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Registration number: 12286852

Nirvana Brands Ltd

Annual Report and Financial Statements

for the Year Ended 31 March 2023

 

Nirvana Brands Ltd

Contents

Company Information

1

Strategic Report

2

Directors' Report

3 to 4

Statement of Directors' Responsibilities

5

Independent Auditor's Report

6 to 8

Income Statement

9

Balance Sheet

10

Statement of Changes in Equity

11

Statement of Cash Flows

12

Notes to the Financial Statements

13 to 22

 

Nirvana Brands Ltd

Company Information

Directors

Mr D B Mehta

Mrs C D Mehta

Mr A D Mehta

Ms N D Mehta

Registered office

Amertrans Park
Bushey Mill Lane
Watford
Hertfordshire
WD24 7JG

Auditors

Cameron & Associates Limited
The Hour House
32 High Street
Rickmansworth
Hertfordshire
WD3 1ER

 

Nirvana Brands Ltd

Strategic Report for the Year Ended 31 March 2023

The directors present their strategic report for the year ended 31 March 2023.

Principal activity

The principal activity of the company is the wholesale of perfume and cosmetics.

Review of the business

Turnover in the year increased to £16.4m (2022: £14.6m), however there was a decrease in the gross margin that dropped from £9.7m to £6.9m in 2023. This has been driven by a fundamental change in the company’s strategy, to sell directly to retailers opposed to using distributors and charging a commission as this is more sustainable and profitable in the longer-term.

In terms of the other key performance indicator (KPI) the profit before tax, this decreased to £3.5m from £7.8m. In addition to the reduction of margin as noted above administration expenses relating principally to advertising increased in the year by £1.3m, due to the change in strategy.

Principal risks and uncertainties


Risk management
The Directors of the Company and other senior managers are responsible, under delegated authority from the Board, for reviewing the Company's risk position and ensuring appropriate risk mitigation is in place. In carrying out this role, the Directors review detailed management reports on a regular basis. The principal risks the business faces are:

Finance, funding and liquidity risk
The Company runs a tight business model collecting monies due in a tight time frame, but there is a risk of trading without adequate financial resources, this is mitigated by maintaining adequate cash balances. The Company also has the ability to seek bank financing if required.

Credit risk
Credit risk is mitigated through credit control and applying adequate credit limits to customer accounts. Every new customer undergoes a credit search and KYC process before a credit limit is assigned, existing customers are also reviewed.

Exchange rate risk
This is mitigated by holding USD and EURO bank accounts, and paying suppliers in their own currencies as far as possible. Care is taken when trading in any necessary foreign currencies, to effectively ensure that favourable rates are achieved. The company operates a very good natural hedge with little surplus, therefore, there is little need to transact spot or forward trades.

Changes in economic conditions which could have a material adverse effect on the level of demand
The demand for many of the company's products is widely linked to economic conditions, both globally and in the particular countries in which the company operates. A consequence of depressed economic conditions, which includes a downturn in the economies of the company's market countries, would result in an adverse demand for, and pricing of, the company's products which could result in reduced sales and reduced profits. The company monitors economic conditions and order books carefully and can respond quickly by reducing stock and overheads if conditions change reducing demand for the company's products.

Approved and authorised by the Board on 9 October 2023 and signed on its behalf by:
 

.........................................
Mr D B Mehta
Director

 

Nirvana Brands Ltd

Directors' Report for the Year Ended 31 March 2023

The directors present their report and the financial statements for the year ended 31 March 2023.

Directors of the company

The directors who held office during the year were as follows:

Mr D B Mehta

Mrs C D Mehta

Mr A D Mehta

Ms N D Mehta

Financial instruments

The Company's financial instruments consist of cash, trade receivables and trade payables. The carrying value of these are recorded at amortised cost. Their contractual maturities are less than one year.

The Company did not have any borrowings as at 31 March 2023, other than an interest free loan from its ultimate controlling party of £1m.

The main risks arising from the Company’s financial instruments are liquidity risk, credit risk, and foreign exchange risk.

The Company maintains sufficient cash balances to fund its working capital requirements, and is developing relationships with its suppliers to further aid its working capital. The Company regularly credit checks its customers. All debtors are regularly communicated with, and followed up to ensure debts owed are paid within credit terms. In relation to foreign exchange risk the Company maintains cash balances as far as possible in the currencies in which sales and purchases are made in order to mitigate foreign exchange risk.

Share capital details of the Company’s issued share capital, are set out in note 19. There is at present only one Ordinary share in issue, which is fully paid and has full voting rights with no restrictions.

Donations

The Company made no political donations in the year (2022: £25,000), charitable donations were made of £4,350 (2022: £Nil).

Future developments

The Directors expect the market to remain competitive in the current climate, future planning of operations is key to the ongoing success of the Company. The Directors are planning strategies to move the Company forward and are confident in the future growth of the Company.

Going concern

The financial statements are compiled on a going concern basis and prepared on the historical cost basis.

After making enquiries, the Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. For this reason they continue to adopt the going concern basis in preparing the financial statements. The Company's cash resources are managed on a Group basis. Working capital forecasts have been prepared for the Group up to 31 December 2024, which demonstrate that the Company and Group has sufficient resources to continue in operational existence for the foreseeable future. The forecasts have been sensitised to take into account the current uncertain outlook, due to rising inflationary pressures and world outlook.

Disclosure of information to the auditors

Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditors are aware of that information. The directors confirm that all relevant information in relation to the audit has been given to the auditors.

 

Nirvana Brands Ltd

Directors' Report for the Year Ended 31 March 2023 (continued)

Reappointment of auditors

The auditors Cameron & Associates Limited are deemed to be reappointed under section 487(2) of the Companies Act 2006.

Approved and authorised by the Board on 9 October 2023 and signed on its behalf by:
 

.........................................
Mr D B Mehta
Director

 

Nirvana Brands Ltd

Statement of Directors' Responsibilities

The directors acknowledge their responsibilities for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

select suitable accounting policies and apply them consistently;

make judgements and accounting estimates that are reasonable and prudent;

state whether applicable United Kingdom Accounting Standards have been followed, 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 company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

 

Nirvana Brands Ltd

Independent Auditor's Report to the Members of Nirvana Brands Ltd

Opinion

We have audited the financial statements of Nirvana Brands Ltd (the 'company') for the year ended 31 March 2023, which comprise the Income Statement, Balance Sheet, Statement of Changes in Equity, Statement of Cash Flows, and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

give a true and fair view of the state of the company's affairs as at 31 March 2023 and of its profit for the year then ended;

have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

have been prepared in accordance with the requirements of the Companies Act 2006.

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 responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the original financial statements were 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. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinion on other matter 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 Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

the Strategic Report and 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 our knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report and the Directors' Report.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

 

Nirvana Brands Ltd

Independent Auditor's Report to the Members of Nirvana Brands Ltd (continued)

adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

the financial statements are not in agreement with the accounting records and returns; or

certain disclosures of 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 Statement of Directors' Responsibilities [set out on page 5], the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor Responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

We gained an understanding of the legal and regulatory framework applicable to the company and the industry in which it operates, and considered the risk of acts by the company that were contrary to applicable laws and regulations, including fraud. These included, but were not limited to compliance with Companies Act 2006 and accounting standards.

- We held discussions with management to understand the laws and regulations relevant to the company. These included elements of the significant laws and regulations relating to the industry, and financial reporting framework, in the UK;
- We held discussions with management to determine any known or suspected instances of non-compliance with laws and regulations or fraud identified by them;
- Testing the appropriateness of journal entries made through the year by applying specific criteria to detect possible irregularities and fraud;
- Performing a detailed review of the year-end adjusting entries and investigating any that appear unusual as to nature or amount and agreeing to supporting documentation;
- For significant and unusual transactions, particularly those occurring at or near year-end, obtaining evidence for the rationale of these transactions and the sources of financial resources supporting the transactions;
- Assessing the judgements made by management when making key accounting estimates and judgements, and challenging management on the appropriateness of these judgements;
- Reviewing minutes from meetings of those charges with governance to identify any instances of non-compliance with laws and regulations;

Communicating relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that 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, misrepresentations or through collusion.

There are inherent limitations in the audit procedures performed 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 are to become aware of it.

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.

 

Nirvana Brands Ltd

Independent Auditor's Report to the Members of Nirvana Brands Ltd (continued)

Use of our report

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

......................................
Rajinder Basra (Senior Statutory Auditor)
For and on behalf of Cameron & Associates Limited, Statutory Auditor

The Hour House
32 High Street
Rickmansworth
Hertfordshire
WD3 1ER

9 October 2023

 

Nirvana Brands Ltd

Income Statement for the Year Ended 31 March 2023

Note

2023
£

2022
£

Turnover

3

16,416,796

14,624,338

Cost of sales

 

(9,535,520)

(4,959,830)

Gross profit

 

6,881,276

9,664,508

Administrative expenses

 

(3,733,948)

(2,128,447)

Other operating income

4

314,716

272,547

Operating profit

5

3,462,044

7,808,608

Other interest receivable and similar income

6

1,076

-

Interest payable and similar expenses

7

(8,532)

(6,774)

   

(7,456)

(6,774)

Profit before tax

 

3,454,588

7,801,834

Tax on profit

11

(703,806)

(1,477,197)

Profit for the financial year

 

2,750,782

6,324,637

The above results were derived from continuing operations.

 

Nirvana Brands Ltd

(Registration number: 12286852)
Balance Sheet as at 31 March 2023

Note

2023
£

As restated
31 March
2022
£

Fixed assets

 

Tangible assets

12

148,840

135,750

Investments

13

10,820

10,820

 

159,660

146,570

Current assets

 

Stocks

14

7,546,608

3,449,254

Debtors

15

6,094,555

5,656,132

Cash at bank and in hand

16

828,446

2,936,683

 

14,469,609

12,042,069

Creditors: Amounts falling due within one year

17

(5,646,715)

(3,937,605)

Net current assets

 

8,822,894

8,104,464

Net assets

 

8,982,554

8,251,034

Capital and reserves

 

Called up share capital

19

1

1

Other reserves

(3,959,445)

(1,940,183)

Retained earnings

12,941,998

10,191,216

Shareholders' funds

 

8,982,554

8,251,034

Approved and authorised by the Board on 9 October 2023 and signed on its behalf by:
 

.........................................
Mr D B Mehta
Director

 

Nirvana Brands Ltd

Statement of Changes in Equity for the Year Ended 31 March 2023

Share capital
£

Other reserves
£

Retained earnings
£

Total
£

At 1 April 2022

1

(1,940,183)

10,191,216

8,251,034

Profit for the year

-

-

2,750,782

2,750,782

Other comprehensive income

-

(2,019,262)

-

(2,019,262)

Total comprehensive income

-

(2,019,262)

2,750,782

731,520

At 31 March 2023

1

(3,959,445)

12,941,998

8,982,554

Share capital
£

Other reserves
£

Retained earnings
£

Total
£

At 1 April 2021

1

-

3,866,579

3,866,580

Profit for the year

-

-

6,324,637

6,324,637

Other comprehensive income as restated

-

(1,940,183)

-

(1,940,183)

Total comprehensive income

-

(1,940,183)

6,324,637

4,384,454

At 31 March 2022

1

(1,940,183)

10,191,216

8,251,034

Share capital
Amount of the contributions made by shareholders in return for issue of shares at their nominal value.

Other reserve
Amount of proceeds paid to a fellow subsidiary as a capital contribution.

Retained earnings
Accumulated distributable profits of the company.
 

 

Nirvana Brands Ltd

Statement of Cash Flows for the Year Ended 31 March 2023

Note

2023
£

(As restated)

2022
£

Cash flows from operating activities

Profit for the year

 

2,750,782

6,324,637

Adjustments to cash flows from non-cash items

 

Depreciation and amortisation

5

20,092

10,786

Finance income

6

(1,076)

-

Finance costs

7

8,532

6,774

Corporation tax expense

11

703,806

1,477,197

Foreign exchange gains

 

(494,154)

(84,264)

 

2,987,982

7,735,130

Working capital adjustments

 

Increase in stocks

14

(4,097,354)

(3,449,254)

Decrease/(increase) in trade debtors

15

344,147

(4,072,240)

Increase in trade creditors

17

2,592,099

1,981,311

Cash generated from operations

 

1,826,874

2,194,947

Income taxes paid

11

(1,273,319)

(1,543,839)

Net cash flow from operating activities

 

553,555

651,108

Cash flows from investing activities

 

Interest received

6

1,076

-

Investment in subsidiaries

 

(2,019,262)

(1,919,105)

Acquisitions of tangible assets

12

(33,182)

(68,030)

Advances of loans

 

(782,713)

(491,378)

Net cash flows from investing activities

 

(2,834,081)

(2,478,513)

Cash flows from financing activities

 

Interest paid

7

(8,532)

(6,774)

Proceeds from other borrowing draw downs

 

-

1,000,000

Net cash flows from financing activities

 

(8,532)

993,226

Net decrease in cash and cash equivalents

 

(2,289,058)

(834,179)

Cash and cash equivalents at 1 April

 

2,936,683

3,656,385

Effect of exchange rate fluctuations on cash held

 

180,821

114,477

Cash and cash equivalents at 31 March

16

828,446

2,936,683

 

Nirvana Brands Ltd

Notes to the Financial Statements for the Year Ended 31 March 2023

1

General information

The company is a private company limited by share capital, incorporated in England and Wales.

The address of its registered office is:
Amertrans Park
Bushey Mill Lane
Watford
Hertfordshire
WD24 7JG

These financial statements were authorised for issue by the Board on 9 October 2023.

2

Accounting policies

Summary of significant accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Statement of compliance

These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland and the Companies Act 2006'.

Basis of preparation

These financial statements have been prepared using the historical cost convention except that as disclosed in the accounting policies certain items are shown at fair value.

Summary of disclosure exemptions

The Company has taken advantage of S400 CA2006, not to prepare group accounts as it is a wholly owned subsidiary of Nirvana Brands Holdings Ltd a company incorporated in England & Wales see note 22.

Going concern

The financial statements are compiled on a going concern basis and prepared on the historical cost basis.

After making enquiries, the Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. For this reason they continue to adopt the going concern basis in preparing the financial statements. The Company's cash resources are managed on a Group basis. Working capital forecasts have been prepared for the Group up to 31 December 2024, which demonstrate that the Group has sufficient resources to continue in operational existence for the foreseeable future. The forecasts have been sensitised to take into account the current uncertain outlook, due to rising inflationary pressures and world outlook.

Exemption from preparing group accounts

The Company has taken advantage of S400 CA2006, not to prepare group accounts as it is a wholly owned subsidiary of Nirvana Brands Holdings Ltd a company incorporated in England & Wales see note 22.

Reclassification of comparative amounts

The cash flow statement has been restated to reflect the advance of loans in the period of £491,378, which was previously classified within debtors. The balance sheet has been restated to reflect the capital contributions paid to a fellow subsidiary as a movement in reserves, the amount of £1,940,183 was previously classified within investments.

 

Nirvana Brands Ltd

Notes to the Financial Statements for the Year Ended 31 March 2023 (continued)

2

Accounting policies (continued)

Revenue recognition

Turnover comprises the fair value of the consideration received or receivable for the sale of goods and provision of services in the ordinary course of the company’s activities. Turnover is shown net of sales/value added tax, returns and discounts.

The company recognises revenue when:
The amount of revenue can be reliably measured;
it is probable that future economic benefits will flow to the entity;
and specific criteria have been met for each of the company's activities.

Foreign currency transactions and balances

The Company has prepared its financial statements in British Pound Sterling (£).

Transactions denominated in currencies other than the functional currency are recorded at the rate of exchange prevailing at the date of the transaction. Monetary assets and liabilities are translated into the relevant functional currency at the closing rates of exchange at the reporting date. Exchange differences arising from the reinstatement of monetary assets and liabilities at the closing rate of exchange at the reporting date or from the settlement of monetary transactions at a rate different from that at which the asset or liability was recorded are dealt with through the statement of profit or loss.

In the Company financial statements foreign exchange losses are recognised in the income statement.

Tax

The tax expense for the period comprises current tax. Tax is recognised in profit or loss, except that a change attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Group operates and generates taxable income.

Tangible assets

Tangible assets are stated in the balance sheet at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

Depreciation

Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:

Asset class

Depreciation method and rate

Furniture, fittings and equipment

15% reducing balance

Computer equipment

25% reducing balance

Investments

Investments in equity shares which are publicly traded or where the fair value can be measured reliably are initially measured at fair value, with changes in fair value recognised in profit or loss. Investments in equity shares which are not publicly traded and where fair value cannot be measured reliably are measured at cost less impairment.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.

 

Nirvana Brands Ltd

Notes to the Financial Statements for the Year Ended 31 March 2023 (continued)

2

Accounting policies (continued)

Trade debtors

Trade debtors are amounts due from customers for merchandise sold or services performed in the ordinary course of business.

Trade debtors are recognised initially at the transaction price. They are subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for the impairment of trade debtors is established when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of the receivables.

Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the weighted average method.

The cost of finished goods and work in progress comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. At each reporting date, stocks are assessed for impairment. If stocks are impaired, the carrying amount is reduced to its selling price less costs to complete and sell; the impairment loss is recognised immediately in profit or loss.

Trade creditors

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the company does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.

Trade creditors are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method.

Share capital

Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.

Defined contribution pension obligation

A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the company has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.

 

Nirvana Brands Ltd

Notes to the Financial Statements for the Year Ended 31 March 2023 (continued)

2

Accounting policies (continued)

Financial instruments


The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a
market rate of interest.

Financial assets classified as receivable within one year are not amortised.

Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method. Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

3

Turnover

The analysis of the company's revenue for the year from continuing operations is as follows:

2023
 £

2022
 £

Sale of goods

11,469,943

6,216,330

Commissions received

4,946,853

8,408,008

16,416,796

14,624,338

Sales of goods and services were made in the following geographical areas UK £2,144,811 (2022: £1,651,763), Europe £9,661,526 (2022: £5,643,460), Rest of the World £4,610,459 (2022: £7,329,115).

Included within turnover are sales to subsidiary companies of £605,695 (2022: £Nil).

 

Nirvana Brands Ltd

Notes to the Financial Statements for the Year Ended 31 March 2023 (continued)

4

Other operating income

The analysis of the company's other operating income for the year is as follows:

2023
 £

2022
 £

Other operating income

314,716

272,547

5

Operating profit

Arrived at after charging/(crediting)

2023
 £

2022
 £

Depreciation expense

20,092

10,786

Foreign exchange gains

(494,154)

(84,264)

6

Other interest receivable and similar income

2023
 £

2022
 £

Interest income

1,076

-

7

Interest payable

2023
 £

2022
 £

Interest payable

8,532

6,774

8

Staff costs

The aggregate payroll costs (including directors' remuneration) were as follows:

2023
 £

2022
 £

Wages and salaries

923,167

786,910

Social security costs

130,481

82,489

Pension costs

26,749

19,712

1,080,397

889,111

The average number of persons employed by the company (including directors) during the year, analysed by category was as follows:

2023
No.

2022
No.

Administration and support

7

3

Marketing

16

16

23

19

The assets of the defined contribution scheme are held separately from those of the company in an independently administered fund. Contributions amounting to £7,001 (2022: £10,065) were payable to the fund at year-end and are included within creditors.

 

Nirvana Brands Ltd

Notes to the Financial Statements for the Year Ended 31 March 2023 (continued)

9

Directors' remuneration

The directors' remuneration for the year was as follows:

2023
 £

2022
 £

Remuneration

240,000

70,000

Contributions to pension

4,403

1,676

244,403

71,676

10

Auditors' remuneration

2023
 £

2022
 £

Audit of the financial statements

19,000

10,000


 

11

Taxation

Tax charged in the income statement

2023
£

2022
£

Current taxation

UK corporation tax

703,806

1,477,197

The tax on profit before tax for this year and the prior year is higher than the standard rate of corporation tax in the UK of 19%.

The differences are reconciled below:

2023
£

2022
£

Profit before tax

3,454,588

7,801,834

Corporation tax at standard rate

656,372

1,482,348

Effect of expense not deductible in determining taxable profit

55,691

5,726

Decrease from adjustment for prior periods

(3,878)

-

Tax decrease from effect of capital allowances and depreciation

(4,379)

(10,877)

Total tax charge

703,806

1,477,197

 

Nirvana Brands Ltd

Notes to the Financial Statements for the Year Ended 31 March 2023 (continued)

12

Tangible assets

Fixtures and fittings
 £

Computer equipment
£

Total
£

Cost or valuation

At 1 April 2022

97,860

52,421

150,281

Additions

8,724

24,458

33,182

At 31 March 2023

106,584

76,879

183,463

Depreciation

At 1 April 2022

8,500

6,031

14,531

Charge for the year

8,631

11,461

20,092

At 31 March 2023

17,131

17,492

34,623

Carrying amount

At 31 March 2023

89,453

59,387

148,840

At 31 March 2022

89,360

46,390

135,750

13

Investments

2023
 £

2022
 £

Investments in subsidiaries cost or fair value

10,820

10,820

The subsidiary companies were acquired on incorporation at cost, the investment represents the cost of the share capital.

Details of undertakings

Details of the investments in which the company holds 20% or more of the nominal value of any class of share capital are as follows:

Undertaking

Registered office

Holding

Proportion of voting rights and shares held

     

2023

2022

Subsidiary undertakings

Nirvana Brands Inc

45 Park Avenue 1902, New York, NY 10016

United States of America

Ordinary shares

100%

100%

Nirvana Beauty GMBH

Kapellenstrabe 12a, 85622, Feldkirchen, Munchen

Germany

Ordinary shares

100%

100%

Nirvana Brands Canada Limited

94 Tomlinson Circle, Markham, Ontario, L3R 9J6

Canada

Ordinary shares

100%

100%

 

Nirvana Brands Ltd

Notes to the Financial Statements for the Year Ended 31 March 2023 (continued)

13

Investments (continued)

The principal activity of the subsidiaries is the sale of perfumes and cosmetics. The subsidiaries are consolidated in the accounts of Nirvana Brands Holdings Ltd incorporated in England & Wales, which owns 100% of the ordinary share capital of Nirvana Brands Ltd. Nirvana Brands Holdings Ltd acquired 100% of the shares in Nirvana Brands Ltd on 5 August 2021. The restructuring has been accounted for as a merger as it satisfies the criteria, accordingly the group accounts are being prepared by Nirvana Brands Holdings Ltd as parent of the group.

14

Stocks

2023
 £

2022
 £

Stock

7,546,608

3,449,254

15

Debtors

Current

2023
£

2022
£

Trade debtors

3,039,835

3,376,859

Amounts owed by subsidiary company

705,281

525,425

Amounts owed by related parties

1,083,481

491,378

VAT

133,757

-

Other debtors

876,491

1,160,594

Prepayments

255,710

101,876

 

6,094,555

5,656,132

16

Cash and cash equivalents

2023
 £

2022
 £

Cash at bank

828,446

2,936,683

17

Creditors

2023
 £

2022
 £

Due within one year

Trade creditors

3,041,446

1,904,330

Amounts due to subsidiary company

1,208,816

-

Amounts due to Director

1,000,000

1,000,000

Social security and VAT

37,742

77,455

Corporation tax

257,684

827,197

Accruals

101,027

128,623

5,646,715

3,937,605

18

Pension and other schemes

Defined contribution pension scheme

The company operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the company to the scheme and amounted to £26,749 (2022: £19,712).

 

Nirvana Brands Ltd

Notes to the Financial Statements for the Year Ended 31 March 2023 (continued)

19

Share capital

Allotted, called up and fully paid shares

 

2023

2022

 

No.

£

No.

£

Ordinary share of £1 each

1

1

1

1

         

20

Related party transactions

Payments made to the directors who are the key management personnel are disclosed in note 8.

During the year the Company sold goods and services to Shaneel Enterprises Limited, a company in which Mr D B Mehta is a Director, on normal commercial terms of £2,061,953 (2022: £1,532,358). The amount outstanding at the year-end of £5,981 (2022: £125,856) is included in trade debtors. The Company also purchased goods and services amounting to £1,811,605 (2022: £173,622). There are no amounts outstanding (2022: £Nil).

During the year the Company sold goods and services to S A Designer Parfums Limited, a company in which Mr D B Mehta is a Director, on normal commercial terms for £988,728 (2022: £2,500,979). The Company also purchased goods and services from S A Designer Parfums Limited amounting to £209,292 (2022: £70,827). There are no amounts outstanding (2022: £Nil).

An amount owed by DNA Select Limited of £160,610 a company in which Mr D B Mehta is a director was fully provided for in the year.

The Company has an interest free loan of £1m (2022: £1m) repayable on demand to its Director Mr D B Mehta.

An amount of £30,000 due from Leela Living Limited a company in which Ms C D Mehta and Ms N D Mehta are directors was fully provided for in the year

An amount of £1,083,481 is due from Akita Brands Limited (2022: £300,768) a company in which Mr A D Mehta and Ms N D Mehta are a directors. During the year the Company advanced loans of £781,713 (2022: £300,768)

21

Financial instruments

Objectives and policies

The Company's objective is to minimise financial risk and the policy to achieve this is to fund operations from equity capital and inter-company borrowings. The Company's financial instruments comprise, financial investments, cash and cash equivalents, trade debtors, trade creditors, and other creditors. The policies, as set by the Board of Directors, are implemented by the Company's finance department.

Credit risk
The credit risk on liquid funds is limited because the company only deals with counter-parties with good credit ratings. The balance in cash comprised of £828,446 (2022: £2,936,683) at the period end. Credit reference agencies are used in order to
check the status of customers and trading partners. Debtors principally relate to trade debtors and amounts due from group and related parties, £4,902,091 (2022: £4,393,662). Creditors principally relate to trade creditors and amounts due to group companies and related parties £5,250,262 (2022: £2,904,330).

Liquidity risk
The Company's policy is to maintain cash in short-term deposits to ensure sufficient funds are readily available to meet funding and working capital requirements arising from the Company's operations. The Company will closely monitor working capital requirements to ensure that it has sufficient funds to meet its financial liabilities as they fall due.

 

Nirvana Brands Ltd

Notes to the Financial Statements for the Year Ended 31 March 2023 (continued)

22

Parent and ultimate parent undertaking

The company's immediate parent is Nirvana Brands Holdings Ltd, incorporated in England and Wales.

  The financial statements are available upon request from the registered office and Companies House, Crown Way, Cardiff, CF14 3UZ.

 The ultimate controlling party is Mr D B Mehta.