Registered number:
FOR THE YEAR ENDED 31 MARCH 2023
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MOUS PRODUCTS LTD
COMPANY INFORMATION
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MOUS PRODUCTS LTD
CONTENTS
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MOUS PRODUCTS LTD
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2023
Review of the Business
2023 2022
£'000 £'000
Turnover 24,151 21,743 Gross Profit % 73% 74% Contribution Margin 4,842 3,755 Contribution Margin % 20% 17% EBITDA excluding Exceptional Costs (1,887) (892) Expensed R&D Costs (269) (224) Non Cash Spends (1,335) - Adjusted EBITDA (283) (668) Mous is a privately owned company that designs, manufactures, and sells protective mobile phone cases and accessories predominantly online, distributing to the UK and over 100 countries internationally. The directors use various measures to assess the performance of the business. At this early stage of the business’s growth, the measure which, in the opinion of the directors, gives the best indication of business performance is turnover growth and adjusted earnings before interest, tax, depreciation and amortisation, exceptional items, expensed research & development costs and non-cash spends (Adjusted EBITDA). The business saw a year-on-year growth in turnover of 11% as a result of ongoing optimisation of the website, improved marketplace channel performance and continued expansion of the product offering which in the year included new phone cases that are certified ‘Made for Google’ and bike mounts as well as the launch of new product categories including backpacks. Gross profit saw a 1% decline driven by new product ranges having lower margins compared to existing product ranges and increased discounting to clear aging inventory. Contribution margin, which is gross profit less costs directly attributable to the sale of goods (logistics fees, sales fees and digital marketing spends), outgrew sales at +29% year-on-year. This equated to a 3ppt increase in the return on sales and was driven by a number of digital marketing efficiencies implemented during the year. The 4th quarter was particularly strong at +166% year-on-year which reflects the positive action that was taken and demonstrates the businesses renewed focus on profitability. Administrative costs excluding exceptional costs in 2023 increased by £2.8m from the prior year with a large portion coming from non-cash spends such as the amortisation of the media for equity deal with Channel 4 and equity for services deals with a number of influencers. In addition to this there were higher logistics and sales fees, linked to increased turnover, production costs incurred in relation to a Mous TV advert on Channel 4 and increased salary costs. These cost increases were partly offset by foreign exchange gains of £0.2m and various cost saving initiatives. Adjusted EBITDA which excludes research & development costs and expenses for which the benefits will be seen in future years and non-cash spends, was a loss of £0.3m in 2023, which was a £0.4m improvement on the prior year.
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MOUS PRODUCTS LTD
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
Principal Risks and Uncertainties
The business’ activities give rise to a number of risks detailed below. Changes in Customer Trends There is a risk that the product offering declines in popularity, leading to reduced revenues, margins and cash flows. This risk is managed by continued research and development in order to design and manufacture market leading products that meet our customers’ needs as well as managing stock levels on products for older phone models. The economic challenges of 2023, namely of inflation, could feed through to declining disposable income and a recession; which could prove headwind to the growth plans. Given the large size of the market vs Mous existing business, this risk can be mitigated by market share gain. Competition Risk The company is exposed to a number of competitors in the market who also provide protective phone cases. This risk is mitigated by investing heavily into the research and development of new and existing products to maintain the business’ point of difference. Supply Chain The company is dependent on the ability of its suppliers to manufacture its products to the desired quality and standards and on its logistics providers to ensure it reaches the required location on a timely basis. The standards, arrangements and contingency plans are under constant review by management. Currency Risk The company is exposed to foreign currency risks on sales and purchases. Exposures are primarily to the US Dollar and Euro. Forecast transactional exposures are reviewed on an ongoing basis and where possible excess foreign currencies are utilised to settle supplier payments. The majority of the sales and supplier purchases are in US dollars, providing a natural and effective hedge to these risks. Research and Development R&D plays a pivotal role in our business, as it drives our ability to innovate and deliver cutting-edge products. Through our relentless commitment to R&D, we strive to enhance user experiences and strengthen our position as a trusted provider of innovative and reliable tech accessories. Future Developments In pursuit of our future growth objectives, we have implemented several key initiatives since year end. We have launched a crowdfunding campaign to raise funds through equity investments, fortifying our financial position and reflecting investor confidence in our business and its potential.
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MOUS PRODUCTS LTD
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
Equally, our significant investment in R&D, expanding our portfolio of products, benefits the business for the years ahead and creates a healthier business for the future.
This report was approved by the board and signed on its behalf.
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MOUS PRODUCTS LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2023
The directors present their report and the financial statements for the year ended 31 March 2023.
The directors are responsible for preparing the Group strategic report, the Directors' report and the consolidated 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 the Group 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 for the Group's financial statements and then apply them consistently;
∙make judgments 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 Group 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 the Group and to 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 the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The loss for the year, after taxation, amounted to £3,040,723 (2022 - loss £1,822,422).
There were no dividends declared during the year.
The directors who served during the year were:
The Group incurred exceptional expenses in the year in respect of restructuring and fundraising costs. This has been presented as 'Exceptional expenses' in the Statement of Comprehensive Income.
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MOUS PRODUCTS LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
Following a rebranding exercise on 15 May 2023 the trading name of the company’s independent auditor changed from MHA MacIntyre Hudson to MHA. A resolution to reappoint MHA as independent auditor will be proposed at the next Annual General Meeting.
This report was approved by the board and signed on its behalf.
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MOUS PRODUCTS LTD
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MOUS PRODUCTS LTD
We have audited the financial statements of Mous Products Ltd (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 March 2023, which comprise the Consolidated Statement of comprehensive income, the Consolidated and Company Balance sheets, the Consolidated Statement of cash flows, the Consolidated and Company Statement of changes in equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council'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.
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 or the 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.
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MOUS PRODUCTS LTD
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MOUS PRODUCTS LTD (CONTINUED)
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' 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.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Group 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 Group strategic report and the Directors' report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group strategic report or the Directors' report.
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MOUS PRODUCTS LTD
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MOUS PRODUCTS LTD (CONTINUED)
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Group financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
∙Enquiry of management around actual and potential litigation and claims;
∙Performing audit work over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for bias;
∙Reviewing minutes of meetings of those charged with governance and management;
∙Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' report.
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MOUS PRODUCTS LTD
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MOUS PRODUCTS LTD (CONTINUED)
This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Statutory Auditors
London
MHA is the trading name of MacIntyre Hudson LLP, a limited liability partnership in England and Wales (registered number OC312313).
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MOUS PRODUCTS LTD
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2023
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MOUS PRODUCTS LTD
REGISTERED NUMBER: 09468982
CONSOLIDATED BALANCE SHEET
AS AT 31 MARCH 2023
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MOUS PRODUCTS LTD
REGISTERED NUMBER: 09468982
CONSOLIDATED BALANCE SHEET (CONTINUED)
AS AT 31 MARCH 2023
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 19 to 41 form part of these financial statements.
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MOUS PRODUCTS LTD
REGISTERED NUMBER: 09468982
COMPANY BALANCE SHEET
AS AT 31 MARCH 2023
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MOUS PRODUCTS LTD
REGISTERED NUMBER: 09468982
COMPANY BALANCE SHEET (CONTINUED)
AS AT 31 MARCH 2023
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements. The loss after tax of the Company for the year was £3,080,896 (2022 - £1,822,422).
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 19 to 41 form part of these financial statements.
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2023
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COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2023
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MOUS PRODUCTS LTD
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2023
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MOUS PRODUCTS LTD
CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
CONSOLIDATED ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 MARCH 2023
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MOUS PRODUCTS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
The entity is a private company, limited by shares, incorporated in England. The registered office is New Kings Court, Tollgate, Chandler's Ford, Eastleigh, Hampshire, United Kingdom, SO53 3LG.
The principal activity of the Group and Company is the manufacture and supply of mobile phone and laptop accessories.
2.Accounting policies
The financial statements have been prepared on a going concern basis under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgment in applying the Group's accounting policies (see note 3).
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of comprehensive income in these financial statements. These are the financial statements of the group.
The following principal accounting policies have been applied:
The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated statement of comprehensive income from the date on which control is obtained. They are deconsolidated from the date control ceases.
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MOUS PRODUCTS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
2.Accounting policies (continued)
The financial statements have been prepared on a going concern basis.
The Group made a pre-tax loss for the year of £3,318,124 (2022 - £2,007,284). The loss reflects the Group's strategy in the year of furthering its brand and increasing its market presence through high marketing costs and investment into research and development. The directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, the directors continue to adopt the going concern basis in preparing the annual report and accounts.
Functional and presentation currency
Transactions and balances
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MOUS PRODUCTS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
2.Accounting policies (continued)
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.
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MOUS PRODUCTS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
2.Accounting policies (continued)
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MOUS PRODUCTS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
2.Accounting policies (continued)
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MOUS PRODUCTS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
2.Accounting policies (continued)
At each reporting date the Group assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
Amortisation is provided on the following bases:
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MOUS PRODUCTS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
2.Accounting policies (continued)
At each reporting date the Group assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following bases:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
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MOUS PRODUCTS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
2.Accounting policies (continued)
Provisions are charged as an expense to profit or loss in the year that the Group becomes aware of the obligation, and are measured at the best estimate at the balance sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties. When payments are eventually made, they are charged to the provision carried in the Balance sheet.
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MOUS PRODUCTS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
2.Accounting policies (continued)
The valuation of stock held at year end is a key judgement made by the Directors. Management ensure that damaged, slow moving and obsolete stock provisions are as accurate as possible, however there is a risk that these provisions do not match the actual write off for damaged, slow moving or obsolete stock. At the end of each reporting period, the Directors estimate the number of share options that are expected to vest as well as the expected vesting period, in determining the share based payment charge for the period.
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MOUS PRODUCTS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
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MOUS PRODUCTS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
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MOUS PRODUCTS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
11.Taxation (continued)
An increase in the UK corporation tax rate from 19% to 25% was substantively enacted in June 2021 and will take effect from 1 April 2023 for profits over £250,000. For profits under £50,000 the tax rate will remain the same at 19% and for profits between these figures it will be subject to 25% but reduced by a marginal relief providing a gradual increase in the effective Corporation Tax rate.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
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MOUS PRODUCTS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
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MOUS PRODUCTS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
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MOUS PRODUCTS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
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MOUS PRODUCTS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
There is no security held over the bank loan.
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MOUS PRODUCTS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
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MOUS PRODUCTS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
Share premium account
Capital redemption reserve
Foreign exchange reserve
Other reserves
Profit and loss account
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MOUS PRODUCTS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
The Group operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the Group in an independently administered fund. The pension cost charge represents contributions payable by the Group to the fund and amounted to £89,614 (2022 - £73,492). Contributions totalling £15,047 (2022 - £14,284) were payable to the fund at the balance sheet date and are included in creditors.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
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MOUS PRODUCTS LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
Warrants
It was resolved that warrant instruments prevoiusly recognised as creditors due in more than one year should be recognised within other reserves in equity based on the nature and conditions of the warrant instruments. The effect on the prior year financial statements has been to reduce creditors due in more than one year by £103,202 and to increase other reserves within equity by £103,202. There has been no effect on the loss after taxation. The prior year figures in the statement of cash flows have also been restated, where required, to reflect the nature of the instruments. The instruments were issued as non-cash consideration in lieu of marketing services rendered to the Group. Statement of Cash Flows The figures in the prior year statement of cash flows have been restated in these financial statements. An increase in prepaymentes of £999,973 previously included in net cash generated from operating activities and within cash flows from financing activities have been restated in these financial statements.
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