Sosandar Plc
Annual Report
For the year ended
31 March 2023
Company Registration Number: 05379931
DocuSign Envelope ID: F157EA5B-0170-4140-BFAA-A45DA74C4291
Contents
Group Overview
Chairman’s Statement
Strategic Report
Corporate Governance
Board of Directors
Directors’ Report
Consolidated and Company Financial Statements
Independent Auditors’ Report
Consolidated Statement of Income and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Cash Flows
Consolidated Statement of Changes in Equity
Company Statement of Financial Position
Company Statement of Cash Flows
Company Statement of Changes in Equity
Notes to the Consolidated and Company Financial Statements
Company Information
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CHAIRMAN’S STATEMENT
For the year ended 31 March 2023
Introduction
I am pleased to be reporting my first set of results as Chairman of Sosandar. I took over as Interim
Chairman in incredibly sad circumstances following the sudden death of Bill Murray in February this
year. Bill was with Sosandar from the beginning and played an important part in steering the Group
to the great success it has achieved. He has left a lasting legacy on the business.
FY23 has been a pivotal year for Sosandar and it is pleasing to report a set of results which
demonstrates another period of significant momentum across all aspects of the business. The Group
has delivered substantial increases in revenue, gross margin and scale economies, whilst also
delivering its first full year of profitability. This performance once again demonstrates the desirability
of the Sosandar product range with our customers and its managements’ ability to steer the business
through the challenging backdrop we have faced.
This outstanding performance has been driven by the continued success across both our own site as
well as our third-party partners. Sosandar.com is the heart of the Group’s success and is the lifestyle
hub where customers access the complete Sosandar experience including the full extent of our diverse
range. This site is continually updated with new product and content and we are constantly working
and investing to ensure that we maintain a seamless customer experience through this channel.
Trading with our now well-established third-party partners, John Lewis, Marks and Spencer, NEXT, The
Very Group and JD Williams, has been extremely strong, with a record quarter for the Group delivered
through third parties in Q3 FY23 followed by a strong Q4. In January, we were delighted to secure a
new partnership with another renowned British retailer, J Sainsbury’s. This partnership has elevated
our strategy from pureplay to an omnichannel brand and will enable us to provide our large but
underserved demographic with more opportunities to purchase our unique and diverse products.
Executing the next stage of our growth strategy
In February 2023 we successfully completed an over-subscribed equity fundraise of £5.5m of net
proceeds, with both existing and new investors showing support for the business and its plans for
future growth. These funds will provide the balance sheet flexibility to enable us to execute our omni-
channel strategy, starting with increasing stock from Autumn/Winter 2023 for the in-store launch with
Sainsbury's, fast-tracking other growth initiatives and accelerating our proven customer acquisition
model.
Despite the strength of the sustained performance over the past two years, we continue to see a
number of opportunities for further growth both on our own site and through our third-party partners
in the coming months and beyond as we to move forward with our objective to make Sosandar one
of the largest womenswear brands globally. As a result, as previously announced, in order to prepare
for further momentum in FY24, we brought forward investment in some growth initiatives in the latter
part of Q4 FY23 that were originally planned for FY24. These investments are centred around
operations, technology platforms and international strategy, which will help support and develop the
Group’s future growth initiatives.
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CHAIRMAN’S STATEMENT
For the year ended 31 March 2023
Nurturing and investing in our team
The Sosandar team is the heartbeat of the business. Our 85 employees continuously show dedication,
creativity, enthusiasm and passion for the Sosandar brand. The culture that transmits throughout the
organisation is testament to the team that has been built and the performance that we have delivered
over the past year would not have been possible without their commitment to the Sosandar brand
and customers.
As previously announced, in the latter part of Q4 FY23 we further strengthened Sosandar's operational
capabilities in order to ready ourselves for the opportunities ahead with the recruitment of an
Ecommerce Director, Commercial International Director and Head of Operations. Their significant
experience will help us continue to execute against the next stage of our growth strategy.
Maintaining effective governance
The Board of Sosandar remains committed to maintaining and enhancing our corporate governance
framework. We have an agile, balanced board, able to make decisions based upon robust assessment
and evaluation, but always in a timely fashion.
In September 2022, we were delighted to welcome Lesley Watt to the Group’s Board as a Non-
Executive Director. Lesley has provided a wealth of knowledge and experience with her appointment
to the board. At the same time, we announced that Mark Collingbourne would step down from the
Board having supported the Group as Group Finance Director and subsequently as a Non-Executive
Director.
Being a responsible business
As a business we are committed to having a positive impact on our society, the environment, and our
team. We acknowledge there is increasing interest from a wide range of stakeholders on the various
positive impacts that the business has and what we are doing to improve outcomes. As we continue
on our growth journey, we will further expand our activity, with an ambition to increase the positive,
lasting impact Sosandar has on the fashion industry.
Outlook
The current financial year has started pleasingly, and we are trading in line with our expectations for
full year growth. The investments that were made in Q4 FY23 are already bearing fruit across the
business, and we are making large strides operationally with the development of our technology
platform and finalising our international strategy. The Sosandar product range continues to resonate
with our customers and we are committed to ensuring that we offer them a seamless customer
experience through all of our sales channels, and continuing to deliver for all our stakeholders.
Nicholas Mustoe
Chairman
7 July 2023
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STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2023
AT A GLANCE
Sosandar provide a one-stop online shop for style conscious women who have graduated from price
led alternatives. We offer this underserved audience fashion forward, affordable, quality clothing to
make them feel sexy, feminine, and chic. The business sells predominantly own label exclusive product
designed in-house.
Investment case
Huge and relatively untapped target market
▪ Sosandar creates fashion-forward products for a generation of women overlooked by existing
fashion brands, offering a significant untapped opportunity – a demographic that spends
£3.7bn per year on fashion.
▪ Estimate around 20 million women over the age of 35 and 13 million within our core
demographic of 35-64.
▪ As age doesn’t determine how women dress anymore, whatever age the Group recruits a
customer gives it the opportunity to dress them for their entire life.
▪ These numbers represent only the UK, this same societal shift and the opportunity it
represents exists in all developed countries across the world, giving the Group the opportunity
to dress women across the globe.
A unique and broad product range
▪ All products are sold at a mid-price point and are increasingly designed with sustainable
materials - offering customers on-trend, affordable, long lasting, lifestyle appropriate clothes
with high fashion credibility.
▪ A unique aesthetic empowering woman of all ages to feel chic, sexy and on-trend.
▪ Offers customers clothing for all occasions with the product range including areas such as
knitwear, loungewear, formal tailoring, coats, partywear, summer occasion wear and swim
wear.
▪ Able to adapt quickly to changes in consumer demand thanks to the broad range of product
categories.
A loyal and engaged customer base
▪ Sosandar has a track record of consistent customer base growth, achieved through a blend of
online and offline marketing activity.
▪ 65% 5 year CAGR/ 26% 3 year CAGR
▪ Average Order Value (AOV) of £97
Successful third-party model established
▪
▪ Established partnerships with several of the UK’s largest fashion retailers NEXT, John Lewis,
Marks and Spencer, The Very Group and JD Williams to trade on their online platforms.
In January 2023, the Group established a partnership with J Sainsbury’s to sell its product
online and in-store. This in-store presence provided Sosandar with the opportunity to become
a truly omnichannel retailer.
▪ Drives further brand awareness across the target market, whilst driving incremental sales
and accelerating improvement in EBITDA.
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Investment case (continued)
Experienced and driven founder-led management team
▪ Highly experienced management team with many years in the fashion and retail industries.
▪ Proven success previously taking a business from concept to market leader.
Underpinned by responsible and scalable business operations
▪ Mobile-first website built on leading Magento platform and logistics run by best-in-class 3PL
GXO (Clipper) providing capacity for large-scale growth.
CO-CEO’S STATEMENT
A milestone year
FY23 has been a milestone year for Sosandar. Over the last six years, the business has grown from a
true start-up to what is now a profitable brand delivering multi-million-pound revenue with clothes
being sold in the UK’s biggest retailers.
Sosandar’s sustained progress to date is testament to our ability to deliver a unique quality product
offering and highly effective marketing strategy that resonates with our customer base. We have
continued to drive momentum within the business and the success of our strategy is reflected by the
44% growth in sales during the period and substantial positive swing of PBT to £1.6m, marking the
first year of profitability for Sosandar. This performance is even more notable when considering it has
been achieved against the backdrop of some of the most challenging macroeconomic conditions
facing the retail sector in decades.
While we have achieved considerable financial and operational success during the year, we have not
rested on our laurels and in the latter part of Q4 we took the decision to make investments in order
to accelerate our growth strategy to capitalise on the considerable opportunity available to us in the
market right now and build the infrastructure to start serving our target customers internationally.
These investments have been made possible following our recent over-subscribed equity fundraise in
February 2023 which saw Sosandar raise £5.5 million of net proceeds from both existing and new
shareholders. We would like to thank all who took part in the raise, and we are excited to utilise this
capital to accelerate investments as we begin the next phase of our growth journey.
As ever, the growth achieved during the year is a result of the hard work and dedication of our valued
staff and partners. We would like to take this opportunity to extend our sincere gratitude to everyone
who has contributed to this transformational year for the Group.
While we are so pleased with progress made throughout FY23, it is tinged with sadness following the
sudden passing of our former Chairman, Bill Murray, in February 2023. Bill will be deeply missed by all
of the Sosandar team, and he has left a lasting legacy on the business.
Our vision and purpose
Our vision is to become one of the largest womenswear brands globally. Our purpose is to empower
women of all ages to feel good in the clothes they wear, catering to the burgeoning 'ageless'
generation. Our incredibly strong performance has evidenced the success of our strategy to allow
women of all ages to feel sexy and chic through our unique and diverse range of products.
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Our vision and purpose (continued)
There is an ongoing shift in the consumer mindset towards fashion; women are leaving behind dated
ideas of what they must wear at what age, and instead embracing clothes that make them feel good,
work in their everyday lives and reflect their individual personalities. Our offering is ideally placed to
cater to this trend.
While our products are trend-led, they are designed to be kept and loved for years. This is why we
invest so highly in quality and fit, reflected in our price point.
Financial performance
Despite the challenging macroeconomic headwinds impacting the wider retail sector we have
delivered a strong financial performance for the year which included a record Q3 and a full year
revenue increase of 44% to £42.5m. As we continue to build on the momentum from previous years,
we are delighted to report PBT of £1.6m, a significant positive swing of £2.2m year on year and first
full year of profitability for Sosandar.
The strength of our performance has given us the confidence to accelerate investment previously
anticipated for FY24 in order to capitalise on this momentum and execute on our growth strategy
ahead of plan.
Performance across our own site has continued to go from strength to strength and drive growth with
the number of orders increasing 22% to 620,977 of which 148,382 were from brand new customers
and average order value up 8% to £97.27 (FY22: £90.39).
Our net cash balance as at 31 March 2023 was £10.5m (FY22: £4.2m), following the successful equity
fundraise of £5.5 million (net) in February, which will allow us invest further into FY24.
Our strategy and future objectives
Our strategy is central to the ongoing success and scale of our business and is spread over four
pillars: product, marketing, sales channels, and supply chain.
1. Expanding our product range
As a clothing brand our product is obviously everything. This is the key driver to success that
makes everything work and our unique product range continues to resonate very well with
our customer base.
As we execute on the next stage of our growth strategy, we have invested further in the
procurement of stock to facilitate demand across both our own site and third-party partners.
The fast-tracked development of key product lines has proven successful with all identified
lines meeting or exceeding expectations. In particular, during the Winter season we saw
strong sales of knitwear, formal tailoring, coats and partywear. As we entered the Spring /
Summer season the new launch of categories such as summer occasion wear and swim and
beach wear have performed very well.
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Our strategy and future objectives (continued)
2. Refinement of our data-driven marketing strategy
Our highly effective marketing strategy has been a central growth driver for the Group,
delivering both new and repeat customers on our own site and through our third-party
partners. We ensure that our industry-leading strategy is constantly evolving using data-
driven learnings to improve its effectiveness in reaching an ever-increasing audience. Our
strategy is to acquire high quality customers who will go onto repeat purchase.
We focus on TV advertising, brochures and social media as our three main areas for marketing
investment. Because of our backgrounds in media, we have been able to develop a strategy
that makes all forms of media work from print to digital, and this has stood us in good stead
as we are not reliant on one channel.
Our brochures are produced brand new at every issue, put together like we would a magazine
with fresh imagery, new product and turned round in a matter of days so that we can exactly
tap into what customers are thinking and feeling at any moment.
These three areas are then supplemented by our email marketing communications. The
success that we have seen through this channel allows us to deliver such high repeat orders
and retention rates. We believe that we have industry leading open rates as we use our email
database like a Newsdesk.
Post period, we are delighted to announce the launch of our first TV sponsorship campaign
with ITV’s weekend breakfast which runs from April through to September.
3. Driving sales through multiple channels
Sosandar’s multi-channel sales strategy has continued to see success with an outstanding year
of trading across both Sosandar.com and our well-established third-party partners.
Sosandar.com is the anchor of our business and we have seen increases across all of our KPIs
including total number of orders increasing by 22% to 620,977 and the average order value
up 8% to £97.27 (FY22: £90.39).
Trading with our now well-established third-party partners, John Lewis, Marks and Spencer,
NEXT, The Very Group and JD Williams, has been extremely strong, with a record quarter for
the Group delivered through third parties in Q3 FY23 followed by a strong Q4.
Throughout the period, the amount of stock allocated to each partner was increased to meet
the rising demand generated through these channels.
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Our strategy and future objectives (continued)
In January, we were delighted to announce our decision to become an omnichannel retailer
as we entered into an agreement to sell a curated collection of products through J Sainsbury’s.
Initially, Sosandar products began selling with Sainsbury’s online in March 2023 and have been
performing in line with expectations. The rollout of Sosandar’s products across a number of
selected stores is expected in August 2023 and in time for the important Autumn/Winter
season. This expansion instore will elevate our business and will enable us to provide our large
but underserved demographic with more opportunities to purchase our unique and diverse
products. We expect this partnership to deliver a significant combined contribution in the
current financial year and beyond.
4. An agile, resilient supply chain
The importance of a diversified, flexible supply base and having partners with expertise in this
area, has always been at the heart of our operation. We are an agile business, allowing us to
continually adjust our product offering, warehousing and fulfilment operations in line with the
ever-changing needs of our customers.
Fostering strong, long-term relations with a number of manufacturers in different territories
and pivoting rapidly between transport methods has been the key to our success and is vital
to achieving our desired scale.
Accelerated investment in growth initiatives
The market opportunity available to Sosandar in the UK and internationally is significant and in order
to position the Group to fully capitalise on this, the Board accelerated investment in growth initiatives
in the latter part of Q4 FY23 that were originally planned for FY24. To facilitate this, in February 2023
we successfully completed an over-subscribed equity fundraise of £5.5m (net) with support from
current and new investors to enable future growth.
This capital will significantly support and develop the Group’s future growth initiatives and allow us to
boost our customer acquisition strategy and ultimately increase market share.
1. Operational enhancements
Operationally, these investments have included the strategic hiring of an ecommerce Director,
Commercial International Director and Head of Operations which will significantly enhance
our operational capabilities and provide the infrastructure to scale to meet the market
demand for Sosandar’s products.
While originally planned for FY24, we have been fortunate to find the right people to fill these
positions and their significant experience will help the Group continue to execute its growth
strategy as it enters into its next phase of development and invests for future growth.
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Accelerated investment in growth initiatives (continued)
2. Technology platforms
Ensuring that our technology is constantly evolving is an integral part of allowing the
increasing number of Sosandar customers to effectively engage with brand online and avail of
our expanded product offering. To facilitate this further, we have commenced the
development of a mobile app which will launch in Q2 FY24.
Sosandar.com is the anchor of our business and we make sure that it is constantly improving
to increase user experience and make it more accessible for current and new customers. As
such, we have invested in personalisation and segmentation tools to enable further
progression customer acquisition, retention, order frequency and average order value, as well
as build the infrastructure to take advantage of international opportunities.
3.
International strategy
The opportunity available for Sosandar both in the UK and internationally is vast and as we
progress into the next stage of our growth journey, we are exploring and researching
opportunities to serve this targeted international customer base whilst remaining conscious
of managing costs and implementation risk.
As part of this strategy, we are delighted to announce that we have signed an agreement with
Global-e, the world's leading platform to enable and accelerate global, direct-to-consumer,
cross-border ecommerce, that will allow us to transact and fulfil orders worldwide in a cost-
effective manner. This agreement is expected to go live in Q2 FY24 and will mark a notable
milestone for the Group as it increases market share across the globe.
Outlook
The sustained momentum across Sosandar, with growth in revenue and profitability delivered in FY23,
is testament to our ability to provide a unique quality product offering and highly effective marketing
strategy that resonates with our customer base. However, we are not resting on our laurels and are
committed to constantly evolving.
FY24 has started well, and we are trading in line with full year expectations. We have continued to see
growth across all product ranges with particular success in our summer occasion wear and beach and
swim ranges. As such, we are going to be launching our biggest ever occasion wear range in time for
the key trading period towards Christmas and will also stock beach and swim wear all year round to
cater for all of our customers needs at any time of the year.
Looking ahead, in Q2FY24 we expect to launch our mobile app after the user testing process is
completed and are finalising our international strategy which will run in conjunction with our
agreement with Global-e, both of which will enable us to increase our market share and offer our
customers more ways to shop with Sosandar. Our in-store launch with J Sainsbury’s continues to
progress to plan and is expected to launch selected stores is expected in August 2023 and in time for
the important Autumn/Winter season.
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Outlook (continued)
This expansion instore will elevate our business and will enable us to provide our large but
underserved demographic with more opportunities to purchase our unique and diverse products. We
expect this partnership to deliver a significant combined contribution in the current financial year and
beyond.
Whilst we are trading well and have not had any material disruption to date, we remain vigilant to the
external challenges including inflationary pressures on consumer spending and believe our agile
approach and understanding of our customers positions us well.
We are extremely excited about the next stage of our growth journey as we take the Sosandar brand
to more customers across the globe and continue on our journey to become one of the largest
womenswear brands globally.
FINANCIAL REVIEW
KPI’s
Year ended 31 March
2023
£'000
Year ended 31 March
2022
£'000
Revenue
Gross Profit
Gross Margin
Administrative Expenses
Profit / (Loss) before tax
EBITDA*
£42,451
£23,837
56.15%
£22,200
£1,597
£1,872
£29,458
£16,496
56.00%
£17,042
(£554)
(£229)
Year ended 31 March
2023
£'000
Year ended 31 March
2022
£'000
Sessions
Conversion rate
Number of orders
AOV
Active customers **
Average Order Frequency ***
15,091,247
4.11%
620,977
£97.27
264,832
2.34
13,141,632
3.87%
508,473
£90.39
223,253
2.28
Change
44%
45%
15bps
30%
388%
917%
Change
15%
24bps
22%
8%
19%
3%
*EBITDA is calculated as profit before tax less interest, depreciation and amortisation
** Active customers is the number of individual customers who purchased from Sosandar.com in the last 12 months
*** Average Order Frequency is the total number of orders in the last 12 months divided by the number of active customers
The Group has had a milestone year in terms of growth, resulting in the first full year of profitability,
with PBT of £1.6m which is a £2.2m positive swing versus the previous year. All KPI’s have moved
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STRATEGIC REPORT
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positively on Sosandar.com and results through our growing number of third-party partnerships
continuing to go from strength to strength.
FINANCIAL REVIEW (continued)
The performance is particularly pleasing given it has been delivered against a backdrop of macro-
economic challenges which increased throughout the year. Our agility and underlying approach to
spreading risk across our business has enabled us to thrive in spite of these challenges including supply
chain disruption and inflationary pressures.
The oversubscribed equity raise of £5.5m (net) in February 2023 will enable the business to invest
further in its many growth opportunities including the first move into bricks & mortar through the
partnership with J Sainsburys from the autumn season. The balance sheet strength will allow us to
take advantage of further opportunities as and when these arise.
Revenue up +44% to £42.5m
The substantial growth in revenue reflects the ever-growing demand for Sosandar product with
incredibly strong performance from both Sosandar.com and through third-party web platforms.
Revenue each quarter increased during the year with Q1, Q2 and Q3 setting new all-time records and
even the traditionally quieter Q4 being strong with the month of March being +32% up on the previous
year.
Gross Margin +15bps to 56.15%
Gross Margin improved compared with the prior year to 56.15% despite the growth in lower gross
margin wholesale channel following the launch with The Very Group, NBrown and J Sainsbury’s in
March 2023.
Actions taken have continued to deliver gross margin benefits throughout the year. These have
included price increases, improved supplier cost prices and further efficiencies in inbound freight
costs.
Selected price increases were implemented in Q3 to help mitigate the impact of the weaker Sterling
against the Dollar. Minimal price increases have been implemented since Sosandar was launched and
as such, in some product categories our price points were below comparable brands in the market.
Further benefits have been delivered by the Sosandar buying and sourcing team with regards to
supplier cost prices reflecting increased buying power, larger quantities being ordered and the
increased importance and trust that suppliers have in the Sosandar brand.
Following the significant change in our inbound freight strategy during FY22, this has continued to be
refined during FY23 resulting in further incremental benefits. The mix of inbound freight has been
balanced between road, air and sea throughout the year and additional partners have been
onboarded to ensure the best value is delivered by managing methods, routes and vessels for each
shipment.
Administrative Expenses
Total administrative expenses increased by 30% to £22.2m (FY 2022 £17.0m) compared to a 44%
increase in revenue.
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FINANCIAL REVIEW (continued)
As a result, administrative expenses as a percentage of revenue reduced to 52% (FY2022 58%)
reflecting the benefit of scale whilst continuing to invest in all areas of the business to drive sustained
growth in revenue and all KPI’s.
Spend on marketing in the year continued to follow a similar strategy to the previous year with focus
on TV, social and brochures with peak months of investment being where the return on investment is
greatest. Overall, spend increased by 3% year on year with the cost of customer acquisition remaining
below £20 which is really pleasing.
The cost of fulfilment which includes warehousing and customer order delivery costs increased by
26% compared to the previous year.
From a warehousing perspective, our 3PL partner, GXO (Clipper) have continued to deliver for our
multi-channel customers and have adapted the operation to manage bulk-order wholesale customer
in addition to B2C demand. In Q4, we onboarded Evri as an additional customer delivery partner, in
addition to Royal Mail in order to give our customer greater choice. This has also helped to reduce
our average cost of delivery, which will yield greater benefit in FY24.
The largest increase in administrative expenses is from third party commissions (increased by 59%)
which reflects the growth in revenue through our concession partners (John Lewis, NEXT, Marks and
Spencer). The commission is retained by the concession partner and is reported within overheads
covering all costs of the operation including warehousing and fulfilment, returns handling, marketing
and other operational costs. The revenue and gross profit figures are therefore undiluted when
compared with trading through Sosandar.com.
Other administrative expense which includes staff costs increased by £1.7m (52%) compared to the
previous year. Headcount increased by 24 during the year to an average of 78 with a closing
headcount of 85 as at March 2023. The investment in people has been across all functions of the
business and has including pivotal roles to equip us to deliver the growth plans in FY24. Key roles
have included an Ecommerce Director, Commercial International Director, Head of Operations and
Head of People.
Statement of Financial Position
The statement of financial position is robust. As at 31 March 2023, the Group had net assets of £18.4m
(FY2022 £10.6m) and a net current asset position of £17.2m (FY 2022 £10.1m - refer to note 1,
deferred tax assets have been represented as part of non-current assets).
During FY23, the financial position was further strengthened following an equity raise of £5.5m (net)
which will enable the Group to accelerate concurrent growth initiatives including roll out into stores
through the wholesale arrangement with Sainsbury’s and to take advantage of international
opportunities. The strength of the balance sheet which includes a cash balance of £10.6m (FY2022
£7.0m) and no bank indebtedness will allow for ongoing investment in inventory to support all sales
channels, whilst also investing in people and technology to ensure the trajectory of growth can be
delivered.
The movements in the statement of financial position reflects the investment in the business
throughout the year, with an increase in inventory to £12.4m (FY2022 £7.3m).
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STRATEGIC REPORT
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FINANCIAL REVIEW (continued)
This includes stock on hand, stock in transit reflecting the higher proportion of supply coming to the
UK via sea and road as well as an increase in the right to return asset which covers post year end
returns.
Trade and other payables increased to £8.4m (FY2022 £6.8m) reflecting the increase in business scale
in the year.
Creditor payment days have continued to move favourably as the Group has become a more
important and trusted customer for our supply partners and credit insurance is now being available
following the sustained strong financial performance over the last 18 months. Contract liabilities
increased to £2.6m (FY2022 £2.0m) which is as expected and reflects the growth in provision required
for post year end refunds for orders fulfilled within the year reflecting the year-on-year increase in
revenue. Liability for VAT increased to £1.1m (FY2022 £0.9m) which is due to the increase in revenue
with settlement to HMRC being made quarterly.
Trade and other receivables increased to £2.7m (FY2022 £2.5m) which includes amounts owing from
concession and wholesale customers. No change to payment terms have been made during the year
and all payments have been received on time and in full.
Non-current assets have increased to £1.7m (FY2022 £0.9m - refer to note 1, deferred tax assets have
been represented as part of non-current assets) being due to the second office lease taken on in April
2022 to provide the space for our growing team to be accommodated.
Cashflow
The Group had a net cash position as at 31 March 2023 of £10.6m (FY2022 £7.0m). As highlighted
already, the Group’s cash position was strengthened with the fund raise in February 2023 with the
proceeds being utilised to:
•
•
accelerate the execution of its omni-channel strategy through further investment in stock,
enabling increased provision of Sosandar's product range in-store with third party partners
including J Sainsbury's from Autumn/Winter 2023 onwards;
create further balance sheet headroom to fast-track other growth initiatives as well as enable
accelerated investment in the Group’s proven customer acquisition model.
The Group is in a strong position, with sufficient working capital to take advantage of opportunities in
FY24 and beyond.
Risk Factors
There are a number of risks and uncertainties associated with the business. The Board believes the
following are the principal risks along with the mitigating actions being applied.
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External Risks
Risk Factor
Economic -
Inflation
Impact
•
is
having
impact
a
Inflation
negative
on
consumers with essential
costs such as food and
energy significantly higher.
consequence,
As
incomes are
disposable
squeezed which
being
loss of
could
revenue.
lead to a
a
therefore
• All revenue is generated in
a
the UK
deterioration of the UK
economy specifically could
have an adverse impact on
consumer
if
revenue
confidence and spending
reduce.
• As trends change there is a
risk that design does not
keep up with customer
requirements for the latest
fashion.
Fashion
Competition
• From new or existing
competitors.
Loss of revenue
•
• Reduction in margin and
profitability if competitors
discounting
increase
resulting
consumers
shopping elsewhere
in
Foreign
exchange
• The
buys
business
a
relatively small proportion
of product
foreign
currency. Adverse currency
in
Mitigating Actions
• The typical customer of the business tends
to have a higher level of disposable
income and therefore able to withstand
economic turbulence. Therefore, the
business is able to trade well through
inflation or wider
periods of high
economic downturn.
• The business is online only and does not
have significant fixed costs and therefore
can flex its operations in order to respond
to any change in the economy.
• The product range offered is diverse
covering all main wardrobe needs of the
target demographic and can be agile to
manage any situation.
• The business has built partnerships with
six third party retailers resulting in greater
routes to the consumer and a reduction in
overall risk profile.
• 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.
• The business is agile and can adjust its
strategy according to all external factors
including those of its competitors.
• The business has an increasingly loyal and
growing active customer database which
allows the business to engage with them
regularly through e-mail and brochures.
• A detailed forward-looking purchase plan
currency
identify any potential
to
exposure.
• RRP’s can be increased to offset any
significant pressure on cost prices
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rate movements
impact margins.
could
Negative
online reviews
Internal risks
Risk Factor
Suppliers
• Negative
social
influence
decisions for new visitors.
comments on
could
purchasing
platforms
• 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.
Impact
Mitigating Actions
• The business relies on its
outsourced manufacturing
supplier base to provide the
Loss of
final product.
through
suppliers
or
insolvency,
ceasing
working
of
relationship could impact
short term supply.
disaster
• Non-compliance
with
labour or environmental
requirements
could
interrupt supply chain and
cause reputational damage.
• Product supplied could be
of insufficient quality for
sale.
• Purchases are spread over a number of
suppliers to avoid over dependency on
any single supplier and as the business is
growing and increasing order quantities
the potential supplier base is widening.
• All design is done in-house with detailed
specification packs provided for each
product which helps on-board new
suppliers quickly.
• All suppliers are asked
to confirm
adherence with the business code of
conduct.
Independent
are
supplier
conducted at least once every two years,
ensuring
compliance with working
practices and ethics.
audits
•
• Each product goes through an extensive
sampling process and final quality control
process to ensure it is suitable for sale.
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Systems
security
availability
–
and
Key employees
Working
capital
• System outages would
prevent the business from
operating and
therefore
would see a reduction in
revenue during this time.
• GDPR could impact ability
to work with data providers
who
identify
prospective customers for
marketing purposes.
help
• Data breaches could impact
reputation and business
continuity.
• The loss of one or more of
key employees could have
an adverse impact on the
business and
its
ability to grow as planned
inhibit
• As
the Group
requires
working capital to further
invest to grow the business.
This will include investment
customer
in
product
acquisition,
development
and
operations.
inventory,
• The business has agreements with
external partners to manage and support
its systems and they would ensure that
any outage is minimised.
• The business works with industry leading
data providers with extensive compliant
databases to ensure sufficient sources of
target
for marketing
purposes.
information
• Dedicated cyber insurance policies are in
place which include specialist resource
and plans to minimise the impact of any
cyber-attacks.
• The remuneration committee ensure that
key employees are rewarded sufficiently
to retain and motivate on an ongoing
basis.
• There is a Long Term Incentive Plan in
place for the board plus the other
members of the senior leadership team in
the form of share options team to further
ensure that they are rewarded and
incentivised appropriately.
• The business has detailed forecasting
models including sensitivity scenarios so
that robust decisions can be made,
balance growth potential with
risk
mitigation.
low cost of acquisition
• Marketing spend efficiencies have been
made over the past two years. The
is
relatively
expected to be maintained, which reduces
the risk as the return on investment is
strong when investment is being made.
• Weekly and monthly cash flow projections
are reviewed by senior management and
actions taken where necessary, with all
key members of staff aware of the cash
flow objective.
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Sosandar: A responsible fashion business
As a responsible business, we are conscious of the impact our operations have on our diverse network
of employees, customers, suppliers, manufacturers, shareholders and the communities in which they
work.
We are committed to having an increasingly positive impact through every aspect of our business as
we progress against our three key areas of focus. These consist of:
• Ethical Operations
A fair, transparent and collaborative supply chain
• Environmental Sustainability
Minimising the footprint left on the natural world
• Fabulous Sosandar
An inclusive and uplifting workplace
Ethical Operations
As we continue to scale as a business, we remain committed to working with suppliers who share our
core values of social responsibility and ethical operations. This remains a central tenet of our strategy
and we are focused on constantly improving how we work to ensure that our levels of corporate
governance consistently improve. In this regard, we routinely review ethical operations within our
supply chain at Board level, overseen by our Head of Sourcing, to ensure that our high standards are
maintained across all levels of our business, our partners and those within our supply chain.
Transparency in our supply chain
As part of our commitment to ethical sourcing within our supply chain, we continue to work against
our robust "Code of Conduct" which encompasses essential aspects of ethical and social compliance.
Amongst others, this includes stringent policies on child labour, which all of our 80 global suppliers
are required to adhere to.
This commitment reflects our dedication to ensuring the highest standards of ethics and social
responsibility throughout our supply chain are both maintained and advanced as we grow as a
business.
At Sosandar, we hold social responsibility at the very core of our ethos and, as we challenge ourselves
to be a more conscientious and socially impactful business, accountability around our progress is
important. In order to enhance transparency and ensure better accountability, we continue to utilise
independent audits through organisations including SMETA (Sedex Members Ethical Trade Audit) and
BSCI (Business Social Compliance Initiative), which serve as robust measures to verify and maintain
compliance within our global supply chain. By employing these review processes, we reinforce our
commitment to upholding our own high standards and ensuring the integrity of our operations.
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Third Party Partners
Working with third party partners is an essential element of our sales strategy and as a business, we
implement a high level of criteria to ensure that our own social values are aligned with any potential
partner.
We currently work with six third party partners including John Lewis, Marks and Spencer, NEXT, The
Very Group, JD Williams and Sainsbury’s. Each of these Group’s maintain their own stringent ESG
policies and we are proud to continue working with them as we grow our brand.
GXO (formerly Clipper)
Sosandar continues to outsource its product storage, packing and returns logistics to GXO, a leading
retail logistics specialist. Throughout our growth journey, we have developed a strong collaborative
relationship with GXO and it has always been vital that our values are aligned with regards to being
responsible businesses. GXO has a robust Corporate Social Responsibility programme, which can be
found on its website at https://gxo.com/esg/
Environmental Sustainability
Reducing our environmental impact is a key focus area for Sosandar. We regularly examine the raw
materials and components used in our products, seeking opportunities to source and produce them
in a more sustainable manner. Our ongoing commitment to sustainability drives us to explore ways to
enhance the sourcing and production processes for greater environmental responsibility and we will
continue to do so as we progress on our growth journey.
Minimising the use of air freight in favour of more environmentally friendly methods of transporting
stock remains part of our ongoing agenda. We are committed to amending our practices to find the
right balance of transportation methods while taking into consideration cost, lead time and
environmental impact. Having increased the amount of our stock that is now being transported via
sea freight shipping and increased the consolidation of inbound shipments, we are pleased to have
found the correct mix and will continue to optimise this in the coming period.
Minimising waste
Since foundation, we have been determined to create clothing that is long-lasting and minimises waste
within the fashion industry. Sosandar products are made to the highest standards, using quality
materials that ensure durability and longevity.
We are proud to continue working with Smart Works, a charity which delivers an invaluable service to
women across Greater Manchester, delivering high quality and sustainable clothing to women in need.
Through this partnership, we seek to combat clothing waste and make a tangible difference within the
fashion industry.
Recycling
As part of our ongoing environmental strategy, we remain committed to minimising waste by utilising
recyclable, carbon neutral and sustainable consumer packaging where possible. In this regard we are
pleased to report that 100% of our inbound polybags have now been migrated to fully recycled
materials and in addition to this, our consumer bags are now being made from sugar cane.
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We continue to use a dedicated packaging supplier for all of our product suppliers to order from,
ensuring full transparency and ensuring that all packaging is made from recycled materials.
Fabulous Sosandar
Our team
At Sosandar, our people are at the centre of everything we do and I would like to take this opportunity
to sincerely thank all of them for their continued diligence and dedication.
We have worked hard to make Sosandar an open and enjoyable workplace for all of our staff and we
are very proud of the inclusive and open culture we have created. It is the commitment and hard work
of our people that has allowed us to become the company we are today and they will continue to be
the backbone of our business as we scale.
We are pleased to be an equal opportunity employer, recruiting from a varied pool of talent and we
are dedicated to ensuring that all applicants and employees are treated with fairness and equality,
without any form of preferential treatment. Promoting this inclusivity is very important to us as a
business and it will continue to be so in the future.
Looking forward
As a business we are committed to having a positive impact on our society, the environment, and our
team. We acknowledge there is increasing interest from a wide range of stakeholders on the various
positive impacts that the business has and what we are doing to improve outcomes. As we continue
on our growth journey, we will further expand our activity, with an ambition to increase the positive,
lasting impact Sosandar has on the fashion industry.
Section 172 Statement
Section 172 of the Companies Act 2006 requires Directors to take into consideration the interests of
stakeholders in their decision making. They must make decision in good faith that they believe will
most likely promote the success of the Group for the benefit of its shareholders. In making these
decisions the Directors must consider, amongst other things:
Likely long-term impact of their decisions
Interests of employees and the need to act fairly between members of the Group
•
•
• The reputation of the Group with customers and suppliers
• The community and environment in which the Group operates
Key Stakeholders
Employees
How we engage
As a relatively small team of 85 people as at March 2023, there is regular
engagement on a daily basis between all departments either in the office or
using video conferencing. All employees are in the office at least three days
per week to aid collaboration and to ensure individuals have lots of face-to-
face interaction to aid development. The culture at Sosandar is a key point
of difference, with employees valuing the regular interactions with all levels
and departments within the business. Regular business wide updates are
given through a variety of channels with more formal updates via
presentations around key events.
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Shareholders
Suppliers
Customers
As an AIM listed business, we have a dedicated investor website, which has
been relaunched in July 2023, with all key information and RNS updates. We
also conduct regular presentations with investors, both institutional and
retail around the time of key trading updates. Presentations are made
available online for those who did not have the opportunity to attend in a live
capacity. Throughout the year, the management term attend forums to
interact with shareholders including attendance at Mello and inviting
institutional shareholders to the offices to gain a greater depth of
understanding about the business, including having the opportunity to meet
employees that otherwise they would not meet.
We have a dedicated Sourcing team, whose role it is to ensure ongoing
assessment and onboarding of new suppliers. In addition, we have personal
relationships from all levels within our business, across all of our supply chain
and update each other through regular meetings and phone calls.
Our customers are at the heart of everything we do. We use email and social
platforms to update them about new products and regularly review any
feedback we received to understand how we can improve their experience.
Significant events/decisions 2023
Event/Decision
Fund Raise
Key
Stakeholders
Shareholders
Inflation
All stakeholders
Actions & Impact
• Raised net proceeds of £5.5 million via a Placing,
and Retail Offer in February 2023
• Representing approximately 12 per cent of the
existing issued share capital
• Allowed for greater investment in stock from H2
FY23 and beyond to support the omnichannel
strategy, commencing with J Sainsburys from
Autumn/Winter 2023
•
increased significantly through
Inflation has
FY23, resulting in the price of everyday items
such as food and energy being much higher
• Disposal income available to consumers has been
reduced, resulting in spending on non-essential
items being reduced
• Consumers have become more discerning in
their spending habits, ensuring that any products
being purchased are absolutely the ones that
they want.
• The Sosandar consumer tends to have a higher
level of disposable income and therefore able to
withstand economic turbulence. Therefore, the
business is able to trade well through periods of
high inflation or wider economic downturn.
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• The average price point of a Sosandar product is
remain
mid-market and
affordable for the target customer.
therefore
items
• The product range is diverse in terms of both
category mix and price point which means the
consumer remains well served by Sosandar
All stakeholders
• Sales continued to accelerate throughout the
Growing revenue
through third-party
retailers
year
• Towards the end of FY23, trading commenced
with Sainsburys on a wholesale agreement in
addition to The Very Group and N Brown. This
new partnerships is strategically important as it
will include selling Sosandar in physical stores for
the first time. This will commence in autumn
2023 and will supplement selling on J Sainsbury’s
website.
• Selling through third parties Increase in brand
awareness for Sosandar through association with
such well known UK retailers who each have
multi-million number of e-commerce customers
has further accelerated visits and sales through
Sosandar.com
Increase in revenue and profitability as a result of
these agreements with accelerated economies of
scale
•
• The product range continues to evolve with new
styles landing frequently in order to ensure the
customer continues to see fresh and relevant
product.
• The product mix
is highly diverse with an
equitable balance across many categories,
including dresses, denim, knitwear and footwear.
The customer has choice across all main
womenswear categories
• Pre-pandemic a higher proportion of the product
mix was formal and work wear. Developments
into new product categories were already taking
place pre-pandemic and these were accelerated
during the year
• The product range available at the year-end is
substantially more diverse than at the beginning
of the year with all product categories widened
during the year
Product range
development
All stakeholders
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Julie Lavington
Director
7 July 2023
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BOARD OF DIRECTORS
FOR THE YEAR ENDED 31 MARCH 2023
Biographical details of the Directors
Nick Mustoe - Interim Non-Executive Chairman
Nick started his career in 1981 working in advertising for agencies Foote Cone and Belding and Lowe
Howard Spink. In that time Nick worked across many clients including Tesco, Heineken, Whitbread,
Vauxhall, Wickes, Weetabix, Bauer Publishing and Hanson Group Companies.
In 1993 Nick led a breakaway start up agency called Mustoe Merriman Levy 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 client accounts including Kia Cars, Danone, Lloyds
Pharmacy, Doctor Marten, Bauer Publishing, Coca Cola and Unilever.
In 2008, Mustoe Merriman Levy merged with a leading PR agency Geronimo to form Kindred Agency
Limited, a PR and social media agency. Nick subsequently led an MBO of Kindred in 2010 and continues
to lead the company as Chairman.
Nick also holds several non-executive positions including Chairman of Sandown Park Racecourse, tech
company Lifestream, and Strata Create events agency.
Alison Hall – Co CEO and Founder
Former fashion magazine editor, Alison Hall, is co-founder and joint CEO of Sosandar.
Prior to founding Sosandar in 2015, Alison was editor of Look magazine. After its launch in 2007, Alison
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 designed
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.
Julie Lavington – Co CEO and Founder
Former fashion magazine publishing director, Julie Lavington, is co-founder and joint 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, 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 the biggest selling magazine on UK
newsstands. 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.
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BOARD OF DIRECTORS
FOR THE YEAR ENDED 31 MARCH 2023
Stephen Dilks – Chief Financial Officer
Steve joined Sosandar from Regatta, the outdoor apparel business in September 2020 as Finance
Director and was appointed Chief Financial Officer in May 2021. Steve is CIMA qualified and has a
broad skillset gained across a number of roles in highly complex organisations with a blend of financial,
commercial and strategic experience.
During his eleven years at Regatta, the last four as Finance Director, Steve supported the Group’s
consistent double-digit growth across multiple brands, countries and channels including wholesale,
own retail, concessions and online. He was also the finance lead for several key strategic projects
including the Group's Brexit planning and the implementation of group wide new IT systems.
Prior to his tenure at Regatta, Steve held a broad range of financial and commercial roles in retail and
FMCG organisations including Kraft Foods and The Co-Operative Group.
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.
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.
Adam is currently Chairman of Belluscura Plc, OTAQ Plc, ProBiotix Plc and MyHealthChecked Plc.
Andrew Booth - Non-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 prior to stock market listing. Thereafter he became
Chief Marketing Officer for the Hut Group spanning all brands, all customer facing activity globally.
In 2014 Andrew joined Laterooms.com, part of TUI PLC as Chief Marketing Officer / Chief Revenue
officer, working also as part of the sale team. Andrew remains within the plural environment focused
on brands that are utilising technology to significantly drive change and growth with customers. In
addition to Sosandar Andrew works with Rolls Royce, JCB, Hyundai and a number of North West based
private equity companies on digital / omni channel customer growth.
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BOARD OF DIRECTORS
FOR THE YEAR ENDED 31 MARCH 2023
Jonathan Wragg - Non-Executive Director
Jonathan is an experienced senior executive with a track record of driving growth in consumer
businesses through digital channels. From April 2014 to September 2021, Jonathan held a number of
including e-Commerce Director and Global Wholesale
executive roles with Superdry plc,
Director. During his time at Superdry Jonathan oversaw rapid sales and profit growth in both
channels, in the UK, and through global partnerships across 65 countries, which included 500+
franchise stores.
Prior to this, Jonathan spent seven years at ASDA WalMart and 26 years at Littlewoods SDG Ltd (now
The Very Group) where he led a multi-functional team to develop, procure and trade the product
portfolio of a £1bn business, and was responsible for creating a portfolio of new web-based niche
businesses. Jonathan is currently an Independent Non-Executive Director of Manchester Airport
Group, appointed in part for his digital experience, and is a member of the company's Audit,
Nomination and Corporate & Social Responsibilities Committees, and an Independent Non-Executive
Director at Abel and Cole Ltd, part of the William Jackson Food Group.
Lesley Watt - Non-Executive Director
Lesley is as an experienced commercial CFO and Finance Director with over 25 years in Board and
senior finance positions across private, public and third sectors, including Scottish and Newcastle plc
and latterly as CFO of Miller Developments. She is currently a member of the Tatton Asset
Management plc Board and has significant experience with high growth strategic start-ups and blue
chip companies. Lesley is a Chartered Accountant having qualified with PWC.
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BOARD OF DIRECTORS
FOR THE YEAR ENDED 31 MARCH 2023
The Directors present their report and the consolidated financial statements for the year ended 31
March 2023.
Results and dividends
The Group profit after tax for the year ended 31 March 2023 amounts to £1.88m (2022: loss £0.14m).
The Directors are not recommending payment of a final dividend for the year (2022: £nil).
Directors
The Directors who served on the Board during the year and to the date of this report are as follows:
Alison Hall
Julie Lavington
Stephen Dilks
Bill Murray (passed away 4th February 2023)
Nicolas Mustoe
Adam Reynolds
Mark Collingbourne (resigned 1st September 2022)
Andrew Booth
Jonathan Wragg (appointed 14th April 2022)
Lesley Watt (appointed 1st September 2022)
Substantial shareholdings
As at 23 June 2023 the following held 3% or more of the share capital of the Company:
Rank Shareholder
1
2
3
4
5
6
7
8
Octopus Investments
Hargreaves Lansdown Asset Mgt
Schroder Investment Mgt
Canaccord Genuity Group Inc
Interactive Investor
Amati Global Investors
EdenTree Investment Mgt
Lombard Odier Asset Mgt
Based on 248,226,513 ordinary shares on 23 June 2023.
As at 31 March 2023 the following held 3% or more of the share capital of the Company:
No of shares at
23-Jun-23
28,530,783
23,156,689
22,391,065
17,386,601
12,827,315
12,480,000
11,520,909
11,251,789
% Issued
Capital
11.49%
9.33%
9.02%
7.00%
5.17%
5.03%
4.64%
4.53%
Rank
Shareholder
Octopus Investments
1
Hargreaves Lansdown Asset Mgt
2
Schroder Investment Mgt
3
Canaccord Genuity Wealth Mgt
4
Lombard Odier Asset Mgt
5
Interactive Investor
6
Amati Global Investors
7
EdenTree Investment Mgt
8
Based on 248,226,513 ordinary shares on 31 March 2023.
No of shares at
31-Mar-23
% Issued
Capital
28,530,783
22,734,230
22,089,768
18,813,042
18,150,756
14,688,914
12,480,000
11,520,909
11.49%
9.16%
8.90%
7.58%
7.31%
5.92%
5.03%
4.64%
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BOARD OF DIRECTORS
FOR THE YEAR ENDED 31 MARCH 2023
Corporate governance
The Directors recognise the importance of robust corporate governance and, following Admission,
have undertaken to take account of the requirements of the Quoted Companies Alliance (QCA) Code
to the extent that they consider it appropriate, having regard to the Group’s size, board structure,
stage of development and resources.
The QCA Code recommends that the Board of Directors should include a balance of Executive and
Non-Executive Directors, such that no individual or small company of individuals can dominate the
board's decision taking.
The Group holds regular Board meetings and the Directors will be responsible for formulating,
reviewing and approving the Group’s strategy, budget and major items of capital expenditure. The
Directors have, established an Audit Committee, a Nomination Committee, and a Remuneration
Committee with formally delegated rules and responsibilities.
The following table summarises the number of Board meetings held in the year along with the
attendance of each Director.
Board
Remuneration
Audit
Nomination
Total In Year
Alison Hall
Julie Lavington
Stephen Dilks
Bill Murray*
Nicolas Mustoe
Adam Reynolds
Mark Collingbourne**
Andrew Booth
Jonathan Wragg ***
Lesley Watt****
31
27
29
29
24
31
29
7
31
31
14
* Passed away on 04 February 2023
** Stepped down on 01 September 2022
***Appointed on 14 April 2022
****Appointed on 01 September 2022
1
1
1
-
1
-
-
-
1
-
1
2
-
-
2
2
2
2
-
-
-
-
2
-
-
-
1
1
2
-
1
1
-
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BOARD OF DIRECTORS
FOR THE YEAR ENDED 31 MARCH 2023
Sub Committee membership
On 13 December 2022, the sub committee memberships were amended.
Remuneration Committee
The Remuneration Committee, which comprises Andrew Booth (chairman) and Lesley Watt. In
addition, Bill Murray was a member until the date of his passing. The committee has met once during
the financial year. The Committee is responsible for the review and recommendation of the scale and
structure of remuneration for senior management, including any bonus arrangements or the award
of share options with due regard to the interests of the Shareholders and the performance of the
Group.
Audit Committee
The Audit Committee, comprising Lesley Watt (chairwoman), Jonathan Wragg and Nick Mustoe, meet
twice a year. The committee is responsible for making recommendations to the Board on the
appointment of auditors and the audit fee and for ensuring that the financial performance of the
Group is properly monitored and reported. In addition, the Audit Committee received and reviewed
reports from management and the auditors relating to the interim report, the Annual Report and
Accounts and the internal control systems of the Group. The Audit Committee is responsible for
assessing the suitability of the external auditor and recommending any rotations required to the
Board.
Nomination Committee
The Nomination Committee, comprises Jonathan Wragg (chairman), Adam Reynolds and Andrew
Booth, meet at such times and frequency as necessary. The Nomination Committee monitor the size
and composition of the Board and the other Board Committees and are responsible for identifying
suitable candidates for Board membership.
Directors Responsibilities
Introduction
The Board of Sosandar Plc seeks to follow best practice in corporate governance as appropriate for a
Group of our size, nature and stage of development. As a public company listed on AIM, we are
cognisant of the trust placed in the Board by institutional and retail investors, employees and other
stakeholders. We recognise the importance of an effectively operating corporate governance
framework.
The Board has adopted the principles of the 2018 Quoted Companies Alliance Corporate Governance
Code to support the Group’s governance framework. The Directors acknowledge the importance of
the ten principles set out in the QCA Code and this statement briefly sets out how we currently comply
with the provisions of the QCA Code. The Board considers that it does not depart from any of the
principles of the QCA code.
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BOARD OF DIRECTORS
FOR THE YEAR ENDED 31 MARCH 2023
Principle
How we comply with the QCA Code in this area
1. Establish a strategy and business model which promote long-term value for shareholders
Sosandar intends to build long-term shareholder value by targeting an underserved 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 forward styles designed to flatter.
Our strategy is to build a loyal customer base, focusing on customer growth and retention, by taking
advantage of the increasing convergence of e-commerce and media.
2. Seek to understand and meet shareholder needs and expectations
The Group recognises the importance of engaging with its shareholders and reports formally to them
when its full-year and half-year results are published.
The Board also seeks to engage with shareholders to understand their needs and expectations,
primarily through meetings with the Executive Directors, both individually as required (this mainly
applies to institutional investors and/or those with significant shareholdings) and at Annual General
Meetings, at which all shareholders are welcome.
The Joint CEOs and CFO regularly present at private investment events during the year.
Investors may contact the Group directly through the investor enquiries email address noted on the
Group’s website sosandar@almapr.co.uk. Investors may also receive Investor Email Alerts from the
Group by signing up at http://www.sosandar-ir.com/content/investors/alert.asp
3. Take into account wider stakeholder and social responsibilities and their implications for long-term
success
We recognise that we are responsible not only to our shareholders and employees, but to a wider
group of stakeholders (including, inter alia, our customers and suppliers) and the communities in
which we operate.
Sosandar Plc is committed to the highest standards of corporate social responsibility in its activities,
as outlined in more detail in the annual report and accounts.
Suppliers
We outsource manufacturing to over 80 subcontractors around the world including Turkey. China,
India, Brazil, Romania and Spain. All suppliers are asked to confirm they adhere to the ethical trade
guidelines. The breadth of strong supplier relationships mitigates the risk of over reliance on a small
number of specific contacts. The output from suppliers is regularly reviewed to ensure continued
success.
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BOARD OF DIRECTORS
FOR THE YEAR ENDED 31 MARCH 2023
Directors Responsibilities (continued)
Customers
We provide frequent new product ranges to ensure constant newness for our customers. Our in-house
designers react quickly to changing customer demand to ensure the Group is on the cutting edge of
fashion, while tailoring garments to fit customers.
4. Embed effective risk management, considering both opportunities and threats, throughout the
organisation
The Board has identified what we believe to be a sensible approach to risk management for a group
of our size.
We outline the Group’s approach to risk management and the principal risks we face, along with what
we do to mitigate those risks, in detail on pages 13 to 16 of our Annual Report and Accounts.
The Group receives regular feedback from its external auditors on the state of its risk management
and internal controls.
This area is subject to regular review as our business and the risks we face evolve.
5. Maintain the board as a well-functioning, balanced team led by the chair
The Board includes a balance of Executive and Non-Executive Directors, with six Non-Executive
Directors compared to three Executive Directors.
The Board's activities are supported by Nomination, Disclosure, Audit and Remuneration Committees.
All the Directors have appropriate skills and experience for the roles they perform at the Group,
including as members of Board Committees.
Directors are subject to re-election at least every three years in accordance with the Articles of
Association.
The Group is satisfied that the current Board is sufficiently resourced to discharge its governance
obligations on behalf of all stakeholders and will consider the requirement for additional Non-
Executive Directors as the Group fulfils its growth objectives.
6. Ensure that between them the Directors have the necessary up-to-date experience, skills and
capabilities
The Board currently comprises three Executive and six Non-Executive Directors with an appropriate
balance of sector, financial and public market skills and experience.
More details of the skills and experience of the Directors are provided in the Annual Report on page
22 as well as the website.
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BOARD OF DIRECTORS
FOR THE YEAR ENDED 31 MARCH 2023
Directors Responsibilities (continued)
The experience and knowledge of each of the Directors gives them the ability to constructively
challenge the strategy and to scrutinise performance.
The Board has access to external advisors where necessary.
The Board and Committees receive training as appropriate. In particular, the members of the Audit
Committee receive technical updates from the Group’s external auditors to keep them abreast of the
latest accounting, auditing, tax and reporting developments.
The Directors also receive regular briefings and updates from the Group’s NOMAD in respect of
continued compliance with, inter alia, the AIM Rules and the Market Abuse Regulation.
7. Evaluate board performance based on clear and relevant objectives, seeking continuous
improvement
Evaluation of the performance of the Group’s Board has historically been implemented in an informal
manner.
The Nomination Committee formally reviews and considers the performance of each Director at or
around the time of publication of the Group’s Annual Report.
The review looks at Director performance during the year, which includes but is not limited to:
financial targets; adherence to Group policies, effectiveness of management as well as attendance
and contribution at Group meetings.
On an ongoing basis, Board members maintain a watching brief to identify relevant internal and
external candidates who may be suitable additions to or backup for current Board members.
8. Promote a corporate culture that is based on ethical values and behaviours
The Board believes that the promotion of a corporate culture based on sound ethical values and
behaviours is essential to maximise shareholder value.
The Group carefully assesses each of the companies it works with to ensure the requisite standards
and values are in place. All new suppliers must confirm in writing that they adhere to the Ethical
Trading Initiative base code www.ethicaltrade.org/eti-base-code.
The Group’s policies set out its zero tolerance approach towards any form of modern slavery,
discrimination or unethical behaviour relating to bribery, corruption or business conduct.
9. Maintain governance structures and processes that are fit for purpose and support good decision-
making by the board
The roles and responsibilities of specific Directors and Board Committees are available on our website.
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BOARD OF DIRECTORS
FOR THE YEAR ENDED 31 MARCH 2023
Directors Responsibilities (continued)
The Board meets formally at least six times per year.
Each Committee has terms of reference outlining the specific responsibilities delegated to it.
The terms of reference of each Committee can be found on in the corporate governance section of
the Group website.
The appropriateness of the Board's structures and processes are reviewed through the ongoing
evaluation process by the Nomination Committee, which will evolve in parallel with the Group’s
objectives, strategy and business model as the Group develops.
10. Communicate how the company is governed and is performing by maintaining a dialogue with
shareholders and other relevant stakeholders.
The Group communicates progress throughout the year through Regulatory News Service
announcements and in more detail in its interim financial statements and Annual Report and
Accounts. All historical Annual Reports and other governance related material, including notices of all
general meetings, since the Group’s formation, are available on the Group’s website.
Results of shareholder votes are made public on the Group’s website after the meetings concerned.
Directors’ remuneration
The Group operates a remuneration policy with the remuneration committee taking responsibility for
all matters relating to Executive, Non-Executive and Senior Management.
Executive Directors
The remuneration policy on executive director remuneration is designed to ensure that there is
alignment between shareholder and executive interests. The desire to sufficiently retain and
motivate the executive is achieved through a combination of a competitive base salary and long term
incentives.
Basic Salary
The remuneration committee review basic salaries annually. In November 2022 the basic salaries for
Julie Lavington and Alison Hall increased by 19% to £220,000 and have remained at this level for the
remainder of the financial year. The basic salary for Stephen Dilks also increased in November 2022,
by 28% to £160,000 and has remained at this level for the remainder of the financial year.
Annual Bonus
Currently there are no short term bonus plans in place however this remains under review by the
remuneration committee.
Pension
The Group operates a defined contribution pension scheme which is available to all employees
following successful completion of the probationary period. The assets of the scheme are held
separately from those of the Group in independently administered funds.
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BOARD OF DIRECTORS
FOR THE YEAR ENDED 31 MARCH 2023
Directors’ remuneration (continued)
The pension contributions made to Julie Lavington and Alison Hall during the year ending 31 March
2023 were 8 per cent of basic salary between April 2022 and October 2022, and 12% of basic salary
from November 2022 to the end of the financial year.
The pension contributions made to Stephen Dilks during the year ending 31 March 2023 was 7% of
basic salary from April 2022 to October 2022 and 8% of basic salary from November 2022 to the end
of the financial year.
Long Term Incentive Plan
The Group has a share ownership compensation scheme for Directors and senior employees of the
Group to further align their interests with those of the shareholders. In June 2021 the Group
established a new Long Term Incentive Plan in which granted new nil cost options totalling 21,431,942
ordinary shares of 0.1 pence each to its executive directors and members of the senior management
team. Some of the existing options granted, totalling 13,888,742 ordinary shares, were modified as
part of these arrangements. There was no incremental fair value because of this modification. The
share options granted will vest at various future dates based on agreed commercial criteria and are
detailed in the table on pages 32-33 and in note 17.
Non-Executive Directors
The remuneration policy on Non-Executive Director remuneration is determined by the Remuneration
Committee. The remuneration is set according to the level of contribution, relevant experience and
specialist knowledge. For the year ending 31 March 2023, the Non-Executive remuneration was
maintained at £45,000 per annum for the Chairman and £30,000 for all the remaining Non Executive
Directors.
The Directors of the Group held the following beneficial interests in the shares and share options of
Sosandar Plc at 31 March 2023 and 31 March 2022:
Share Options
Ordinary
shares of
0.01p each
Ordinary
shares of
0.01p each
Option
exercise
Price £
5,309,343
5,309,343
4,905,981
2,431,390
928,919
345,107
150,000
126,750
43,184
-
1,655,629
9,725,971
1,655,629
9,725,971
400,000
800,000
400,000
400,000
-
-
-
720,000
0.151
0.000
0.151
0.000
0.151
0.151
0.151
0.151
N/A
N/A
N/A
0.000
Share based
payment P&L
charge
3,894
125,667
3,894
125,667
941
1,882
941
941
-
-
-
19,765
Expiry
03/11/2027
18/06/2031
03/11/2027
18/06/2031
03/11/2027
03/11/2027
03/11/2027
03/11/2027
N/A
N/A
N/A
18/06/2031
31-Mar-23
Alison Hall
Julie Lavington
Nicholas Mustoe
Adam Reynolds
Mark Collingbourne
Bill Murray
Andrew Booth
Jonathan Wragg
Lesley Watt
Steve Dilks
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BOARD OF DIRECTORS
FOR THE YEAR ENDED 31 MARCH 2023
31-Mar-22
Alison Hall
Julie Lavington
Nicholas Mustoe
Adam Reynolds
Mark Collingbourne
Bill Murray
Andrew Booth
Steve Dilks
Share Options
Ordinary
shares of
0.01p each
5,309,343
5,309,343
4,905,981
2,431,390
928,919
Option
Ordinary
shares of exercise
Price £
0.151
0.000
0.151
0.000
0.151
0.151
0.151
0.01p each
1,655,629
9,725,971
1,655,629
9,725,971
400,000
800,000
400,000
Share based
payment P&L
charge
4,191
100,558
4,191
100,558
1,013
2,025
1,013
Expiry
03/11/2027
18/06/2031
03/11/2027
18/06/2031
03/11/2027
03/11/2027
03/11/2027
345,107
400,000
0.151
03/11/2027
150,000
-
-
720,000
N/A
0.000
N/A
18/06/2031
1,013
-
15,491
Further details with regards to Executive and Non-Executive remuneration is detailed in note 6.
Going concern
After making appropriate enquires, the Directors consider that the Group and 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 Group and Company’s operations for the 12 months
from the date of approval of the financial statements. The Group and Company has adequate cash to
cover its corporate overheads and management costs over this year but management continues to
monitor these costs and manage cashflows. Refer to note 2 for further information.
Events after the reporting period
Further information on events after the reporting period is set out in note 22.
Disclosure in the strategic report
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the
company’s strategic report information required by Large and Medium-sized Companies and Groups
(Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors’ report. It has done
so in respect of information on research and development, environmental actions and future
developments.
Principal risks and uncertainties
The principal and uncertainties of the business are discussed in the Strategic Report and in note 21.
Overseas branches
The Group has no overseas branches.
Directors' responsibilities
The Directors are responsible for preparing the strategic report, directors' report and financial
statements in accordance with applicable law and UK adopted international accounting standards.
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BOARD OF DIRECTORS
FOR THE YEAR ENDED 31 MARCH 2023
Directors' responsibilities (continued)
Company law requires the directors to prepare financial statements for each financial year. Under that
law the directors have elected to prepare the financial statements in accordance with United Kingdom
Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law).
Under company law the directors must not approve the financial statements unless they are satisfied
that they give a true and fair view of the state of affairs of the Company and Group and the profit or
loss of the company for that period.
In preparing these financial statements the Directors are required to:
•
select suitable accounting policies and apply them consistently;
• make judgements and estimates that are reasonable and prudent;
•
state whether the Group and Company financial statements have been prepared in
accordance with UK adopted international accounting standards, 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.
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 Company and Group and to enable them to ensure that the financial
statements comply with the UK-adopted international accounting standards Companies Act 2006.
They are also responsible for safeguarding the assets of the Company and Group 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 intend to consider Saffery Champness LLP for re-appointment as auditors of the Group and
Company.
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 she/he has
taken all the steps that he ought to have taken as a Director in order to make her/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: 7 July 2023
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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF SOSANDAR PLC
FOR THE YEAR ENDED 31 MARCH 2023
Opinion
We have audited the financial statements of Sosandar Plc (the ‘parent company’) and its subsidiary
(the ‘group’) for the year ended 31 March 2023 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 statements of cash flows, the consolidated and parent
company statements of changes in equity and notes to the financial statements, including significant
accounting policies. The financial reporting framework that has been applied in their preparation is
applicable law and UK-adopted international accounting standards.
In our opinion the financial statements:
•
•
•
give a true and fair view of the state of affairs of the group and of the parent company as at
31 March 2023 and of the group’s profit for the year then ended;
have been properly prepared in accordance with UK-adopted international accounting
standards; and
the financial statements have been prepared in accordance with the requirements of the
Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and
applicable law. Our responsibilities under those standards are further described in the Auditor’s
responsibilities for the audit of the financial statements section of our report. We are independent of
the group and the parent company in accordance with the ethical requirements that are relevant to
our audit of the financial statements in the UK, including the FRC’s Ethical Standard 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.
Our approach to the audit
We tailored the scope of the audit work to ensure we obtained sufficient evidence to support our
opinion on the financial statements as a whole, taking into account the structure of the group and the
parent company, the accounting processes and controls and the industry in which the group operates.
The group consists of two reporting components, which are both its legal entities, both incorporated
and operating in the UK. The group financial statements are a consolidation of these two reporting
components. All trading entities within the group have been subject to a full scope audit by the group
audit team within the same firm. The components within the scope of our audit work therefore
covered 100% of group revenue, group profit before tax and group net assets. We also tested the
consolidation process and adjustments. As part of designing our audit, we determined materiality and
assessed the risks of material misstatement in the financial statements.
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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF SOSANDAR PLC
FOR THE YEAR ENDED 31 MARCH 2023
Our approach to the audit (continued)
In particular, we looked at where the Directors made subjective judgements. For example in respect
of significant accounting estimates that involved making assumptions and considering future events
that are inherently uncertain. We also addressed 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.
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.
Key Audit Matter
Inventory valuation
At 31 March 2023, the Group held inventory of
£11,251k (2022: £7,307k) net of provisions of
totalling £388k (2021: £761k)
Due to the nature of the inventory and the
industry in which the group operates there is a
risk of inventory quickly becoming obsolete,
proving difficult to sell above cost and
requiring a provision for impairment.
Due to the significance of inventory to the
financial statements, we consider this to be a
key audit matter.
How our scope addressed this matter
Our audit procedures included the following:
• We obtained an understanding of
management’s provisioning policy which
is based on the last goods received note
and
inventory
purchased that were converted to sales
the percentages of
• We
the
assessed
obsolescence
percentages applied and determined it
was appropriate with reference to sales
and purchases made during the year
• We tested the mathematical integrity of
management’s provision calculation by
recalculation. We validated the inputs
into the model, including verifying the
quantity and values for various elements
inventory
making up
provision and confirmed the accuracy of
the data used with references to
purchase and sales reports
the overall
• We carried out testing on a sample of
inventory lines to ensure that inventory
is held at the lower of cost or selling price
less costs to sell with reference to future
orders
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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF SOSANDAR PLC
FOR THE YEAR ENDED 31 MARCH 2023
Carrying value of investment in the subsidiary
At 31 March 2023, the parent company has
investments in the subsidiary of £7,432k (2022:
£7,127k).
Due to the significance of the carrying value of
the investment in the subsidiary to the parent
company, we consider this to be a key audit
matter.
Based on our audit procedures we have not
identified any material misstatements arising
from the valuation or provisioning of inventory.
Our audit procedures included the following:
• We evaluated management’s annual
review for indicators of impairment by
comparing the calculated net present
value of the
investment based on
forecast revenue and EBITDA to the
carrying value recorded within the
financial statements
• We
verified
that management’s
assessment for indicators of impairment
used
that
adequately represented forecast trading
performance
consistent
flows
cash
Based on our audit procedures we have not
identified any material misstatements arising
from the carrying value of investment in the
subsidiary.
Our application of materiality
We apply the concept of materiality in planning and performing our audit, in evaluating the effect of
misstatements and in forming our opinion. Our overall objective as auditor is to obtain reasonable
assurance that the financial statements as a whole are free from material misstatement, whether due
to fraud or error. We consider materiality to be magnitude by which misstatements, including
omissions, could influence the economic decisions of reasonable users that are taken on the basis of
the financial statements.
Based on our professional judgement, we determined certain quantitative thresholds for materiality,
as set out below. These, together with qualitative considerations, helped us to determine the scope
of our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of
misstatements, if any, both individually and in aggregate on the financial statements as a whole.
We determined a materiality of £530,000 for the group and £91,000 for the parent company financial
statements. Group materiality is based on 1.25% of group revenue and the parent company
materiality is based on 2% of gross net assets per management accounts at the planning stage.
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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF SOSANDAR PLC
FOR THE YEAR ENDED 31 MARCH 2023
Our application of materiality (continued)
We use performance materiality to reduce to an appropriately low level the probability that the
aggregate of uncorrected and undetected misstatements exceeds over materiality. Performance
materiality was set at 70% of materiality for both the group and the parent company. We set a level
of triviality of £25,000 for the group which is 5% of planning materiality and £5,000 for the parent
company which is also 5% of planning materiality. Any uncorrected audit differences below these
levels were not reported to the Audit Committee, unless warranted under qualitative grounds.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors’ use of the going concern
basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the
directors’ assessment of the group and the parent company’s ability to continue to adopt the going
concern basis of accounting included:
• obtaining, critically appraising and assessing for arithmetical accuracy the directors formal
going concern assessment, including the group’s cash flow forecasts for the period to 31
August 2024 and considering the completeness and accuracy of the future cash flows assessed
against historical results and existing contractual arrangements;
•
considering the reasonableness of assumptions used by the directors in the preparation of the
cash flow forecast which included comparing the 2022 actual results to the 2022 forecast;
• understanding the assumptions applied in the directors’ sensitivity analysis applied to the
base case scenario to derive their blended downside scenario, including assumptions around
revenue growth, funding options and cost management opportunities;
•
reviewing the adequacy of disclosures made within the financial statements on the going
concern basis of preparation; and
• discussing events after the reporting date with the directors to assess their impact on the
going concern assumption.
Based on the work we have performed, we have not identified any material uncertainties relating to
events or conditions that, individually or collectively, may cast significant doubt on the group or the
parent company's ability to continue as a going concern for a period of at least twelve months from
when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are
described in the relevant sections of this report.
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.
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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF SOSANDAR PLC
FOR THE YEAR ENDED 31 MARCH 2023
Other information (continued)
Our opinion on the financial statements does not cover the other information and, except to the
extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion
thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other
information is materially inconsistent with the financial statements or our knowledge obtained in the
course of the audit or otherwise appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required to determine whether this gives
rise to a material misstatement in the financial statements themselves. If, based on the work we have
performed, we conclude that there is a material misstatement of this other information we are
required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
•
•
the information given in the Strategic Report and the Directors’ Report for the financial year
for which the financial statements are prepared is consistent with the financial statements;
and
the Strategic Report and the Directors’ Report have been prepared in accordance with
applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent company and their
environment obtained in the course of the audit, we have not identified material misstatements in
the Strategic Report or the Directors’ Report.
We have nothing to report in respect of the following matters in relation to which the Companies Act
2006 requires us to report to you if, in our opinion:
•
•
•
•
adequate accounting records have not been kept by the parent company, or returns
adequate for our audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records
and returns; or
certain disclosures of directors’ remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the Directors’ Responsibilities Statement set out on pages 33-34, 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
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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF SOSANDAR PLC
FOR THE YEAR ENDED 31 MARCH 2023
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 and the
parent company’s ability to continue as a going concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting unless the directors either intend to
liquidate the group or the parent company or to cease operations, or have no realistic alternative but
to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the group and parent company
financial statements as a whole are free from material misstatement, whether due to fraud or error,
and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of
assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always
detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above, to detect material misstatements in
respect of irregularities, including fraud. The specific procedures for this engagement and the extent
to which these are capable of detecting irregularities, including fraud are detailed below.
Identifying and assessing risks related to irregularities:
We assessed the susceptibility of the group and parent company’s financial statements to material
misstatement and how fraud might occur, including through discussions with the directors,
discussions within our audit team planning meeting, updating our record of internal controls and
ensuring these controls operated as intended. We evaluated possible incentives and opportunities for
fraudulent manipulation of the financial statements. We identified laws and regulations that are of
significance in the context of the group and parent company by discussions with directors, and by
updating our understanding of the sector in which the group and parent company operate.
Laws and regulations of direct significance in the context of the group and parent company include
The Companies Act 2006, the AIM Rules for Companies and UK Tax legislation
Audit response to risks identified:
We considered the extent of compliance with these laws and regulations as part of our audit
procedures on the related financial statement items including a review of group and parent company
financial statement disclosures. We reviewed the parent company’s records of breaches of laws and
regulations, minutes of meetings and correspondence with relevant authorities to identify potential
material misstatements arising. We discussed the parent company’s policies and procedures for
compliance with laws and regulations with members of management responsible for compliance.
During the planning meeting with the audit team, the engagement partner drew attention to the key
areas which might involve non-compliance with laws and regulations or fraud. We enquired of
management whether they were aware of any instances of non-compliance with laws and regulations
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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF SOSANDAR PLC
FOR THE YEAR ENDED 31 MARCH 2023
or knowledge of any actual, suspected or alleged fraud. We addressed the risk of fraud through
management override of controls by testing the appropriateness of journal entries and identifying any
significant transactions that were unusual or outside the normal course of business. We assessed
whether judgements made in making accounting estimates gave rise to a possible indication of
management bias. At the completion stage of the audit, the engagement partner’s review included
ensuring that the team had approached their work with appropriate professional scepticism and thus
the capacity to identify non-compliance with laws and regulations and fraud.
There are inherent limitations in the audit procedures described above and the further removed non-
compliance with laws and regulations is from the events and transactions reflected in the financial
statements, the less likely we would become aware of it. Also, the risk of not detecting a material
misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud
may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or
through collusion.
A further description of our responsibilities is available on the Financial Reporting Council’s website
at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Use of our report
This report is made solely to the parent company’s members, as a body, in accordance with Chapter
3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state
to the parent company’s members those matters we are required to state to them in an 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 parent company and the parent company’s members as a
body, for our audit work, for this report, or for the opinions we have formed.
…………………………………..
Diane Petit-Laurent FCA (Senior Statutory Auditor)
for and on behalf of Saffery Champness LLP
Chartered Accountants
Statutory Auditors
7 July 2023
Trinity
16 John Dalton Street
Manchester
M2 6H
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DocuSign Envelope ID: F157EA5B-0170-4140-BFAA-A45DA74C4291
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2023
Revenue
Cost of sales
Gross profit
Administrative expenses
Operating profit/(loss)
Finance costs
Profit/(loss) before taxation
Income tax credit
Group profit/(loss) for the year
Other comprehensive income
Total comprehensive profit/(loss) for the year
Earnings/(loss) per share:
Earnings/(loss) per share – basic, attributable to ordinary
equity holders of the parent (pence)
Earnings/(loss) per share – diluted, attributable to
ordinary equity holders of the parent (pence)
Notes
3
5
7
8
Year ended
31 March
2023
£’000
42,451
(18,614)
23,837
(22,200)
1,637
(40)
1,597
284
1,881
-
1,881
Year ended
31 March
2022
£’000
29,458
(12,962)
16,496
(17,042)
(546)
(8)
(554)
412
(142)
-
(142)
0.84
0.74
(0.07)
(0.07)
The notes on pages 50 to 73 form part of these financial statements.
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DocuSign Envelope ID: F157EA5B-0170-4140-BFAA-A45DA74C4291
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2023
Assets
Non-current assets
Intangible assets
Property, plant and equipment
Deferred income tax asset
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 Reserves
Other reserves
Reverse acquisition reserve
Retained earnings
Total equity
Current liabilities
Trade and other payables
Lease liability
Total current liabilities
Non current liabilities
Lease liability
Total non current liabilities
Total liabilities
Total equity and liabilities
Notes
9
10
1,7
12
14
15
16
16
18
19
19
As at 31
March
2023
£’000
As at 31
March
2022
£’000
-
991
696
1,687
12,361
2,730
10,576
25,667
27,354
248
52,619
4,648
1,223
(19,596)
(20,773)
18,369
8,355
148
8,503
482
482
-
446
412
858
7,307
2,495
7,048
16,850
17,708
221
47,089
4,648
912
(19,596)
(22,654)
10,620
6,761
38
6,799
289
289
8,985
27,354
7,088
17,708
The financial statements were approved and authorised for issue by the Board of Directors on 7 July
2023 and were signed on its behalf by:
Steve Dilks
Director
Company Number: 05379931
The notes on pages 50 to 73 form part of these financial statements.
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Annual Report 2023
DocuSign Envelope ID: F157EA5B-0170-4140-BFAA-A45DA74C4291
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2023
Cash flows from operating activities
Group profit/(loss) before tax
Adjustments for:
Share based payments
Depreciation and amortisation
Finance 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
Initial direct costs on right of use asset
Bank interest paid
Net cash flow from investing activities
Cash flow from financing activities
Gross proceeds from issue of equity instruments
Costs from issue of equity instruments
Lease payment
Net cash flow from financing activities
Net change in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
Year ended
31 March
2023
£’000
Year ended
31 March
2022
£’000
1,597
(554)
311
235
40
(5,054)
(235)
1,594
(1,512)
(400)
-
-
(400)
5,900
(343)
(117)
5,440
255
317
8
(4,441)
(1,768)
3,906
(2,277)
(36)
(18)
(4)
(58)
5,813
(287)
(71)
5,455
3,528
3,120
7,048
10,576
3,928
7,048
Notes
17
9, 10
10
5
16
19
15
15
The notes on pages 50 to 73 form part of these financial statements.
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Annual Report 2023
DocuSign Envelope ID: F157EA5B-0170-4140-BFAA-A45DA74C4291
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2023
Balance at 31 March 2021
Loss for the year
Share-based payments
Issue of share capital
Costs on issue of share capital
Balance at 31 March 2022
Profit for the year
Share-based payments
Issue of share capital
Costs on issue of share capital
Balance at 31 March 2023
Share
capital
Share
premium
£’000
192
-
-
29
-
221
-
-
27
-
248
£’000
41,592
-
-
5,784
(287)
47,089
-
-
5,873
(343)
52,619
Reverse
acquisition
reserve
£’000
(19,596)
-
-
-
-
(19,596)
-
-
-
-
(19,596)
Capital
redemption
reserve
£’000
4,648
-
-
-
-
4,648
-
-
-
-
4,648
Notes
17
16
16
17
16
16
Retained
earnings
Other
reserves
£’000
(22,512)
(142)
-
-
-
(22,654)
1,881
-
-
-
(20,773)
£’000
657
-
255
-
-
912
-
311
-
-
1,223
Total
£’000
4,981
(142)
255
5,813
(287)
10,620
1,881
311
5,900
(343)
18,369
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.
Other reserve relates 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.
The notes on pages 50 to 73 form part of these financial statements.
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Annual Report 2023
DocuSign Envelope ID: F157EA5B-0170-4140-BFAA-A45DA74C4291
COMPANY STATEMENT OF FINANCIAL POSITION
FOR THE YEAR ENDED 31 MARCH 2023
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 redemption reserve
Retained earnings
Total equity
Current liabilities
Trade and other payables
Total current liabilities
Total liabilities
Total equity and liabilities
Restated Restated
As at 31
March
2023
£’000
As at 31
March
2022
£’000
As at 31
March
2021
£’000
Notes
11
13
14
15
16
16
18
7,432
-
7,432
23
5,119
5,142
12,574
7,128
-
7,128
34
3,399
3,433
10,561
6,878
-
6,878
38
2,952
2,990
9,868
248
52,619
1,223
4,648
(46,220)
12,518
221
47,089
912
4,648
(42,361)
10,509
192
41,592
657
4,648
(37,251)
9,838
56
56
56
12,574
52
52
52
10,561
30
30
30
9,868
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
£3,859k (restated 2022: £5,110k loss).
The financial statements were approved and authorised for issue by the Board of Directors on 7 July
2023 and were signed on its behalf by:
Steve Dilks
Director
Company Number: 05379931
The notes on pages 50 to 73 form part of these financial statements.
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DocuSign Envelope ID: F157EA5B-0170-4140-BFAA-A45DA74C4291
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2023
Cash flows from operating activities
Profit/(loss) before tax
Adjustments for:
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 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 year
Cash and cash equivalents at end of year
Year ended
31 March
2023
£’000
Notes
Restated
Year ended
31 March
2022
£’000
(3,859)
-
7
11
4
(3,837)
5,557
5,557
1,720
3,399
5,119
(5,110)
-
5
4
22
(5,079)
5,526
5,526
447
2,952
3,399
17
16
15
15
The notes on pages 50 to 73 form part of these financial statements.
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Annual Report 2023
DocuSign Envelope ID: F157EA5B-0170-4140-BFAA-A45DA74C4291
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2023
Balance at 31 March 2021
Effect of restatement on opening balance
Restated Balance at 31 March 2021
Loss for the year
Shares based payments
Issue of share capital
Costs on issue of share capital
Restated Balance at 31 March 2022
Loss for the year
Share-based payments
Issue of share capital
Costs on issue of share capital
Balance at 31 March 2023
Share
capital
Share
premium
Other
reserves
Notes
£’000
192
17
16
16
17
16
16
192
-
-
29
-
221
-
-
27
-
248
£’000
41,592
41,592
-
-
5,784
(287)
47,089
-
-
5,873
(343)
52,619
£’000
657
657
-
255
-
-
912
-
311
-
-
1,223
Capital
redemption
reserve
£’000
4,648
4,648
-
-
-
-
4,648
-
-
-
-
4,648
Retained
earnings
£’000
(37,847)
596
(37,251)
(5,110)
-
-
-
(42,361)
(3,859)
-
-
-
(46,220)
Total
£’000
9,242
596
9,838
(5,110)
255
5,813
(287)
10,509
(3,859)
311
5,900
(343)
12,518
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.
Other reserves relate to the charge for share-based payments in accordance with International Financial Reporting Standard 2. The cumulative share-based
payment expense recognised in the consolidated statement of comprehensive income is £311k. The cumulative share payment expense recognised in the
parent company statement of comprehensive income is £7k.
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.
The notes on pages 50 to 73 form part of these financial statements.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
1 General information
Sosandar Plc (the ‘Company’) is a public limited company by shares 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 Group in the year under review was that of a clothing manufacturer and
distributer via internet and mail order.
The principal activity of the company is that of a holding company.
2 Significant accounting policies
Basis of preparation
The consolidated financial statements consolidate those of the Company and its subsidiary (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 UK
adopted international accounting standards (IFRSs) 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 year,
in conformity with IFRS.
Prior period adjustments
The following table summarises the impact of the prior period adjustment on the financial statements
of the Company. Note that the Group financial statements are unaffected.
Company statement of comprehensive
income
Share based payment
Increase in profit
Company statement of financial position
Investments
Increase in net assets
31/03/2022
31/03/2021
£’000
250
250
£’000
596
596
250
250
596
596
The adjustment of £596k shown in restated 2021 relates to the aggregate of 2021 and all years
preceding.
The presentation of deferred tax asset has been amended in accordance with IAS 1 paragraph 56 to
present deferred tax asset as non-current. £312k has been reclassified from current assets to non-
current assets in the prior year.
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 pages 2-3. The financial position of
the Group, its cash flows and liquidity position 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.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
2 Significant accounting policies (continued)
In order to assess the going concern of the Group, the directors have reviewed the Group’s bank
balances, cash flows, the annual budgets and forecasts, including assumptions concerning revenue
growth, marketing spend, returns and repeat customers and expenditure commitments and their
impact on cash flow. These cash flow and profit and loss forecasts show the Group expect an increase
in revenue based on the assumptions set out in note 11 of the financial statements. This will have
sufficient headroom over available banking facilities. Management continue to monitor costs and
manage cashflows against these forecasts.
In February 2023, the Group’s cashflow position was strengthened through raising net proceeds of
£5.5 million via a Placing and Retail Offer. At 31 March 2023, the Group had a cash balance of £10.6m
and is therefore in a strong position, with sufficient working capital to take advantage of opportunities
in FY24. This substantiates the view that the Group is a going concern.
The directors continue to monitor the Group’s going concern basis against the backdrop of significant
external events. Whilst Covid 19 still exists, it had significantly less impact on the Group compared
with the prior year and the normal course of business resumed. In addition to this, it was concluded
the Ukraine war has had no material impact on the consumer behaviour. During the financial year,
rising inflation and increased interest rates led to a ‘cost of living crisis’ in the UK. Whilst at a macro
level, these changes are expected to impact consumer spending, the Group has not experienced a
material downturn in activity with gross margin remaining stable.
Therefore, despite these events, the directors confirm that they have a reasonable expectation that
the Group will be able to continue in operation and meet its liabilities as they fall due for the
foreseeable future.
Should the underlying assumptions of the working capital model prove invalid and the Group be
unable to continue as a going concern it may be required to realise its assets and discharge its liabilities
other than in the normal course of business and at amounts different to those stated in the financial
statements. The financial statements do not include any adjustments relating to the recoverability and
classifications of recorded asset amounts or liabilities that may be necessary should the Group and
Company be unable to continue as a going concern.
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.
Consolidation
The consolidated financial statements include the financial statements of the Company and its
subsidiary undertakings; Thread 35 Limited has a reporting date of 31 March.
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.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
2 Significant accounting policies (continued)
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 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 restated 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.
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 recognised 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:
• monetary 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
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
2 Significant accounting policies (continued)
• 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 recognised in the income statement as
part of the gain or loss on sale.
Changes in accounting policies and disclosures
The accounting policies adopted are consistent throughout the financial period. Standards and
amendments to UK adopted international accounting standards (IFRSs) effective as of 1 April 2022
have been applied by the Group.
Adoption of new and revised standards
During the financial year, the Group has adopted the following new IFRSs (including amendments
thereto) and IFRIC interpretations, that became effective for the first time.
Standard
Reference to the Conceptual Framework (Amendments to IFRS 3 Business
Combinations)
Property, Plant and Equipment: Proceeds before Intended Use
(Amendments to IAS 16)
Onerous Contracts – Cost of Fulfilling a Contract (Amendments to IAS 37
Provisions, Contingent Liabilities and Contingent Assets)
Annual improvements 2018-2020 cycle
Effective date, annual
period beginning on or
after
1 January 2022
1 January 2022
1 January 2022
1 January 2022
Their adoption has not had any material impact on the disclosures or amounts reported in the financial
statements.
Standards issued but not yet effective:
At the date of authorisation of these financial statements, the following standards and interpretations
relevant to the Group and which have not been applied in these financial statements, were in issue
but were not yet effective.
Standard
Disclosure of Accounting Policies (Amendments to IAS 1 Presentation of
Financial Statements and IFRS Practice Statement 2 Making Materiality
Judgements)
Definition of Accounting Estimates (Amendments to IAS 8 Accounting
Policies, Changes in Accounting Estimates and Errors)
Deferred Tax related to Assets and Liabilities arising from a Single
Transaction (Amendments to IAS 12 Income Taxes)
Effective date, annual
period beginning on or
after
1 January 2023
1 January 2023
1 January 2023
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
2 Significant accounting policies (continued)
The Directors have assessed the full impact of these accounting changes on the Company. To the
extent that they may be applicable, the Directors have concluded that none of these pronouncements
will cause material adjustments to the Group’s Financial Statements. They may result in consequential
changes to the accounting policies and other note disclosures. The new standards will not be early
adopted by the Group and will be incorporated in the preparation of the Group Financial Statements
from the effective dates noted above.
The directors anticipate that the adoption of these standards and interpretations in future periods
will have no material effect on the financial statements of the group.
The Directors have taken advantage of the exemption available under Section 408 of the Companies
Act 2006 and not presented an income statement nor a statement of comprehensive income for the
Company alone.
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 year 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. The key areas identified by the Group are as
follows:
Inventories
Inventories are valued at the lower of cost and net realisable value, on a weighted average cost basis.
Net realisable 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 £387k at 31 March 2023 (2022: £761k). A difference of 1%pt in the provision as a
percentage of gross inventory would give rise to a difference of +/- £124k in gross profit (2022: +/-
£81k).
Contract liabilities - 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 refunds totalled £2,617k (2022 refund
accrual: £2,029k) and a right to returned goods asset recognised of £1,113k (2022: £814k). A
performance obligation is deemed for returns and refunds. A 14 days return policy is noted for a full
refund through Sosandar.com and up to 30 days on third party retailer websites. A difference of 1%pt
in the sales returns rate have an impact of +/- £134k (2022: +/- £92k) on the refund provision, and +/-
£60k (2022: +/- £38k) on the right to returned goods asset.
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DocuSign Envelope ID: F157EA5B-0170-4140-BFAA-A45DA74C4291
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
2 Significant accounting policies (continued)
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 17.
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.
Revenue recognition
Revenue is recognised at the point where legal title in the goods passes from the Group to the
customer. This includes the price paid for the goods as well as any delivery charge where applicable.
Typically legal title is passed when the goods are despatched from the warehouse and as the invoice
is created.
Revenue is reported after making deduction for actual and anticipated returns, relevant vouchers and
sales taxes.
Revenue is generated both on Sosandar’s own website, and through third party partners. No
breakdown of revenue can be made in tabular form as all sales are UK and online, with similar risk
profiles.
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 of assets less their residual values over their
useful economic lives. The estimated useful economic life of intangible assets has been revised to 5
years. For any assets older than this with a net book value at year end, the amortisation has been
accelerated to make the net book value nil at the end of the financial year.
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.
2 Significant accounting policies (continued)
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
2 Significant accounting policies (continued)
Depreciation on property, plant and equipment is calculated using the straight-line and reducing
balance methods to write off their cost over their estimated useful lives at the following annual rates:
15% Straight line
Plant and Machinery
33.33% Straight line
Computer Equipment
15% Reducing balance
Fixture and Fittings
25% Reducing balance
Office Equipment
Leasehold Improvements
20% Straight line
Right of Use Asset 20% Straight line
Investments
In order to assess the impairment of the investment in the subsidiary, the Directors use a value in use
calculation.
The key assumptions used for the value in use calculation for the year ended 31 March 2023 were as
follows:
Discount rate
Returns assumption
Compound annual revenue growth rate
2023
%
11
45
20
2022
%
11
45
20
The Directors have made significant estimates on future revenues and EBITDA growth in future 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.
Equity
Equity instruments issued by the Group are recorded at the value of the proceeds received, net of
direct issue costs, allocated between share capital and share premium.
Impairment of non-financial assets
At each statement of financial position date, the Group 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 Group estimates the recoverable amount of the
cash-generating unit to which the asset belongs.
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.
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DocuSign Envelope ID: F157EA5B-0170-4140-BFAA-A45DA74C4291
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
2 Significant accounting policies (continued)
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 revalued 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.
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.
Deferred tax
Deferred tax is recognised 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 recognised for all taxable temporary differences and deferred tax assets are recognised 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 recognised 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.
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DocuSign Envelope ID: F157EA5B-0170-4140-BFAA-A45DA74C4291
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
2 Significant accounting policies (continued)
Share-based compensation
The Group has issues equity-settled share-based payments to employees. The fair value of the
employee and suppliers’ services received in exchange for the grant of the options is recognised 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 other reserves within 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 taking 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.
Pension costs
The Group contributes to a defined contribution scheme for employees. The costs of these
contributions are charged to the statement of comprehensive income on an accruals basis as they
become payable under the scheme rules.
Investments
Investments in subsidiary companies are stated at cost less any provision for impairment. Investments
are accounted for at cost unless there is evidence of a permanent diminution in value, in which case
they are written down to their estimated realisable value. Any such provision, together with any
realised gains and losses, is included in the statement of comprehensive income.
Impairment of investments
The impairment of the carrying value of the investment in subsidiaries is calculated using forward-
looking assumptions of profit growth rates, discount rates and timeframe which require management
judgement and estimates that cannot be certain. Note 11 contains the assumptions made by
management.
Provisions
Provisions are recognised 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.
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DocuSign Envelope ID: F157EA5B-0170-4140-BFAA-A45DA74C4291
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
2 Significant accounting policies (continued)
Non-derivative financial instruments are recognised 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 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 the 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 amortised 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 transaction price and subsequently measured
at their cost when the contractual right to receive cash or other financial assets from another entity
is established.
Trade receivables are considered past due when they have passed their contracted due date. Trade
receivables are assessed for impairment based upon the expected credit losses model. The Group
applies the IFRS 9 Simplified Approach to measuring expected credit losses using a lifetime expected
credit loss provision for trade receivables. To measure, expected credit losses on a collective basis are
grouped based on similar credit risk and aging.
Financial assets and liabilities
The Group classifies its financial assets at inception as measured at amortised cost. The Group
classifies its financial liabilities, other than financial guarantees and loan commitments, as measured
at amortised cost. Management determines the classification of its investments at initial recognition.
A financial asset or financial liability is measured initially at fair value. At inception transaction cost
that are directly attributable to its acquisition or issue, for an item not at fair value through profit or
loss, is added to the fair value of the financial asset and deducted from the fair value of the financial
liability.
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DocuSign Envelope ID: F157EA5B-0170-4140-BFAA-A45DA74C4291
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
2 Significant accounting policies (continued)
Amortised cost measurement
The amortised cost of a financial asset or financial liability is the amount at which the financial asset
or liability is measured at initial recognition, minus principal payments, plus or minus the cumulative
amortisation using the effective interest method of any difference between the initial amount
recognised and maturity amount, minus any reduction for impairment.
Fair value measurement
Fair value is the amount for which an asset could be exchanged, or a liability settled, between
knowledgeable, willing parties in an arm’s length transaction on the measurement date. The fair value
of assets and liabilities in active markets are based on current bid and offer prices respectively. If the
market is not active the group establishes fair value by using appropriate valuation techniques. These
include the use of recent arm’s length transactions, reference to other instruments that are
substantially the same for which market observable prices exist, net present value and discounted
cash flow analysis.
Derecognition
Financial assets are derecognised when the rights to receive cash flows from the financial assets have
expired or where the group has transferred substantially all of the risks and rewards of ownership.
In transaction in which the group neither retains nor transfers substantially all the risks and rewards
of ownership of a financial asset and it retains control over the asset, the group continues to recognise
the asset to the extent of its continuing involvement, determined by the extent to which it is exposed
to changes in the value of the transferred asset. There have not been any instances where assets have
only been partly derecognised. The group derecognises a financial liability when its contractual
obligation are discharge, cancelled or expire.
Impairment losses from contracts with customers
The Group assesses at each financial position date whether there is objective evidence that a financial
asset or group of financial assets is impaired. If there is objective experience (such as significant
financial difficulty of obligor, breach of contract, or it becomes probable that debtor will enter
bankruptcy), the asset is tested for impairment. The amount of the loss is measured as the difference
between the asset’s carrying amount and the present value of the estimated future cash flows
(excluding future expected credit losses that have not been incurred) discounted at the financial
asset’s original effective interest rate (that is, the effective interest rate computed at initial
recognition). The carrying amount of the asset is reduced through use of an allowance account. The
amount of loss is recognised in the Statement of Comprehensive Income.
Leases
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities
include the net present value of the following lease payments:
•
fixed payments (including in-substance fixed payments), less any lease incentives receivable
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be
determined, the lessee’s incremental borrowing rate is used, being the rate that the lessee would have
to pay to borrow the funds necessary to obtain an asset of similar value in a similar economic
environment with similar terms and conditions.
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DocuSign Envelope ID: F157EA5B-0170-4140-BFAA-A45DA74C4291
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
2 Significant accounting policies (continued)
Right-of-use assets are measured at cost comprising the following:
the amount of the initial measurement of lease liability
•
• any lease payments made at or before the commencement date less any lease incentives
received
• any initial direct costs, and
•
restoration costs.
Payments associated with short-term leases and leases of low-value assets are recognised on a
straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12
months or less. Low-value assets comprise IT-equipment and small items of office furniture less than
£5k.
3 Revenue
The directors have considered the requirement of IFRS 15 with regards to disaggregation of revenue
and do not consider this to be required as the group only has one operating segment which is retail
sales.
The income recognition for delivery receipts, commissions on partner-fulfilled sales and wholesale
revenue are in line with that of retail sales and linked to dispatch/delivery to customers.
Due to the nature of its activities, the group is not reliant on any individual major customers.
There is one geographical market being the UK.
4 Operating loss
Operating loss is stated after charging/(crediting):
Operating lease rentals
Auditors’ remuneration:
Audit fee – group and company
Legal and other fees
Foreign currency loss
Share based payment
5 Finance cost
Interest on the lease
Other interest
Total
31 March
2023
£'000
31 March
2022
£'000
86
54
155
190
311
24
44
167
48
255
31 March
2023
£'000
40
-
40
31 March
2022
£'000
4
4
8
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DocuSign Envelope ID: F157EA5B-0170-4140-BFAA-A45DA74C4291
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
6 Employees
Aggregate Directors’ emoluments including consulting fees
Wages and salaries
Social security costs
Pension costs
Share-based payments
Total
Directors
Staff
Total
Directors’ remuneration
31 March
31 March
2023
£'000
752
2,571
353
148
311
4,135
31 March
2023
£'000
8
70
78
2022
£'000
629
1,641
230
94
255
2,849
31 March
2022
£'000
8
45
53
Details of emoluments received by Directors of the Group for the year ended 31 March 2023 are as
follows:
2023
Base
Salary
£
199,583
199,583
139,583
38,019
30,692
30,000
25,000
30,000
29,230
17,500
739,190
2023
Pensions
2023
Other
Benefits
2023
Total
2022
Total
£
19,633
19,633
10,438
-
-
-
-
-
-
-
49,704
£
3,351
3,705
1,757
-
-
-
-
-
-
-
8,813
£
222,567
222,921
151,778
38,019
30,692
30,000
25,000
30,000
29,230
17,500
797,707
£
186,300
186,300
128,132
39,750
28,500
39,000
28,500
28,500
-
-
664,982
Alison Hall
Julie Lavington
Steve Dilks
Bill Murray
Nicholas Mustoe
Adam Reynolds
Mark Collingbourne
Andrew Booth
Jonathan Wragg
Lesley Watt
Total
Details of the share options held by each Director can be found in the Group Directors’ Report on
pages 32-33.
The key management personnel are deemed to be the directors.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
7 Income tax
a) Analysis of charge in the period
Deferred tax
Origination and reversal of timing differences
Total deferred tax charge/(credit)
b) Factors affecting the tax charge for the period
Loss on ordinary activities before taxation
Tax at the UK corporation tax rate of 19% (2022: 19%)
Expenses not deductible for tax purposes
Fixed asset differences
Remeasurement of deferred tax for changes in tax rates
Movement in deferred tax not recognised
Tax on loss on ordinary activities
31 March
2023
£'000
31 March
2022
£'000
(284)
(284)
(412)
(412)
31 March
2023
£'000
1,597
303
31 March
2022
£'000
(554)
(105)
60
(15)
(63)
(569)
(284)
60
(2)
(1,256)
890
(412)
The Chancellor confirmed in the Spring Budget on 15 March 2023 that the rate of corporation tax will
increase from 19% to 25% from 1 April 2023, as originally planned in the 2021 Budget. From the same
date a small companies’ rate of 19% will be introduced for companies with profits of £50,000 or less.
The main rate applies to companies with profits over £250,000 and marginal relief will apply to for
profits in between the thresholds.
The unrecognised deferred tax asset amounts to £4,073k (2022: £4,693k) and has been calculated at
the tax rate of 25%.
The deferred tax asset of £696k (2022: £412k) has been recognised due to the expectation that it will
be reversed in future years.
8 Earnings/(loss) per share
Basic earnings/(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 year:
Profit / (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 earnings/(loss) per share (pence)
Diluted earnings/(loss) per share (pence)
31 March
2023
31 March
2022
1,881
224,738,344
252,499,241
0.84
0.74
(142)
216,844,739
216,844,739
(0.07)
(0.07)
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
8 Earnings/(loss) per share (continued)
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. For the prior year loss per
share, the share options outstanding as at 31 March 2022 totalled 27,760,897 and were potentially
dilutive.
9 Intangible assets – Group
Cost
At 1 April 2021
Additions
At 31 March 2022
Amortisation
At 1 April 2021
Charge for the year
At 31 March 2022
Carrying value 31 March 2022
Cost
At 1 April 2022
At 31 March 2023
Amortisation
At 1 April 2022
At 31 March 2023
Carrying value 31 March 2023
Website
£’000
Trademark
£’000
Total
£’000
228
-
228
31
197
228
-
228
228
228
228
-
2
-
2
1
1
2
-
2
2
2
2
-
230
-
230
32
198
230
-
230
230
230
230
-
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
10 Property, plant and equipment – Group
Computer
Equipment
£’000
Fixtures
and
fittings
equipment
£’000
Right of
use
asset
£’000
Assets
under
Construction
Total
£’000 £’000
93
30
123
58
27
85
38
123
68
191
85
34
119
72
306
6
312
218
38
256
56
312
280
592
256
53
309
283
192
364
556
150
54
204
352
556
380
936
204
148
352
584
-
-
-
-
-
-
-
591
400
991
426
119
545
446
991
-
780
52
52 1,771
-
-
-
52
545
235
780
991
Company
2023
£’000
7,128
305
7,432
-
-
-
7,432
Restated 2022
£’000
6,878
250
7,128
-
-
-
7,128
Cost
At 1 April 2021
Additions
At 31 March 2022
Accumulated depreciation
At 1 April 2021
Charge for year
At 31 March 2022
Carrying value 31 March 2022
Cost
At 1 April 2022
Additions
At 31 March 2023
Accumulated depreciation
At 1 April 2022
Charge for year
At 31 March 2023
Carrying value 31 March 2023
11 Non-current assets
Investments in subsidiaries:
Cost at 1 April
Additions during the year
Cost at 31 March
Impairment at 1 April
Disposals during the year
Impairment at 31 March
Carrying value as at 31 March
A prior period adjustment was made during the year to take the share-based payments charge related
to employees of Thread 35 Limited through the subsidiary P&L rather than that of the parent. This was
treated as a capital contribution in the subsidiary and an increase in investment value of the subsidiary
in the parent company.
Investments are tested for impairment at the balance sheet date. There were no investments held by
the group. The recoverable amount of the investment in Thread 35 Ltd as at 31 March 2023 was
assessed on the basis of value in use. As this exceeded carrying value no impairment loss was
recognised.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
11 Non-current assets (continued)
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 were for the next 9 years and included terminal value. 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 for the year ended 31 March 2023 are
disclosed in note 2, Critical accounting judgements and key sources of estimation uncertainty on page
53.
The subsidiaries of Sosandar Plc are as follows:
Subsidiary companies
Incorporation
Holding
Type of share held
%
Holding
2023
%
Holding
2022
Thread 35 Limited
UK
Direct
Ordinary shares
100
100
The registered office of Thread 35 Limited is 40 Water Lane, Wilmslow, SK9 5AP.
12 Inventories – Group
Stock – finished goods
Right to returned stock
Total
31 March
2023
£'000
11,251
1,110
12,361
31 March
2022
£'000
6,493
814
7,307
The cost of inventories charged in the year as an expense equated to £18,614k (2022: £12,962k). Right
to returned stock relates to the cost of products sold in the financial year but expected to be returned
after the financial period.
13 Loans to subsidiaries
Loan to subsidiary
Group
Company
2023
£’000
-
2022
£’000
-
2023
£’000
-
2022
£’000
-
The loan made to Thread 35 Limited by Sosandar Plc of £26,470k (2022: £23,047k) was fully impaired
at the year end.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
14 Trade and other receivables
Trade receivables
VAT recoverable
Other receivables
Prepayments
Trade and other receivables
Group
Company
2023
£’000
1,973
23
86
648
2,730
2022
£’000
1,683
16
329
467
2,495
2023
£’000
-
23
-
-
23
2022
£’000
-
16
-
18
34
The Directors consider that the carrying amount of trade and other receivables approximates their fair
value.
Trade receivables are considered past due when they have passed their contracted due date. Trade
receivables are assessed for impairment based upon the expected credit losses model. The Group
applies the IFRS 9 Simplified Approach to measuring expected credit losses using a lifetime expected
credit loss provision for trade receivables. To measure, expected credit losses on a collective basis are
grouped based on similar credit risk and aging.
At 31 March 2023 there were 7 customers who owed in excess of 80% of the total trade debtor
balance. These customers were operating within their credit terms and the directors do not foresee
an increased credit risk associated with these customers. As such no impairment provision has been
recognised on trade debtors.
Expected credit losses have been recognised in the parent company on the loan to the subsidiary.
31/03/2023 Note
External
credit
rating
Internal
credit
rating
12 month or
lifetime ECL
Gross
carrying
amount
Loss
allowance
Net
carrying
amount
Loans to
subsidiaries
13
N/A
Doubtful
Lifetime
26,471
(26,471)
-
£'000
£'000
£'000
15 Cash and cash equivalents
Cash at bank
Group
Company
2023
£’000
10,577
2022
£’000
7,048
2023
£’000
5,119
2022
£’000
3,399
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
16 Share capital and reserves
Details of ordinary shares issued are in the table below:
Ordinary Shares (£0.01)
Number of
shares
Issue
Price
£
221,408,332 0.001
26,818,181 0.001
Total Share
Capital
£’000
221
27
248,226,513 0.001
248
Total Share
Premium
£’000
47,089
5,873
(343)
52,619
At 31 Mar 2022
Shares issued: Fundraise Feb 2023
Direct costs: Fundraise Feb 2023
At 31 Mar 2023
17 Share based payments
Share option plans
The Group has a share ownership compensation scheme for Directors and senior employees of the
Group. On 2nd November 2017 share options over ordinary shares of 15.1p were issued with a further
issue over ordinary shares of 29.1p issued on 25th February 2019. On 21 June 2021 the Group
announced the establishment of a new Long Term Incentive Plan in which it granted new nil cost
options totalling 21,431,942 ordinary shares of 0.1 pence each to its executive directors and members
of the senior management team. Some of the existing options granted, totalling 13,888,742 ordinary
shares, were modified as part of these arrangements. There was no incremental fair value because of
this modification.
The options are settled in equity once exercised. If the options remain unexercised for a period after
ten years from the date of grant, the options expire.
Details of the number of share options and the weighted average exercise price (“WAEP”)
outstanding during the period are as follows:
Outstanding at 31 March 2022
Modifications in the year
Issuances in the year
Cancellations in the year
Outstanding at 31 March 2023
31 March 2023
31 March 2022
Number (‘000)
27,761
-
-
-
-
27,761
WAEP £
0.035
-
-
-
-
0.035
Number (‘000) WAEP £
0.154
20,218
0.154
(13,889)
0.000
11,789
0.000
9,643
-
-
0.154
27,761
Exercisable at 31 March 2023
18,118
0.035
14,682
0.154
The options outstanding at 31 March 2023 had a weighted average exercise price of £0.035 and a
weighted average remaining contractual life of 7.59 years.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
17 Share based payments (continued)
The fair values of options granted prior to 2021 were calculated using the Black Scholes pricing model.
The fair values of the options granted in June 2021 were calculated using the Monte Carlo model. The
Group used historical data to estimate expected period to exercise, within the valuation model.
Expected volatilities of options outstanding granted prior to the Company’s admission to AIM were
based on implied volatilities of a sample of listed companies based in similar sectors. The risk-free rate
for the expected period to exercise of the option was based on the UK gilt yield curve at the time of
the grant.
The Group recognised a charge of £311k (2022: £255k) related to equity-settled share-based payment
transactions during the year. Of this, the charge recognised in the subsidiary, Thread 35 Ltd, was £305k
(2022: £250k).
The assumptions used in the valuation of the options at the grant date are as follows. There were no
new share issues in the year.
Exercise price
Share price at date of grant
Risk-free rate
Volatility
Expected Life
Fair Value
18 Trade and other payables
Trade payables
Accruals
Other payables
VAT payable
Contract liabilities
Deferred income
Trade and other payables
Share options
2022
0.0p
23.75p
0.25%
42%
5 years
0.13
Share options
2020
29.1p
29.1p
0.25%
25%
10 years
0.07
Share options
2018
15.1p
15.1p
0.25%
25%
10 years
0.05
Group
Company
2023
£’000
3,694
549
384
1,077
2,617
34
8,355
2022
£’000
2,869
656
269
856
2,029
82
6,761
2023
£’000
20
36
-
-
-
2022
£’000
22
30
-
-
-
56
52
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
19 Leases
The Group has a property lease contract which is used in its day to day operations.
Lease liability brought forward
Additions
Finance cost
Lease payments
Lease liability recognised in statement of financial position
Of which
Current lease liabilities
Non-current lease liabilities
Lease liability recognised in statement of financial position
31 March
2023
£’000
327
380
40
(117)
630
31 March
2022
£’000
49
345
4
(71)
327
31 March 31 March
2022
£’000
2023
£’000
148
482
630
38
289
327
Both leases have a term of five years with a break clause after three years. On 1 April 2022, the Group
entered into a second property lease in Wilmslow, England in order to expand its office space.
20 Related party transactions
During the year to 31 March 2023 the Group was charged £10k (2022: £39k) for services provided by
Reyco Limited, a company controlled by A Reynolds. There was no amount outstanding at the balance
sheet date (2022: £nil).
During the year to 31 March 2023 the Group was charged £28k (2022: £29k) for services provided by
Morrison Kingsley Consultants Limited, a company controlled by M Collingbourne. There was no
amount outstanding at the balance sheet date (2022: £3k).
During the year to 31 March 2023 the Group was charged £14k (2022: £40k) for services provided by
Bill Murray and Associates, a company controlled by B Murray. There was no amount outstanding at
the balance sheet date (2022: £nil).
During the year to 31 March 2023 the Group was charged £10k (2022: £29k) for services provided by
N Mustoe. There was £nil outstanding at the balance sheet date (2022: £10k).
During the year to 31 March 2023 the Group was charged £9k (2022: £29k) for services provided by
Skale Limited, a company controlled by A Booth. There was no amount outstanding at the balance
sheet date (2021: £3k).
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
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
Group’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 whether there is a requirement for foreign currency on a monthly basis. The
Group considers this policy minimises 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.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
21 Financial instruments – risk management (continued)
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 ongoing commitments prior to
being satisfied that sufficient funding is available to the Group to finance the planned programmes.
For cash and cash equivalents, the Group only uses recognised banks with medium to high credit
ratings.
The maturity of borrowings and other financial liabilities (representing undiscounted contractual cash-
flows) is as follows:
As at 31 March 2023
Trade and other payables
Lease liabilities
Total
As at 31 March 2022
Trade and other payables
Lease liabilities
Total
Group
Company
Within 1
Within 1 year
£’000
18 8,073
19 148
8,221
1-2 years
£’000
year 1-2 years
£’000
£’000
- 56
-
- -
485
-
56
485
Group
Company
Within 1
Within 1 year
£’000
18 6,761
19 38
6,799
1-2 years
£’000
year 1-2 years
£’000
£’000
-
- 52
- -
-
289
289 52
Financial assets
At the reporting date, the Group held the following financial assets, all of which were classified as
financial assets at amortised cost:
Cash and cash equivalents
Trade & other receivables*
Total
*excluding prepayments
Group
Company
31 March 31 March
2022
£’000
7,048
2,027
9,075
2023
£’000
10,576
2,081
12,657
31 March
2023
£’000
5,122
23
5,145
31 March
2022
£’000
3,399
34
3,433
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
21 Financial instruments – risk management (continued)
Financial liabilities
At the reporting dates, the Group held the following financial liabilities, all of which were classified
as other financial liabilities at amortised cost:
Trade payables
Accruals
Other payables
Contract liabilities
Lease liabilities
Group
Company
31 March 31 March
2022
£’000
2023
£’000
31 March
2023
£’000
31 March
2022
£’000
3,694
549
384
2,617
633
2,869
656
269
2,029
327
20
36
-
-
-
22
30
-
-
-
Trade and other payables
7,877
6,150 56
52
*excluding VAT
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 Net cash
The below table shows the Group’s cash position less lease liabilities.
Cash
flow Additions
Accrued
interest
charges
£'000
£'000
At 31
March
2023
£'000
-
(380)
(380)
-
10,459
(40)
(40)
(630)
9,830
£'000
3,411
117
3,528
At 1
April
2022
£'000
7,048
(327)
6,721
Cash and cash equivalents
Lease liabilities
Net cash (excluding lease liabilities)
23 Post balance sheet events
There were no post balance sheet events.
24 Contingent liabilities
The Company and Group has no contingent liabilities.
25 Ultimate controlling party
There is no ultimate controlling party of the Company.
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Registered office
COMPANY INFORMATION
40 Water Lane,
Wilmslow, Cheshire,
England SK9 5AP
Registered number
05379931, England and Wales
Directors
Nicholas Mustoe – Non-Executive Chairman
Alison Hall – Joint CEO
Julie Lavington – Joint CEO
Stephen Dilks - CFO
Nicholas Mustoe – Non-Executive Director
Adam Reynolds – Non-Executive Director
Andrew Booth – Non-Executive Director
Jonathan Wragg – Non-Executive Director
Lesley Watt – Non-Executive Director
Stephen Dilks
Saffery Champness LLP
Trinity
16 John Dalton Street
Manchester, M2 6HY
Singer Capital Markets Advisory LLP
1 Bartholomew Lane
London
EC2N 2AX
United Kingdom
Singer Capital Markets Advisory LLP
1 Bartholomew Lane
London
EC2N 2AX
United Kingdom
Share Registrars Limited
The Courtyard
17 West St
Farnham
GU9 7DR
BPE Solicitors LLP
St. James’ House
St. James’ Square
Cheltenham GL50 3PR
Alma PR
71-73 Carter Lane
London EC4V 5EQ
Secretary
Auditors
Nominated advisor
Broker
Registrars
Solicitors
Public Relations
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