Company registration number 10295387 (England and Wales)
YELLAPRO LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
YELLAPRO LIMITED
COMPANY INFORMATION
Directors
Mr P Poignant
(Appointed 29 September 2022)
Mr C Jordan
(Appointed 21 December 2023)
Company number
10295387
Registered office
First Floor
1 Des Roches Square
Witan Way
Witney
OX28 4BE
Auditor
DSA Prospect Audit Limited
First Floor
1 Des Roches Square
Witan Way
Witney
OX28 4BE
YELLAPRO LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Directors' responsibilities statement
5
Independent auditor's report
6 - 8
Income statement
9
Statement of comprehensive income
10
Statement of financial position
11
Statement of changes in equity
12
Notes to the financial statements
13 - 22
YELLAPRO LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 1 -
The directors present the strategic report for the year ended 31 December 2022.
Financial review and performance
In February 2021, the company (‘Yellapro’) became part of a group of companies (the ‘Branded’ group). Branded’s main focus is on product innovation and diversification as the global consumer base continues to place increased emphasis on eCommerce as their preferred method of shopping.
Sales
Year ended
Period ended
31 December 2022
31 December 2021
$
£
Sales
33,761,856
23,434,934
Cost of sales
(36,558,114)
(22,529,477)
Gross profit
(2,796,258)
905,457
Operating expenses
(16,215,393)
(8,760,078)
Other operating income/(expenses)
21,143,585
2,436,396
Profit/(loss) from operations
2,131,934
(5,418,225)
Net finance expenses
(158,519)
(802)
Profit/(loss) before tax
1,973,415
(5,419,027)
Sales
Yellapro has delivered a relatively satisfactory financial performance during the year with sales reaching $33,761,856 (2021: £23,434,934). The year to 31 December 2022, witnessed a slight increase in sales by 4.7% (2021:decrease by 25.5%) compared to previous period. Revenue generated during the year relates to sales of products with strong brand equity. These products can be purchased online through Amazon and other platforms or through other online or wholesale channels. Products were primarily offered to US customers while other markets and sales channels started to evolve.
Key performance indicators
The key performance indicators below reflect Yellapro’s performance for the period.
Financial objectives
Our key financial measures give us a clear indication of the overall performance and position of Yellapro.
Year ended
Period ended
31 December 2022
31 December 2021
$
£
Revenue Online sales less sales returns and promotions
33,761,856
23,434,934
Gross margin % Gross profit as a percentage of revenue
(8.28%)
3.86%
EBITDA margin % Profit before interest, tax, depreciation and amortisation as a percentage of revenue
8.72%
(23.12%)
(Loss)/profit before tax
1,973,415
(5,419,027)
YELLAPRO LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 2 -
Profitability
We have closed the financial year with a negative gross margin. The gross loss includes $5,451,946 of write downs and write offs of inventory mainly due to slow moving or obsolete products. Management is taking corrective actions through product lines differentiation, targeted advertising and promotional campaigns and cost and inventory management initiatives to improve Yellapro’s profitability and healthy margins.
Financial position at the end of the period
Yellapro finished the year with quick and current ratios at 0.9 (2021: 0.3) and 1.1 (2021: 0.9) respectively. We are looking to improve our liquidity ratios by managing our intercompany receivables and payables and closely monitoring cash to settle the amounts owed to group undertakings.
Description of risks and uncertainities
Credit risk
Credit risk arises when a failure by counter parties to discharge their obligations could reduce the amount of future cash inflows from financial assets on hand at the reporting date. Significant customers are those that represent more than 10% of the company's total revenue or gross accounts receivable balance. As at 31 December 2021, Yellapro had a concentration of credit risk as more than 10% of total revenue is with Amazon acting as a payment facilitator. Yellapro’s cash is held with reputable and regulated institutions and is not invested in any financial instruments carrying credit risk.
Liquidity risk
Liquidity risk is the risk that arises when the maturity of assets and liabilities does not match. An unmatched position potentially enhances profitability but can also increase the risk of losses. We have procedures with the object of minimizing such losses, such as, appropriate management of working capital and close monitoring of forecasted cash flows, with the aim of maintaining adequate cash to service the company’s current needs.
Currency risk
Currency risk is the risk that the value of financial instruments will fluctuate due to changes in foreign exchange rates and it arises when future commercial transactions and recognised assets and liabilities are denominated in a currency other than Yellapro's functional currency. Yellapro is exposed to foreign exchange risk from various currency exposures. Revenue earned and costs incurred in foreign currencies are matched to the maximum extent possible to create natural hedging. We monitor the exchange rate fluctuations on a continuous basis and act accordingly.
Looking to the future
Strategic focus
We move forward with an increased focus on product innovation and diversification as the global consumer base continues to place increased emphasis on eCommerce as their preferred method of shopping.
Outlook
Looking ahead, we continue to be well positioned to capture consumers needs through the continued development of our brands and exploration of new markets. By pairing ourselves with like-minded individuals, we continue to work together and lead the industry in terms of value-added quality products and customer experience. We want to be the customer’s choice for their online shopping needs.
Mr P Poignant
Director
13 March 2024
YELLAPRO LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 3 -
The directors present their annual report and financial statements for the year ended 31 December 2022.
Principal activities
The principal activity of the company continued to be that of selling products via online market places.
Results and dividends
The results for the year are set out on page 9.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr A Thompson
(Resigned 26 April 2023)
Mr P Poignant
(Appointed 29 September 2022)
Mr C Jordan
(Appointed 21 December 2023)
Research and development
Research and development (R&D) expenditure is expensed in the year in which it is incurred.
Post reporting date events
In April 2023, ATV Global Ltd was fully acquired by Branded Group Assets SARL. It is now a wholly owned subsidiary of the Branded Group.
Future developments
There have been no significant future developments the director believes need to be reported.
Auditor
The auditor, DSA Prospect Audit Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
Covid-19 pandemic
The additional risk of the impact of COVID-19 on the company has been assessed by the director. The director does not expect COVID-19 to have a material impact on the company’s future operations.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
YELLAPRO LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 4 -
On behalf of the board
Mr P Poignant
Director
13 March 2024
YELLAPRO LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 5 -
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 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.
YELLAPRO LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF YELLAPRO LIMITED
- 6 -
Opinion
We have audited the financial statements of Yellapro Limited (the 'company') for the year ended 31 December 2022 which comprise the income statement, the statement of comprehensive income, the statement of financial position, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 December 2022 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.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the 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.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the 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.
YELLAPRO LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF YELLAPRO LIMITED
- 7 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, 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 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.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the online marketplace sector;
we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006, taxation legislation and data protection, anti-bribery, employment, environmental (including Waste Electrical and Electronic Equipment recycling (WEEE) Regulations 2013) and health and safety legislation;
we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and
identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
YELLAPRO LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF YELLAPRO LIMITED
- 8 -
We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
To address the risk of fraud through management bias and override of controls, we:
performed analytical procedures to identify any unusual or unexpected relationships;
tested journal entries to identify unusual transactions;
assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and
investigated the rationale behind significant or unusual transactions.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
agreeing financial statement disclosures to underlying supporting documentation;
reading the minutes of meetings of those charged with governance;
enquiring of management as to actual and potential litigation and claims; and
reviewing correspondence with HMRC, relevant regulators including the Health and Safety Executive, and the company’s legal advisors.
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
A further description of our responsibilities 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.
Mr Gary John McHale FCCA
Senior Statutory Auditor
For and on behalf of DSA Prospect Audit Limited
13 March 2024
Chartered Certified Accountants
Statutory Auditor
First Floor
1 Des Roches Square
Witan Way
Witney
OX28 4BE
YELLAPRO LIMITED
INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 9 -
Year
Period
ended
ended
31 December
31 December
2022
2021
Notes
$
£
Revenue
3
33,761,856
23,434,934
Cost of sales
(36,558,114)
(22,529,477)
Gross (loss)/profit
(2,796,258)
905,457
Administrative expenses
(16,215,393)
(8,760,078)
Other operating income
21,143,585
2,436,396
Operating profit/(loss)
4
2,131,934
(5,418,225)
Investment income
7
814,143
Finance costs
8
(972,662)
(802)
Profit/(loss) before taxation
1,973,415
(5,419,027)
Tax on profit/(loss)
9
268,997
867,700
Profit/(loss) for the financial year
2,242,412
(4,551,327)
The income statement has been prepared on the basis that all operations are continuing operations.
YELLAPRO LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2022
- 10 -
Year
Period
ended
ended
2022
2021
$
£
Profit/(loss) for the year
2,242,412
(4,551,327)
Other comprehensive income
-
-
Total comprehensive income for the year
2,242,412
(4,551,327)
YELLAPRO LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2022
31 December 2022
- 11 -
2022
2021
Notes
$
$
£
£
Non-current assets
Intangible assets
11
11,906
Current assets
Inventories
12
4,873,486
7,573,682
Trade and other receivables
13
18,583,083
4,772,604
Cash and cash equivalents
158,102
893,273
23,614,671
13,239,559
Current liabilities
14
(21,495,713)
(13,416,664)
Net current assets/(liabilities)
2,118,958
(177,105)
Total assets less current liabilities
2,118,958
(165,199)
Provisions for liabilities
Deferred tax liability
15
3,446
-
(3,446)
Net assets/(liabilities)
2,118,958
(168,645)
Equity
Called up share capital
16
1
1
Retained earnings
2,118,957
(168,646)
Total equity
2,118,958
(168,645)
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.true
The financial statements were approved by the board of directors and authorised for issue on 13 March 2024 and are signed on its behalf by:
Mr P Poignant
Director
Company registration number 10295387 (England and Wales)
YELLAPRO LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
- 12 -
Share capital
Retained earnings
Total
£
£
£
Balance at 27 January 2021
1
4,382,681
4,382,682
Period ended 31 December 2021:
Loss and total comprehensive income
-
(4,551,327)
(4,551,327)
Balance at 31 December 2021
1
(168,646)
(168,645)
$
$
$
Year ended 31 December 2022:
Profit and total comprehensive income
-
2,242,412
2,242,412
Other movements
-
45,191
45,191
Balance at 31 December 2022
1
2,118,957
2,118,958
YELLAPRO LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
- 13 -
1
Accounting policies
Company information
Yellapro Limited is a private company limited by shares incorporated in England and Wales. The registered office is First Floor, 1 Des Roches Square, Witan Way, Witney, OX28 4BE.
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 US dollars, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest $.The company changed its functional currency from Sterling pounds to US dollars from 1 January 2022 with prospective application on comparative figures according to FRS 102. The change was made to reflect that US dollars is the predominant currency in the company, accounting for more than 50% of net cash flow.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: The disclosure requirements of paragraphs 11.42, 11.44, 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b), 11.48(c), 12.26, 12.27, 12.29(a), 12.29(b), and 12.29A;
Section 26 ‘Share based Payment’: Share based payment arrangements required under FRS 102 paragraphs 26.18(b), 26.19 to 26.21 and 26.23;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
Yellapro Limited is ultimately owned by Branded Group SA. The results of Yellapro Limited are included in the consolidated financial statements of Branded Group SA which are available from 17 Boulevard Friedrich Wilhelm Raiffeisen, 2411, Luxembourg.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
YELLAPRO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 14 -
1.3
Revenue
Revenue is measured at the fair value of the consideration received or receivable and represents the amount receivable for goods supplied, net of returns, discounts and rebates allowed by the company and value added taxes.
The company bases its estimate of returns on actual results, taking into consideration the type of customer, the type of transaction and the specifics of each arrangement.
Where the consideration receivable in cash or cash equivalents is deferred, and the arrangement constitutes a financing transaction, the fair value of the consideration is measured as the present value of all future receipts using the imputed rate of interest.
The company recognises revenue when (a) the significant risks and rewards of ownership have been transferred to the buyer; (b) the group retains no continuing involvement or control over the goods; (c) the amount of revenue can be measured reliably; (d) it is probable that future economic benefits will flow to the entity and (e) when the specific criteria relating to the group’s sales channel have been met, as described below.
The company sells goods online on Amazon and other platforms for delivery to the customer. Revenue is recognised when the risks and rewards of the inventory are passed to the customer. The point of acceptance is the delivery of goods to the customer.
Provision is made for credit notes based on the expected level of returns which is based on the actual experience of returns.
1.4
Research and development expenditure
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.
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:
Patents & licences
5 years straight line
1.6
Inventories
Inventories 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 inventories to their present location and condition.
Inventories held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
YELLAPRO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 15 -
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of inventories 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.
1.7
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include trade and other receivables and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
YELLAPRO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 16 -
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including trade and other payables, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade payables 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 payables are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.10
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 income statement 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.
YELLAPRO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 17 -
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.11
Foreign exchange
Transactions in currencies other than US dollars are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
2
Judgements 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 amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
3
Revenue
2022
2021
$
£
Revenue analysed by class of business
Online sales
33,761,856
23,434,934
2022
2021
$
£
Revenue analysed by geographical market
Rest of the World
33,761,856
23,434,934
2022
2021
$
£
Other revenue
Interest income
814,143
-
YELLAPRO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 18 -
4
Operating profit/(loss)
2022
2021
Operating profit/(loss) for the year is stated after charging/(crediting):
$
£
Exchange (gains)/losses
(1,198,946)
14,509
Research and development costs
-
3,106
Amortisation of intangible assets
-
2,673
Impairment of inventories recognised or reversed
5,451,946
1,798,546
5
Auditor's remuneration
2022
2021
Fees payable to the company's auditor and associates:
$
£
For audit services
Audit of the financial statements of the company
7,232
4,000
For other services
Audit-related assurance services
3,014
2,000
The cost of the audit of the company’s financial statements has been borne by a subsidiary company in the group, ATV Global Limited.
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2022
2021
Number
Number
1
1
7
Investment income
2022
2021
$
£
Interest income
Other interest income
814,143
8
Finance costs
2022
2021
$
£
Interest on bank overdrafts and loans
313
802
Other interest on financial liabilities
972,349
972,662
802
YELLAPRO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 19 -
9
Taxation
2022
2021
$
£
Current tax
UK corporation tax on profits for the current period
(264,826)
(867,700)
Deferred tax
Origination and reversal of timing differences
(4,171)
Total tax credit
(268,997)
(867,700)
The actual credit for the year can be reconciled to the expected charge/(credit) for the year based on the profit or loss and the standard rate of tax as follows:
2022
2021
$
£
Profit/(loss) before taxation
1,973,415
(5,419,027)
Expected tax charge/(credit) based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
374,949
(1,029,615)
Tax effect of expenses that are not deductible in determining taxable profit
3,446
Unutilised tax losses carried forward
56,478
241,842
Adjustments in respect of prior years
(595,635)
Group relief
(183,188)
Section 455
(25,331)
Tax rate changes
78,399
(58,042)
Taxation credit for the year
(268,997)
(867,700)
10
Impairments
Impairment tests have been carried out where appropriate and the following impairment losses have been recognised in profit or loss:
2022
2021
Notes
$
£
In respect of:
Inventories
12
5,451,946
1,798,546
Recognised in:
Cost of sales
5,451,946
1,798,546
YELLAPRO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 20 -
11
Intangible fixed assets
Patents & licences
$
Cost
At 1 January 2022
14,579
Disposals
(14,579)
At 31 December 2022
Amortisation and impairment
At 1 January 2022
2,673
Disposals
(2,673)
At 31 December 2022
Carrying amount
At 31 December 2022 $
At 31 December 2021 £
11,906
Intangible assets with a carrying amount of $0 (2021 - £11,906) have been pledged to secure borrowings of the company. The company is not allowed to pledge these assets as security for other borrowings.
12
Inventories
2022
2021
$
£
Finished goods and goods for resale
4,873,486
7,573,682
Stock with a carrying amount of $4,873,486 (2021 - £7,573,682) have been pledged to secure borrowings of the company. The company is not allowed to pledge these assets as security for other borrowings.
13
Trade and other receivables
2022
2021
Amounts falling due within one year:
$
£
Trade receivables
1,272,063
1,371,793
Corporation tax recoverable
1,438,228
Amounts owed by group undertakings
14,953,155
1,138,845
Other receivables
454,842
2,166,794
Prepayments and accrued income
464,795
95,172
18,583,083
4,772,604
Debtors with a carrying amount of $18,118,289 (2021 - £4,772,603) have been pledged to secure borrowings of the company. The company is not allowed to pledge these assets as security for other borrowings.
YELLAPRO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 21 -
14
Current liabilities
2022
2021
$
£
Trade payables
1,487,035
585,494
Amounts owed to group undertakings
17,319,135
9,053,731
Taxation and social security
845,749
792,999
Other payables
677,708
1,837,330
Accruals and deferred income
1,166,086
1,147,110
21,495,713
13,416,664
15
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2022
2021
Balances:
$
£
Accelerated capital allowances
-
3,446
2022
Movements in the year:
$
Liability at 1 January 2022
4,171
Credit to profit or loss
(4,171)
Liability at 31 December 2022
-
16
Share capital
2022
2021
2022
2021
Ordinary share capital
Number
Number
$
£
Issued and fully paid
Ordinary shares of $1 each
1
1
1
1
Ordinary shares are entitled to one vote in any circumstances, equal rights to dividends, to participate in a distribution on winding up of the company and are non-redeemable.
17
Financial commitments, guarantees and contingent liabilities
The company has an outstanding fixed and floating charge, which contains a negative pledge, against certain assets of the company in respect of group liabilities.
In 2018, a former director opened a remuneration trust in the name of the business. The former director has agreed to settle all liabilities due to HMRC in regards to this.
YELLAPRO LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 22 -
18
Events after the reporting date
In April 2023, ATV Global Ltd was fully acquired by Branded Group Assets SARL. It is now a wholly owned subsidiary of the Branded Group.
19
Ultimate controlling party
The parent company of Yellapro Limited is AT Global Holdings Limited.
As at the year end the ultimate holding company of Yellapro Limited was Branded Group SA and its registered office is 17 Boulevard Friedrich Wilhelm Raiffeisen, 2411, Luxembourg.
The company's financial statements are consolidated into the ultimate holding company's financial statements as at 31 December 2022 and are available from the parent's registered office.
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