A N N U A L R E P O R T 2 0 1 8
SOSANDAR PLC
40 Water Lane
Wilmslow
Cheshire
SK9 5AP
Investor Relations
sosandar@almapr.com
A N N U A L R E P O R T 2 0 1 8
Registered office
Registered number
Directors
Secretary
Auditors
Nominated advisor
Broker
Registrars
Solicitors
Public Relations
40 Water Lane,
Wilmslow, Cheshire,
England SK9 5AP
5379931, England and Wales
Bill Murray – Non-executive Chairman
Adam Reynolds – Non-executive Director
Mark Collingbourne – Finance Director
Alison Hall – Joint CEO
Julie Lavington – Joint CEO
Nicholas Mustoe – Non-executive Director
Andrew Booth – Non-executive Director
Mark Collingbourne
Jeffreys Henry LLP
Finsgate
5-7 Cranwood Street
London EC1V 9EE
Cairn Financial Advisers LLP
Cheyne House
Crown Court
62-63 Cheapside
London EC2V 6AX
Turner Pope Investments
6th Floor Becket House
36 Old Jewry
London EC2R 8DD
Capita Asset Services
The Registry, 34 Beckenham Road
Beckenham
Kent BR3 4TU
BPE Solicitors LLP
St. James’ House
St. James’ Square
Cheltenham GL50 3PR
Alma PR
Aldwych House
71 – 91 Aldwych
London WC2B 4HN
WHO WE ARE
A new womenswear e-commerce brand
launched in September 2016 targeting a new
generation of women who have graduated from
younger fast fashion brands, who want
trend-led, quality, affordable clothing with a
premium aesthetic.
This is an underserved sector of the market
who spend £3.7bn a year on fashion*.
We have already built a loyal and rapidly
growing customer base of fashion conscious
women with a high disposable income who
love Sosandar. Revenue is showing
substantial growth year on year.
Sosandar clothing is also regularly worn by a
large and growing following of celebrities and
fashion influencers and Sosandar is regularly
featured across national newspapers and
magazines and on TV.
sosandar.com
2SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018*GB TGI Q2 Jan-Dec 2016.My first delivery has just arrived and I cannot believe the quality! Finally, finally decent clothing that looks absolutely fantastic. About to place my second order! WELL DONE!Andrea, Facebook
SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018
WHAT MAKES
US DIFFERENT?
P R O D U C T
Exclusive
clothing and
footwear
designs created
from scratch
in our in-house
design studio.
B R A N D
Exceptional
brand
engagement
from customers,
press and an
army of social
influencers.
E X P E R I E N C E
Highly experienced
management team
with combined
experience of
35 years in fashion.
G R O W T H
From start-
up to rapidly
growing
listed
business in
18 months.
C R E A T I V I T Y
A N D D A T A
A business that
combines high
levels of creativity
with data driven
efficiencies.
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sosandar.com SOSANDAR.COM ANNUAL REPORT AND ACCOUNTS 2017
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SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018sosandar.com 8
Celebrities
wearing
Sosandar
18
Chairman's
Statement
CONTENTS
STRATEGIC REPORT
6. Highlights
8. Celebrities and Influencers
10. The Market Opportunity
12. Timeline
14. Vision, Ambition and Business model
16. Strategy
18. Chairman’s Statement
20. Operating Review
24. Financial Review
26. Risk Management
CORPORATE GOVERNANCE
28. Board of Directors
30. Group Directors’ Report
CONSOLIDATED FINANCIAL
STATEMENTS
33. Independent Auditors’ Report
38. Consolidated Statement of Profit
or Loss and Other Comprehensive
Income
39. Consolidated Statement of
Financial Position
40. Consolidated Statement
of Cash Flows
41. Consolidated Statement of
Changes in Equity
42. Company Statement of
Financial Position
43. Company Statement of Cash Flows
44. Company Statement of
Changes in Equity
45. Notes to the Consolidated
Financial Statements
ibc. Company Information
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Vision, Ambition
and Business
model
Financial
Review
24
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HIGHLIGHTS
Over the last 12 months Sosandar has made
outstanding progress operationally, f inancially
and in our engagement with our customers.
OPERATIONAL
n Reverse takeover of Orogen plc in
November 2017, start of trading on AIM
and fundraise of £5.3m.
n Increased product range
from 74 to 489 styles.
n Order growth of 353% to 31,732 orders.
n Sosandar now sells in just one hour
what we used to sell in a day.
ENGAGEMENT
n Major increase in customer database -
up 695% to 54,196 (2017: 6,821).
n Significant growth in social media
reach - 181% increase in Facebook
following and 888% increase in
Instagram followers.
n Conversion rate increase from
1.29% to 2.16%.
FINANCIAL
n Full-year revenue for 2018 of £1.35m,
like-for-like sales for the six months
to March 2018 up 268% against the
prior year.
n Gross margin improvement
from 37.8% to 49.4%.
n 8% increase in average order
value to £94.18.
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SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018sosandar.com R E V E N U E
2018
2017
£1.353m
£0.278m
G R O S S M A R G I N
2018
2017
49.4%
37.8%
C O N V E R S I O N R A T E
2018
2.16%
2017
1.29%
C U S T O M E R D A T A B A S E
2018
54,196
2017
6,821
387
%
116
bps
87
bps
695
%
CUSTOMER FEEDBACK
Our target demographic has responded
positively to the Sosandar brand and we
continue to capture a highly-affluent
customer demographic. Our unique
in-house designs are selling ahead of
forecasts across all categories: dresses,
skirts and tops, leather and footwear.
TESTIMONIAL
I recently
purchased the
black and white
spot print ruffle
dress, just wanted
to say that I love it,
ver y easy to wear
and it arrived in
time for me to wear
to a reception at
Buckingham Palace
yesterday and I
received lots of
compliments about
my dress!
Anna Hemmings MBE, Wimbledon
A V E R A G E O R D E R V A L U E
2018
2017
£94.18
£87.22
8
%
MARKETING AND PR
Investment in the business has enabled
us to diversify our marketing channels
and accelerate customer acquisition.
Sosandar continues to achieve extensive
PR across all forms of media from The
Sunday Times, to ITV, to the Daily Mail.
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CELEBRITY & INFLUENCER
ENDORSEMENTS
Sosandar already achieves strong press on television, in newspapers and fashion
media, with a signif icant range of influencers and celebrities wearing the
product, despite the brand’s infancy. This endorsement builds brand credibility,
as well as having a direct and measurable positive impact on sales, repeat order
rates, social media awareness, customer sign-ups and website traff ic .
H O L L Y W I L L O U G H B Y
@ D R E S S L I K E A M U M
@ B U B B L Y A Q U A R I U S
M I C H E L L E A C K E R L E Y
@ L U L U D U M A S
@ N A T A L I E J A Y N E _ S E M M E N S
A N D R E A M C L E A N
C H A R L I F I S H E R
K A T E T H O R N T O N
@ J U D E R E A M O D E L
C A T H E R I N E T Y L D S L E Y
@ L O V E S T Y L E 4 0
C H A R L O T T E H A W K I N S
@ M O N I C A B E A T R I C E
D E N I S E V A N O U T E N
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@ L U L U D U M A S
S A I R A K H A N
F E A R N E C O T T O N
@ A N N E L I B U S H
@ J U D E R E A M O D E L
C A M I L L A D A L L E R U P
A N G E L A G R I F F I N
K E L L Y B R O O K
D E N I S E V A N O U T E N
C H R I S T I N E L A M P A R D
@ C H A R L O T T E L O V E S
G E M M A O A T E N
SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018sosandar.com
THE MARKET OPPORTUNITY
Fashion e-commerce represents a large
and growing oppor tunity to build a
mul timillion pound e-commerce business
in an area of the market that is currently
underser ved by existing retailers.
SOCIAL MEDIA
Social media plays a big part in driving
growth and is leading how online
retailers engage with and understand
customer wants and needs, driving
design and fulfilment capabilities.
Sosandar has exploited this to the
fullest by using product imagery and
content to create a lifestyle hub and
engage with customers. Strong PR
also enhances our social reach with
extensive endorsement from key
fashion influencers via Instagram
and blog posts.
ONLINE GROWTH
Fashion retail is changing. There is
a buy-now, wear-now mentality and
customers want convenient shopping
that fits around their busy lifestyles.
The UK womenswear sector is a large
market with several areas of growth.
The online fashion market in the UK
is valued at £16.2bn, with the overall
market expected to be worth £29bn
by 2022, fuelled by mobile purchasing.
Online sales accounted for 24% of total
UK fashion market spend in 2017, up
from 17% in 2014, and are forecast to
continue outpacing the overall clothing
market with double-digit growth over
the next five years. (Mintel)
UNDERSERVED MARKET
Online-only retailers account for 38%
of the online fashion market in the UK
and are growing at a faster rate than
multi-channel retailers. One of the
main advantages of online shopping
for retailers is having the ability to reach
customers anywhere 24/7, through both
traditional and social media channels.
Sosandar focuses on an underserved
demographic of women with high
purse spend. This core demographic
spends £3.7bn a year on fashion* (GB
TGI Q2 Jan-Dec 2016), the highest
aggregate and fastest-growing
spend out of all women aged 15-
75 (Euromonitor). The business
has successfully accessed this
high-spending market. Our customer
has a high disposable income and is
very fashion conscious, with 60% of her
purchases made online. She’s looking
for trend-led, quality, affordable clothes
in a flattering design for all occasions.
(CIL customer survey)
U K A N N U A L O N L I N E
F A S H I O N S A L E S
Large &
Growing
Market
Opportunity
2012
2013
2014
2015
2016
2017
2018
2019
2020 2021
2022
Actual
Forecast
Est
* A N N U A L E X P E N D I T U R E
O N F A S H I O N B Y A G E
G R O U P - W O M E N
£1.9bn
£1.8bn £1.8bn
£1.7bn
Sosandars'
core demographic
spend £3.7bn
per annum
on fashion
£1.6bn
£1.4bn
£0.9bn
15-24
25-34
35-44
45-54
55-64
65-74
75+
Best Case
(£m)
38,575
Mintel
forecast
(£m) 28,951
Worst case
(£m) 19,327
Confidence
intervals
95%
90%
70%
50%
Source: Mintel - UK online fashion market, Published UK June 2017
Source: GB TGI 2017 Q2 (Jan 2016 - Dec 2016) Kantar Media UK Ltd - base 9,751 women
)
M
£
(
E
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SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018sosandar.com
50% of social
media users say
shopping-related
information
is especially
impor tant to them.
(McKinsey 2018).
Analysis shows
that companies
with above
average activity
on popular social
networks have up
to 75% higher per
capita revenues
(McKinsey 2013).
71% of consumers
who have had a
good social media
ser vice experience
with a brand are
likely to recommend
it to others.
(Ambassador, 2014)
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SOSANDAR.COM ANNUAL REPORT AND ACCOUNTS 2018
SOSANDAR TIMELINE
After closing the f irst round of launch investment in 2015,
Sosandar began trading less than a year later in September
2016. Since then we have achieved so many signif icant
milestones, in par ticular the IPO in November 2017 which
has enabled us to accelerate the grow th of the business.
First round
of investment
closed &
business
set up
First piece of
national press
coverage in
Sunday Times
Style - our
snakeskin
boots
First batch
of stock
arrives at
Clipper &
first photo
shoot
Deal signed
between
Sosandar and
Orogen PLC for
reverse takeover
5
1
0
2
V
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1
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Move to
new office
with own
photographic
studio
6
1
0
2
T
C
O
6
1
0
2
P
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S
7
1
0
2
Y
A
M
6
1
0
2
N
A
J
6
1
0
2
P
E
S
6
1
0
2
T
C
O
6
1
0
2
V
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Move into
first rented
office space
Sosandar
website goes
live, and first
customer
purchase is
recorded within
5 minutes
12
First garment
appears on TV
Loose women
celebrities
begin wearing
Sosandar
SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018sosandar.com
Sosandar sells more
than 1000 items in a
day for the first time
with a conversion
rate over 5%
Christmas
party wear
is a huge
hit and
sells out
7
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1
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2
V
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1
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N
A
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1
0
2
B
E
F
Sosandar
celebrates
record
monthly
sales
8
1
0
2
R
A
M
Sosandar
reports on
excellent
seasonal
sales over the
Christmas
period
Sosandar
breaks
through £1m
cumulative
gross revenue
since launch
£1M
7
1
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2
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1
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T
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First test of
direct mail
brochures
M A Y / J U N E 2 0 1 8
M AY/ J U N E 2 0 1 8
MAY/ JUNE 2018
S O S A N D A R . C O M
1
S O S A N DA R . C O M 1
SOSANDAR.COM 1
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X3
Instagram
followers
triple in
a day
Multiple
celebrities wear
Sosandar 'IT'
dress
Sosandar floats
on AIM at 15.1p,
£5.3m raised
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VISION AND AMBITION
Our vision is to be a global one stop online destination for a new
generation of fashion for ward women who have graduated f rom younger
fast fashion brands. We aim to build Sosandar into the go to fashion
destination for all occasions, combining exceptional product with a
f irst class customer experience.
BUSINESS MODEL
Our business is driven by creative flair
skilfully combined with a data centric
approach, in order to understand and
respond to our customers needs. We
excite and inspire our customers with
affordable, trend-led clothes for every
occasion, showcased with stunning
lifestyle photography, beautiful
e-commerce imagery and video for
every product. Our customer sits at the
heart of everything we do and we are
committed to serving her every fashion
need. We also provide fashion and
lifestyle content with styling tips,
fashion ideas and trend advice.
DESIGN
DATA
ENGAGEMENT
ENGAGEMENT
We use stunning product
imagery and inspirational
content to engage with our
customers and build brand
awareness through both
our own e-commerce site
and a variety of channels,
including social media, PR
and direct mail.
DATA
Data underpins everything
we do: it leads our thinking
on product and customer
engagement, giving a deep
insight into our customers'
decision-making and buying
preferences, driving product
efficiency and enabling
personalised marketing.
This ensures we continue
to exceed customer
expectations.
DESIGN
Our exclusive designs
created entirely in-house
offer exceptional quality
at affordable prices. New
products are launched
every month to deliver
constant newness and
to keep the brand at the
forefront of fashion trends.
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I just wanted to say how
absolutely gorgeous your clothes
are, really lovely quality and ver y
fair pricing. They also f it the size
you say they are. Thank you.
I’ ve also introduced my daughter
to you and she thinks the same.
Ruth Lee, Chal font St Peter
SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018sosandar.com
STRATEGY
Sosandar targets an underser ved market of women looking for trend-led, affordable,
quality clothing with a premium aesthetic . We design and manufacture clothing and
footwear for all occasions with fashion for ward styles designed to flatter. Our strategy
is to build a loyal customer base, focusing on customer grow th and retention, by
taking advantage of the increasing convergence of e - commerce and media.
WE ARE
DELIVERING
OUR STRATEGY
THROUGH
FOCUSING
ON THE
FOLLOWING
AREAS:
STRATEGIC
OBJECTIVES
2018
S T R A T E G Y
O B J E C T I V E S
PRODUCT DEVELOPMENT
We provide frequent new product ranges to ensure
constant newness for our customers. Exclusive product
design is created in-house, and we continually assess
trends and the performance of existing ranges to
expand the product range. Our in-house designers
react quickly to changing customer demand to ensure
we are always on the cutting edge of fashion, while
tailoring garments to fit customers.
n Continue to broaden product range
to offer increased choice to customer
n Manage expansion and increased selling of lines by
buying deeper, resulting in a better selection for the
customer and improved margins for Sosandar
n Continue to monitor trends using data analytics to drive
design and maximise product demand and repeat rates
MANUFACTURING
We outsource manufacturing to 16 subcontractors
around the world including India, China, Turkey
and Spain, focusing on a high quality of output
and strong skillset. The breadth of strong supplier
relationships mitigates the risk of over-reliance
on a small number of specific contacts, and we
regularly review their output. These relationships
enable us to order in small minimum quantities,
de-risking new product launches and maximising
sell-through rates. Waitlist functionality allows us
to track excess demand and influence re-orders on
top performing product.
MARKETING
Our focus is on building Sosandar’s brand
awareness across a multitude of channels and
on building emotional engagement with our
customers. To enhance the desirability of our
product, we invest in high-quality lifestyle imagery
and fashion content used through all channels.
Data is captured and monitored to learn more
about customer preferences, so we can flexibly
deploy funds to better performing products,
improve the impact of marketing spend and
optimise returns.
n Continue to invest in global
manufacturer network
n Broaden fabric supplier base to
enhance product choice
n Continued investment
in new product areas
n Reinforce ‘test and repeat’ model, with low
initial order quantities on new product and
re-orders on top-performing product
n Continue to build brand awareness across all
channels, and increase volume of social media
coverage, particularly Instagram
n Further expand celebrity and social
influencer network to increase third party
endorsement
n Build on content generation to
further customer engagement
n Use data analytics to enhance customer
understanding and deliver personalised
and relevant marketing campaigns
16
SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018sosandar.com "I have just
taken deliver y
of my f irst item
ever ordered
with you. I feel
compelled to
thankyou for
a per fectly cut
and stylish
skir t ."
WE ARE
DELIVERING
OUR STRATEGY
THROUGH
FOCUSING
ON THE
FOLLOWING
AREAS:
STRATEGIC
OBJECTIVES
2018
S T R A T E G Y
O B J E C T I V E S
ANALYTICS & TECHNOLOGY
We invest in scalable and integrated technologies
throughout Sosandar to ensure that our
e-commerce, stock and marketing capabilities are
robust. With no legacy infrastructure, our mobile-
first website is capable of servicing high levels of site
traffic and is built on an open-sourced e-commerce
platform to ensure customer experience stays high.
We are adopters of new proven technology.
n Drive further efficiencies with
data analytics in marketing and product
development
n Invest in building data analytics team
n Ongoing review of e-commerce advancements to
enhance customer experience
INFRASTRUCTURE
We outsource our logistics to Clipper Logistics,
a leading supplier to the fashion industry, for
warehousing, e-fulfilment and distribution.
Clipper can provide a first class scalable service
as Sosandar expands. It receives inbound
deliveries, manages storage, order dispatch and
order returns.
n Invest in improving processes such as
delivery options and refunds to ensure
ease of purchase for customer
n Review delivery service providers
for most cost-effective solution and to
maximise customer convenience
n Carefully monitor overheads, selectively
investing in value-add areas
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CHAIRMAN'S STATEMENT
Bill Murray, Sosandar ’s non- executive Chairman shares
his view on Sosandar ’s f irst full year of trading and on
the exceptional progress the business has made.
The past 12 months have been an
extraordinary period in the short life
of Sosandar, with some momentous
achievements.
In our first full financial year, we
achieved revenue of £1.35m with
like-for-like sales for the six months to
March 2018 showing a 268% growth
against the prior year. Gross margin
performance has been particularly
pleasing, increasing significantly
to 49.4% from 37.8%, with scope to
increase further as the Sosandar brand
awareness builds and purchasing
efficiencies increase.
The conclusion of Orogen’s conversion to
a cash-shell, Sosandar’s reverse takeover
with Orogen, fund raising of £5.3m and
start of trading on AIM in November
2017 were company milestones.
These major transactions have resulted
in one off costs and accounting
adjustments which have increased
losses. We anticipate our increased
financial strength will continue to
underpin future development. We
have seen terrific growth in customer
engagement, evidenced by a 695%
increase in our customer database, a
181% increase in our Facebook following
and an 888% increase in Instagram
followers, supported by our investment
in marketing via direct mail brochures
and social media channels.
For the first half of the year, Sosandar
continued to expand while the
management team worked to secure
the financing required to accelerate our
growth, and I credit Julie and Ali, the co-
CEOs, with their extraordinary success
in surmounting these challenges. Our
increased financial strength has allowed
the management team to unlock the
exciting potential of the Sosandar brand
and to fully exploit obvious market
opportunities.
CORPORATE GOVERNANCE
Even though Sosandar was little more
than a year old in November 2017,
the Sosandar Board has committed
to a corporate governance approach
commensurate with more mature
businesses. Both Julie and Ali have
decades of experience in running
and overseeing large, dynamic media
businesses, bringing disciplines and
prudent financial approach to the
day-to-day running of the business.
In November 2017, Nick Mustoe and I
carried across to the Board, joined by
Adam Reynolds and Mark Collingbourne
(as Finance Director). The Board is
committed to adding real value and
oversight to Sosandar’s growth and
development and, since the start of
the 2018/19 financial year, we have
appointed Andrew Booth as NED, who
brings additional e-commerce and retail
experience to the Board.
As an early-stage business, it is a priority
to keep all our shareholders up-to-date
and engaged. The reverse takeover
attracted investment from both private
and institutional investors. We appreciate
that they share Sosandar’s longer-
term ambition and we are committed
to transparency in all our corporate
communications.
OUTLOOK
Looking ahead, the new financial year
has started encouragingly and we
expect strong year-on-year growth.
This will be delivered via the expansion
of our clothing and footwear ranges,
increased stocking levels and continued
investment in marketing channels to
acquire new customers. Our approach
remains underpinned by analysing and
using the wealth of data available to us
to optimise purchase frequency and to
ensure we continue to design, promote
and deliver first-class, wearable and
affordable fashion.
PEOPLE
Sosandar is blessed with a talented,
creative and loyal staff. Much of this
is due to Julie and Ali’s efforts at
maintaining an enthusiastic, vibrant
culture, while introducing structures and
processes that enable a fast-growing
business to stay on track. I would like to
thank the Sosandar management team,
all of whom have shown depth of vision,
creativity and determination throughout
a busy first year of trading.
Bill Murray – Chairman
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SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018sosandar.com
L I K E F O R
L I K E
S A L E S U P
2 6 8%
Y E A R O N
Y E A R
G R O S S M A R G I N P E R F O R M A N C E
2018
2017
49.4%
116
bps
37.8%
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SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018sosandar.com
OPERATING REVIEW
It has been the most incredibly exciting 12 months. In
just a year Sosandar has flourished f rom star t-up to a
well-resourced listed business. Our vision of creating a
global fashion-for ward brand is accelerating. Demand we
anticipated f rom an underser ved market continues to grow
and is testament to the brand's increasing momentum.
N E W C U S T O M E R S
2018
20,325
2017
5,257
R E P E A T C U S T O M E R S
2018
11,407
2017
1,746
287
%
553
%
Julie Lavington and Ali Hall Co-CEO’s
successful on and offline marketing
activity. This is underpinned by
combining our creativity with gathering
and analysing data on shopping habits,
trends and customer preferences
to drive product development and
effectively target new customers.
HIGHLIGHTS
We have made significant progress
during the year, including five months
as a listed company on AIM following
the reverse takeover of Orogen plc in
November 2017 and the fundraise of
£5.3m. Since listing on AIM, we have seen
a major acceleration of our business
with all KPIs exceeding management
expectations. We have expanded the
depth and breadth of our product range,
diversified our marketing channels,
accelerated customer acquisition and
invested in building a first-class team.
Full-year revenue for the year to 31 March
2018 was £1.35m, with like-for-like sales
for the six months ending 31 March 2018
showing a 268% increase. We reached
record monthly revenues in March, with
continued momentum into the new
financial year, and we are now selling
in just one hour what we used to sell in
a day.
Significant margin improvements have
been achieved through both economies
of scale from increased order quantities
and a higher proportion of sales from
product sold at full price. Investment
in marketing and careful stock
management have helped maximise
product sell-through rates, creating an
‘urgency to buy’ with our customers,
S osandar is focused on creating
chic and fashion-forward
products for a generation of
women who are underserved by
existing fashion brands, and this offers
a significant untapped opportunity – a
demographic that spent £3.7bn on
fashion in 2016.
Our typical customer has a high
disposable income and is very fashion
conscious. She is looking for quality,
affordable clothing with a premium,
trend-led aesthetic for all areas
of her life.
Our strategy is to expand Sosandar’s
customer base and build our brand
awareness through developing
exceptional products, providing a
seamless customer experience and
continuing to expand our highly
20
SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018sosandar.com
I only discovered
SOSANDAR a
couple of week’s
ago but am so
impressed at how
easy and smoothly
ever y thing runs,
f rom ordering
to deliver y and
returns. I will
be back. I don’t
usually have time
to praise retailers
but when I f ind one
that seems to get
ever y thing right it
is impor tant to feed
that back.
Jan, Okehampton
and decreasing the need to discount. As
a result, gross margins have improved
from 37.8% to 49.4%.
Basket sizes have increased from £87.22
to £94.18 over the year and while we
have limited trading history, there are
signals that customers acquired at the
end of the financial year are showing
greater order frequency. This will drive
future marketing cost-efficiencies as our
customer base continues to grow and
we build loyalty.
CUSTOMER GROWTH
Sosandar successfully targets a wide
demographic of customers across all
age ranges. Our target customer has
responded positively to the Sosandar
brand and we continue to capture a
highly-affluent customer demographic.
Our unique in-house designs are selling
ahead of forecasts across all categories:
dresses, skirts, trousers and tops, outer
wear, leather and footwear.
We have operated an aggressive
marketing strategy to drive customer
acquisition, which has proven successful
in building our customer database
to over 54,000, from just 7,000 a year
S O S A N D A R ' S C U S T O M E R
D E M O G R A P H I C
31%
20%
23%
A wide
demographic
of customer
9%
14%
3%
18-24
25-34
35-44
45-54
55-64
65+
Source: Google Analytics Sosandar Shoppers
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SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018sosandar.com
ago. With a larger customer database,
we can use data-led, personalised
communications to engage with both
our existing customers and target
prospects who do not purchase
immediately. It also provides a platform
to promote the Sosandar brand and our
new products in a cost-effective way,
helping to reduce longer term cost of
acquisition.
We work hard on product fit, driving
repeat orders, which we anticipate will
lead to improving repeat rates as our
customers become used to Sosandar
sizing. Return levels are in line with
expectations. We expect returns to
remain at a similar level in the near
future but to reduce over time with the
growth of repeat customers..
REVERSE TAKEOVER
The £5.3m funds we raised in November
2017 at the time of our flotation on
AIM have enabled Sosandar to build
on its positive start, expanding both
the product range and the stock levels
of popular products, to ensure there is
sufficient supply for increasing demand.
The funds have also provided
working capital to begin testing on
new customer acquisition channels,
including direct mail and increased
social media investment, to increase
customer reach, brand awareness and
build our customer database.
PRODUCT
All our products are designed exclusively
in-house, which ensures we retain
control of all aspects of garment
development. This provides reassurance
on quality and enables us to expand
capacity according to demand.
Over the year, we have invested in
broadening the product range from 74
to 489 styles and have seen excellent
rates of sell through, including higher-
price point items such as leather,
outerwear and footwear.
We monitor our entire product range
on an item-by-item basis to identify
top-selling and slow-moving items,
which acts as a key driver for the
design process. We accumulate data
to feedback customer preferences and
combine this with the creative flair of
the design team who monitor catwalks
and up-to-date trends to influence our
design process. This tailored approach
to design ensures that our products stay
fresh and relevant to our customers.
MARKETING
Marketing, combined with highly
desirable product, are the primary
22
drivers behind Sosandar’s growth and
we operate a multi-channel marketing
strategy.
We have built a highly-engaged and
ever growing community of Sosandar
fans across social platforms through
carefully-targeted content and
aspirational lifestyle photography. Over
the past year our customer database
has grown by 695%. Since November
2017, direct mail has been Sosandar’s
most successful route to new customers,
diversifying our social marketing
platform and increasing brand
awareness. As a result, revenue from
customers coming directly to our site,
or by finding us on internet searches,
has grown significantly by 508%. This
has contributed to an 809% increase in
revenue generated from emails sent to
customers, emphasising the value of our
highly-engaged customer community.
Growth in these channels helped
improve cost efficiencies as they
are effectively free. We have seen
improvement in performance from key
social and paid search channels, as well
as increased development in google
shopping and referral campaigns, all
contributing to customer acquisition
improvements since November 2017.
PR
Sosandar’s senior management has
unrivalled UK fashion PR and editorial
experience, market understanding and
contacts, which have all contributed to
a growing awareness and endorsement
SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018sosandar.com I have to say I
have been super
impressed! Great
brand, product and
ser vice. Love it!
Victoria, London
of the Sosandar brand with a broad
cross-section of major influencers
across all demographics. These third-
party endorsements mean Sosandar
clothes are regularly worn by a host of
celebrities and a growing tide of fashion
influencers are embracing the brand in
their Instagram posts.
Sosandar’s level of PR coverage in the
media and from well-known celebrities
is unprecedented for an early-stage
brand and continues to go from
strength to strength across all forms of
social and national media, including
national newspapers and regular
coverage on television.
INFRASTRUCTURE AND
LOGISTICS
We outsource our manufacturing to a
network of 16 sub-contractors around
the world including India, China,
Spain and Turkey and this base is
increasing as Sosandar grows in scale.
We have strong relationships with all
our suppliers, which all provide a high
quality skill base. They have worked with
us seamlessly as our product range has
widened and our order quantities have
grown.
To ensure leading customer service
and first-class logistics, we work with
Clipper Logistics for warehousing and
e-fulfilment with Sosandar-branded
premium packaging. Clipper is a high
quality and scalable operator. It has
allowed us to grow at pace and will be
able to support our planned growth over
the coming years.
Delivery is free for orders over £75 and
free returns are offered as standard.
We want to maximise customer
convenience and next year will be
reviewing our delivery service options
to ensure we continue to provide the
most cost-effective solution, as well
as a smooth purchase journey, for all
Sosandar’s customers.
TECHNOLOGY
As a new e-commerce business, we are
focusing on scalable and integrated
technologies. We have had the benefit
of building a mobile-first platform
and have not suffered from any legacy
issues of internally-developed systems,
allowing us to fully exploit the increasing
use of mobile devices for e-retail.
F A C E B O O K F O L L O W E R S
2018
2017
37,750
13,430
I N S T A G R A M F O L L O W E R S
2018
2017
8,299
840
181
%
888
%
We use technology and data to analyse
sales and customer behaviour to
influence design decisions, product
strategy, marketing and customer
service. Data analysis underpins
our creative excellence and we are
continuing to invest in this area,
expanding data analytics resource in
Sosandar.
Our technology strategy is to continue to
invest across web and digital platforms
to enhance customer experiences and
provide frictionless online journeys,
through in-depth analysis of customer
shopping habits.
PEOPLE
Over the past year we have focused
on building our team in Wilmslow
to complement our experienced
executive director team, ensuring we
are fully resourced to meet operational
development. Our marketing, imagery,
customer service and finance teams
have all expanded over the past year
bringing a combination of increasing
creative and commercial e-commerce
experience into the business.
Our people are everything and are
the solution to making Sosandar a
successful business. We recruit people
who are entrepreneurial and who want
to be part of our business. We consider
ourselves to have an inclusive workplace
were everyone is fully engaged.
We encourage everyone to grasp
opportunities to develop and show
initiative and we support their training
needs.
OUTLOOK
Our substantial momentum has
continued into the new financial year.
Our strategy is straightforward: we will
continue to broaden the product range,
including testing into new areas such
as bags, loungewear and gifts, to give
more choice to our customers; buy
deeper; and engage in a more diversified
marketing strategy. We remain focused
on data-driven marketing efficiencies
and digital investment to improve our
customers’ journeys.
We believe that the results to date
demonstrate the considerable potential
and opportunity in this underserved
market and are testament to the brand's
growing momentum. Sosandar's unique
offering and market positioning puts us
in a strong position to achieve another
year of strong growth in 2018/19.
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SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018sosandar.com
SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018
FINANCIAL REVIEW
Sosandar has shown strong year- on- year grow th in both topline revenue
and margin. Key performance indicators have exceeded expectation and
demonstrate the strength of our product offering, our marketing strategy
and the inf rastructure on which the business is buil t .
K P I ' S
Revenue
Gross Profit
Gross Margin
Operating Profit
EBITDA
Adjusted EBITDA*
Sessions
Conversion rate
Number of orders
AOV
Facebook Followers
Instagram Followers
Customer database
New customers
Repeat customers
YEAR ENDED
31 MARCH 2018 £'000
PERIOD ENDED
31 MARCH 2017 £'000
£1,353
£669
49.4%
£(6,056)
£(6,001)
£(3,124)
£278
£105
37.8%
£(1,826)
£(1,795)
£(1,795)
YEAR ENDED
31 MARCH 2018
PERIOD ENDED
31 MARCH 2017
1,467,952
2.16%
31,732
£94.18
543,340
1.29%
7,003
£87.22
AS AT
31 MARCH 2018
AS AT
31 MARCH 2017
37,750
8,299
54,196
YEAR ENDED
31 MARCH 2018
20,325
11,407
13,430
840
6,821
PERIOD ENDED
31 MARCH 2017
5,257
1,746
*EBITDA adjusted for one-off reverse transaction fees and accounting adjustments
CHANGE
+387%
+537%
+116bps
-232%
-234%
-74%
CHANGE
+170%
+87bps
+353%
+8%
CHANGE
+181%
+888%
+695%
CHANGE
+287%
+553%
24
SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018sosandar.com
FINANCIAL REVIEW
In its first full 12 months of trading, Sosandar
achieved revenue of £1.35m with like-for-
like sales for the six months to March 2018
showing revenue growth of 269%.
The November 2017 fundraise of £5.3m
has enabled the business to invest in new
marketing channels in the second half of
the year, accelerating engagement and
customer acquisition.
Marketing investment, combined with
further investment in product imagery,
has driven an increase in sell-through rates
and stock turn, with a number of popular
styles selling out. This helped to maximise
product sales at full price avoiding the
discount strategies adopted by many
other e-commerce retailers and, along
with buying improvements, increased
margin to 49.4% from 37.8% in the prior
year. Average order value has showed
an improvement up 8% to £94.18 (2017:
£87.22) and customers increased urgency
Marketing
investment has
driven an increase
in sell- through rates
and stock turn
to purchase contributed to conversion rate
improvement to 2.16% from 1.29% in the
prior year.
The increased funding has allowed
Sosandar to establish the teams required
to deliver growth with investment across,
marketing, finance and technology,
enabling the business to gain momentum
going into the new year.
Pre-tax losses of £6.06m include £2.9m of
one off costs and accounting adjustments
related to the reverse takeover (of which
£0.9m relate to actual cash costs to the
business). Adjusting for these costs shows
loss of £3.16m compared to £1.82m in the
prior year reflecting the investment in
growth. Post investment we are already
starting to see cost efficiency improvements
in new marketing channels and the
economies of scale in other areas that come
with growth.
Cash position at the year-end was £4.6m
(2017: £0.3m). Over the coming year,
Sosandar will continue to invest in customer
acquisition and product to drive future
profitability. This will be done while we
focus on using the growing data in the
business to adopt ‘test and repeat’ models,
maximising return on investment across
all areas of the business and constantly
balancing the need for growth with a focus
on cost efficiencies.
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SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018sosandar.com
SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018
RISK MANAGEMENT
There are a number of risks and uncer tainties associated with
the business. The Board believes the following are the principle
risks, along with the mitigating actions being applied.
S T R A T E G I C & M A R K E T R I S K S
RISK FACTOR
MARKET COMPETITION
IMPACT
MITIGATING ACTIONS
n As the business continues to grow,
competitors may try and target the same
demographic using a similar proposition.
n Competitor activity is regularly reviewed
to ensure Sosandar’s brand proposition
continues to be viewed as a leader of the
trend-led, affordable market within its target
demographic.
n Sosandar puts the customer at the heart
of all decisions, focusing on up to date
trends, design principles important to its
demographic and a seamless purchase
experience to attract new customers.
n This is combined with a relentless pursuit
of service excellence to make sure customers
have the best possible experience to build
loyalty and further purchases.
n As a first mover, Sosandar has begun
building up a repeat customer base loyal to
the brand.
n The business operates on monthly drops
with tight design lead times that allow the
design team to track the latest catwalk and
commercial fashion trends. These are then
fed into the product development to ensure
that customers have access to the latest
trends at affordable prices.
n Regular meetings are held with developers
of new technology and services that enhance
customer experience to ensure that the
business stays up to date with the latest
e-commerce trends. This is not limited to the
fashion industry with review and adoption
of best practice principles from all areas of
e-commerce.
n A dedicated customer service team is
able to monitor any reviews or comments
in order to contact customers to resolve any
issues. Any unwarranted malicious content
is removed and the user reported to the
relevant social platform.
FASHION RISK
n As trends change there is a risk that design
does not keep up with customer requirements
for the latest fashion.
CUSTOMER DEMANDS AND
E-COMMERCE ADVANCEMENTS
n As the e-commerce market grows across
all sectors and industries consumers have
increased expectations, and increasing
demands around ease of purchasing and
returns.
NEGATIVE ONLINE REVIEWS
n Negative comments on social platforms
could influence purchasing decisions for new
visitors.
26
SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018sosandar.com O P E R A T I O N A L R I S K S
IMPACT
MITIGATING ACTIONS
RISK FACTOR
SUPPLIER RISK
DATA & GDPR
n The business relies on its outsourced
manufacturing supplier base to provide
the final product. Loss of suppliers through
insolvency, disaster or ceasing of working
relationship could impact short term supply.
n Non-compliance with labour or
environmental requirements could interrupt
supply chain and cause reputational damage.
n Product supplied could be of insufficient
quality for sale.
n New GDPR legislation could impact our
ability to communicate with customers.
n GDPR could impact ability to work with
data providers who help identify prospective
customers for marketing purposes.
n Data breaches could impact reputation
and business continuity.
MIS-USE OF RETURNS POLICY BY
CUSTOMERS
n Customers may wear the product then use
the returns policy to gain refund with the
product not suitable for re-sale.
SLOW MOVING STOCK
n Slow moving stock could increase
warehousing or impact margin if discounted.
n Purchases are spread over a number
of suppliers to avoid overdependency on
any single supplier and as the business is
growing and increasing order quantities the
potential supplier base is widening.
n All design is done in house with detailed
specification packs provided for each product
which helps on-board new suppliers quickly.
n All suppliers are asked to confirm that they
adopt all relevant Ethical Trade Initiative (ETI)
base code principles.
n Each product goes through an extensive
sampling process and final quality control
process to ensure it is suitable for sale.
n As a young business data has been
captured with an inherent awareness of the
GDPR legislation with little or no legacy data
issues.
n Legal and data security experts have been
engaged to review processes and policies
to ensure compliance and data security
protection.
n We work with industry leading data
providers with extensive compliant databases
to ensure sufficient sources of target
information for marketing purposes.
n Dedicated cyber insurance policies are in
place which include specialist resource and
plans to minimise the impact of any cyber
attacks.
n Each product is quality controlled upon
return to the warehouse to check for wear or
damage and make sure that a refund should
be processed. The quality control process
includes equipment that ensures the product
is in the same condition as when first received
and that it is suitable for sale.
n Stock turn is reviewed regularly at product
level by senior management. Focused
marketing techniques are applied to
stimulate demand and maximise conversion.
n The outlet section of the website exists for
fragmented stock lines and any out of season
stock should we decide to reduce the price if
the above are unsuccessful.
F I N A N C I A L R I S K S
RISK FACTOR
IMPACT
MITIGATING ACTIONS
FOREIGN EXCHANGE RATE RISK
n The business buys some product in foreign
currency. Adverse currency rate movements
could impact margins.
WORKING CAPITAL RISK
n As the company invests in product and
customer acquisition there is a risk that funds
will be required to fund continued growth.
n A detailed forward-looking purchase plan
to identify any potential currency exposure
and appropriate hedging techniques is used
to avoid any margin erosion caused by FX
movements.
n The business has detailed forward looking
forecasts and in-depth analysis of both
product and marketing channel performance.
This analysis is used to maximise efficiency of
spend and return on investment, balancing
the growth requirements against the funds
available to the business. Activities are
adjusted accordingly to manage cashflows
whilst maintaining communication with any
potential funders should any further growth
capital be required.
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SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018
SOSANDAR'S BOARD
OF DIRECTORS
The Sosandar board is made up of highly experienced individuals
with a weal th of commercial and corporate exper tise.
BILL MURRAY
NON-EXECUTIVE CHAIRMAN
Bill Murray has worked with the founders
of Sosandar since early 2014 and chaired
the Sosandar Board since its inception
in 2016.
He has extensive experience in the media
industry and spent 22 years until 2008 at
Haymarket Media Group, one of the UK’s
largest independent media companies,
where he served as Managing Director
of digital strategy.
Since then Bill has worked across a
portfolio of digital, media and other
commercial organisations, providing
strategic and commercial direction
on both a non-executive and
consultancy basis.
He was appointed Chairman of Hollins
Murray Group in 2009, a North West-
based commercial property group.
He is a director of 10ACT, trading as
Trackback,Jayess Assets and Paragraph
Media, was founding chairman of the
UK Association of Online Publishers and
Chairman and President of Camberley
RFC between 2006 and 2014.
Julie was also publishing director of
UK InStyle magazine, a global
fashion brand published in
17 countries worldwide.
Prior to her role at Look and InStyle,
Julie was publishing director of the
TV portfolio at H. Bauer from 2001
to 2006, where she took TV Choice
from fledgling brand to market
leader. She has also held publishing
roles on numerous women's brands,
including Marie Claire, after starting her
career in advertising sales, following a
modern languages degree at Durham
University.
JULIE LAVINGTON
CO-CEO AND FOUNDER
Former fashion magazine publishing
director, Julie Lavington, is co-founder and
Co-CEO of Sosandar.
In 2007, Julie launched Look magazine, a
leading UK women's fashion publication.
During her tenure, Julie steered Look to
have a multi-platform presence with a
wide social media reach. She diversified
into producing successful Look branded
clothing ranges with leading UK fashion
retailers. Julie was awarded the prestigious
Publisher of the Year Award in 2010 by the
Professional Publishers Association. From
August 2014,
successful clothing ranges for several
of the UK's top retailers.
Alison started out her career as a
newspaper journalist, before holding
editor positions on magazine brands
such as Slimming, Bliss and More.
She successfully implemented major
relaunches of various titles, creating
growing businesses, reinvigorating the
brands and increasing circulations. Alison
has also been a fashion contributor to
both local and national radio and TV
shows.
ALISON HALL
C0-CEO AND FOUNDER
Former fashion magazine editor,
Alison Hall, is co-founder and joint
Co-CEO of Sosandar.
Prior to founding Sosandar in 2015,
Alison was editor of Look magazine. After
launching it in 2007, she helped it grow to
become a leading fashion magazine title.
Alison has been a highly influential fashion
editor, and has twice been awarded the
Editor of the Year (Women's Magazines
(weekly or fortnightly)) accolade by the
British Society of Magazine Editors. During
her tenure at Look, Alison also designed
28
SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018sosandar.com MARK COLLINGBOURNE
FINANCE DIRECTOR
Mark is a qualified accountant with
significant experience in financial
management, particularly in the area of
publicly quoted companies. He has dealt
with all aspects of PLC development from
bringing small companies to flotation to
supervising the on-going accountancy
and ensuring the good governance of
international businesses.
During his ten year tenure with ViaLogy
plc (now Premaitha Health plc), Mark was
a key member of the team that arranged
its transformation from a private US
organisation to an AIM company, via a
merger with Original Investments PLC. He
also played a major part in arranging the
financial details of ViaLogy's restructuring.
Previously, after periods with ITV Network
Centre and Mechanical Copyright
Protection Society Limited, Mark was
appointed Finance Director of Curtis
Brown Group Limited, one of the UK's
leading literary agencies, in 1996, where he
managed the financial implications of the
management buyout in 2001.
Mark is currently Chief Finance Officer
of Optibiotix Health PLC and also holds
board positions on a number of small
private companies.
NICK MUSTOE
NON-EXECUTIVE DIRECTOR
Nick started his career in 1981 working in
London advertising agency Foote Cone
and Belding, followed by nine years at
Lowe Howard Spink. In that time Nick
worked across many clients including
Tesco, Heineken, Whitbread, Vauxhall,
Wicks, Weetabix, Bauer Publishing and
Hanson Group Companies.
Nick started his own agency, Mustoes
Merriman Levy, in 1993, which he
ran as an independent agency for 15
years, with a brief period under the
ownership of Japanese multi-national
Hakuhodo. During this time the agency
managed clients including Kia Cars,
Lloyds Pharmacy, Doctor Marten, Bauer
Publishing, Coca Cola and Unilever.
In 2008, Mustoes Merriman Levy merged
with a leading PR agency Geronimo to
form Kindred, the first fully integrated PR
and advertising agency. Nick subsequently
led an MBO of Kindred in 2010 and
continues to lead the company as the
chief executive.
Nick is Chairman of Kempton Park
Racecourse, Big Sofa Technologies Group
plc, ABC Connection Limited and Starlight
Children's Foundation and a non-executive
director of Premaitha Health PLC.
ADAM REYNOLDS
NON-EXECUTIVE DIRECTOR
Adam began his career in the City in 1980
with stockbrokers Rowe Rudd. He later
joined Public Relations business Basham
& Coyle heading their Investor Relations
Division. In 2000, he established his own
PR/IR and Corporate Finance firm, which
listed on AIM in November 2000 and
was then sold in 2004.
Adam was approached in 2005 to
become Non-Executive Chairman of
International Brand Licensing Plc. In
2009, Adam brought David Evans and
Julian Baines - the two leading diabetes
specialists in the UK - into the company
and the business changed direction. Today
it is known as EKF Diagnostics Plc. Adam is
a non-executive director and
a shareholder.
In 2012, Adam was introduced to
Autoclenz Plc through an institutional
fund manager. In November 2012, Adam
launched a successful agreed bid with
the management for the business to be
taken private. Adam is a director and
shareholder of this business.
the Hut Group, spanning all brands, all
customer facing activity globally. In 2014
Andrew joined Lateooms.com, part of TUI
PLC as Chief marketing Officer / Chief
Revenue officer remaining on until its
sale. Andrew remains within the plural
environment focused on brands that are
utilising technology to significantly grow
the customer relationship.
ANDREW BOOTH
N0N-EXECUTIVE DIRECTOR
Andrew is a 20 year digital marketing
veteran working with hypergrowth
companies, starting with gettyimages in
1999, developing his career throughout
the rise from Aim to Nasdeq, to NYSE
becoming Vice President of Marketing.
Following the sale of gettyimages in 2008
for $2.4BN to Hellman and Friedman,
Andrew joined Time Out as Group
Marketing Director, leading the migration
of digital with the customers and growth
of the worldwide brand. Thereafter he
became Chief Marketing Officer for
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SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018sosandar.com
GROUP DIRECTOR’S REPORT
The Directors present their repor t and the consolidated f inancial statements for the
period ended 31 March 2018
CHANGE OF NAME AND STRATEGY
On 1 November 2017 at a general meeting of the Company, Sosandar shareholders voted to adopt resolutions to effect a change
of strategy to that of online Women’s Fashion retailer and to change the name of the Company from Orogen plc to Sosandar
plc. Trading on AIM commenced under the new Company name on 2 November 2017.
RESULTS AND DIVIDENDS
The Group loss after tax for the year ended 31 March 2018 amounts to £6,056,896 (2017: £1,823,000). The Directors are not
recommending payment of a final dividend for the year (2017: £nil).
DIRECTORS
The Directors who served on the Board during the year and to the date of this report are as follows:
Adam Reynolds
Alison Hall (appointed on 2 November 2017)
Julie Lavington (appointed on 2 November 2017)
Bill Murray (appointed on 2 November 2017)
Nicolas Mustoe (appointed on 2 November 2017)
Steven Metcalfe (resigned on 2 November 2017)
Mark Collingbourne (appointed 7 April 2017)
Andrew Booth (appointed 29 June 2018)
Under the terms of the articles of association all Directors must retire by rotation every three years and may seek re-election
to the Board at the Annual General Meeting of the Company. The articles also provide for one-third of the Directors to retire
by rotation. All new Directors appointed since the previous Annual General Meeting must seek re-election at the next Annual
General Meeting in order to ratify their appointment to the Board by the members.
The Directors required to seek re-election at the next Annual General Meeting are Alison Hall, Julie Lavington, Bill Murray,
Nicolas Mustoe and Mark Collingbourne as directors appointed since the previous AGM and Adam Reynolds by rotation.
SUBSTANTIAL SHAREHOLDINGS
As at 18 June 2018 the following held 3% or more of the share capital of the Company:
Rank
Shareholder
1
2
3
4
5
6
Alison Hall
Julie Lavington
Miton Group Plc
Nigel Wray
Nicholas Mustoe
Mike Cooper
A Based on 106,814,658 ordinary shares on 18 June 2018.
CORPORATE GOVERNANCE
The Company is subject to the UK City Code on Takeovers and Mergers.
No of shares at
18 June 2018
% Issued
Capital
5,309,343
5,309,343
4,967,517
4,966,887
4,872,871
4,736,658
5.0%
5.0%
4.65%
4.6%
4.6%
4.4%
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SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018 E
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The Quoted Companies Alliance Code (“QCA Code”) adopts key elements of the UK Corporate Governance Code, current policy
initiatives and other relevant guidance and then applies these to the needs and particular circumstances of small and mid-size
quoted companies on a public market. Focusing on 12 principles and a set of minimum disclosures, the QCA Code encourages
companies to consider how or whether they should apply each principle to achieve good governance and provide quality
explanations to their shareholders about what they have done.
COMMITTEES OF THE BOARD
The Directors have established Audit and Remuneration Committees.
The Audit Committee
The Audit Committee currently comprises Bill Murray as Chairman, Adam Reynolds and Nick Mustoe and has primary responsibility
for monitoring the quality of internal controls ensuring that the financial performance of the Company is properly measured and
reported on and reviewing reports from the Company’s auditors relating to the Company’s accounting and internal controls, in all
cases having due regard to the interests of Shareholders. The Audit committee meets at least twice a year.
The Remuneration Committee
The Remuneration Committee currently comprises Nick Mustoe as Chairman, Adam Reynolds and Bill Murray who review the
performance of the executive directors and determine their terms and conditions of service, including their remuneration and
the grant of options, having due regard to the interests of Shareholders. The Remuneration Committee meets no less than once
every year.
DIRECTORS’ REMUNERATION
The Directors are entitled to receive relevant fees, as detailed in the Directors remuneration in Note 6.
DIRECTORS AND THEIR INTERESTS
The Directors of the Company held the following beneficial interests in the shares and share options of Sosandar plc at 31 March
2018 and 31 March 2017:
31 March 2018
Alison Hall
Julie Lavington
Nicholas Mustoe
Adam Reynolds
Mark Collingbourne
Bill Murray
Ordinary shares of
0.01p each
Ordinary shares of
0.01p each
Option exercise
Price £
Share Options
5,309,343
5,309,343
4,872,871
1,960,802
928,919
345,107
8,400,000
8,400,000
400,000
400,000
400,000
400,000
0.151
0.151
0.151
0.151
0.151
0.151
Expiry
03/11/2027
03/11/2027
03/11/2027
03/11/2027
03/11/2027
03/11/2027
31 March 2017
Adam Reynolds
Ordinary shares of
0.01p each
Ordinary shares of
0.01p each
Option exercise
Price £
348,162
160,000
1.50
Expiry
15/02/2021
These options lapsed as a result of the change of strategy on 7 April 2017 and the reverse acquisition on 2 November 2017
Share Options
GOING CONCERN
After making appropriate enquires, the Directors consider that the Company has adequate resources to continue in operational
existence for the foreseeable future. As part of their enquiries the Directors have reviewed cash forecasts for the company’s
operations for the 12 months from the date of approval of the financial statements. The Company has adequate cash to cover its
corporate overheads and management costs over this period.
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SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018
EVENTS AFTER THE REPORTING PERIOD
Further information on events after the reporting period is set out in note 22.
PRINCIPAL RISKS AND UNCERTAINTIES
The principal risks and uncertainties of the business are discussed in the Strategic Report and in note 21.
OVERSEAS BRANCHES
The Company has no overseas branches.
DIRECTORS’ RESPONSIBILITIES
The Directors are responsible for preparing the Group Directors’ report and financial statements in accordance with applicable
law and International Financial Reporting Standards.
Company law requires the Directors to prepare financial statements for each financial period. Under that law the Directors have
elected to prepare the financial statements in accordance with International Financial Reporting Standards as adopted for use
in the European Union that give a true and fair view of the state of the affairs of the Group and the Company and of the profit or
loss of the Group for that period.
In preparing these financial statements the Directors are required to:
n Select suitable accounting policies and apply them consistently; and
n make judgements and estimates that are reasonable and prudent; and
n
state whether the Group and Company financial statements have been prepared in accordance with IFRS as adopted by
the European Union, subject to any material departures disclosed and explained in the financial statements; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and
Company will continue in business.
n
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 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 Group and Company and hence for taking reasonable steps for the prevention and detection of
fraud and other irregularities.
The directors are responsible for the maintenance and integrity of the corporate and financial information included on the
Company’s website.
AUDITORS
The Board are recommending Jeffreys Henry LLP for re-appointment as auditors of the Group and Company. Jeffreys Henry
LLP have expressed their willingness to accept this appointment and a resolution re-appointing them will be submitted to the
forthcoming Annual General Meeting.
DISCLOSURE OF INFORMATION TO THE AUDITORS
At the date of approving this report, each Director confirms that, so far as that he is aware, there is no relevant audit information
of which the Group and Company’s auditors are unaware and he has taken all the steps that he ought to have taken as a
director in order to make himself aware of any relevant audit information and to establish that the Group and Company’s
auditors are aware of that information.
For and on behalf of the board:
Julie Lavington
Director
Date: 10 July 2018
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SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018 INDEPENDENT AUDITOR’S
REPORT
Independent auditor ’s repor t to the members of Sosandar Plc for the period ended
31 March 2018
OPINION
BASIS FOR OPINION
We conducted our audit in accordance
with International Standards on
Auditing (UK) (ISAs (UK)) and applicable
law. Our responsibilities under those
standards are further described in the
Auditor’s responsibilities for the audit
of the financial statements section
of our report. We are independent of
the Company in accordance with the
ethical requirements that are relevant
to our audit of the financial statements
in the UK, including the FRC’s Ethical
Standard as applied to listed entities,
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
n
We have nothing to report in respect
of the following matters in relation to
which the ISAs (UK) require us to report
to you where:
n
the directors’ use of the going
concern basis of accounting in
the preparation of the financial
statements is not appropriate; or
the directors have not disclosed
in the financial statements any
identified material uncertainties
that may cast significant doubt
about the Company’s ability to
continue to adopt the going
concern basis of accounting for a
period of at least twelve months
from the date when the financial
statements are authorised for issue.
We have audited the financial
statements of Sosandar Plc (the
‘parent Company’) and its subsidiaries
(the ‘Group’) for the period ended
31 March 2018 which comprise the
consolidated statement of income
and other comprehensive income, the
consolidated and parent Company
statements of financial position, the
consolidated and parent Company
statement of cash flows, the
consolidated and parent Company
statements of changes in equity and
notes to the financial statements,
including a summary of significant
accounting policies. The financial
reporting framework that has been
applied in the preparation of the Group
financial statements is applicable law
and International Financial Reporting
Standards (IFRSs) as adopted by
the European Union. The financial
reporting framework that has been
applied in the preparation of the
parent Company financial statements
is applicable law and International
Financial Reporting Standards (IFRSs)
as adopted by the European Union,
as applied in accordance with the
provisions of the Companies Act 2006.
In our opinion:
n
the financial statements give a
true and fair view of the state of
the Group’s and of the parent
Company’s affairs as at 31 March
2018 and of the Group’s loss for the
period then ended;
the Group financial statements
have been properly prepared in
accordance with IFRS’s as adopted
by the European Union;
the parent Company financial
statements have been properly
prepared in accordance with IFRS’s
as adopted by the European Union
as applied in accordance with the
provisions of the Companies Act
2006; and
the financial statements have been
prepared in accordance with the
requirements of the Companies Act
2006.
n
n
n
OUR AUDIT APPROACH
OVERVIEW
Key audit matters
Key audit matters are those matters
that, in our professional judgment,
were of most significance in our audit
of the financial statements of the
current period and include the most
significant assessed risks of material
misstatement (whether or not due to
fraud) we identified, including those
which had the greatest effect on: the
overall audit strategy, the allocation of
resources in the audit; and directing
the efforts of the engagement team.
These matters were addressed in the
context of our audit of the financial
statements as a whole, and in forming
our opinion thereon, and we do not
provide a separate opinion on these
matters. This is not a complete list of all
risks identified by our audit.
n
n
n
n
Inventory provisioning
Going concern issues
Carrying value of investments and
recoverability of intercompany loans
Accounting for the reverse
acquisition
These are explained in more detail
below
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Audit scope
n
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We conducted audits of the
complete financial information of
Sosandar Plc and Thread 35 Ltd.
We performed specified procedures
over certain account balances and
transaction classes at other Group
companies.
Taken together, the Group
companies over which we
performed our audit procedures
accounted for 100% of the absolute
profit before tax (i.e. the sum of the
numerical values without regard to
whether they were profits or losses
for the relevant reporting units) and
100% of revenue.
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SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018
KEY AUDIT MATTERS
Key audit matter
Inventory Provisioning
The Group held £531,000 of inventory as at 31 March 2018.
There are key assumptions that drive the inventory provision.
Including the ability to sell through older inventory and the
realisable value that will be achieved on sale. A provision for
items looking to be sold off at below cost and a provision for
aged items which there is a concern may ultimately be sold at
below cost.
Going concern assumption
The Group is dependent upon its ability to generate sufficient
cash flows to meet continued operational costs and hence
continue trading.
Although the current loss-making status is as expected due
its relative newness, given the scale of cash outflows, the
Group needs to be generating sufficient revenues to sustain its
position.
Investments and Company loans to subsidiaries
The Company has amounts due from Group companies
£2,941,301 (2016: £100,000).
How our audit addressed the key audit matter
We understood the methodology used to calculate the
inventory provision and determined it was consistent with
that applied in the prior year.
We reconciled the inventory values used in the provision to
the general ledger.
For items looking to be sold at below cost we checked the
calculation performed by management as to the required
provision to write these items down to the net realisable value.
We recomputed the level of provision having regard to the
Group’s provisioning methodology and performed some
sensitivity analysis to assess whether there was risk of material
misstatement of the provision.
Evaluated the suitability of management’s model for the
forecast.
The forecast includes a number of assumptions related to
future cash flows and associated risks. Our audit work has
focused on evaluating and challenging the reasonableness of
these assumptions and their impact on the forecast period.
Specifically, we obtained, challenged and assessed
managements going concern forecast and performed
procedures including:
n
n
n
Verifying the consistency of key inputs relating to
future sales and costs to other financial and operational
information obtained during the audit;
Assessed the reasonableness of expenses and costs
established;
Corroborated with management relating to future cash
inflows.
We reviewed the latest management accounts to gauge the
financial position.
We reviewed the carrying value of the investments and loans
to fellow subsidiaries. The review considered the current
position of the subsidiaries, the future outlook and forecasts
prepared by management.
The directors have confirmed these loans are recoverable.
We reviewed the subsidiary accounts and forecasts and have
assessed the financial position of the subsidiaries.
Management have performed impairment reviews relating to
the investments.
We have also discussed payments of the loans with the
directors to confirm recoverability.
We have also assessed the impairment reviews performed by
management as set out under the impairment review work
on intangibles noted above.
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SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018 Key audit matter
How our audit addressed the key audit matter
Accounting for the reverse acquisition of Orogen
We evaluated management’s assessment that it is the
shareholders of Orogen Plc.
On 2 November 2017, Orogen Plc, a cash shell acquired Thread
35 Ltd, which operates as women’s e-commerce brand
Sosandar as a reverse takeover under AIM rules. The total
consideration for the acquisition of the entire issued share
capital of Thread is £6,281,618, satisfied by the issue of shares
of £1,603,422 and cash of £4,678,196.
We evaluated the methodology and tested the mathematical
accuracy of the calculations of the Group for the deemed
consideration paid to Thread 35 Ltd shareholders. We
corroborated the underlying information inputs, including the
share prices, exchange ratios with independent data sources
and we checked the contractual agreements.
As the legal subsidiary is reversed into the Company, which
originally was a publicly listed cash shell company, this
transaction cannot be considered a business combination,
as the Company, the accounting acquire does not meet the
definition of a business, under IFRS 3 ‘Business Combinations’.
We obtained the signed contractual agreements relating to
the reverse acquisition and read significant contract terms
relevant to the accounting and disclosures in the financial
statements.
However, the accounting for such capital transaction should
be treated as a share-based payment transaction and
therefore accounted for under IFRS 2 ‘Share-based payment’.
We substantively tested journal entries and supporting
workings and evidence relating to the accounting for the
exchange of shares and internal restructuring steps, agreeing
them to the contracts and to the terms of the scheme of
arrangement.
We evaluated the capital and equity movements of both
Sosandar Plc and Thread 35 Limited, for accuracy by
comparison to the terms of the scheme of arrangement.
OUR APPLICATION OF MATERIALITY
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality.
These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and
extent of our audit procedures on the individual financial statement line items and disclosures and in evaluating the effect of
misstatements, both individually and in aggregate on the financial statements as a whole.
Based on our professional judgment, we determined materiality for the financial statements as a whole as follows:
Overall materiality
How we determined it
Rationale for benchmark applied
Group financial statements
Company financial statements
£260,000 (31 March 2017: £60,000).
£220,000 (31 December 2016: £35,400).
The average of 2.5% of revenue, 10% of
loss before tax and 2.5% of gross assets.
The average of 10% of loss before tax and
1% of gross assets
We believe that loss before tax is a
primary measure used by shareholders
in assessing the performance of the
Group whilst gross asset values and
revenue are a representation of the size
of the Group; all are generally accepted
auditing benchmarks.
We believe that loss before tax is a
primary measure used by shareholders
in assessing the performance of the
Company whilst gross asset values
are a representation of the size of the
Company; both are generally accepted
auditing benchmarks
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For each component in the scope of our
Group audit, we allocated a materiality
that is less than our overall Group
materiality. The range of materiality
allocated across components was
between £120,000 and £206,000.
We agreed with the Audit and Risk
Committee that we would report to
them misstatements identified during
our audit above £12,500 (Group audit)
(31 March 2017: £3,000) and £10,300
(Company audit) (31 December 2016:
£1,770) as well as misstatements
below those amounts that, in our view,
warranted reporting for qualitative
reasons.
AN OVERVIEW OF THE SCOPE
OF OUR AUDIT
As part of designing our audit, we
determined materiality and assessed
the risks of material misstatement in
the financial statements. In particular,
we looked at where the directors made
subjective judgments, for example
in respect of significant accounting
estimates that involved making
assumptions and considering future
events that are inherently uncertain. As
in all of our audits we also addressed
the risk of management override of
internal controls, including evaluating
whether there was evidence of bias by
the directors that represented a risk of
material misstatement due to fraud.
How we tailored the audit scope
We tailored the scope of our audit to
ensure that we performed enough
work to be able to give an opinion on
the financial statements as a whole,
taking into account the structure
of the Group and the Company, the
accounting processes and controls, and
the industry in which they operate.
The Group financial statements are
a consolidation of 5 reporting units,
comprising the Group’s operating
businesses and holding companies.
We performed audits of the complete
financial information of Sosandar Plc,
and Thread 35 Ltd reporting units, which
were individually financially significant
and accounted for 100% of the Group’s
revenue and 100% of the Group’s
absolute profit before tax (i.e. the sum
of the numerical values without regard
to whether they were profits or losses
for the relevant reporting units). We also
performed specified audit procedures
over goodwill and other intangible
assets, as well as certain account
balances and transaction classes that
we regarded as material to the Group at
5 reporting units.
MATTERS ON WHICH WE ARE
REQUIRED TO REPORT BY
EXCEPTION
OTHER INFORMATION
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.
In connection with our audit of the
financial statements, our responsibility
is to read the other information and, in
doing so, consider whether the other
information is materially inconsistent
with the financial statements or our
knowledge obtained in the audit or
otherwise appears to be materially
misstated. If we identify such material
inconsistencies or apparent material
misstatements, we are required
to determine whether there is a
material misstatement in the financial
statements or a material misstatement
of the other information. 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:
n
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.
n
In the light of the knowledge and
understanding of the Group and
parent 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:
n
n
n
n
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 (and the part of the
directors’ remuneration report to be
audited) 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’
responsibilities statement set out on
page 28, 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 Group’s and 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 Group or the
parent Company or to cease operations,
or have no realistic alternative but to
do so.
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SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018 USE OF THIS REPORT
This report is made solely to the
Company’s members, as a body, in
accordance with Chapter 3 of Part 16
of the Companies Act 2006. Our audit
work has been undertaken so that we
might state to the Company’s members
those matters we are required to state
to them in an auditor’s report and for
no other purpose. To the fullest extent
permitted by law, we do not accept or
assume responsibility to anyone other
than the Company and the Company’s
members as a body, for our audit work,
for this report, or for the opinions we
have formed.
Sachin Ramaiya
Senior Statutory Auditor
For and on behalf of
Jeffreys Henry LLP (Statutory
Auditors)
Finsgate
5-7 Cranwood Street
London EC1V 9EE
10 July 2018
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.
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
auditor’s report.
OTHER MATTERS WHICH WE
ARE REQUIRED TO ADDRESS
The non-audit services prohibited by
the FRC’s Ethical Standard were not
provided to the Group or the parent
Company and we remain independent
of the Group and the parent Company
in conducting our audit.
Our audit opinion is consistent with
the additional report to the audit
committee.
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SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018
CONSOLIDATED STATEMENT OF INCOME
AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2018
NOTES
YEAR ENDED
31 MARCH 2018
£’000
PERIOD ENDED
31 MARCH 2017
£’000
Revenue
Operational costs
Gross profit
Administrative expenses
Deemed cost of reverse
Reverse acquisition cost
Operating (loss)
Finance income
Loss on ordinary activities before taxation
Tax on loss on ordinary activities
Profit/(Loss) for the period
Other Comprehensive income
Total Comprehensive income for the period
Attributable to:
Equity holders of the parent
Non-controlling interests
Group loss for the period
Exchange translation differences
Total comprehensive loss for the period
Loss per share:
Loss per share – basic and diluted, attributable to ordinary
equity holders of the parent (pence)
Loss per share – basic and diluted, from continuing
operations (pence)
4
5
7
8
8
1,353
(684)
669
(3,793)
(1,439)
(1,493)
(6,056)
–
(6,056)
–
(6,056)
–
278
(173)
105
(1,931)
–
–
(1,826)
3
(1,823)
–
(1,823)
–
(6,056)
(1,823)
(6,056)
–
(6,056)
–
(6,056)
(10.31)
(10.31)
(1,823)
–
(1,823)
–
(1,823)
(1,844)
(1,844)
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SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018
CONSOLIDATED STATEMENT OF FINANCIAL
POSITION
AS AT 31 MARCH 2018
Assets
Non-current assets
Intangible assets
Property, plant and equipment
Total non-current assets
Current assets
Inventories
Trade and other receivables
Cash and cash equivalents
Total current assets
Total assets
Equity and liabilities
Equity
Share capital
Share premium
Capital redemption reserve
Other reserves
Reverse acquisition reserve
Retained earnings
Equity attributable to owners of the parent
Non-controlling interests
Total equity
Current liabilities
Trade and other payables
Total current liabilities
Total liabilities
Total equity and liabilities
NOTES
9
10
11
13
14
15
15
15
16
15
17
18
2018
£’000
56
172
228
531
478
4,616
5,625
5,853
107
27,796
4,648
32
(19,596)
(8,055)
4,932
–
4,932
921
921
921
5,853
2017
£’000
55
210
265
363
61
338
762
1,027
1
2,743
–
–
–
(1,999)
745
–
745
282
282
282
1,027
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
The financial statements were approved and authorised for issue by the Board of Directors on 10 July 2018 and were signed on
its behalf by:
_____________________
Julie Lavington
Director
Company Number: 5379931
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SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2018
Cash flows from operating activities
Group loss for the period
Share-based payments
Depreciation and amortisation
Reverse acquisition costs
Working capital adjustments:
Change in inventories
Change in trade and other receivables
Change in trade and other payables
Net cash flow from operating activities
Cash flow from investing activities
Addition of property, plant and equipment, and intangibles
Acquisition, net of cash acquired1
Bank interest received
Net cash flow from investing activities
Cash flow from financing activities
Net proceeds from issue of equity instruments
Net cash flow from financing activities
Net change in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
NOTES
16
9 & 10
9 & 10
5
15
14
14
YEAR ENDED
31 MARCH 2018
£’000
PERIOD ENDED
31 MARCH 2017
£’000
(6,056)
582
55
1,439
(168)
(445)
849
(3,744)
(18)
(1,938)
–
(1,956)
9,978
9,978
4,278
338
4,616
(1,823)
–
28
–
(363)
(26)
278
(1,906)
(292)
–
3
(289)
788
788
(1,407)
1,745
338
1 The cash outflow on acquisition (net of cash acquired) relates to the cash and cash equivalents of Sosandar PLC as at date of acquisition (2 November 2017).
Significant non-cash transactions: on 2 November 2017 Sosandar PLC acquired the entire issued share capital of Thread 35 Limited for a consideration of
£6,281,618, satisfied by the issue of shares of £1,603,422 (non-cash transaction) and cash of £4,678,196.
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SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018
CONSOLIDATED STATEMENT OF CHANGES IN
EQUITY
FOR THE PERIOD ENDED 31 MARCH 2018
Balance at 1 November 2015
Loss for the period
Foreign exchange translation
reserve
Other movements
Shares based payments
Issue of share capital
Balance at 31 March 2017
SOSANDAR PLC
Balance at 1 January 2017
Thread 35 retained earnings b/f
Loss for the year
Transfer of share-based
payment reserve
Loss for the period to
acquisition
Reverse Acquisition
Shares based payments
Issue of share capital
Cancellation of share capital
Balance at 31 March 2018
16
15
16
15
15
NOTES
SHARE
CAPITAL
£’000
1
–
SHARE
PREMIUM
£’000
1,955
–
REVERSE
CAPITAL
ACQUISITION REDEMPTION RETAINED
EARNINGS
RESERVE
£’000
£’000
(176)
–
(1,823)
–
RESERVE
£’000
–
–
SHARE
BASED
PAYMENT
RESERVE
£’000
–
–
–
–
–
–
–
610
–
–
TOTAL
£’000
1,780
(1,823)
–
–
–
788
745
88
(1,999)
(6,057)
–
–
–
–
1
4,651
–
–
–
–
–
788
2,743
12,268
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(1,999)
(17,441)
(1,999)
(6,057)
610
(610)
–
–
–
–
104
(4,648)
107
–
–
–
15,528
–
27,796
–
(19,596)
–
–
–
(19,596)
–
–
–
–
4,648
4,648
(770)
17,601
–
–
–
(8,055)
–
–
32
–
–
32
(770)
(1,995)
32
15,632
–
4,932
Share capital is the amount subscribed for shares at nominal value.
Share premium represents the excess of the amount subscribed for share capital over the nominal value of those shares net of
share issue expenses.
Share based payments reserve relate to the charge for share-based payments in accordance with International Financial
Reporting Standard 2.
Retained earnings represent the cumulative loss of the Group attributable to equity shareholders.
Reverse acquisition reserve relates to the effect on equity of the reverse acquisition of Thread 35 Limited.
Capital redemption reserve represents the aggregate nominal value of all the deferred shares repurchased and cancelled by the
Company. The reserve is non-distributable.
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41
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2018
Assets
Non-current assets
Investments
Loans to subsidiaries
Total non-current assets
Current assets
Trade and other receivables
Cash and cash equivalents
Total current assets
Total assets
Equity and liabilities
Equity
Share capital
Share premium
Other reserves
Capital Reserves
Retained earnings – prior periods
Retained earnings – current year
Total equity
Current liabilities
Trade and other payables
Total current liabilities
Total liabilities
Total equity and liabilities
NOTES
12
12
13
14
15
15
16
17
17
18
2018
£’000
6,282
–
6,282
2,989
4,312
7,301
13,583
107
27,796
32
4,648
(17,441)
(1,765)
13,377
206
206
206
13,583
2016
£’000
–
100
100
62
64
126
226
4,651
12,268
610
–
(14,860)
(2,581)
88
138
138
138
226
The financial statements were approved and authorised for issue by the Board of Directors on 10 July 2018 and were signed on
its behalf by:
_____________________
Julie Lavington
Director
Company Number: 5379931
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SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018
COMPANY STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED 31 MARCH 2018
Cash flows from operating activities
Loss for the period – continuing operations
Loss for the period – discontinued operations
Loss for the year
Impairment of investments and loans to subsidiaries
Impairment of exploration and evaluation assets
Share based payments
Working capital adjustments:
Change in trade and other receivables
Change in trade and other payables
Net cash flow from operating activities
Cash flow from investing activities
Expenditure on exploration and evaluation assets and
project earn-ins
Investment in subsidiary undertakings
Net cash flow from investing activities
Cash flow from financing activities
Net proceeds from issue of equity instruments
Funds advanced to subsidiary companies
Net cash flow from financing activities
Net change in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
NOTES
12
16
13
18
12
14
14
2018
£’000
(2,375)
–
(2,375)
100
–
582
(2,927)
68
(4,552)
—
(4,678)
(4,678)
13,478
–
13,478
4,248
64
4,312
2016
£’000
(2,525)
(63)
(2,588)
2,197
168
20
(1)
49
(155)
(168)
—
(168)
320
(234)
86
(237)
301
64
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
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SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 31 MARCH 2018
NOTES
SHARE
CAPITAL
£’000
4,418
SHARE
PREMIUM
£’000
12,181
SHARE
BASED
CAPITAL
PAYMENT REDEMPTION RETAINED
EARNINGS
RESERVE
RESERVE
£’000
£’000
£’000
(14,860)
–
597
Balance at 1 January 2016
Loss and total comprehensive loss for
the year
Issue of share capital
Transfer of share-based payment reserve
Shares based payments
Balance at 31 December 2016
Balance at 1 January 2017
Loss and total comprehensive loss for
the period
Transfer of share-based payment reserve
Issue of share capital
Cancellation of share capital
Shares based payments
Balance at 31 March 2018
15
16
15
15
16
–
233
–
–
4,651
–
87
–
–
12,268
4,651
12,268
–
–
104
(4,648)
–
107
–
–
15,528
–
–
27,796
–
–
(7)
20
610
610
–
(610)
–
–
32
32
–
–
–
–
–
–
–
–
–
4,648
–
4,648
TOTAL
£’000
2,336
(2,588)
320
–
20
88
(2,588)
–
7
–
(17,441)
(17,441)
88
(2,375)
610
–
–
–
(19,206)
(2,375)
–
15,632
–
32
13,377
Share capital is the amount subscribed for shares at nominal value.
Share premium represents the excess of the amount subscribed for share capital over the nominal value of those shares net of
share issue expenses.
Share based payments reserve relate to the charge for share-based payments in accordance with International Financial
Reporting Standard 2.
Retained earnings represent the cumulative loss of the Company attributable to the equity shareholders.
Capital redemption reserve represents the aggregate nominal value of all the deferred shares repurchased and cancelled by the
Company. The reserve is non-distributable.
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SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS
1 GENERAL INFORMATION
Sosandar plc (formerly Orogen plc) (the “Company”) is a company incorporated in England and Wales. Details of the registered
office, the officers and advisers to the Company are presented on the Company Information page at the end of this report. The
Company is listed on the AIM market of the London Stock Exchange (ticker: SOS).
The principal activity of the company in the period under review was that of a clothing manufacturer and distributor via internet
and mail order.
2 SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PREPARATION
The consolidated financial statements consolidate those of the Company and its subsidiaries (together the “Group” or
“Sosandar”). The consolidated financial statements of the Group and the individual financial statements of the Company are
prepared in accordance with applicable UK law and International Financial Reporting Standards ("IFRS") as adopted by the
European Union and as applied in accordance with the provisions of the Companies Act 2006. The Directors consider that the
financial information presented in these Financial Statements represents fairly the financial position, operations and cash flows
for the period, in conformity with IFRS.
GOING CONCERN
The Group’s business activities, together with the factors likely to affect its future development, performance and position, are
set out in Chairman’s statement on page 18. The financial position of the Group, its cash flows, liquidity position and borrowing
facilities are described in the financial statements and associated notes. In addition, Note 21 to the financial statements includes
the Group’s objectives, policies and processes for managing its capital; its financial risk management objectives; details of its
financial instruments; and its exposures to credit risk and liquidity risk.
In order to assess the going concern of the Group, the Directors have prepared cashflow forecasts for companies within the
Group. These cashflow forecasts show the Group expect an increase in revenue and will have sufficient headroom over available
banking facilities.
After making enquiries, the Directors have a reasonable expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the
financial statements.
The financial statement does not include any adjustments that would result if the forecast were not achieved.
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
CONSOLIDATION
The consolidated financial statements include the financial statements of the Company and its subsidiaries and associated
undertakings.
Thread 35 Limited has a reporting date of 31 March. All other subsidiaries have a reporting date of 31 December.
Subsidiaries are all entities over which Sosandar plc has the power to govern the financial and operating policies generally
accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that
are currently exercisable or convertible are considered when assessing whether the Group controls another entity. Subsidiaries
are fully consolidated from the date on which control is transferred to the Company. They are de-consolidated from the date
that control ceases.
In November 2017, Sosandar PLC (“Company”) acquired the entire issued share capital of Thread 35 Ltd (“legal subsidiary”)
for a consideration of £6,281,618, satisfied by the issue of shares of £1,603,422 and cash of £4,678,196. As the legal subsidiary is
reversed into the Company (the legal parent), which originally was a publicly listed cash shell company, this transaction cannot
be considered a business combination, as the Company, the accounting acquiree does not meet the definition of a business,
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45
SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018
under IFRS 3 ‘Business Combinations’. However, the accounting for such capital transaction should be treated as a share-
based payment transaction and therefore accounted for under IFRS 2 ‘Share-based payment’. Any difference in the fair value
of the shares deemed to have been issued by the Thread 35 Ltd (accounting acquirer) and the fair value of Sosandar PLC’s (the
accounting acquiree) identifiable net assets represents a service received by the accounting acquirer.
Although the consolidated financial information has been issued in the name of Sosandar PLC, the legal parent, it represents in
substance continuation of the financial information of the legal subsidiary.
The assets and liabilities of the legal subsidiary are recognised and measured in the Group financial statements at the pre-
combination carrying amounts and not re-stated at fair value.
The retained earnings and other reserves balances recognised in the Group financial statements reflect the retained earnings
and other reserves balances of the legal subsidiary immediately before the business combination and the results of the period
from 1 April 2017 to the date of the business combination are those of the legal subsidiary only.
The equity structure (share capital and share premium) appearing in the Group financial statements reflects the equity
structure of Sosandar PLC the legal parent. This includes the shares issued in order to effect the business combination.
The difference between the aggregate deemed fair value of the consideration paid and the identified assets and liabilities
acquired of Sosandar PLC is £1,438,608 and this amount was charged to the income statement for the period ended
31 March 2018.
Functional and presentation currency
Items included in the financial statements of the Group are measured using the currency of the primary economic
environment in which the entity operates (the functional currency). The financial statements are presented in Pounds Sterling
(£), which is the Group’s presentation currency and the Company’s functional currency.
Foreign currency transactions are translated into the functional currency using exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation
at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in the income
statement.
The results and financial position of all Group entities (none of which has the currency of a hyper-inflationary economy) that
have a functional currency different from the presentation currency are translated into the presentation currency as follows:
n
n
assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of that
statement of financial position;
income and expenses for each income statement are translated at average exchange rates (unless this average is not a
reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income
and expenses are translated at the rate on the dates of the transactions); and
n All resulting exchange differences are recognised as a separate component of equity.
On consolidation, exchange differences arising from the translation of the net investment in foreign operations, and of
borrowings and other currency instruments designated as hedges of such investments, are taken to shareholders’ equity. When
a foreign operation is partially disposed of or sold, exchange differences that were recorded in equity are recognized in the
income statement as part of the gain or loss on sale.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the
foreign entity and translated at the closing rate.
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SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018 Changes in accounting policies and disclosures
During the financial year, the Group has adopted the following new and amended IFRS and IFRIC interpretations that are
mandatory for current financial year:
Amendments to IAS 7
Amendments to IAS 12
Annual Improvements to IFRS standard 2014 2016
Disclosure Initiative
Recognition of Deferred Tax Assets for Unrealised Losses
Amendments to IFRS 12 Disclosure of Interest in Other Entities
The impact of adopting the above amendments had no material impact on the financial statements of the Group.
Standards, interpretations and amendments to published standards that are not yet effective
The following standards, amendments and interpretations applicable to the Group are in issue but are not yet effective and
have not been early adopted in these financial statements. They may result in consequential changes to the accounting policies
and other note disclosures. We do not expect the impact of such changes on the financial statements to be material. These are
outlined in the table below:
Effective dates for Financial periods
Beginning on or after
IFRS 15
IFRS 9
IFRIC 22
Amendments to IFRS 2
Amendments to IFRS 4
Revenue from Contracts with
Customers
Financial Instruments
Foreign Currency Transactions and
Advance Consideration
Classification and Measurement of
Share-Based Payment Transactions
1 January 2018
1 January 2018
1 January 2018
1 January 2018
Applying IFRS 9 Financial Instruments
with IFRS 4 Insurance Contracts
1 January 2018*
Amendments to IFRS 15
Clarification to IFRS 15
1 January 2018
Amendments to IAS 40
Transfer of Investment Property
1 January 2018
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
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SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018
Annual Improvements to IFRS Standards 2014 – 2016 Cycle
n
n
Amendments to IFRS 1 First-time Adoption of IFRS
Amendments to IAS 28 Investment in Associate and Joint Venture
IFRS 16
Leases
Amendments to IFRS 9
IFRIC 23
Amendments to IAS 28
Amendments to IAS 19
Prepayment Features with Negative
Compensation
Uncertainty over Income Tax
Treatments
Long-term Interest in Associates and
Joint Ventures
1 January 2019
Plan Amendment, Curtailment or
Settlement
1 January 2019
Effective dates for Financial periods
Beginning on or after
1 January 2018
1 January 2018
1 January 2019
1 January 2019
1 January 2019
Annual Improvements to IFRS Standards 2015 – 2017 Cycle – Various standards
1 January 2019
n
n
n
n
Amendment to IFRS 3
Amendment to IFRS 11
Amendment to IAS 12
Amendment to IAS 23
1 January 2019
1 January 2019
1 January 2019
1 January 2019
Amendment to References to Conceptual Framework in IFRS Standards
1 January 2020
IFRS 17
Insurance Contracts
1 January 2021
Amendment to IFRS 10 and IAS 28
Sale or Contribution of Assets between
an Investor and its Associate or joint
Venture
Deferred until further notice
Note:
* Entities that meet the specific criteria in IFRS 4, paragraph 20B, may choose to defer the application of IFRS 9 until that earlier of the application of the
forthcoming insurance contracts standard or annual periods beginning before 1 January 2021.
The Directors anticipate that the adoption of these standards and the interpretations in future periods will have no material impact on the financial
statements of the Group.
Critical accounting judgements and key sources of estimation uncertainty
The preparation of Financial Statements in conformity with IFRS requires management to make estimates and judgements
that affect the reported amounts of assets and liabilities as well as the disclosure of contingent assets and liabilities at the
period end and the reported amounts of revenues and expenses during the reporting period. Estimates and judgements are
continually evaluated and are based on historical experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances.
Inventories
Inventories are valued at the lower of cost and net realizable value, on a weighted average cost basis. Net realizable value is
the estimated selling price in the ordinary course of the business less applicable variable selling expenses. Cost of purchase
comprises the purchase price including import duties and other taxes, transport and handling costs and other attributable
costs, less trade discounts.
A provision is made to write down any slow-moving or obsolete inventory to net realisable value. The provision is £55k at
31 March 2018 (2017: £18k).
Refund accruals
Accruals for sales returns are estimated on the basis of historical returns and are recorded so as to allocate them to the same
period in which the original revenue is recorded. These accruals are reviewed regularly and updated to reflect management’s
latest best estimates, although actual returns could vary from these estimates. The accrual for net refunds totalled £15k (2017: £17k).
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SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018 Calculation of share-based payment charges
The charge related to equity-settled transactions with employees is measured by reference to the fair value of the equity
instruments at the date they are granted, using an appropriate valuation model selected according to the terms and conditions
of the grant. Judgement is applied in determining the most appropriate valuation model and in determining the inputs to
the model. Judgements are also applied in relation to estimations of the number of options which are expected to vest, by
reference to historic leaver rates and expected outcomes under relevant performance conditions. Please see Note 16.
Depreciation of property, plant and equipment and amortisation of other intangible assets
Depreciation and amortisation are provided to write down assets to their residual values over their estimated useful lives. The
determination of these residual values and estimated lives, and any change to the residual values or estimated lives, requires
the exercise of management judgement. Please see Notes 9 and 10.
Principal accounting policies
The principal accounting policies are summarised below. They have been consistently applied throughout the period covered
by the Financial Statements.
Revenue recognition
Revenue represents net invoiced sales of goods including posting and packing receipts, excluding value added tax. Revenue
from the sale is recognised when the company has transferred the goods to the buyer on dispatch from the warehouse, less
actual returns and provision for expected returns. Revenue consists primarily of internet sales.
BUSINESS COMBINATIONS
Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the
aggregate of the consideration transferred, measured at acquisition date fair value and the amount of any non-controlling
interest in the acquiree. In the consolidated Financial Statements, acquisition costs incurred are expensed and included in
general and administrative expenses.
Intangible Assets
Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be
demonstrated. Costs are capitalised where the expenditure will bring future economic benefit to the company.
Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful economic
lives.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are stated at historical cost less subsequent accumulated depreciation and accumulated
impairment losses, if any. Historical cost includes expenditure that is directly attributable to the acquisition of the items.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it
is probable that future economic benefits associated with the item will flow to the company and the cost of the item can be
measured reliably. All other repairs and maintenance are charged to profit or loss during the financial period in which they are
incurred.
Depreciation on property, plant and equipment is calculated using the straight-line method to write off their cost over their
estimated useful lives at the following annual rates:
Plant and Machinery
Computer Equipment
Fixture and Fittings
Office equipment
Leasehold improvements
15% Straight line
33.33% Straight line
15% Reducing balance
25% Reducing balance
20% Straight line
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
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SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018
EQUITY
Equity instruments issued by the Company are recorded at the value of the proceeds received, net of direct issue costs,
allocated between share capital and share premium.
GOODWILL
Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the net identifiable
assets of the acquired subsidiary or associate at the date of acquisition. Goodwill on acquisitions of subsidiaries is included
in ‘intangible assets’. Separately recognized goodwill is tested annually for impairment and carried at cost less accumulated
impairment losses. Impairment losses on goodwill are not reversed. Gains and losses on the disposal of an entity include the
carrying amount of goodwill relating to the entity sold.
Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those cash-
generating units or groups of cash-generating units that are expected to benefit from the business combination in which the
goodwill arose. The Group allocates goodwill to each business segment in each country in which it operates.
IMPAIRMENT OF NON-FINANCIAL ASSETS
At each statement of financial position date, the Company reviews the carrying amounts of its investments 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 the asset does not
generate cash flows that are independent from other assets, the Company estimates the recoverable amount of the cash-
generating unit to which the asset belongs. An intangible asset with an indefinite useful life is tested for impairment annually
and whenever there is an indication that the asset may be impaired.
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 (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised as an
expense immediately, unless the relevant asset is carried at a re-valued amount, in which case the impairment loss is treated as
a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the asset (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 (cash-generating unit) in prior years.
A reversal of an impairment loss is recognised as income immediately, 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.
Leasing
Assets held under finance leases are initially recognised as assets of the company at their fair value at the inception of the lease
or, if lower, at the present value of the minimum lease payments. The corresponding liability to the lessor is included in the
statement of financial position as a finance lease obligation. Lease payments are treated as reduction of the lease obligation
on the remaining balance of the liability. Finance expenses are recognised immediately in profit or loss, unless they are directly
attributable to qualifying assets, in which case they are capitalised in accordance with the Group’s general policy on borrowing
costs (see below). Contingent rentals are recognised as expenses in the periods in which they are incurred.
Rental leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as
operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the
income statement. Rentals payable under operating leases are charged against the statement of comprehensive income on a
straight line basis over the lease term.
TAXATION
Income tax
Income tax expense represents the sum of the tax currently payable and deferred tax. The tax currently payable is based on
taxable profit for the year. Taxable profit differs from profit as reported in the same 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 Group and Company’s liability for current tax is calculated using tax rates that have been enacted or
substantively enacted by the statement of financial position date.
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SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018 DEFERRED TAX
Deferred tax is recognized on differences between the carrying amounts of assets and liabilities in the financial statements and
the corresponding tax bases used in the computation of taxable profit, and is accounted for using the statement of financial
position liability method. Deferred tax liabilities are generally recognized for all taxable temporary differences and deferred tax
assets are recognized to the extent that it is probable that taxable profits will be available against which deductible temporary
differences can be utilised. Such assets and liabilities are not recognized if the temporary difference arises from goodwill or
from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects
neither the taxable profit nor the accounting profit.
The carrying amount of deferred tax is reviewed at each statement of financial position 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
realised. Deferred tax is charged or credited to 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 there is a legally enforceable right to set off current tax assets against current
tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group and Company intends
to settle its current tax assets and liabilities on a net basis.
SHARE BASED COMPENSATION
The fair value of the employee and suppliers’ services received in exchange for the grant of the options is recognized as an
expense. The total amount to be expensed over the vesting year is determined by reference to the fair value of the options
granted, excluding the impact of any non-market vesting conditions (for example, profitability and sales growth targets).
Non-market vesting conditions are included in assumptions about the number of options that are expected to vest. At each
statement of financial position date, the entity revises its estimates of the number of options that are expected to vest. It
recognises the impact of the revision to original estimates, if any, in the income statement, with a corresponding adjustment to
equity.
The proceeds received net of any directly attributable transaction costs are credited to share capital (nominal value) and share
premium when the options are exercised.
The fair value of share-based payments recognised in the income statement is measured by use of the Black Scholes model,
which takes into account conditions attached to the vesting and exercise of the equity instruments. The expected life used in
the model is adjusted; based on management’s best estimate, for the effects of non-transferability, exercise restrictions and
behavioural considerations. The share price volatility percentage factor used in the calculation is based on management’s
best estimate of future share price behaviour and is selected based on past experience, future expectations and benchmarked
against peer companies in the industry.
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
INVESTMENTS
Investments on subsidiary companies are stated at cost less any provision for impairment.
PROVISIONS
Provisions are recognized when the Group and Company has a present obligation as a result of a past event, and it is probable
that the Group and Company will be required to settle that obligation. Provisions are measured at the Directors’ best estimate
of the expenditure required to settle the obligation at the statement of financial position date and are discounted to present
value where the effect is material.
FINANCIAL INSTRUMENTS
Non-derivative financial instruments comprise investments in equity and debt securities, trade and other receivables, cash and
cash equivalents, loans and borrowings, and trade and other payables. Non-derivative financial instruments are recognized
initially at fair value plus, for instruments not at fair value through profit or loss, any directly attributable transactions costs,
except as described below. Subsequent to initial recognition non-derivative financial instruments are measured as described
below.
A financial instrument is recognised when the Group becomes a party to the contractual provisions of the instrument.
Financial assets are derecognised if the Group’s contractual rights to the cash flows from the financial assets expire or if the
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SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018
Group transfers the financial assets to another party without retaining control or substantially all risks and rewards of the asset.
Regular purchases and sales of financial assets are accounted for at trade date, i.e. the date that the Group commits itself to
purchase or sell the asset. Financial liabilities are derecognised if the Group’s obligations specified in the contract expire or are
discharged or cancelled.
FAIR VALUES
The carrying amounts of the financial assets and liabilities such as cash and cash equivalents, receivables and payables of the
Group and Company at the statement of financial position date approximated their fair values, due to relatively short-term
nature of these financial instruments.
TRADE PAYABLES AND OTHER NON-DERIVATIVE FINANCIAL LIABILITIES
Trade payables and other creditors are non-interest bearing and are measured at cost.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents include cash in hand, deposits held on call with banks, other short-term highly liquid investments
with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current
liabilities on the statement of financial position.
Trade and other receivables
Trade and other receivables are recognised initially at fair value and subsequently measured at their cost when the contractual
right to receive cash or other financial assets from another entity is established.
A provision for doubtful debts is made when there is objective evidence that the Group will not be able to collect all amounts
due according to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor
will enter bankruptcy or financial reorganization and default or delinquency in payments are considered indicators that a trade
and other receivables are impaired.
3 SEGMENTAL INFORMATION
In the opinion of the directors, the group has one class of business, being that of a clothing manufacturer and distributor via
internet and mail order. The group’s primary reporting format is determined by the geographical segment according to the
location of its establishments. There is currently only one geographic reporting segment, which is the UK. All costs are derived
from the single segment.
4 OPERATING LOSS
Operating loss is stated after charging/(crediting):
Operating lease rentals
Auditors’ remuneration
Legal & other fees transactions
Foreign currency (gain)/loss
Deemed cost of reverse acquisition
Reverse acquisition cost
5 FINANCE INCOME
Bank interest received
2018
£’000
51
28
122
10
1,439
1,493
2018
£’000
–
2017
£’000
18
8
37
(21)
–
–
2017
£’000
3
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SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018
6 EMPLOYEES
Aggregate Directors’ emoluments including consulting fees
Wages and salaries
Social security costs
Pension Costs
Total
Directors
Staff
Total
Directors’ remuneration
2018
£’000
1,235
553
89
32
1,909
2017
£’000
312
297
69
14
692
2018
2017
6
12
18
6
5
11
Details of emoluments received by Directors of the Company for the year ended 31 March 2018 are as follows:
Alison Hall
Julie Lavington
Nicholas Mustoe
Bill Murray
Adam Reynolds
Mark Collingbourne
Steven Metcalfe
Total
2018
TO 1
2018
FROM 2
NOV 2017 NOV 2017
FEE
SHARES PENSION
2018
TOTAL
2017
TOTAL
£
73,333
73,333
-
20,000
243,410
78,240
93,100
£
36,667
36,667
12,500
12,500
25,000
12,500
-
£
-
-
-
-
200,000
100,000
200,000
£
8,800
8,800
-
-
-
-
-
£
118,800
118,800
12,500
32,500
468,410
190,740
293,100
£
155,830
155,830
-
-
-
-
-
585,416
135,834
500,000
17,600
1,234,850
311,660
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
7 INCOME TAX BENEFIT / (EXPENSE)
No corporation tax charge arises in the year ended 31 March 2018 and the year ended 31 March 2017. A reconciliation of the
expected tax benefit computed by applying the tax rate applicable in the primary jurisdiction, the UK, to the loss before tax to
the actual tax credit is as follows:
Loss on ordinary activities before taxation
Tax at the UK corporation tax rate of 19% (2017: 20%)
Expenses not deductible for tax purposes
Losses unutilised
Accelerated depreciation
Differences in overseas taxation rates
Tax on loss on ordinary activities
2018
£’000
(6,056)
(1,151)
557
594
–
–
–
2017
£’000
(1,823)
(346)
4
337
5
22
–
2018
£’000
(2,375)
(451)
380
71
–
–
–
2017
£’000
(2,588)
(518)
477
41
–
–
–
The Group has estimated tax losses of £2,000,000 (2017: £1,900,000) to carry forward against future taxable profits. The deferred
tax asset on these tax losses at 19% amounts to approximately £380,000 (2017: £360,000) and has not been recognised due to
the uncertainty of the recovery. Due to the fundamental change in the Company’s business following the exit of the mineral
exploration industry, tax losses carried forward may not be fully available for use against the future profits of the Group.
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SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018
8 LOSS PER SHARE
Basic loss per share is calculated by dividing the loss attributable to equity shareholders by the weighted average number of
ordinary shares in issue during the period:
Loss after tax attributable to equity holders of the parent from
continuing operations (£’000)
Loss after tax attributable to equity holders of the parent (£’000)
Weighted average number of ordinary shares in issue
Fully diluted average number of ordinary shares in issue
Basic and diluted loss per share (pence) – continuing operations
Basic and diluted loss per share (pence)
2018
(6,056)
(6,056)
58,770,354
58,770,354
(10.31)
(10.31)
2017
(1,823)
(1,823)
98,846
98,846
(1,844)
(1,844)
Basic and diluted earnings per share have changed, since where a loss is incurred the effect of outstanding share options
and warrants is considered anti-dilutive and is ignored for the purpose of the loss per share calculation. The share options
outstanding as at 31 March 2018 totalled 20,056,748 (2017: 380,000,000) and are potentially dilutive.
9 INTANGIBLE ASSETS – GROUP
GROUP
Website
£’000
TOTAL
£’000
Cost
At 1 November 2015
Additions
At 31 March 2017
Impairment
At 1 November 2015
Impairment charge
At 31 March 2017
Carrying value 31 March 2017
Cost
At 1 April 2017
Additions
Discontinued operations
At 31 March 2018
Impairment
At 1 April 2017
Impairment charge
Discontinued operations
At 31 March 2018
Carrying value 31 March 2018
–
56
56
–
1
1
55
56
4
–
60
1
3
–
4
56
–
56
56
–
1
1
55
56
4
–
60
1
3
–
4
56
All assets held by the Group in connection with mining and exploration activities have been fully impaired in previous years.
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SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018
10 PROPERTY, PLANT AND EQUIPMENT - GROUP
Cost
At 1 November 2015
Additions
At 31 March 2017
Accumulated depreciation
At 1 November 2015
Charge for period
At 31 March 2017
Carrying value 31 March 2017
Cost
At 1 April 2017
Additions
At 31 March 2018
Accumulated depreciation
At 1 April 2017
Charge for period
At 31 March 2018
Carrying value 31 March 2018
11 INVENTORIES - GROUP
Stock
Computer
Equipment
£’000
Fixtures &
Fittings
Equipment
£’000
–
12
12
–
3
3
9
12
13
25
3
5
8
17
–
225
225
–
24
24
201
225
1
226
24
47
71
155
Total
£’000
–
237
237
–
27
27
210
237
14
251
27
52
79
172
2018
£’000
531
2017
£’000
363
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
The cost of inventories charged in the year as an expense equated to £665k (2017: £112k).
12 NON-CURRENT ASSETS
Investments in subsidiaries and associates:
Cost as at 1 January 2017
Additions
Cost at 31 March 2018
Impairment as at 1 January 2017
Impairment during the year
Intercompany balance received during the year 1
Reclassed to current intercompany debtor balance
Impairment at 31 March 2018
Carrying value as at 31 March 2018
Break down of carrying value of investment:
Thread 35
Loans to subsidiaries1
Total non-current assets
Group
2018
£’000
2017
£’000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Company
2018
£’000
9,336
6,282
15,618
9,236
–
77
23
9,336
6,282
2016
£’000
9,102
234
9,336
7,039
2,197
–
–
9,236
100
Group
2018
£’000
2017
£’000
–
–
–
–
–
–
Company
2018
£’000
6,282
–
6,282
2016
£’000
–
100
100
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SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018
Subsidiary companies
Incorporation
Holding Type of share held
Thread 35
UK
Direct
Ordinary shares
%
Holding1
2018
–
100
%
Holding1
2017
100
1 The loan to subsidiary has been moved to intercompany debtors within current assets as trade and other receivables. Monies
have been received post year end as per note 22.
Investments is tested for impairment at the balance sheet date. The recoverable amount of the investment in Thread 35 Ltd at
31 March 2018 was assessed on the basis of value in use. As this exceeded carrying value no impairment loss was recognised.
The key assumptions in the calculation to access value in use are the future revenues and the ability to generate future cash
flows. The most recent financial results and forecast approved by management for the next four years. The projected results
were discounted at a rate which is a prudent evaluation of the pre-tax rate that reflects current market assessments of the time
value of money and the risks specific to the cash-generating unit.
The key assumptions used for the value in use calculation in 2018 were as follows:
Discount rate
Returns assumption
Repeats assumption
Units per order
%
9
43
11
Units
2.0
The Directors have made significant estimates on future revenues and EBITDA growth over the next 4 years based on the
budgeted investment and expansion of our clothing and footwear ranges, increased stocking levels and continued investment
in marketing channels to acquire new customers.
The Directors have performed a sensitivity analysis to assess the impact of downside risk of the key assumptions underpinning
the projected results of the Group. The projections and associated headroom used for the group is sensitive to the EBITDA
growth assumptions that have been applied. A 50% reduction in EBITDA growth in the first four years of the management
projections would not result in any impairment at the group level.
The subsidiaries of Sosandar Plc are as follows:
Subsidiary companies
Incorporation
Holding
Type of
share held
%
Holding1
2018
%
Holding1
2017
Thread 355
Medavinci Gold Limited6
Emotion Fitness Limited4
Orogen Gold Limited6
Orogen Gold (Serbia) Limited3
Orogen Gold (Armenia) Limited6
Georaid CJSC2
UK
UK
UK
Ireland
Ireland
Ireland
Armenia
Direct
Ordinary shares
Direct Ordinary shares
Direct
Ordinary shares
Indirect Ordinary Shares
Indirect Ordinary shares
Indirect Ordinary Shares
Indirect Ordinary Shares
100
100
100
100
100
100
80
100
100
100
100
100
100
–
1 Percentage of share type held and overall voting rights
2 Disposed of in May 2018, net sale proceeds after costs $97,500
3 Disposed of on 8 April 2018 for €1
4 Application made to strike off on 1st July 2018
5 Thread 35 Limited is the trading entity
6 These are dormant entities
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SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018
13 TRADE AND OTHER RECEIVABLES
VAT recoverable
Other receivables and prepayments
Receivables from Group Companies
Trade and other receivables
Group
Company
2018
£’000
257
221
–
478
2017
£’000
20
41
–
61
2018
£’000
154
–
2,835
2,989
2016
£’000
10
22
30
62
The Directors consider that the carrying amount of trade and other receivables approximates their fair value.
14 CASH AND CASH EQUIVALENTS
Cash at bank
Cash and cash equivalents
Group
2018
£’000
4,616
4,616
2017
£’000
338
338
2018
£’000
4,312
4,312
Company
2016
£’000
64
64
15 SHARE CAPITAL AND RESERVES
Details of ordinary shares issued are in the table below:
Ordinary Shares (£0.01)
Date
At 31 Dec 2015
9 Aug 2016
At 31 Dec 2016
07 Apr 2017
10 Apr 2017
03 May 2017
01 Nov 2017
02 Nov 2017
At 31 Mar 2018
Details
Number of shares
Issue Price
£
5,507,669,337
Share placing - £350,000
2,333,333,333
0.00015
7,841,002,670
Consolidation becomes
31,364,011
Share issue
Share issue
231,364,011
2,000,000
Consolidation becomes
26,472,816
Share Issue
80,341,842
106,814,658
0.0001
0.0001
0.0001
0.001
0.001
0.001
Total
Share
Capital
£’000
Total
Share
Premium
£’000
551
233
784
784
231
2
27
80
107
12,181
87
12,268
12,268
3,239
28
15,773
12,023
27,796
Deferred shares cancelled on 1st November
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
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SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018
Group
Date
Share
capital premium
Share
Reverse
acquisition
reserve
Capital
redemption
reserve
Retained
earnings
Thread 35 Limited
£’000
£’000
£’000
£’000
At 1 November 2015
Loss for the period
Share based payments
Issue of share capital
At 31 March 2017
1
–
–
–
1
1,955
–
–
7,88
2,743
4,651
12,268
Sosandar Plc
At 1 Jan 2017
Thread 35 retained
earnings b/f
Loss for the period
Transfer of share-based
payment reserve
Loss for the period to
acquisition
Reverse acquisition
–
–
–
–
–
–
–
–
–
–
–
Shares based payments –
Issue of share capital
104
15,528
Cancellation of share
capital
(4,648)
–
At 31 March 2018
107
27,796
(19,596)
Reserves
–
–
–
–
–
–
–
–
–
–
(19,596)
–
–
–
–
–
–
–
–
–
–
–
–
–
-
–
–
4,648
4,648
Share based
payment
reserve
£’000
–
–
–
–
–
Total
£’000
1,780
(1,823)
–
788
745
£’000
(176)
(1,823)
–
–
(1,999)
(17,441)
610
88
(1,999)
(6,056)
–
–
(1,999)
(6,056)
610
(610)
-
(770)
17,601
–
–
–
(8,055)
–
–
32
–
–
32
(770)
(1,995)
32
15,632
–
4,932
The following describes the nature and purpose of each reserve within equity:
Share premium
Amount subscribed for share capital in excess of nominal value.
Share based payment reserve
Cumulative fair value of share options and warrants granted and recognised as an
expense in the Income Statement.
Capital redemption reserve
Capital redemption reserve arises from the 100% acquisition of Thread 35 Limited in
November 2017 whereby the excess of the fair value of the issued ordinary share capital
issued over the nominal value of these shares is transferred to this reserve in accordance
with section 612 of the Companies Act 2006.
Reverse acquisition reserve
Effect on equity of the reverse acquisition of Thread 35 Limited
Retained earnings
Retained earnings represents all other net gains and losses and transactions with
shareholders (example dividends) not recognised elsewhere.
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SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018
16 SHARE BASED PAYMENTS
The Group has a share ownership compensation scheme for Directors and Senior employees of the Group. In accordance with
the provisions of the plan, Directors and Senior employees may be granted options to purchase ordinary shares in the Company.
Balance at 1 January 2016 and 2017
Lapsed 7 April 2017
Effect of reorganisation 1
Effect or reorganisation 2
Lapsed following reorganisation 2
Issued during the year
Balance at 31 March 2018
Exercisable at 31 March
Number of share options
Weighted
average exercise
price
380,000,000
(300,000,000)
(79,680,000)
320,000
(316,800)
3,200
(3,200)
20,024,748
20,024,748
–
0.369p
0.369p
92.25p
9225p
9225p
15.1p
15.1p
–
1 The shares were reorganised on 7 April 2017. All existing rights attached to share options were amended to reflect the new
share structure. The rights are now over new ordinary shares of 0.01p, with the original units divided by a factor of 250 and the
original exercise price increased by a factor of 250.
300,000,000 of these options lapsed on 7 April 2017 following the board changes that were effective on that date as a result of
the change of company strategy.
2 The shares were further reorganised on 2 November 2017. All existing rights attached to share options were amended to reflect
the new share structure. The rights are now over new ordinary shares of 0.01p, with the original units divided by a factor of 100
and the original exercise price increased by a factor of 100.
The fair value of equity based share options granted is estimated at the date of grant using the Black-Scholes pricing model,
taking into account the terms and conditions upon which the options have been granted. The calculated fair value of share
options and warrants charged to the Group and Company financial statements in the year is £32,000 (2016: £20,000).
During the year the Company settled fees of £550,000 by way of issuing shares to directors and advisors.
The following are the inputs to the model for the options granted during the prior year:
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
Exercise price
Share price at date of grant
Risk free rate
Volatility
Expected Life
Fair Value
17 RETAINED EARNINGS
Share Options
2018
15.1p
15.1p
0.25%
25%
10 Years
0.05
Opening balance
Loss for the year
Transfer from share based payment reserve
Closing balance
Group
Company
2018
£’000
(1,999)
(6,056)
–
(8,055)
2017
£’000
(176)
((1,823)
–
(1,999)
2018
£’000
(17,441)
(2,375)
610
(19,206)
2016
£’000
(14,860)
(2,588)
–
(17,441)
In accordance with the provisions of the Companies Act 2006, the Company has not presented a statement of profit or loss and
other comprehensive income. The Company's loss for the year was £2,375,000 (2016: loss £2,588,000).
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SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018
18 TRADE AND OTHER PAYABLES
Trade payables
Accruals and deferred income
Amounts due to Directors
Payable to Group Companies
Other payables
Trade and other payables
Group
2018
£’000
2017
£’000
Company
2018
£’000
2016
£’000
506
271
–
–
144
921
117
51
–
114
282
–
206
–
–
–
206
13
93
8
24
–
138
Amounts due to Directors are unsecured, interest free and are current liabilities.
19 OPERATING LEASE COMMITMENTS
Within one year
Between one and five years
Operating lease commitments
20 RELATED PARTY TRANSACTIONS
Group
2018
£’000
65
202
267
2017
£’000
41
267
308
Company
2018
£’000
2016
£’000
–
–
–
–
–
–
During the period to 31 March 2018 the group was charged £268,410 (2017 – £nil) for services provided by Reyco Limited, a
company controlled by A Reynolds. There was no amount outstanding at the balance sheet date.
During the period to 31 March 2018 the group was charged £90,740 (2017 – £nil) for services provided by Morrison Kingsley
Consultants Limited, a company controlled by M Collingbourne. There was no amount outstanding at the balance sheet date.
During the period to 31 March 2018 the group was charged £93,100 (2017 – £nil) for services provided by Metcalfe Consultancy, a
company controlled by S Metcalfe. There was no amount outstanding at the balance sheet date.
During the period to 31 March 2018 the group was charged £36,500 (2017 – £36,000) for services provided by Bill Murray and
Associates, a company controlled by B Murray. There was no amount outstanding at the balance sheet date.
During the period to 31 March 2018 the group was charged £13,900 (2017 – £nil) for services provided by N Mustoe. There was no
amount outstanding at the balance sheet date.
During the period to 31 March 2018 the group was charged £4,100 (2017 – £nil) for services provided by Kindred limited, a
company controlled by N Mustoe. There was no amount outstanding at the balance sheet date.
During the period to 31 March 2018 the group was charged £5,000 (2017 – £nil) for services provided by C Bird. There was no
amount outstanding at the balance sheet date.
At the balance sheet date, Julie Lavington owed Thread 35 Ltd £1,200 (2017 – £nil) for personal tax invoices paid for by Thread.
At the balance sheet date, Alison Hall owed Thread 35 Ltd £1,200 (2017 – £nil) for personal tax invoices paid for by Thread.
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SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018
21 FINANCIAL INSTRUMENTS – RISK MANAGEMENT
In common with all other businesses, the Group is exposed to risks that arise from its use of financial instruments. This note
describes the Group’s objectives, policies and processes for managing those risks and the methods used to measure them.
Further quantitative information in respect of these risks is presented throughout these financial statements.
There have been no substantive changes in the Group’s exposure to financial instrument risks, its objectives, policies and
processes for managing those risks or the methods used to measure them from previous periods unless otherwise stated in
this note.
GENERAL OBJECTIVES, POLICIES AND PROCESSES
The Board has overall responsibility for the determination of the Group’s risk management objectives and policies and, whilst
retaining responsibility for them it has delegated the authority for designing and operating processes that ensure the effective
implementation of the objectives and policies to the Group’s finance function. The Board receives regular updates from the
management team through which it reviews the effectiveness of the processes put in place and the appropriateness of the
objectives and policies it sets. The overall objective of the Board is to set policies that seek to reduce risk as far as possible
without unduly affecting the Group’s competitiveness and flexibility. The Company’s operations expose it to some financial risks
arising from its use of financial instruments, the most significant ones being cash flow interest rate risk, foreign exchange risk,
liquidity risk and capital risk. Further details regarding these policies are set out below:
CASH FLOW INTEREST RATE RISK
The Group is exposed to cash flow interest rate risk from its deposits of cash and cash equivalents with banks. The cash balances
maintained by the Group are proactively managed in order to ensure that attractive rates of interest are received for the
available funds but without affecting the working capital flexibility the Group requires. The Group is not at present exposed to
cash flow interest rate risk on borrowings as it has no debt. No subsidiary company of the Group is permitted to enter into any
borrowing facility or lease agreement without the prior consent of the Company.
FOREIGN EXCHANGE RISK
Foreign exchange risk may arise because the Group purchases stock in currencies other than the functional currency.
The group monitors the requirement for foreign currency on a monthly basis. The group will forward purchase the currency to
fix the cost of goods for stock. Once the cost of goods has been fixed a final selling price can be derived.
The Group considers this policy minimizes any unnecessary foreign exchange exposure.
LIQUIDITY RISK
Liquidity risk arises from the Group’s management of working capital; it is the risk that the Group will encounter difficulty
in meeting its financial obligations as they fall due. The principal obligations of the Group arise in respect of committed
expenditure in respect of its stock purchases and design. The Group’s policy is to ensure that it will always have sufficient cash to
allow it to meet its obligations when they become due. To achieve this aim, it seeks to maintain readily available cash balances
(or agreed facilities) to meet expected requirements and to raise new equity finance if required for future development or
expansion.
The Board receives cash flow projections on a monthly basis as well as information on cash balances. The Board will not commit
to material expenditure in respect of its on-going commitments prior to being satisfied that sufficient funding is available to
the Group to finance the planned programmes. For cash and cash equivalents, the Company only uses recognised banks with
medium to high credit ratings.
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
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SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018
CAPITAL RISK
The Group’s objectives when managing capital are to safeguard the ability to continue as a going concern in order to provide
returns for shareholders and benefits to other stakeholders and to maintain an optimal capital structure to reduce the cost of
capital.
22 POST BALANCE SHEET EVENTS
On 8 April 2018 Orogen Gold Serbia was sold for €2.
On 15 May 2018, the interest in Geroaid was sold for $97,500 after expenses.
23 CONTINGENT LIABILITIES
The Company has no contingent liabilities.
24 ULTIMATE CONTROLLING PARTY
There is no ultimate controlling party of the company.
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SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018 Registered office
Registered number
Directors
Secretary
Auditors
Nominated advisor
Broker
Registrars
Solicitors
Public Relations
40 Water Lane,
Wilmslow, Cheshire,
England SK9 5AP
5379931, England and Wales
Bill Murray – Non-executive Chairman
Adam Reynolds – Non-executive Director
Mark Collingbourne – Finance Director
Alison Hall – Joint CEO
Julie Lavington – Joint CEO
Nicholas Mustoe – Non-executive Director
Andrew Booth – Non-executive Director
Mark Collingbourne
Jeffreys Henry LLP
Finsgate
5-7 Cranwood Street
London EC1V 9EE
Cairn Financial Advisers LLP
Cheyne House
Crown Court
62-63 Cheapside
London EC2V 6AX
Turner Pope Investments
6th Floor Becket House
36 Old Jewry
London EC2R 8DD
Capita Asset Services
The Registry, 34 Beckenham Road
Beckenham
Kent BR3 4TU
BPE Solicitors LLP
St. James’ House
St. James’ Square
Cheltenham GL50 3PR
Alma PR
Aldwych House
71 – 91 Aldwych
London WC2B 4HN
WHO WE ARE
A new womenswear e-commerce brand
launched in September 2016 targeting a new
generation of women who have graduated from
younger fast fashion brands, who want
trend-led, quality, affordable clothing with a
premium aesthetic.
This is an underserved sector of the market
who spend £3.7bn a year on fashion*.
We have already built a loyal and rapidly
growing customer base of fashion conscious
women with a high disposable income who
love Sosandar. Revenue is showing
substantial growth year on year.
Sosandar clothing is also regularly worn by a
large and growing following of celebrities and
fashion influencers and Sosandar is regularly
featured across national newspapers and
magazines and on TV.
sosandar.com
2SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018SOSANDAR PLC ANNUAL REPORT AND ACCOUNTS 2018*GB TGI Q2 Jan-Dec 2016.My first delivery has just arrived and I cannot believe the quality! Finally, finally decent clothing that looks absolutely fantastic. About to place my second order! WELL DONE!Andrea, Facebook
A N N U A L R E P O R T 2 0 1 8
SOSANDAR PLC
40 Water Lane
Wilmslow
Cheshire
SK9 5AP
Investor Relations
sosandar@almapr.com
A N N U A L R E P O R T 2 0 1 8