,617,105
Carrying amount
At 31 December 2021
2,151,269
149,246
70,544
2,371,059
At 31 December 2020
1,992,003
199,507
14,159
2,205,669
iSmash UK Trading Limited
Notes to the financial statements (continued)
For the year ended 31 December 2021
13
Tangible fixed assets (continued)
Page 32
Company
Leasehold land and buildings
Fixtures and fittings
Computers
Total
£
£
£
£
Cost
At 1 January 2021
3,003,126
728,827
123,757
3,855,710
Additions
664,592
56,803
71,917
793,312
At 31 December 2021
3,667,718
785,630
195,674
4,649,022
Depreciation and impairment
At 1 January 2021
1,113,110
529,320
109,598
1,752,028
Depreciation charged in the year
347,967
103,190
15,444
466,601
Impairment losses
122,984
3,874
88
126,946
At 31 December 2021
1,584,061
636,384
125,130
2,345,575
Carrying amount
At 31 December 2021
2,083,657
149,246
70,544
2,303,447
At 31 December 2020
1,890,016
199,507
14,159
2,103,682
More information on impairment movements in the year is given in note 11.
14
Fixed asset investments
Group
Company
2021
2020
2021
2020
Notes
£
£
£
£
Investments in subsidiaries
15
61,656
61,656
iSmash UK Trading Limited
Notes to the financial statements (continued)
For the year ended 31 December 2021
14
Fixed asset investments (continued)
Page 33
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 1 January 2021 and 31 December 2021
61,656
Carrying amount
At 31 December 2021
61,656
At 31 December 2020
61,656
15
Subsidiaries
Details of the company's subsidiaries at 31 December 2021 are as follows:
Name of undertaking
Registered
Nature of business
Class of
% Held
office
shares held
Direct
iSmash Canary Wharf Limited
United Kingdom
Leaseholder
Ordinary
100
iSmash Ken High Limited
United Kingdom
Leaseholder
Ordinary
100
iSmash Limited
United Kingdom
Leaseholder
Ordinary
100
16
Financial instruments
Group
Company
2021
2020
2021
2020
£
£
£
£
Carrying amount of financial assets
Debt instruments measured at amortised cost
1,184,290
938,673
1,294,313
1,074,574
Carrying amount of financial liabilities
Measured at amortised cost
25,947,871
19,058,646
26,144,095
19,246,373
iSmash UK Trading Limited
Notes to the financial statements (continued)
For the year ended 31 December 2021
Page 34
17
Stocks
Group
Company
2021
2020
2021
2020
£
£
£
£
Finished goods and goods for resale
1,633,725
1,347,735
1,633,725
1,347,735
18
Debtors
Group
Company
2021
2020
2021
2020
Amounts falling due within one year:
£
£
£
£
Trade debtors
368,619
181,159
368,619
181,159
Corporation tax recoverable
20,312
20,312
Other debtors
815,671
757,514
925,694
893,415
Prepayments and accrued income
3,691,301
4,601,791
3,691,301
4,601,791
4,875,591
5,560,776
4,985,614
5,696,677
19
Creditors: amounts falling due within one year
Group
Company
2021
2020
2021
2020
Notes
£
£
£
£
Bank loans and overdrafts
225
225
Other borrowings
6,750
6,750
Trade creditors
1,150,475
1,325,589
1,150,475
1,325,589
Amounts owed to group undertakings
23,427,191
16,741,234
23,427,191
16,741,234
Other taxation and social security
1,447,370
1,147,099
1,447,370
1,147,099
Government grants
21
31,500
31,500
Other creditors
16,304
9,896
228,208
213,303
Accruals and deferred income
1,144,600
821,153
1,129,145
805,698
27,186,165
20,083,446
27,382,389
20,271,173
iSmash UK Trading Limited
Notes to the financial statements (continued)
For the year ended 31 December 2021
19
Creditors: amounts falling due within one year (continued)
Page 35
A limited guarantee has been given by a Director Julian Shovlin for an amount of £150,000 (2020: £150,000).
The above amounts due to parent is in respect of a loan from Ismash Group. Interest is charged at 4% and it is repayable on demand.
20
Creditors: amounts falling due after more than one year
Group
Company
2021
2020
2021
2020
£
£
£
£
Other creditors
209,076
153,799
209,076
153,799
21
Government grants
Group
Company
2021
2020
2021
2020
£
£
£
£
Arising from government grants
-
31,500
-
31,500
22
Retirement benefit schemes
2021
2020
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
55,328
72,566
A
defined contribution pension scheme
is operated
for all qualifying employees.
The assets of the scheme are held separately from those of the group in an independently administered fund.
23
Share-based payment transactions
iSmash UK Trading Limited
Notes to the financial statements (continued)
For the year ended 31 December 2021
23
Share-based payment transactions (continued)
Page 36
The parent company has a share based option scheme for certain employees employed by iSmash UK Trading Limited.
Options are exercisable at a price equal to the estimated fair value of the company's shares on the date of the grant. The vesting period is nine years and the options can be exercised on an exit or on the ninth anniversary of the grant date - May 2027.
There are 325 options outstanding at 31 December 2021 (2020: 325).
The fair value of the share options at the grant date was calculated using the Black Scholes model, which is considered to be the most appropriate generally accepted valuation method of measuring fair value. As a result of this calculation management have not recognised a share-based payment expense.
24
Share capital
Group and company
2021
2020
Ordinary share capital
£
£
Issued and fully paid
1,072,398 Ordinary share of £1 each
1,072,398
1,072,398
11,058 Ordinary B share of 1p each
111
111
1,072,509
1,072,509
25
Operating lease commitments
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
Group
Company
2021
2020
2021
2020
£
£
£
£
Within one year
2,045,950
1,764,918
1,820,950
1,539,918
Between two and five years
6,103,426
4,740,011
5,949,604
4,361,025
In over five years
1,634,125
2,525,418
1,634,125
2,525,418
9,783,501
9,030,437
9,404,679
8,426,361
iSmash UK Trading Limited
Notes to the financial statements (continued)
For the year ended 31 December 2021
Page 37
26
Events after the reporting date
T
he
parent company has
put in place a
new
share option scheme for four key managers
employed by iSmash UK trading in May 2022, granting 748 options in total.
The options are exercisable at a price equal to the estimated fair value of the company's shares on the date of the grant. The vesting period is nine years and the options can be exercised on an exit or on the ninth anniversary of the grant date - May 2031.
27
Related party transactions
Remuneration of key management personnel
The Director, COO and Finance Director are considered to be key management personnel. The total compensation of key management personnel during the period was £458,106 (2020: £414,215).
Other information
The company has taken advantage of the exemption in FRS102 from the requirement to disclose transactions with group companies on the grounds that consolidated financial statements are prepared by the ultimate parent company.
During the year to 31 December 2021, the company incurred advertising costs of £845,976 relating to the activities and spend carried out by Sky UK Limited on their behalf. At the year end, there is a prepayment in debtors of £3,329,023 that relates to prepaid advertising costs with Sky as part of the issue of iSmash Group Limited shares to Sky. Sky is a shareholder in UK Trading's parent, iSmash Group Limited, which wholly owns iSmash UK Trading Limited.
28
Controlling party
The parent company of Ismash UK Trading Ltd is Ismash Group Ltd and its registered office is Geneva Place, Waterfront Drive, P.O Box 3469, Road Town, Tortola, British Virgin Islands.
There is no ultimate controlling party.
iSmash UK Trading Limited
Notes to the financial statements (continued)
For the year ended 31 December 2021
Page 38
29
Cash generated from group operations
2021
2020
£
£
Loss for the year after tax
(3,085,149)
(3,228,439)
Adjustments for:
Finance costs
468,110
622,618
Amortisation and impairment of intangible assets
34,634
29,379
Depreciation and impairment of tangible fixed assets
627,922
484,318
Other gains and losses
-
3,619
Movements in working capital:
(Increase)/decrease in stocks
(285,990)
359,990
Decrease in debtors
664,873
562,564
Increase in creditors
7,196,246
2,445,004
(Decrease)/increase in deferred income
(31,500)
31,500
Cash generated from operations
5,589,146
1,310,553
30
Cash generated from operations - company
2021
2020
£
£
Loss for the year after tax
(3,085,149)
(3,228,345)
Adjustments for:
Finance costs
468,110
622,618
Amortisation and impairment of intangible assets
34,634
29,379
Depreciation and impairment of tangible fixed assets
593,547
449,944
Other gains and losses
-
3,619
Movements in working capital:
(Increase)/decrease in stocks
(285,990)
359,990
Decrease in debtors
690,751
574,977
Increase in creditors
7,204,743
2,466,871
(Decrease)/increase in deferred income
(31,500)
31,500
Cash generated from operations
5,589,146
1,310,553
iSmash UK Trading Limited
Notes to the financial statements (continued)
For the year ended 31 December 2021
Page 39
31
Analysis of changes in net funds - group
1 January 2021
Cash flows
31 December 2021
£
£
£
Cash at bank and in hand
496,283
4,293,293
4,789,576
Bank overdrafts
(225)
-
(225)
496,058
4,293,293
4,789,351
Borrowings excluding overdrafts
(6,750)
6,750
-
489,308
4,300,043
4,789,351
32
Analysis of changes in net funds - company
1 January 2021
Cash flows
31 December 2021
£
£
£
Cash at bank and in hand
495,964
4,293,293
4,789,257
Borrowings excluding overdrafts
(6,750)
6,750
-
489,214
4,300,043
4,789,257
33
Prior period adjustment
A prior year adjustment was necessary to ensure the rent free accrual was disclosed correctly between a current liability and long term liability. £153,799 was adjusted and disclosed as over one year.
Reconciliation of changes in equity
The prior period adjustments do not give rise to any effect upon equity.
2021-12-31
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