REGISTERED NUMBER: SC693722 (Scotland) |
Group Strategic Report, Report of the Director and |
Consolidated Financial Statements for the Year Ended 31 July 2023 |
for |
Cheynes Management Holdings Limited |
REGISTERED NUMBER: SC693722 (Scotland) |
Group Strategic Report, Report of the Director and |
Consolidated Financial Statements for the Year Ended 31 July 2023 |
for |
Cheynes Management Holdings Limited |
Cheynes Management Holdings Limited (Registered number: SC693722) |
Contents of the Consolidated Financial Statements |
for the Year Ended 31 July 2023 |
Page |
Company Information | 1 |
Group Strategic Report | 2 |
Report of the Director | 3 |
Report of the Independent Auditors | 5 |
Consolidated Income Statement | 9 |
Consolidated Other Comprehensive Income | 10 |
Consolidated Balance Sheet | 11 |
Company Balance Sheet | 12 |
Consolidated Statement of Changes in Equity | 13 |
Company Statement of Changes in Equity | 14 |
Consolidated Cash Flow Statement | 15 |
Notes to the Consolidated Cash Flow Statement | 16 |
Notes to the Consolidated Financial Statements | 18 |
Cheynes Management Holdings Limited |
Company Information |
for the Year Ended 31 July 2023 |
DIRECTOR: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
SENIOR STATUTORY AUDITOR: | Alan Drummond BA CA FMAAT |
AUDITORS: |
Statutory Auditor |
47-49 The Square |
Kelso |
Roxburghshire |
TD5 7HW |
Cheynes Management Holdings Limited (Registered number: SC693722) |
Group Strategic Report |
for the Year Ended 31 July 2023 |
The director presents his strategic report of the company and the group for the year ended 31 July 2023. |
The principal activities of the company in the year under review were those of Hairdressing Salons, Hairdressing Training delivering NVQ qualifications, educational hairdressing seminars and shows. |
REVIEW OF BUSINESS |
The Directors are satisfied with the performance for the year in view of the restructuring that has taken place. |
While there were substantial costs incurred in consolidating the business from 4 to 3 salons, the reduction in ongoing costs has proven to be positive and will lead to stronger profitability going forward. Overheads have been significantly reduced and staff retention is high due to the 'new' business footprint. |
PRINCIPAL RISKS AND UNCERTAINTIES |
The current economic situation across the UK, driven by both domestic and worldwide events have undoubtedly had an impact on consumer confidence but the Directors are confident that the measures taken to consolidate the business has created a strong platform for improved financial results in the months and years ahead. |
ON BEHALF OF THE BOARD: |
Cheynes Management Holdings Limited (Registered number: SC693722) |
Report of the Director |
for the Year Ended 31 July 2023 |
The director presents his report with the financial statements of the company and the group for the year ended 31 July 2023. |
PRINCIPAL ACTIVITY |
The principal activity of the group in the year under review was that of Hairdressing Salons, Hairdressing Training delivering NVQ qualifications, educational hairdressing seminars and shows. |
DIVIDENDS |
No dividends will be distributed for the year ended 31 July 2023. |
EVENTS SINCE THE END OF THE YEAR |
Information relating to events since the end of the year is given in the notes to the financial statements. |
DIRECTOR |
GOING CONCERN |
In carrying out their duties in respect of going concern, the directors have carried out a review of the group's financial position for a period of 12 months from the date of signing these financial statements. The company currently meets its day to day working capital requirements through its cash balance, which is sufficient to cover working capital requirements. The directors have a reasonable expectation that the group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the annual reports and accounts. |
DIRECTOR'S RESPONSIBILITIES STATEMENT |
The director is responsible for preparing the Group Strategic Report, the Report of the Director and the financial statements in accordance with applicable law and regulations. |
Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the company and the group and of the profit or loss of the group for that period. In preparing these financial statements, the director is required to: |
- | select suitable accounting policies and then apply them consistently; |
- | make judgements and accounting estimates that are reasonable and prudent; |
- | prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. |
The director is 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 him to ensure that the financial statements comply with the Companies Act 2006. He is 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. |
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
So far as the director is aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and he has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the group's auditors are aware of that information. |
Cheynes Management Holdings Limited (Registered number: SC693722) |
Report of the Director |
for the Year Ended 31 July 2023 |
AUDITORS |
The auditors, Douglas Home & Co Ltd, will be proposed for re-appointment at the forthcoming Annual General Meeting. |
ON BEHALF OF THE BOARD: |
Report of the Independent Auditors to the Members of |
Cheynes Management Holdings Limited |
Opinion |
We have audited the financial statements of Cheynes Management Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 July 2023 which comprise the Consolidated Income Statement, Consolidated Other Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Consolidated Cash Flow Statement, 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 of the parent company affairs as at 31 July 2023 and of the group's loss for the year then ended; |
- | have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and |
- | have been prepared in accordance with the requirements of the Companies Act 2006. |
Basis for opinion |
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' 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 and the parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. |
Our responsibilities and the responsibilities of the director with respect to going concern are described in the relevant sections of this report. |
Other information |
The director is responsible for the other information. The other information comprises the information in the Group Strategic Report and the Report of the Director, but does not include the financial statements and our Report of the Auditors 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 this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. |
Opinions on other matters prescribed by the Companies Act 2006 |
In our opinion, based on the work undertaken in the course of the audit: |
- | the information given in the Group Strategic Report and the Report of the Director for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
- | the Group Strategic Report and the Report of the Director have been prepared in accordance with applicable legal requirements. |
Report of the Independent Auditors to the Members of |
Cheynes Management Holdings Limited |
Matters on which we are required to report by exception |
In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Report of the Director. |
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 director's remuneration specified by law are not made; or |
- | we have not received all the information and explanations we require for our audit. |
Responsibilities of director |
As explained more fully in the Director's Responsibilities Statement set out on page three, the director is 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 director determines 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 director is responsible for assessing the group's and the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the director either intends to liquidate the group or the parent company or to cease operations, or has no realistic alternative but to do so. |
Report of the Independent Auditors to the Members of |
Cheynes Management Holdings Limited |
Auditors' 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 a Report of the Auditors 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 obtained an understanding of the legal and regulatory frameworks that are applicable to the entity, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included the Companies Act 2006, FRS102 and local tax legislation. The engagement partner ensured the engagement team had the necessary competence, capabilities, and skills to identify laws and regulations and they remained alert to such matters throughout the audit. |
Based on the results of our risk assessments we designed our audit procedures to identify non-compliance with such laws and regulation. We identified and evaluated the laws and regulations and enquired of management whether they were aware of any instances of non-compliance. We corroborated these through review of legal and professional fees and any correspondence with HMRC, alongside a review of Companies House updates. A full disclosure checklist was carried out. Tax computations were checked for accuracy of calculations and inputs. |
In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which may be fundamental to the company's ability to operate or to avoid a material penalty. The laws and regulations we considered in this context included UK Employment Law, Data Protection Act 2018 and Health and Safety regulations. |
Based on the results of our risk assessments we designed our audit procedures to identify non-compliance with such laws and regulation. We identified and evaluated the laws and regulation and enquired with management whether they were aware of any instances of non-compliance and what procedures were in place to ensure compliance. We corroborated this through review of correspondence with any regulators, review of policies for health and safety and data protection and reviewing submissions to HMRC. A walk through of the payroll processes was performed including review of contracts, gross to net pay checks, and verification checks of staff. |
We assessed the risks of material misstatement in respect of fraud via enquiries of management and those charged with governance as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud and considered the internal controls in place to mitigate risks of fraud. Permissions on the accounting software were checked and were appropriate to the staff role, access to online banking for making payments was also established, and evidence of authorisation and allocations of major expenditure were sought. The directors are heavily involved in the day to day running of the business and have good knowledge of the amount and expected timing of receipts from customers and payments to suppliers. |
To address the risk of fraud through management bias and override of controls we performed analytical procedures to identify any unusual or unexpected relationships, tested journal entries to identify unusual transactions, assessed the level of subjectivity and estimation within the account balances and investigated the rationale behind any significant or unusual transactions. The preparation of the yearly accounts by DHCO mitigates this risk. |
With regard to identification of material misstatements in relation to fraud, we considered income recognition in line with FRS102, reviewed the appropriateness of the accounting policies selected and reviewed disclosures for completeness and accuracy. We also identified related parties and reviewed the completeness and accuracy of related party transactions. |
There are inherent limitations in our audit procedures described above. The more removed that laws & regulations are from financial transactions, the less likely it is that we would become aware of non compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management, and the inspection of regulatory and legal correspondence, if any. |
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion. |
Report of the Independent Auditors to the Members of |
Cheynes Management Holdings Limited |
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors. |
Use of our report |
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed. |
for and on behalf of |
Statutory Auditor |
47-49 The Square |
Kelso |
Roxburghshire |
TD5 7HW |
Cheynes Management Holdings Limited (Registered number: SC693722) |
Consolidated |
Income Statement |
for the Year Ended 31 July 2023 |
31/7/23 | 31/7/22 |
Notes | £ | £ |
TURNOVER | 3 | 3,831,865 | 3,831,865 |
Cost of sales | 2,912,681 | 2,912,681 |
GROSS PROFIT | 919,184 | 919,184 |
Administrative expenses | 1,445,440 | 1,445,441 |
(526,256 | ) | (526,257 | ) |
Other operating income | 14,961 | 14,961 |
OPERATING LOSS | 5 | (511,295 | ) | (511,296 | ) |
Interest receivable and similar income | 546 | 546 |
(510,749 | ) | (510,750 | ) |
Gain on bargain purchase | - | 3,202,847 |
(510,749 | ) | 2,692,097 |
Interest payable and similar expenses | 7 | 13,821 | 13,821 |
(LOSS)/PROFIT BEFORE TAXATION | (524,570 | ) | 2,678,276 |
Tax on (loss)/profit | 8 | (29,631 | ) | (29,631 | ) |
(LOSS)/PROFIT FOR THE FINANCIAL YEAR |
( |
) |
(Loss)/profit attributable to: |
Owners of the parent | (494,939 | ) | 2,707,907 |
Cheynes Management Holdings Limited (Registered number: SC693722) |
Consolidated |
Other Comprehensive Income |
for the Year Ended 31 July 2023 |
31/7/23 | 31/7/22 |
Notes | £ | £ |
(LOSS)/PROFIT FOR THE YEAR | (494,939 | ) | 2,707,907 |
OTHER COMPREHENSIVE INCOME | - | - |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
(494,939 |
) |
2,707,907 |
Total comprehensive income attributable to: |
Owners of the parent | (494,939 | ) | 2,707,907 |
Cheynes Management Holdings Limited (Registered number: SC693722) |
Consolidated Balance Sheet |
31 July 2023 |
31/7/23 | 31/7/22 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Intangible assets | 10 | 3,870,000 | 3,870,000 |
Tangible assets | 11 | 73,092 | 73,092 |
Investments | 12 | - | - |
3,943,092 | 3,943,092 |
CURRENT ASSETS |
Stocks | 13 | 46,349 | 46,349 |
Debtors | 14 | 229,101 | 289,101 |
Cash at bank and in hand | 250,290 | 250,290 |
525,740 | 585,740 |
CREDITORS |
Amounts falling due within one year | 15 | 780,879 | 780,880 |
NET CURRENT LIABILITIES | (255,139 | ) | (195,140 | ) |
TOTAL ASSETS LESS CURRENT LIABILITIES |
3,687,953 |
3,747,952 |
CREDITORS |
Amounts falling due after more than one year |
16 |
(308,313 |
) |
(368,313 |
) |
PROVISIONS FOR LIABILITIES | 19 | (1,500 | ) | (1,500 | ) |
NET ASSETS | 3,378,140 | 3,378,139 |
CAPITAL AND RESERVES |
Called up share capital | 20 | 500 | 500 |
Share premium | 514,500 | 514,500 |
Retained earnings | 2,863,140 | 2,863,139 |
SHAREHOLDERS' FUNDS | 3,378,140 | 3,378,139 |
The financial statements were approved by the director and authorised for issue on 20 February 2024 and were signed by: |
P Adamczuk - Director |
Cheynes Management Holdings Limited (Registered number: SC693722) |
Company Balance Sheet |
31 July 2023 |
31/7/23 | 31/7/22 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Intangible assets | 10 |
Tangible assets | 11 |
Investments | 12 |
CREDITORS |
Amounts falling due within one year | 15 |
NET CURRENT LIABILITIES | ( |
) | ( |
) |
TOTAL ASSETS LESS CURRENT LIABILITIES |
CREDITORS |
Amounts falling due after more than one year |
16 |
NET ASSETS |
CAPITAL AND RESERVES |
Called up share capital | 20 |
Share premium |
SHAREHOLDERS' FUNDS |
Company's profit for the financial year | - | - |
The financial statements were approved by the director and authorised for issue on |
Cheynes Management Holdings Limited (Registered number: SC693722) |
Consolidated Statement of Changes in Equity |
for the Year Ended 31 July 2023 |
Called up |
share | Retained | Share | Total |
capital | earnings | premium | equity |
£ | £ | £ | £ |
Balance at 1 August 2021 | 1 | 155,232 | - | 155,233 |
Changes in equity |
Issue of share capital | 499 | - | 514,500 | 514,999 |
Total comprehensive income | - | 2,707,907 | - | 2,707,907 |
Balance at 31 July 2022 | 500 | 2,863,139 | 514,500 | 3,378,139 |
Changes in equity |
Total comprehensive income | - | (494,939 | ) | - | (494,939 | ) |
Balance at 31 July 2023 | 500 | 2,368,200 | 514,500 | 2,883,200 |
Cheynes Management Holdings Limited (Registered number: SC693722) |
Company Statement of Changes in Equity |
for the Year Ended 31 July 2023 |
Called up |
share | Retained | Share | Total |
capital | earnings | premium | equity |
£ | £ | £ | £ |
Balance at 1 August 2021 |
Changes in equity |
Issue of share capital | - |
Balance at 31 July 2022 |
Changes in equity |
Balance at 31 July 2023 |
Cheynes Management Holdings Limited (Registered number: SC693722) |
Consolidated Cash Flow Statement |
for the Year Ended 31 July 2023 |
31/7/23 | 31/7/22 |
Notes | £ | £ |
Cash flows from operating activities |
Cash generated from operations | 1 | 27,442 | (5,635 | ) |
Interest paid | (13,821 | ) | (13,821 | ) |
Government grants | - | 12,000 |
Tax paid | 7,631 | (34,440 | ) |
Net cash from operating activities | 21,252 | (41,896 | ) |
Cash flows from investing activities |
Purchase of tangible fixed assets | (1,666 | ) | (1,666 | ) |
Purchase of subsidiary | - | (210,000 | ) |
Cash acquired from subsidiary | - | 547,027 |
Interest received | 546 | 546 |
Net cash from investing activities | (1,120 | ) | 335,907 |
Cash flows from financing activities |
Loan repayments in year | (131,415 | ) | (135,571 | ) |
Net cash from financing activities | (131,415 | ) | (135,571 | ) |
(Decrease)/increase in cash and cash equivalents | (111,283 | ) | 158,440 |
Cash and cash equivalents at beginning of year |
2 |
250,290 |
1 |
Cash and cash equivalents at end of year | 2 | 250,290 | 250,290 |
Cheynes Management Holdings Limited (Registered number: SC693722) |
Notes to the Consolidated Cash Flow Statement |
for the Year Ended 31 July 2023 |
1. | RECONCILIATION OF (LOSS)/PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS |
31/7/23 | 31/7/22 |
£ | £ |
(Loss)/profit before taxation | (524,570 | ) | 2,678,276 |
Depreciation charges | 475,727 | 475,727 |
Loss on disposal of fixed assets | 18,376 | 18,376 |
Gain on revaluation of fixed assets | - | (3,202,847 | ) |
Finance costs | 13,821 | 13,821 |
Finance income | (546 | ) | (546 | ) |
(17,192 | ) | (17,193 | ) |
Decrease in stocks | - | 23,664 |
Decrease/(increase) in trade and other debtors | 40,047 | (29,438 | ) |
Increase in trade and other creditors | 4,587 | 17,332 |
Cash generated from operations | 27,442 | (5,635 | ) |
2. | CASH AND CASH EQUIVALENTS |
The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts: |
Year ended 31 July 2023 |
31/7/23 | 1/8/22 |
£ | £ |
Cash and cash equivalents | 250,290 | 250,290 |
Year ended 31 July 2022 |
31/7/22 | 1/8/21 |
£ | £ |
Cash and cash equivalents | 250,290 | 1 |
3. | ANALYSIS OF CHANGES IN NET DEBT |
At 1/8/22 | Cash flow | At 31/7/23 |
£ | £ | £ |
Net cash |
Cash at bank and in hand | 250,290 | - | 250,290 |
250,290 | - | 250,290 |
Debt |
Debts falling due within 1 year | (134,037 | ) | - | (134,037 | ) |
Debts falling due after 1 year | (123,313 | ) | - | (123,313 | ) |
(257,350 | ) | - | (257,350 | ) |
Total | (7,060 | ) | - | (7,060 | ) |
Cheynes Management Holdings Limited (Registered number: SC693722) |
Error Messages from the Consolidated Cash Flow Statement |
for the Year Ended 31 July 2023 |
** | CURRENT YEAR - MOVEMENT IN CASH AND CASH EQUIVALENTS |
AS CALCULATED IN CONSOLIDATED CASH FLOW STATEMENT |
DOES NOT AGREE TO MOVEMENT PER BALANCE SHEET |
COMPARE MOVEMENT ON CONSOLIDATED CASH FLOW STATEMENT |
= |
(111,283 |
) |
TO | MOVEMENT PER BALANCE SHEET |
CASH AND CASH EQUIVALENTS | = | 0 |
** | LAST YEAR - MOVEMENT IN CASH AND CASH EQUIVALENTS |
AS CALCULATED IN CONSOLIDATED CASH FLOW STATEMENT |
DOES NOT AGREE TO MOVEMENT PER BALANCE SHEET |
COMPARE MOVEMENT ON CONSOLIDATED CASH FLOW STATEMENT |
= |
158,440 |
TO | MOVEMENT PER BALANCE SHEET |
CASH AND CASH EQUIVALENTS | = | 250,289 |
Cheynes Management Holdings Limited (Registered number: SC693722) |
Notes to the Consolidated Financial Statements |
for the Year Ended 31 July 2023 |
1. | STATUTORY INFORMATION |
Cheynes Management Holdings Limited is a |
2. | ACCOUNTING POLICIES |
Basis of preparing the financial statements |
Basis of consolidation |
The consolidated financial statements consolidate the financial statements of the Company and its subsidiary undertaking drawn up to July 2023. The subsidiary undertaking is Cheynes (Management) Limited. |
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. |
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 assets given, equity instruments issued and the liabilities incurred or assured 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 combinations are measured initially at their fair values at the acquisition date. Any excess of the cost of the business combination over the acquirers 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 subsidiary, which are related parties, are eliminated in full. |
Significant judgements and estimates |
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. |
There are not considered to be any critical judgements in applying the company's accounting policies. |
The company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates are assumptions which have a significant risk of causing a material adjustment to the carrying amounts of assets or liabilities within the next financial year are addressed below. |
(i) Goodwill valuation |
The valuation of goodwill involves a number of estimates including future profitability and considered of any factors which may lead to an impairment. |
Cheynes Management Holdings Limited (Registered number: SC693722) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 July 2023 |
2. | ACCOUNTING POLICIES - continued |
Turnover |
Turnover is the amount derived from ordinary activities and is measured at fair value of the consideration received or receivable. Turnover is reduced for estimated customer returns, rebates and other similar allowances, and is stated net of VAT. |
Turnover from the provision of services as specified in the strategic report is recognised when all the following conditions are satisfied: |
- The amount of revenue can be measured reliably; |
- It is probable that the economic benefits associated with the transaction will flow to the company; and |
- The costs incurred or to be incurred in respect of the transaction can be measured reliably. |
Goodwill |
Positive goodwill is capitalised, classified as an asset on the balance sheet and amortised over its useful life. |
The company had previously departed from the requirements of Companies Act 2006 to amortise goodwill. The directors have reconsidered this treatment in the current year and have decided to amortise the net book value over the coming 10 years. |
Tangible fixed assets |
Short leasehold | - |
Fixtures and fittings | - |
Tangible assets are stated at cost less accumulated depreciation and accumulated impairment losses. Cost includes the original purchase price and costs directly attributable to bringing the asset to its working condition for its intended use. |
Stocks |
Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items. |
Cheynes Management Holdings Limited (Registered number: SC693722) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 July 2023 |
2. | ACCOUNTING POLICIES - continued |
Financial instruments |
The company has chosen to adopt Sections 11 and 12 of FRS in respect of financial instruments. |
(i) Financial assets |
Trade and other debtors that are receivable within one year and do not constitute a financing transaction are recorded at the undiscounted amount expected to be received, net of impairment. Those that are receivable after more than one year or that constitute a financing transaction are recorded initially at fair value less transaction costs and subsequently at amortised cost, net of impairment. |
Cash and cash equivalents comprise cash at bank and in hand, demand deposits with banks and other short-term highly liquid investments with original maturities of three months or less and bank overdrafts. In the statement of financial position, bank overdrafts are shown within borrowings or current liabilities. |
(ii) Financial liabilities |
Basic financial liabilities, including trade debtors and other creditors, bank loans, loans from fellow group companies that are classified as debt, 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 receipts discounted at a market rate of interest. |
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. Accounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. |
Taxation |
Taxation for the year comprises current and deferred tax. Tax is recognised in the Consolidated Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. |
Current or deferred taxation assets and liabilities are not discounted. |
Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date. |
Deferred tax |
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date. |
Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference. |
Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. |
Pension costs and other post-retirement benefits |
The group operates a defined contribution pension scheme. Contributions payable to the group's pension scheme are charged to profit or loss in the period to which they relate. |
Employee benefits |
Short term employee benefits, including holiday pay, are recognised as an expense in the statement of income and retained earnings in the period in which they are incurred. |
Cheynes Management Holdings Limited (Registered number: SC693722) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 July 2023 |
2. | ACCOUNTING POLICIES - continued |
Provisions |
Provisions are recognised when the company has a present legal or constructive obligation as a result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made. Provisions are measure at the present value of the value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money ans the risks specific to the obligation. The increase in the provision due to passage of time is recognised as an interest expense. |
Interest bearing borrowings |
Interest-bearing borrowings are recognised initially at fair value less attributable transaction costs. Subsequent to initial recognition, interest-bearing borrowings are stated at amortised cost with any difference being between the amount initially recognised and redemption value being recognised in the statement of comprehensive income over the period of the borrowings, together with any interest and fees payable, using the effective interest method. |
Related parties |
For the purposes of these financial statement, a party is considered to be related to the company if: |
(i) the party has the ability, directly or indirectly, through one or more intermediaries, to control the Company or exercise significant influence over the company in making financial and operating policy decision, or has joint control over the company; |
(ii) the company and the party are subject to common control; |
(iii) the party is an associate of the company or a joint venture in which the company is a venturer; |
(iv) the party is a member of key management personnel of the company or the company;s parent, or a close family member of such an individual, or is an entity under the control, joint control or significant influence of such individuals; |
(v) the party is a close family member of a party referred to in (i) or is an entity under the control, joint control or significant influence of such individuals; |
(vi) the party is a post-employment benefit plan which is for the benefit of employees of the company or of any entity that is a related party of the company; or |
(vii) the party, or any member of a group of which is a part, provides key management personnel services to the company or is a parent. |
Close family members of an individual are those family members who may be expected to influence, or be influenced by, that individual in their dealings with the entity. |
Leased assets |
Assets that are held by company under leases which transfer to the company substantially all the risks and rewards of ownership are classified as being held under finance leases. Leases which do not transfer substantially all the risks and rewards of ownership to the company are classified as operating leases. |
Operating lease payments are recognised as an expense on a straight-line basis over the lease term, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed. |
In the event that lease incentives are received to enter into operating leases, such incentives are recognised as a liability. The aggregate benefit of incentives is recognised as a reduction of rental expense on a straight-line basis, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed. |
Cheynes Management Holdings Limited (Registered number: SC693722) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 July 2023 |
3. | TURNOVER |
The turnover and loss (2022 - profit) before taxation are attributable to the one principal activity of the group. |
An analysis of turnover by class of business is given below: |
31/7/23 | 31/7/22 |
£ | £ |
Salon | 2,490,544 | 2,597,051 |
Retail | 113,320 | 114,416 |
Training | 1,228,001 | 1,394,823 |
3,831,865 | 4,106,290 |
**TURNOVER ENTERED ON CLIENT SCREEN - LAST YEAR | 4,106,290 |
**DOES NOT AGREE TO TURNOVER PER TRIAL BALANCE | 3,831,865 |
4. | EMPLOYEES AND DIRECTORS |
31/7/23 | 31/7/22 |
£ | £ |
Wages and salaries | 1,755,808 | 1,755,808 |
Social security costs | 148,946 | 148,946 |
Other pension costs | 30,253 | 30,253 |
1,935,007 | 1,935,007 |
The average number of employees during the year was as follows: |
31/7/23 | 31/7/22 |
Administration and support | 3 | 11 |
Sales, marketing and distribution | 68 | 58 |
The average number of employees by undertakings that were proportionately consolidated during the year was 71 (2022 - 69 ) . |
31/7/23 | 31/7/22 |
£ | £ |
Director's remuneration | 203,229 | 203,229 |
Director's pension contributions to money purchase schemes | 2,356 | 2,356 |
Information regarding the highest paid director is as follows: |
31/7/23 | 31/7/22 |
£ | £ |
Emoluments etc | 90,110 | 90,110 |
Pension contributions to money purchase schemes | 102 | 102 |
Cheynes Management Holdings Limited (Registered number: SC693722) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 July 2023 |
5. | OPERATING (LOSS)/PROFIT |
The operating loss (2022 - operating profit) is stated after charging: |
31/7/23 | 31/7/22 |
£ | £ |
Depreciation - owned assets | 45,727 | 45,727 |
Loss on disposal of fixed assets | 18,376 | 18,376 |
Goodwill amortisation | 430,000 | 430,000 |
Operating lease charges | 126,500 | 126,500 |
6. | AUDITORS' REMUNERATION |
31/7/23 | 31/7/22 |
£ | £ |
Fees payable to the company's auditors for the audit of the company's financial statements |
10,160 |
10,160 |
Non audit services £2,500 |
7. | INTEREST PAYABLE AND SIMILAR EXPENSES |
31/7/23 | 31/7/22 |
£ | £ |
Bank loan interest | 13,821 | 13,821 |
8. | TAXATION |
Analysis of the tax credit |
The tax credit on the loss for the year was as follows: |
31/7/23 | 31/7/22 |
£ | £ |
Current tax: |
UK corporation tax | (7,631 | ) | (7,631 | ) |
Deferred tax | (22,000 | ) | (22,000 | ) |
Tax on (loss)/profit | (29,631 | ) | (29,631 | ) |
Cheynes Management Holdings Limited (Registered number: SC693722) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 July 2023 |
8. | TAXATION - continued |
Reconciliation of total tax credit included in profit and loss |
The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below: |
31/7/23 | 31/7/22 |
£ | £ |
(Loss)/profit before tax | (524,570 | ) | 3,399,668 |
(Loss)/profit multiplied by the standard rate of corporation tax in the UK of 19 % (2022 - 19 %) |
(99,668 |
) |
645,937 |
Effects of: |
Expenses not deductible for tax purposes | 14 | 143 |
Depreciation in excess of capital allowances | 92,624 | 6,464 |
Adjustments to tax charge in respect of previous periods | (482 | ) | - |
Deferred taxation | (22,000 | ) | (2,413 | ) |
Bargain purchase | - | (608,541 | ) |
Expenses allowable | (119 | ) | - |
Total tax credit | (29,631 | ) | 41,590 |
** | PROFIT BEFORE TAX FOR LAST YEAR ON CLIENT SCREEN OF | 3,399,668 |
DOES NOT AGREE TO AMOUNT ON INCOME STATEMENT OF | 2,678,276 |
** | TAX CHARGE FOR LAST YEAR ON CLIENT SCREEN OF | 41,590 |
DOES NOT AGREE TO AMOUNT PER TB OF | (29,631 | ) |
9. | INDIVIDUAL INCOME STATEMENT |
As permitted by Section 408 of the Companies Act 2006, the Income Statement of the parent company is not presented as part of these financial statements. |
10. | INTANGIBLE FIXED ASSETS |
Group |
Goodwill |
£ |
COST |
At 1 August 2022 |
and 31 July 2023 | 8,689,000 |
AMORTISATION |
At 1 August 2022 | 4,389,000 |
Amortisation for year | 430,000 |
At 31 July 2023 | 4,819,000 |
NET BOOK VALUE |
At 31 July 2023 | 3,870,000 |
At 31 July 2022 | 4,300,000 |
Cheynes Management Holdings Limited (Registered number: SC693722) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 July 2023 |
11. | TANGIBLE FIXED ASSETS |
Group |
Fixtures |
Short | and |
leasehold | fittings | Totals |
£ | £ | £ |
COST |
At 1 August 2022 | 427,252 | 918,560 | 1,345,812 |
Additions | - | 1,666 | 1,666 |
Disposals | (135,806 | ) | (482,178 | ) | (617,984 | ) |
At 31 July 2023 | 291,446 | 438,048 | 729,494 |
DEPRECIATION |
At 1 August 2022 | 366,360 | 843,923 | 1,210,283 |
Charge for year | 16,633 | 29,094 | 45,727 |
Eliminated on disposal | (129,728 | ) | (469,880 | ) | (599,608 | ) |
At 31 July 2023 | 253,265 | 403,137 | 656,402 |
NET BOOK VALUE |
At 31 July 2023 | 38,181 | 34,911 | 73,092 |
At 31 July 2022 | 60,892 | 74,637 | 135,529 |
12. | FIXED ASSET INVESTMENTS |
Company |
31/7/23 | 31/7/22 |
£ | £ |
Shares in group undertakings |
Loans to group undertakings | ( |
) | ( |
) |
Additional information is as follows: |
Company |
Shares in |
group |
undertakings |
£ |
COST |
At 1 August 2022 |
and 31 July 2023 |
NET BOOK VALUE |
At 31 July 2023 |
At 31 July 2022 |
Cheynes Management Holdings Limited (Registered number: SC693722) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 July 2023 |
12. | FIXED ASSET INVESTMENTS - continued |
The group or the company's investments at the Balance Sheet date in the share capital of companies include the following: |
Subsidiary |
Registered office: George Street, Edinburgh, EH2 2LE |
Nature of business: |
% |
Class of shares: | holding |
Company |
Loans to |
group |
undertakings |
£ |
At 1 August 2022 | ( |
) |
Repayment in year | ( |
) |
At 31 July 2023 | ( |
) |
13. | STOCKS |
Group |
31/7/23 | 31/7/22 |
£ | £ |
Stocks | 46,349 | 46,349 |
14. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
Group |
31/7/23 | 31/7/22 |
£ | £ |
Trade debtors | 90,025 | 90,025 |
Other debtors | 77,125 | 137,125 |
Tax | 7,148 | 7,148 |
Prepayments and accrued income | 54,803 | 54,803 |
229,101 | 289,101 |
Cheynes Management Holdings Limited (Registered number: SC693722) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 July 2023 |
15. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
Group | Company |
31/7/23 | 31/7/22 | 31/7/23 | 31/7/22 |
£ | £ | £ | £ |
Bank loans and overdrafts (see note 17) | 134,037 | 134,037 |
Trade creditors | 202,559 | 202,560 |
Social security and other taxes | 38,059 | 38,059 |
VAT | 120,868 | 120,868 | - | - |
Other creditors | 125,854 | 125,854 |
Accruals and deferred income | 159,502 | 159,502 |
780,879 | 780,880 |
16. | CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
Group | Company |
31/7/23 | 31/7/22 | 31/7/23 | 31/7/22 |
£ | £ | £ | £ |
Bank loans (see note 17) | 123,313 | 123,313 |
Other creditors | 185,000 | 245,000 |
308,313 | 368,313 |
17. | LOANS |
An analysis of the maturity of loans is given below: |
Group |
31/7/23 | 31/7/22 |
£ | £ |
Amounts falling due within one year or on | demand: |
Bank loans | 134,037 | 134,037 |
Amounts falling due between one and two | years: |
Bank loans - 1-2 years | 85,813 | 85,813 |
Amounts falling due between two and five | years: |
Bank loans - 2-5 years | 37,500 | 37,500 |
18. | LEASING AGREEMENTS |
Minimum lease payments fall due as follows: |
Cheynes Management Holdings Limited (Registered number: SC693722) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 July 2023 |
Group |
Non-cancellable operating | leases |
31/7/23 | 31/7/22 |
£ | £ |
Within one year | 126,500 | 152,750 |
Between one and five years | 506,000 | 506,000 |
In more than five years | 453,000 | 579,500 |
1,085,500 | 1,238,250 |
19. | PROVISIONS FOR LIABILITIES |
Group |
31/7/23 | 31/7/22 |
£ | £ |
Deferred tax |
Accelerated capital allowances | 1,500 | 1,500 |
Group |
Deferred |
tax |
£ |
Balance at 1 August 2022 | 23,500 |
Credit to Income Statement during year | (22,000 | ) |
Balance at 31 July 2023 | 1,500 |
Group |
BALANCE ABOVE AT START OF YEAR RE DEFERRED TAX ON CLIENT SCREEN OF | 23,500 |
DOES NOT AGREE TO LAST YEAR TOTAL OF ACCOUNTS PER TB | 1,500 |
PLEASE CHECK CLIENT SCREEN - NOTES TO FINANCIAL STATEMENTS - BALANCE SHEET ITEMS - PROVISIONS FOR LIABILITIES - MOVEMENT IN PROVISIONS ETC |
Please note: a deferred tax asset should be entered as a negative balance (i.e. include a "-" sign) |
20. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 31/7/23 | 31/7/22 |
value: | £ | £ |
Ordinary | 1 | 500 | 500 |
21. | PENSION COMMITMENTS |
The group operates a defined pension contribution pension schemes. The pension cost charge for the year represents contributions payable by the company to the schemes and amounted to £30,252 (2022 - £31,160). Contributions totalling £6,095 (2022 - £6,019) were payable to the schemes at the year end and are included within creditors. |
Cheynes Management Holdings Limited (Registered number: SC693722) |
Notes to the Consolidated Financial Statements - continued |
for the Year Ended 31 July 2023 |
22. | RELATED PARTY DISCLOSURES |
Company |
At the year end there was an amount of £270,000 due from Cheynes Management Holdings Limited to Cheynes Management Limited. |
During the year, a total of key management personnel compensation of £ 100,983 was paid. |
23. | POST BALANCE SHEET EVENTS |
Since the year end the directors of the subsidiary have taken the decision to separate the training division from the company. |