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Registration number: 13550616

Nirvana Brands Holdings Ltd

Annual Report and Consolidated Financial Statements

for the Year Ended 31 March 2023

 

Nirvana Brands Holdings Ltd

Contents

Company Information

1

Strategic Report

2

Directors' Report

3

Statement of Directors' Responsibilities

4

Independent Auditor's Report

5 to 7

Consolidated Profit and Loss Account

8

Consolidated Statement of Comprehensive Income

9

Consolidated Balance Sheet

10

Balance Sheet

11

Consolidated Statement of Changes in Equity

12

Consolidated Statement of Cash Flows

13

Notes to the Financial Statements

14 to 24

 

Nirvana Brands Holdings Ltd

Company Information

Directors

Mr D B 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 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 Board on 9 October 2023 and signed on its behalf by:
 

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

 

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:

Mr D B Mehta

Mr A D Mehta

Ms N D Mehta

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 Board on 9 October 2023 and signed on its behalf by:
 

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

 

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.

......................................
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 Holdings Ltd

Consolidated Profit and Loss Account for the Year Ended 31 March 2023

Note

2023
£

(As restated)

2022
£

Turnover

3

63,046,524

48,176,261

Cost of sales

 

(49,143,298)

(33,516,609)

Gross profit

 

13,903,226

14,659,652

Administrative expenses

 

(6,533,384)

(3,809,742)

Other operating income

4

315,499

272,548

Operating profit

5

7,685,341

11,122,458

Other interest receivable and similar income

6

21,998

466

Interest payable and similar expenses

7

(9,393)

(6,775)

   

12,605

(6,309)

Profit before tax

 

7,697,946

11,116,149

Tax on profit

11

(1,800,057)

(2,365,162)

Profit for the financial year

 

5,897,889

8,750,987

Profit attributable to:

 

Owners of the company

 

5,897,889

8,750,987

 

Nirvana Brands Holdings Ltd

Consolidated Statement of Comprehensive Income for the Year Ended 31 March 2023

2023
£

2022
£

Profit for the year

5,897,889

8,750,987

Foreign currency translation gains

117,519

170,489

Total comprehensive income for the year

6,015,408

8,921,476

Total comprehensive income attributable to:

Owners of the company

6,015,408

8,921,476

 

Nirvana Brands Holdings Ltd

(Registration number: 13550616)
Consolidated Balance Sheet as at 31 March 2023

Note

2023
£

2022
£

Fixed assets

 

Tangible assets

12

183,488

166,122

Current assets

 

Stocks

14

13,500,128

7,775,244

Debtors

15

12,597,606

8,343,413

Cash at bank and in hand

 

2,781,713

6,686,916

 

28,879,447

22,805,573

Creditors: Amounts falling due within one year

16

(9,066,254)

(5,581,331)

Net current assets

 

19,813,193

17,224,242

Total assets less current liabilities

 

19,996,681

17,390,364

Creditors: Amounts falling due after more than one year

16

-

(3,409,091)

Net assets

 

19,996,681

13,981,273

Capital and reserves

 

Called up share capital

18

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 Board on 9 October 2023 and signed on its behalf by:
 

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

 

Nirvana Brands Holdings Ltd

(Registration number: 13550616)
Company Balance Sheet as at 31 March 2023

Note

2023
£

2022
£

Fixed assets

 

Investments

13

101

101

Creditors: Amounts falling due within one year

16

(1)

(1)

Net assets

 

100

100

Capital and reserves

 

Called up share capital

18

100

100

Shareholders' funds

 

100

100

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

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

 

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

-

-

5,897,889

5,897,889

Other comprehensive income

-

117,519

-

117,519

Total comprehensive income

-

117,519

5,897,889

6,015,408

At 31 March 2023

100

224,249

19,772,332

19,996,681

Share capital
£

Foreign currency translation
£

Profit and loss account
£

Total equity
£

At 1 April 2021

1

(63,759)

5,123,456

5,059,698

Profit for the year

-

-

8,750,987

8,750,987

Other comprehensive income

-

170,489

-

170,489

Total comprehensive income

-

170,489

8,750,987

8,921,476

New share capital subscribed

99

-

-

99

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)

2022
£

Cash flows from operating activities

Profit for the year

 

5,897,889

8,750,987

Adjustments to cash flows from non-cash items

 

Depreciation and amortisation

5

29,020

16,655

Finance income

6

(21,998)

(466)

Finance costs

7

9,393

6,775

Income tax expense

11

1,800,057

2,365,162

Foreign exchange gains

 

(485,682)

(24,247)

 

7,228,679

11,114,866

Working capital adjustments

 

Increase in stocks

14

(5,724,884)

(7,732,208)

Increase in trade debtors

15

(1,522,930)

(3,914,155)

Increase in trade creditors

16

4,896,841

3,077,563

Cash generated from operations

 

4,877,706

2,546,066

Income taxes paid

11

(2,974,181)

(2,135,428)

Net cash flow from operating activities

 

1,903,525

410,638

Cash flows from investing activities

 

Interest received

21,998

466

Acquisitions of tangible assets

(46,386)

(104,271)

Advances of loans

 

(2,731,263)

(2,261,106)

Net cash flows from investing activities

 

(2,755,651)

(2,364,911)

Cash flows from financing activities

 

Interest paid

7

(9,393)

(6,775)

Proceeds from issue of ordinary shares, net of issue costs

 

-

99

Proceeds from other borrowings draw downs

 

(3,409,091)

4,409,091

Net cash flows from financing activities

 

(3,418,484)

4,402,415

Net (decrease)/increase in cash and cash equivalents

 

(4,270,610)

2,448,142

Cash and cash equivalents at 1 April

 

6,686,916

4,117,412

Effect of exchange rate fluctuations on cash held

 

365,407

121,362

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

1

General information

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

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

Transactions in foreign currencies are initially recorded at the functional currency rate prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated into the respective functional currency of the entity at the rates prevailing on the reporting period date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rate on the date when the fair value is re-measured.

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
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.

 

 

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.

3

Turnover

The analysis of the group's Turnover for the year from continuing operations is as follows:

2023
£

2022
£

Sale of goods

56,787,640

39,582,412

Commissions received

6,258,884

8,593,849

63,046,524

48,176,261

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)

4

Other operating income

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

2023
£

2022
£

Other operating income

315,499

272,548

5

Operating profit

Arrived at after charging

2023
£

2022
£

Depreciation expense

29,020

16,655

Foreign exchange gains

(485,682)

(24,247)

6

Other interest receivable and similar income

2023
£

2022
£

Interest income

21,998

466

 

Nirvana Brands Holdings Ltd

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

7

Interest payable

2023
£

2022
£

Interest payable

9,393

6,775

8

Staff costs

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

2023
£

2022
£

Wages and salaries

1,475,666

1,078,890

Social security costs

366,527

208,933

Pension costs

26,749

19,712

1,868,942

1,307,535

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
No.

2022
No.

Administration and support

8

3

Marketing

24

28

32

31

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

Audit of the financial statements of subsidiaries of the company pursuant to legislation

40,927

8,119

59,927

18,119


 

 

Nirvana Brands Holdings Ltd

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

11

Taxation

Tax charged in the income statement

2023
£

2022
£

Current taxation

Corporation tax

1,800,057

2,365,162

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 19% (2022 - 19%).

The differences are reconciled below:

2023
£

2022
£

Profit before tax

7,697,946

11,116,149

Corporation tax at standard rate

1,462,610

2,112,068

Effect of expense not deductible in determining taxable profit (tax loss)

59,418

5,726

Effect of foreign tax rates

233,218

214,476

Decrease in UK and foreign current tax from adjustment for prior periods

(3,878)

-

Tax decrease from effect of capital allowances and depreciation

(4,380)

(10,877)

Tax increase from effect of unrelieved tax losses carried forward

53,069

43,769

Total tax charge

1,800,057

2,365,162

12

Tangible assets

Group

Short leasehold
£

Furniture, fittings and equipment
 £

Computer equipment
£

Total
£

Cost or valuation

At 1 April 2022

9,016

97,860

79,646

186,522

Additions

-

8,724

37,662

46,386

Reclassification

3,560

-

(2,960)

600

At 31 March 2023

12,576

106,584

114,348

233,508

Depreciation

At 1 April 2022

-

8,500

11,900

20,400

Charge for the year

3,024

8,631

17,365

29,020

Reclassification

3,560

-

(2,960)

600

At 31 March 2023

6,584

17,131

26,305

50,020

Carrying amount

At 31 March 2023

5,992

89,453

88,043

183,488

At 31 March 2022

9,016

89,360

67,746

166,122

 

Nirvana Brands Holdings Ltd

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

13

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

Nirvana Brands Ltd*

Amertrans Park,
Bushy Mill Lane,
Watford WD24 7JG

Ordinary

100%

100%

 

England

     

Nirvana Brands Worldwide Ltd*

Amertrans Park,
Bushy Mill Lane,
Watford WD24 7JG

Ordinary

100%

100%

 

England

     

Nirvana Brands Inc.

45 Park Avenue, Ste 1902
New York
10016 NY

Ordinary

100%

100%

 

United States of America

     

Nirvana Brands Canada Limited

94 Tomlinson Circle
Markham
Ontario L3R 9J6
Canada

Ordinary

100%

100%

 

     

Nirvana Beauty GMBH

Kapellenstrasse 12a,
85622 Feldkirchen
Munchen
Germany

Ordinary

100%

100%

 

     

* 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

101

At 31 March 2023

101

 

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.

14

Stocks

 

Group

Company

2023
£

2022
£

2023
£

2022
£

Finished goods and components

13,500,128

7,775,244

-

-

15

Debtors

 

Group

Company

Current

2023
£

2022
£

2023
£

2022
£

Trade debtors

5,873,814

3,735,156

-

-

Other debtors

4,877,543

3,738,393

-

-

Amounts due from related parties

1,372,425

710,171

-

-

VAT

133,757

-

-

-

Prepayments

340,067

159,693

-

-

 

12,597,606

8,343,413

-

-

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.

16

Creditors

 

Group

Company

2023
£

2022
£

2023
£

2022
£

Due within one year

Trade creditors

5,217,112

2,803,622

-

-

Amounts due to related parties

3,212,506

1,000,000

-

-

Corporation tax

187,648

1,361,772

-

-

Social security and other taxes

37,791

34,489

-

-

Other payables

-

42,373

1

1

Accruals

411,197

339,075

-

-

9,066,254

5,581,331

1

1

Due after one year

Amounts due to related parties

-

3,409,091

-

-

 

Nirvana Brands Holdings Ltd

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

17

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 £26,749 (2022: £19,712). Contributions amounting to £7,001 (2022: £10,065) were payable to the fund at year-end and are included within creditors.

18

Share capital

Allotted, called up and fully paid shares

 

2023

2022

 

No.

£

No.

£

Ordinary share of £1 each

100

100

100

100

         

19

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.

20

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.

21

Ultimate controlling party

The ultimate controlling party is Mr D B Mehta who owns the entire issued share capital of Nirvana Brands Holdings Limited.

22

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.