Registration number:
Nirvana Brands Holdings Ltd
for the Year Ended 31 March 2023
Nirvana Brands Holdings Ltd
Contents
Company Information |
|
Strategic Report |
|
Directors' Report |
|
Statement of Directors' Responsibilities |
|
Independent Auditor's Report |
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Consolidated Profit and Loss Account |
|
Consolidated Statement of Comprehensive Income |
|
Consolidated Balance Sheet |
|
Balance Sheet |
|
Consolidated Statement of Changes in Equity |
|
Consolidated Statement of Cash Flows |
|
Notes to the Financial Statements |
Nirvana Brands Holdings Ltd
Company Information
Directors |
Mr D B Mehta Mr A D Mehta Ms N D Mehta |
Registered office |
|
Auditors |
|
Nirvana Brands Holdings 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 Group is the wholesale and retail of perfumes and cosmetics. The Company's principal activity is to manage the trade and activities of its subsidiaries.
Review of the business
The Group has continued to grow in line with the expectations of the Directors, the principal focus being to increase turnover.
The business has grown substantially again in the current year with turnover increasing to £63.0m (2022: £48.1m), this strong growth is expected to continue. The slightly lower profitability this year is due a shift in the business model, favouring a direct approach which is in the groups long term interest.
The principal key performance indicators are the Group's turnover and profitability. The Group achieved a gross profit of £13.9m (2022 £14.7m) and profit after tax of £6.0m (2022 £8.9m).
Principal risks and uncertainties
Risk management
The Directors of the Group and other senior managers are responsible, under delegated authority from the Board, for reviewing the Group'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 face are:
Finance, funding and liquidity risk
The Group 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 Group 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.
Inflationary risk
There are continuing inflationary risks that are rising in the world economy. In the current period these have had an effect on the profitability of the company. The Directors are actively exploring strategies to contain the effect of price increases.
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 Group operates a very good natural hedge with little surplus, therefore, there is little need to transact spot or forward trades.
Approved and authorised by the
......................................... |
Nirvana Brands Holdings 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:
Dividends
The directors do not recommend a dividend for the year (2022: £Nil).
Financial instruments
The Group'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 parent Company did not have any borrowings as at 31 March 2023. The Group had borrowings from its shareholder totalling £1m (2022: £4.4m) which is interest free and repayable on demand.
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 parent Company’s issued share capital, are set out in note 18. There is at present one hundred ordinary shares in issue, which are fully paid and have full voting rights with no restrictions.
Political and charitable donations
The Group has contributed £Nil (2022: £25,000) to UK political parties, and made charitable donations of £4,350 (2022: £15,329).
Non adjusting events after the financial period
In May 2023 the Company acquired the entire issued share capital of The Lovely Distribution Company Limited, for a maximum consideration including an earnout of £9m.
Disclosure of information to the auditor
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 auditor is aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditor is unaware.
Approved and authorised by the
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Nirvana Brands Holdings 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 group and the company and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:
• |
select suitable accounting policies and apply them consistently; |
• |
make judgements and accounting estimates that are reasonable and prudent; |
• |
state whether applicable UK 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 and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group 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 the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Nirvana Brands Holdings Ltd
Independent Auditor's Report to the Members of Nirvana Brands Holdings Ltd
Opinion
We have audited the financial statements of Nirvana Brands Holdings Ltd (the 'parent company') and its subsidiaries (the ''Group) for the year ended 31 March 2023, which comprise the Consolidated Profit and Loss Account, Consolidated Statement of Comprehensive Income, Consolidated Balance Sheet, Balance Sheet, Consolidated Statement of Changes in Equity, Consolidated 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 Group's and the parent company's affairs as at 31 March 2023 and of the Group's profit for the year 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 group 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 group'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 the group and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report and the Directors' Report.
Nirvana Brands Holdings Ltd
Independent Auditor's Report to the Members of Nirvana Brands Holdings Ltd (continued)
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:
• | 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 Statement of Directors' Responsibilities [set out on page 4], 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 management 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 Holdings Ltd
Independent Auditor's Report to the Members of Nirvana Brands Holdings Ltd (continued)
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 company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
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For and on behalf of
The Hour House
32 High Street
Hertfordshire
WD3 1ER
Nirvana Brands Holdings Ltd
Consolidated Profit and Loss Account for the Year Ended 31 March 2023
Note |
2023 |
(As restated) |
|
Turnover |
|
|
|
Cost of sales |
( |
( |
|
Gross profit |
|
|
|
Administrative expenses |
( |
( |
|
Other operating income |
|
|
|
Operating profit |
|
|
|
Other interest receivable and similar income |
|
|
|
Interest payable and similar expenses |
( |
( |
|
12,605 |
(6,309) |
||
Profit before tax |
|
|
|
Tax on profit |
( |
( |
|
Profit for the financial year |
|
|
|
Profit attributable to: |
|||
Owners of the company |
|
|
Nirvana Brands Holdings Ltd
Consolidated Statement of Comprehensive Income for the Year Ended 31 March 2023
2023 |
2022 |
|
Profit for the year |
|
|
Foreign currency translation gains |
|
|
Total comprehensive income for the year |
|
|
Total comprehensive income attributable to: |
||
Owners of the company |
|
|
Nirvana Brands Holdings Ltd
(Registration number: 13550616)
Consolidated Balance Sheet as at 31 March 2023
Note |
2023 |
2022 |
|
Fixed assets |
|||
Tangible assets |
|
|
|
Current assets |
|||
Stocks |
|
|
|
Debtors |
|
|
|
Cash at bank and in hand |
|
|
|
|
|
||
Creditors: Amounts falling due within one year |
( |
( |
|
Net current assets |
|
|
|
Total assets less current liabilities |
|
|
|
Creditors: Amounts falling due after more than one year |
- |
( |
|
Net assets |
|
|
|
Capital and reserves |
|||
Called up share capital |
100 |
100 |
|
Foreign currency translation reserve |
224,249 |
106,730 |
|
Profit and loss account |
19,772,332 |
13,874,443 |
|
Equity attributable to owners of the company |
19,996,681 |
13,981,273 |
|
Shareholders' funds |
19,996,681 |
13,981,273 |
Approved and authorised by the
......................................... |
Nirvana Brands Holdings Ltd
(Registration number: 13550616)
Company Balance Sheet as at 31 March 2023
Note |
2023 |
2022 |
|
Fixed assets |
|||
Investments |
|
|
|
Creditors: Amounts falling due within one year |
( |
( |
|
Net assets |
|
|
|
Capital and reserves |
|||
Called up share capital |
100 |
100 |
|
Shareholders' funds |
100 |
100 |
Approved and authorised by the
......................................... |
Nirvana Brands Holdings Ltd
Consolidated Statement of Changes in Equity for the Year Ended 31 March 2023
Equity attributable to the parent company
Share capital |
Foreign currency translation |
Profit and loss account |
Total equity |
|
At 1 April 2022 |
100 |
106,730 |
13,874,443 |
13,981,273 |
Profit for the year |
- |
- |
|
|
Other comprehensive income |
- |
|
- |
|
Total comprehensive income |
- |
|
|
|
At 31 March 2023 |
|
|
|
|
Share capital |
Foreign currency translation |
Profit and loss account |
Total equity |
|
At 1 April 2021 |
|
( |
|
|
Profit for the year |
- |
- |
|
|
Other comprehensive income |
- |
|
- |
|
Total comprehensive income |
- |
|
|
|
New share capital subscribed |
|
- |
- |
|
At 31 March 2022 |
100 |
106,730 |
13,874,443 |
13,981,273 |
Nirvana Brands Holdings Ltd
Consolidated Statement of Cash Flows for the Year Ended 31 March 2023
Note |
2023 |
(As restated) |
|
Cash flows from operating activities |
|||
Profit for the year |
|
|
|
Adjustments to cash flows from non-cash items |
|||
Depreciation and amortisation |
|
|
|
Finance income |
( |
( |
|
Finance costs |
|
|
|
Income tax expense |
|
|
|
Foreign exchange gains |
( |
( |
|
|
|
||
Working capital adjustments |
|||
Increase in stocks |
( |
( |
|
Increase in trade debtors |
( |
( |
|
Increase in trade creditors |
|
|
|
Cash generated from operations |
|
|
|
Income taxes paid |
( |
( |
|
Net cash flow from operating activities |
|
|
|
Cash flows from investing activities |
|||
Interest received |
|
|
|
Acquisitions of tangible assets |
( |
( |
|
Advances of loans |
( |
( |
|
Net cash flows from investing activities |
( |
( |
|
Cash flows from financing activities |
|||
Interest paid |
( |
( |
|
Proceeds from issue of ordinary shares, net of issue costs |
- |
|
|
Proceeds from other borrowings draw downs |
( |
|
|
Net cash flows from financing activities |
( |
|
|
Net (decrease)/increase in cash and cash equivalents |
( |
|
|
Cash and cash equivalents at 1 April |
|
|
|
Effect of exchange rate fluctuations on cash held |
|
|
|
Cash and cash equivalents at 31 March |
2,781,713 |
6,686,916 |
Nirvana Brands Holdings Ltd
Notes to the Financial Statements for the Year Ended 31 March 2023
General information |
The company is a private company limited by share capital, incorporated in England & Wales.
The address of its registered office is:
These financial statements were authorised for issue by the
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.
Basis of consolidation
The consolidated financial statements consolidate the financial statements of the company and its subsidiary undertakings drawn up to 31 March 2023.
A subsidiary is an entity controlled by the company. Control is achieved where the company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.
The results of subsidiaries acquired or disposed of during the year are included in the Profit and Loss Account from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the group.
In relation to acquisition of subsidiaries the purchase method of accounting is used to account for business combinations that result in the acquisition of subsidiaries by the group. The cost of a business combination is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the business combination. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Any excess of the cost of the business combination over the acquirer’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised is recorded as goodwill.
Inter-company transactions, balances and unrealised gains on transactions between the company and its subsidiaries, which are related parties, are eliminated in full. Intra-group losses are also eliminated but may indicate an impairment that requires recognition in the consolidated financial statements.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group. Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the group’s equity therein. Non-controlling interests consist of the amount of those interests at the date of the original business combination and the non-controlling shareholder’s share of changes in equity since the date of the combination.
Nirvana Brands Holdings Ltd
Notes to the Financial Statements for the Year Ended 31 March 2023 (continued)
2 |
Accounting policies (continued) |
Going concern
The cash resources and facilities are managed on a Group basis. Based on funds and facilities available and the level of profitability, the Directors have prepared the financial statements on a going concern basis.
Working capital forecasts have been prepared 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 times that have been caused by the ongoing effects on the economy due to the continuing conflict in Ukraine and rising inflationary pressures. The forecasts indicate sufficient headroom to enable the company to continue as a going concern.
The financial statements have been prepared on a going concern basis.
Reclassification of comparative amounts
The cash flow statement has been restated to reflect the advance of loans in the prior period of £2,261,106, which was previously classified within debtors. The profit and loss statement has been restated to reclassify amounts previously shown as other income of £185,841 into commissions receivable, and £466 from other income to interest receivable.
Accounting judgments and key sources of estimation uncertainty
The key judgements the company make are in relation to the following:
- The carrying value of tangible assets, the management will estimate the useful economic life of the assets and
apply depreciation and amortisation to write of the cost of the asset over that period. The carrying value of the assets will be
reassessed for impairment when circumstances suggest, as there were no indicators of impairment no test was carried out.
- The recoverability of inventories is dependent upon the future sales of the company, and future prices achievable, which will
determine if any provision is required against inventories. The directors have assessed the impairment indicators, and made
judgements in reflection to future prices achievable and make impairments as appropriate.
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 group’s activities. Turnover is shown net of sales/value added tax, returns, and discounts and after eliminating sales within the group.
The group 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 group's activities.
Foreign currency transactions and balances
Non-monetary items measured in terms of historical cost in a foreign currency are not retranslated.
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.
Nirvana Brands Holdings Ltd
Notes to the Financial Statements for the Year Ended 31 March 2023 (continued)
2 |
Accounting policies (continued) |
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.
Interest income on debt securities, where applicable, is recognised in income using the effective interest method. Dividends on equity securities are recognised in income when receivable.
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.
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 group 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 group 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.
Nirvana Brands Holdings Ltd
Notes to the Financial Statements for the Year Ended 31 March 2023 (continued)
2 |
Accounting policies (continued) |
Borrowings
Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the profit and loss account over the period of the relevant borrowing.
Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.
Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.
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 group 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.
Financial instruments
Classification
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.
Nirvana Brands Holdings Ltd
Notes to the Financial Statements for the Year Ended 31 March 2023 (continued)
2 |
Accounting policies (continued) |
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.
Turnover |
The analysis of the group's Turnover for the year from continuing operations is as follows:
2023 |
2022 |
|
Sale of goods |
|
|
Commissions received |
|
|
|
|
Sales of goods and services were made in the following geographical areas UK £3,456,843 (2022: £1,837,605), Europe £9,975,553 (2022: £5,715,135), Rest of the World £49,614,128 (2022: £40,623,521)
Other operating income |
The analysis of the group's other operating income for the year is as follows:
2023 |
2022 |
|
Other operating income |
|
|
Operating profit |
Arrived at after charging
2023 |
2022 |
|
Depreciation expense |
|
|
Foreign exchange gains |
( |
( |
Other interest receivable and similar income |
2023 |
2022 |
|
Interest income |
|
|
Nirvana Brands Holdings Ltd
Notes to the Financial Statements for the Year Ended 31 March 2023 (continued)
Interest payable |
2023 |
2022 |
|
Interest payable |
|
|
Staff costs |
The aggregate payroll costs (including directors' remuneration) were as follows:
2023 |
2022 |
|
Wages and salaries |
|
|
Social security costs |
|
|
Pension costs |
|
|
|
|
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.
The average number of persons employed by the group (including directors) during the year, analysed by category was as follows:
2023 |
2022 |
|
Administration and support |
|
|
Marketing |
|
|
|
|
Directors' remuneration |
The directors' remuneration for the year was as follows:
2023 |
2022 |
|
Remuneration |
|
|
Contributions to pension |
|
|
244,403 |
71,676 |
Auditors' remuneration |
2023 |
2022 |
|
Audit of the financial statements |
19,000 |
10,000 |
Audit of the financial statements of subsidiaries of the company pursuant to legislation |
40,927 |
8,119 |
|
|
Nirvana Brands Holdings Ltd
Notes to the Financial Statements for the Year Ended 31 March 2023 (continued)
Taxation |
Tax charged in the income statement
2023 |
2022 |
|
Current taxation |
||
Corporation tax |
|
|
The tax on profit before tax for the year is higher than the standard rate of corporation tax in the UK (2022 - higher than the standard rate of corporation tax in the UK) of
The differences are reconciled below:
2023 |
2022 |
|
Profit before tax |
|
|
Corporation tax at standard rate |
|
|
Effect of expense not deductible in determining taxable profit (tax loss) |
|
|
Effect of foreign tax rates |
|
|
Decrease in UK and foreign current tax from adjustment for prior periods |
( |
- |
Tax decrease from effect of capital allowances and depreciation |
( |
( |
Tax increase from effect of unrelieved tax losses carried forward |
|
|
Total tax charge |
|
|
Tangible assets |
Group
Short leasehold |
Furniture, fittings and equipment |
Computer equipment |
Total |
|
Cost or valuation |
||||
At 1 April 2022 |
|
|
|
|
Additions |
- |
|
|
|
Reclassification |
|
- |
( |
|
At 31 March 2023 |
|
|
|
|
Depreciation |
||||
At 1 April 2022 |
- |
|
|
|
Charge for the year |
|
|
|
|
Reclassification |
|
- |
( |
|
At 31 March 2023 |
|
|
|
|
Carrying amount |
||||
At 31 March 2023 |
|
|
|
|
At 31 March 2022 |
|
|
|
|
Nirvana Brands Holdings Ltd
Notes to the Financial Statements for the Year Ended 31 March 2023 (continued)
Investments |
Group
Details of undertakings
Details of the investments (including principal place of business of incorporated entities) in which the group 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 |
||||
|
Amertrans Park,
|
Ordinary |
|
|
England |
||||
|
Amertrans Park,
|
Ordinary |
|
|
England |
||||
|
45 Park Avenue, Ste 1902
|
Ordinary |
|
|
United States of America |
||||
|
94 Tomlinson Circle
|
Ordinary |
|
|
|
Kapellenstrasse 12a,
|
Ordinary |
|
|
* indicates direct investment of the company
The principal activity of all subsidiaries is the sale of perfumes and cosmetics, except for Nirvana Brands Worldwide Ltd, which is in the business of the acquisition of brand licences of perfumes and beauty products. 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.
Company
Subsidiaries |
£ |
Cost |
|
At 1 April 2022 |
|
At 31 March 2023 |
|
Nirvana Brands Holdings Ltd
Notes to the Financial Statements for the Year Ended 31 March 2023 (continued)
13 |
Investments (continued) |
The Company investment in subsidiaries represents its ownership of the share capital of Nirvana Brands Ltd and Nirvana Brands Worldwide Ltd.
Stocks |
Group |
Company |
|||
2023 |
2022 |
2023 |
2022 |
|
Finished goods and components |
|
|
- |
- |
Debtors |
Group |
Company |
|||
Current |
2023 |
2022 |
2023 |
2022 |
Trade debtors |
|
|
- |
- |
Other debtors |
4,877,543 |
3,738,393 |
- |
- |
Amounts due from related parties |
1,372,425 |
710,171 |
- |
- |
VAT |
133,757 |
- |
- |
- |
Prepayments |
|
|
- |
- |
|
|
- |
- |
Included within other debtors is an amount of £3,648,117 (2022: £1,769,728) which is due for repayment in more than one year.
Creditors |
Group |
Company |
|||
2023 |
2022 |
2023 |
2022 |
|
Due within one year |
||||
Trade creditors |
|
|
- |
- |
Amounts due to related parties |
|
|
- |
- |
Corporation tax |
187,648 |
1,361,772 |
- |
- |
Social security and other taxes |
|
|
- |
- |
Other payables |
- |
|
|
|
Accruals |
|
|
- |
- |
|
|
|
|
|
Due after one year |
||||
Amounts due to related parties |
- |
|
- |
- |
Nirvana Brands Holdings Ltd
Notes to the Financial Statements for the Year Ended 31 March 2023 (continued)
Pension and other schemes |
Defined contribution pension scheme
The group operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the group to the scheme and amounted to £
Share capital |
Allotted, called up and fully paid shares
2023 |
2022 |
|||
No. |
£ |
No. |
£ |
|
|
|
100 |
|
100 |
Related party transactions |
Group
Payments made to the directors who are the key management personnel are disclosed in note 9.
The Group has a loan payable to its shareholder of £1m which is interest free with no fixed repayment terms, a loan of £3.4m ($4.5m) received in the prior period was repaid in February 2023.
During the year the Group had the following transactions with companies in which Mr D B Mehta is a Director, on normal commercial terms
- sales of goods and services to Shaneel Enterprises Limited, of £2,061,953 (2022: £1,532,358). The amount outstanding at the year-end was £5,981 (2021: £125,856) included in trade debtors.
- purchases of goods and services from Shaneel Enterprises Limited, of £2,737,208 (2022: £173,622). The amount outstanding at the year-end of £868,271 (2022: £nil).
- sales of goods and services to S A Designer Parfums £2,300,956 (2022: £2,687,110). The amount outstanding at the year end was £118,273 (2022: £nil).
- purchases goods and services from SA Designer Parfums Limited, for £6,769,450 (2022: £3,116,317). The amount outstanding at the year-end was £1,344,234 (2022: £nil).
- sales of goods and services to Shaneel Designer Parfums Mexico Sa De Cv of £197,133 (2022: £231,716). The amount outstanding at the year end was £nil (2022: £143,884).
- purchases of goods and services to DNA select of £195,492 (2022: £93,705). The amount outstanding at the year end was £195,492 (2022: £nil). An amount of £160,610 was fully provided for in the year.
Nirvana Brands Holdings Ltd
Notes to the Financial Statements for the Year Ended 31 March 2023 (continued)
19 |
Related party transactions (continued) |
During the year the Group had the following transactions with companies in which Mr A D Mehta and Ms N D Mehta are Directors,
- purchases of goods and services from Akita Brands Limited of £93,452 (2022: £125,088). The amount outstanding at the year end was £93,452 (2022: £125,088). In addition loans were advanced of £782,713 (2022: £300,768), the total outstanding is £1,083,481 (2022: £300,768).
During the year the Group had the following transactions with companies in which Ms C D Mehta and Ms N D Mehta are Directors,
An amount of £30,000 due from Leela Living Limited was fully provided for in the year.
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 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 £2,781,713 (2022: £6,686,817) 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 related parties, £11,271,664 (2022: £6,398,713). Creditors principally relate to trade creditors and amounts due to related parties £8,429,617 (2022: £3,845,995).
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.
Ultimate controlling party |
The ultimate controlling party is
Non adjusting events after the financial period |
|