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Registered number: 06945009









HSNF LIMITED









FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2023

 
HSNF LIMITED
 
 
 
COMPANY INFORMATION


 
Directors
Ben White 
David Yonatan 
Dan Iian (appointed 22 March 2023)
Roman Maksymenkov (appointed 22 March 2023)
Ajitpal Saini (appointed 22 March 2023)




Registered number
06945009



Registered office
Finsgate
5-7 Cranwood Street

London

EC1V 9EE




Independent auditors
Donald Reid Limited
Chartered Accountants & Statutory auditors

18a/20 King Street

Maidenhead

Berkshire

SL6 1EF





 
HSNF LIMITED
 
 
 
CONTENTS



Page
Group strategic report
1 - 3
Directors' report
4 - 5
Independent auditors' report
6 - 9
Consolidated Statement of Profit or Loss and Other Comprehensive Income
10
Consolidated statement of financial position
11 - 12
Company statement of financial position
13 - 14
Consolidated statement of changes in equity
15
Company statement of changes in equity
16
Consolidated statement of cash flows
17 - 18
Company statement of cash flows
19 - 20
Notes to the consolidated financial statements
21 - 61
Company detailed profit and loss account and summaries
61

 
HSNF LIMITED
 
 
 
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 30 JUNE 2023

Introduction
 
As we reflect on the achievements of the financial year 2023, HSNF Ltd continues its journey towards excellence in the beauty eCommerce industry making remarkable strides in its journey towards growth and market domination within the beauty eCommerce sector. The CEO's review provides a thorough assessment of the company amd group's performance, emphasizing key strategic initiatives that drove us forward and contributed to our sustained growth and profitability.
Market Dynamics and Response:
As we navigated the transition into a post-COVID normalcy, marked by dynamic shifts in consumer behaviours and market landscapes, HSNF Ltd exhibited remarkable resilience. Despite the challenges posed by this period of transformation, we not only maintained a consistent revenue flow and profitability but also achieved significant growth in our range of branded products. This exceptional performance is a testament to our adaptability and strategic agility, allowing us to seize opportunities amidst evolving market dynamics and emerge stronger than before.
Financial Performance:
In Financial year 2023, the group reported a turnover of £39.85 million, gross profit of £12.56 million, an operating profit of £1.2 million and a profit before tax of £1.05 million. These robust financial results underscored our resilience and ability to navigate challenges while sustaining growth.
Strategic Initiatives:
Our strategic initiatives spanned multiple critical areas, each contributing to our overarching goal of sustained growth and market leadership.
Expansion into New Geographic Areas: We strategically expanded our footprint into new geographic territories by establishing a distribution centre in Eastern Europe, launching dedicated websites, and tailoring offerings to diverse consumer segments. This penetration into untapped markets unlocked revenue opportunities and expanded our market reach.
Relocation of London Warehouse to Wales Distribution Facility: This strategic initiative involved the relocation of our London warehouse to a newly established distribution facility in Wales. The decision to move was driven by several factors, including cost-effectiveness, logistical advantages, and operational efficiency. By consolidating our operations into a centralized distribution centre in Wales, we aimed to streamline processes, reduce overhead costs, and improve service levels to customers.
Digital Marketing and Brand Awareness: Leveraging advanced digital marketing strategies, by tailoring our messaging to specific audience segments, partnering with authentic influencers, and creating engaging content, we effectively captured attention in the digital landscape, boosting brand visibility and engagement.
Product Innovation and Development: Innovation remained central to our growth strategy. Through dedicated research and development, we iterated on our product offerings to address evolving consumer needs and preferences. This focus on innovation ensured our brands remained at the forefront of industry trends.
Talent Acquisition: We intensified efforts in talent acquisition, seeking individuals with diverse expertise and experiences to contribute to our organization's success. Fostering a culture of innovation, collaboration, and continuous learning ensured our team remained ahead of industry developments. Resulting in a headcount growth from 78 to 86.
Customer Experience and Satisfaction: Prioritizing customer feedback and data-driven insights, we enhanced the overall customer experience. From optimizing website functionality to streamlining the purchasing process, our initiatives aimed to exceed customer expectations, fostering long-term loyalty and advocacy.
 
Page 1

 
HSNF LIMITED
 
 
 
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023


Sustainability and Corporate Responsibility: Integrating sustainability into our business practices, we focused on ethical sourcing and sustainable packaging. These efforts aligned with environmental and social responsibility, resonating with conscientious consumers, and strengthening our brand reputation.
The appointment of three new directors to our board in March 2023 marked a significant milestone for our company, bringing a wealth of experience, diverse perspectives, and valuable expertise to our leadership team. Each director's unique background and skill set have already begun to positively impact on our strategic decision-making and organizational development. Collectively, the addition of Dan Ilan, Roman Maksymenkov, and Ajitpal Saini to our board reinforces our commitment to excellence, innovation, and strategic growth. Their diverse backgrounds, complementary skill sets, and shared vision for the future position us for continued success and leadership in the ever-evolving marketplace.
HSNF Ltd continues to thrive as a dynamic eCommerce powerhouse, showcasing three premier brands: Mylee, PraNaturals, and Magnitone. With a primary emphasis on nail care, skincare, and waxing solutions, we've carved a niche in these essential beauty segments. Through a strategic fusion of retail and trade channels, we've cultivated a formidable presence in top-tier retail chains and online marketplaces spanning the UK and EU.
Business strategy involves diversifying revenue streams through strategic partnerships and exploring vertical integration within related sectors of the beauty industry. By forming alliances with other eCommerce platforms, we can expand our distribution network and reach new customer segments. Additionally, expanding our product development initiatives presents a significant opportunity to drive growth and innovation. By focusing on new product development (NPD), we can tap into emerging trends, address evolving consumer needs, and strengthen our competitive position in the market.
Key Performance Indicators (KPIs):
We continue to track key performance indicators, including revenue growth, customer acquisition and retention rates, customer lifetime value, conversion rate, average order value, product return rate, websites traffic and engagement metrics and gross profit margin, to evaluate our performance and inform strategic decision-making.
Risks and Uncertainties:
By addressing and mitigating risks and uncertainties, HSNF Ltd can enhance its resilience and adaptability in the ever-changing business landscape.
Supply Chain Interruptions: Disruptions in the supply chain due to factors such as natural disasters, trade disputes, or geopolitical tensions could affect our ability to deliver products to customers on time.
Economic Recession: Economic downturns or recessions in key markets may lead to decreased consumer spending on beauty products, impacting our sales and revenue.
Intellectual Property Infringement: The risk of competitors or third parties infringing on our intellectual property rights, such as trademarks or patents, could lead to legal disputes or loss of market exclusivity.
Data Security Breaches: The increasing reliance on digital platforms and customer data poses a risk of cybersecurity breaches, hacking, or data leaks, potentially compromising sensitive customer information and damaging our reputation.
Supplier Reliability: Dependence on a limited number of suppliers or reliance on suppliers in regions prone to political instability or economic volatility may pose risks to our supply chain resilience and continuity.
Environmental Sustainability Regulations: Increasing regulations related to environmental sustainability, such as
Page 2

 
HSNF LIMITED
 
 
 
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023

restrictions on certain ingredients or packaging materials, could require us to reformulate products or invest in eco-friendly packaging solutions, impacting costs and operations.
Viability Assessment:
Our financial metrics demonstrate resilience and strength, with consistent revenue streams and healthy profit margins. This stability is a testament to our prudent financial management practices and effective cost controls, ensuring that we remain well-capitalized to weather any potential economic uncertainties.
An analysis of market trends and competitive dynamics indicates that we are strategically positioned to capitalize on emerging opportunities and mitigate potential threats. Our robust brand presence, coupled with a deep understanding of consumer preferences, enables us to maintain a competitive edge in the ever-evolving beauty eCommerce industry.
In summary, our viability assessment reaffirms our confidence in our ability to continue operating and generating sustainable profits. By leveraging our strengths, mitigating risks, and embracing strategic opportunities, we are well-positioned to thrive in the dynamic and competitive business environment.


This report was approved by the board on 28 March 2024 and signed on its behalf.



Ben White
Director

Page 3

 
HSNF LIMITED
 
 
 
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 JUNE 2023

The directors present their report and the financial statements for the year ended 30 June 2023.

Directors' responsibilities statement

The directors are responsible for preparing the Group strategic report, Directors' report and the consolidated financial statements, in accordance with applicable law.

Company law requires the directors to prepare consolidated financial statements for each financial year. Under that law they have elected to prepare the consolidated financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the UK.

Under company law the directors must not approve the consolidated 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 the consolidated financial statements, the directors are required to:

select suitable accounting policies and then apply them consistently;

make judgments and estimates that are reasonable and prudent;

state whether they have been prepared in accordance with IFRS as adopted by the UK, subject to any material departures disclosed and explained in the financial statements;

assess the Group and Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and

use the going concern basis of accounting unless they either intend to liquidate the Group or the Company or to cease operations, or have no realistic alternative but to do so.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the parent Company's transactions and disclose with reasonable accuracy at any time the financial position of the parent Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.

Principal activity

HSNF Limited (the "Company") was incorporated on 25 June 2009. The principal activity of the Company and Group continued to be that of retail and wholesale sales of beauty products.

Results and dividends

The profit for the year, after taxation, amounted to £670,099 (2022 - £1,844,000).

Directors

The directors who served during the year were:

Ben White 
David Yonatan 
Dan Iian (appointed 22 March 2023)
Roman Maksymenkov (appointed 22 March 2023)
Ajitpal Saini (appointed 22 March 2023)

Page 4

 
HSNF LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023
Political contributions

The Company made no contributions during the year.

Financial instruments

The Company's financial risk management objectives and policies are disclosed in note 31. Details of the use of financial instruments are also given in notes 5.2 and 31.

Disclosure of information to auditors

Each of the persons who are directors at the time when this Directors' report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the Company and the Group's auditors are unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company and the Group's auditors are aware of that information.

Auditors

The auditorsDonald Reid Limitedwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board on 28 March 2024 and signed on its behalf.
 



Ben White
Director
Page 5

 
HSNF LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF HSNF LIMITED
 

Opinion


We have audited the financial statements of HSNF Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 30 June 2023 which comprise the Consolidated statement of profit or loss and other comprehensive incomethe Consolidated statement of financial position, the Company Statement of financial positionthe Consolidated statement of cash flows, the Company Statement of cash flowsthe Consolidated statement of changes in equity, the Company Statement of changes in equity and the related notes, including a summary of significant accounting policies set out on pages 21 - 30. The financial reporting framework that has been applied in the preparation of the financial statements is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the United Kingdom.

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 30 June 2023 and of the Group's profit for the year then ended;

the Group financial statements have been properly prepared in accordance with IFRSs as adopted by the United Kingdomand

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

Basis for opinion


We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Group and the parent Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council'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 directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the directors' assessment of the Group's and the parent Company's ability to continue to adopt the going concern basis of accounting included:
 
- A review of management forecast and cash flow forecast
- A comparison of post year end performance to management forecast to evaluate the accuracy of the forecast

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 or the parent Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Page 6

 
HSNF LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF HSNF LIMITED (CONTINUED)


Other information


The other information comprises the information included in the Annual report, other than the financial statements and our auditors' report thereon.  The directors are responsible for the other information contained within the Annual reportOur opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. 

We have nothing to report in this regard.

Opinion 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 Directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

the Group strategic report and the Directors' report have been prepared in accordance with applicable legal requirements.


Matters on which we are required to report by exception

In the light of the knowledge and understanding of the Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group strategic report or the Directors' report.

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

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

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

certain disclosures of directors' remuneration specified by law are not made; or

we have not received all the information and explanations we require for our audit.


Responsibilities of directors

As explained more fully in the directors' responsibilities statement 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 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 directors either intend to liquidate the Group or the parent Company or to cease operations, or have no realistic alternative but to do so.

Page 7

 
HSNF LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF HSNF LIMITED (CONTINUED)



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

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
 
enquiring of management concerning actual and potential litigation claims;
performing analytical procedures to identify any unusual results that may indicate risks of material
mistatement due to fraud;
reading minutes of meetings;
assessing any mangement override of controls by testing journal entries and other adjustments and
reviewing accounting estimates for indications of potential bias and;
evaluating any transactions that are unusual or outside the normal course of business and maintaining alert to any fraud risks throughout the audit;

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance.  The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

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 auditors' report.

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 them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.



Page 8

 
HSNF LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF HSNF LIMITED (CONTINUED)





 
 
Daniel Reid (Senior statutory auditor)
  
for and on behalf of
Donald Reid Limited
 
Chartered Accountants
Statutory auditors
  
18a/20 King Street
Maidenhead
Berkshire
SL6 1EF

1 April 2024
Page 9

 
HSNF LIMITED
 
 
 
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2023


2023
2022
Note
£
£

  

Revenue
 6 
39,847,642
34,808,377

Cost of sales
  
(27,285,871)
(23,174,115)

Gross profit
  
12,561,771
11,634,262

  

Other operating income
 7 
2,356
114

Administrative expenses
  
(6,873,362)
(5,868,158)

Selling expenses
  
(4,488,900)
(3,164,330)

Profit from operations
  
1,201,865
2,601,888

  

Finance income
  
-
1

Finance expense
  
(155,964)
(106,588)

Profit before tax
  
1,045,901
2,495,301

  

Tax expense
 13 
(375,802)
(651,301)

Profit for the year
  
670,099
1,844,000


Total comprehensive income
  
670,099
1,844,000

The notes on pages 21 to 61 form part of these financial statements.

Page 10

 
HSNF LIMITED
REGISTERED NUMBER: 06945009
 
 
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2023


2023
2022
Note
£
£

Assets

Non-current assets
  

Property, plant and equipment
 14 
2,807,536
2,873,210

Other intangible assets
 15 
5,530
9,040

Goodwill
 16 
472,967
645,070

Other non-current investments
 18 
11,470
11,469

  
3,297,503
3,538,789

Current assets
  

Inventories
 19 
7,178,196
8,235,948

Trade and other receivables
 20 
3,691,246
3,450,385

Cash and cash equivalents
  
3,356,483
2,388,192

  
14,225,925
14,074,525

  

Total assets

  

17,523,428
17,613,314
Page 11

 
HSNF LIMITED
REGISTERED NUMBER: 06945009
 
 
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 30 JUNE 2023


2023
2022
Note
£
£

Liabilities

Non-current liabilities
  

Loans and borrowings
 22 
2,128,737
2,232,292

Deferred tax liability
 13 
47,163
52,046

  
2,175,900
2,284,338

Current liabilities
  

Bank overdraft
 21 
408
-

Trade and other liabilities
 21 
5,333,560
5,630,521

Loans and borrowings
 22 
385,953
456,271

  
5,719,921
6,086,792

  

Total liabilities
  
7,895,821
8,371,130

  

  

Net assets
  
9,627,607
9,242,184


Issued capital and reserves attributable to owners of the parent
  

Share capital
 24 
100
100

Foreign exchange reserve
 25 
(3,923)
-

Retained earnings
 25 
9,631,430
9,242,084

  
9,627,607
9,242,184

  

TOTAL EQUITY
  
9,627,607
9,242,184

The financial statements on pages 10 to 61 were approved and authorised for issue by the board of directors on 28 March 2024 and were signed on its behalf by:




Ben White
Director

The notes on pages 21 to 61 form part of these financial statements.

Page 12

 
HSNF LIMITED
REGISTERED NUMBER: 06945009
 
 
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2023


2023
2022
Note
£
£

Assets

Non-current assets
  

Property, plant and equipment
 14 
2,601,777
2,873,210

Other intangible assets
 15 
5,530
9,040

Other non-current investments
 18 
11,470
11,469

  
2,618,777
2,893,719

Current assets
  

Inventories
 19 
7,178,196
8,235,948

Trade and other receivables
 20 
3,878,057
3,461,023

Cash and cash equivalents
  
2,917,247
2,005,340

  
13,973,500
13,702,311

  

Total assets

  

16,592,277
16,596,030
Page 13

 
HSNF LIMITED
REGISTERED NUMBER: 06945009
 
 
COMPANY STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 30 JUNE 2023

2023
2022
Note
£
£

Liabilities

Non-current liabilities
  

Loans and borrowings
 22 
2,081,150
2,191,031

Deferred tax liability
 13 
47,163
52,046

  
2,128,313
2,243,077

Current liabilities
  

Trade and other liabilities
 21 
5,776,576
6,160,611

Loans and borrowings
 22 
204,873
410,934

  
5,981,449
6,571,545

  

Total liabilities
  
8,109,762
8,814,622

  

  

Net assets
  
8,482,515
7,781,408


Issued capital and reserves attributable to owners of the parent
  

Share capital
 24 
100
100

Retained earnings
 25 
8,482,415
7,781,308

TOTAL EQUITY
  
8,482,515
7,781,408

The Company's profit for the year was £981,862 (2022 - £1,895,815).

The financial statements on pages 10 to 61 were approved and authorised for issue by the board of directors on 28 March 2024 and were signed on its behalf by:




Ben White
Director

The notes on pages 21 to 61 form part of these financial statements.

Page 14

 
HSNF LIMITED

 
 
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2023



Share capital
Foreign exchange reserve
Retained earnings
Total attributable to equity holders of parent
Total equity


£
£
£
£
£

At 1 July 2021
100
-
9,417,673
9,417,773
9,417,773

Comprehensive income for the year




Profit for the year
-
-
1,844,000
1,844,000
1,844,000

Total comprehensive income for the year
-
-
1,844,000
1,844,000
1,844,000

Contributions by and distributions to owners






Dividends
-
-
(2,034,992)
(2,034,992)
(2,034,992)

Share based payments
-
-
15,403
15,403
15,403

Total contributions by and distributions to owners
-
-
(2,019,589)
(2,019,589)
(2,019,589)

At 30 June 2022
100
-
9,242,084
9,242,184
9,242,184

At 1 July 2022
100
-
9,242,085
9,242,185
9,242,185

Comprehensive income for the year




Profit for the year
-
-
670,099
670,099
670,099

Other comprehensive income
-
(3,923)
-
(3,923)
(3,923)

Total comprehensive income for the year
-
(3,923)
670,099
666,176
666,176

Contributions by and distributions to owners






Dividends
-
-
(300,000)
(300,000)
(300,000)

Share based payments
-
-
19,245
19,245
19,245

Total contributions by and distributions to owners
-
-
(280,755)
(280,755)
(280,755)

At 30 June 2023
100
(3,923)
9,631,429
9,627,606
9,627,606

The notes on pages 21 to 61 form part of these financial statements.

Page 15

 
HSNF LIMITED

 
 
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2023



Share capital
Retained earnings
Total equity


£
£
£

At 1 July 2021
100
7,905,082
7,905,182

Comprehensive income for the year



Profit for the year
-
1,895,815
1,895,815

Total comprehensive income for the year
-
1,895,815
1,895,815

Contributions by and distributions to owners




Dividends
-
(2,034,992)
(2,034,992)

Share based payments
-
15,403
15,403

Total contributions by and distributions to owners
-
(2,019,589)
(2,019,589)

At 30 June 2022
100
7,781,308
7,781,408

At 1 July 2022
100
7,781,308
7,781,408

Comprehensive income for the year



Profit for the year
-
981,862
981,862

Total comprehensive income for the year
-
981,862
981,862

Contributions by and distributions to owners




Dividends
-
(300,000)
(300,000)

Share based payments
-
19,245
19,245

Total contributions by and distributions to owners
-
(280,755)
(280,755)

At 30 June 2023
100
8,482,415
8,482,515

The notes on pages 21 to 61 form part of these financial statements.

Page 16

 
HSNF LIMITED

 
 
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2023


2023
2022
Note
£
£

Cash flows from operating activities
  

Profit for the year
  
670,099
1,844,000

Adjustments for
  

Depreciation of property, plant and equipment
 14 
557,250
410,016

Amortisation of intangible fixed assets
 15 
3,510
66,729

Impairment of goodwill
 15 
172,103
-

Gain on reversal of inventory write down
  
(288,606)
(248,339)

Finance income
  
-
(1)

Finance expense
  
155,964
106,192

Share-based payment expense
 28 
19,245
15,403

Income tax expense
 13 
375,802
651,301

  
1,665,367
2,845,301

Movements in working capital:
  

Increase in trade and other receivables
 20 
(173,225)
(404,321)

Due from related parties
  
145,157
(145,157)

Decrease/(increase) in inventories
 19 
1,057,752
(2,378,154)

Prepaid expenses
  
(212,793)
(77,138)

Increase/(decrease) in trade and other payables
 21 
547,690
(513,669)

Cash generated from operations
  
3,029,948
(673,138)

  

Income taxes paid
  
(1,197,639)
(1,418,696)

Net cash from/(used in) operating activities

  
1,832,309
(2,091,834)

Cash flows from investing activities
  

Purchases of property, plant and equipment
  
(108,143)
(338,468)

Interest paid
  
-
(40,137)

Net cash used in investing activities

  
(108,143)
(378,605)
Page 17

 
HSNF LIMITED

 
 
CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023









2023
2022




£
£



Cash flows from financing activities
  

Repayment of bank borrowings
  
(58,903)
(21,989)

Dividends paid to the holders of the parent
  
(300,000)
(1,034,992)

Payment of lease liabilities
  
(397,380)
(381,659)

Net cash used in financing activities
  
(756,283)
(1,438,640)

Net increase/(decrease) in cash and cash equivalents
  
967,883
(3,909,079)

  

Cash and cash equivalents at the beginning of year
  
2,388,192
6,297,271

Cash and cash equivalents at the end of the year
  
3,356,075
2,388,192

The notes on pages 21 to 61 form part of these financial statements.

Page 18

 
HSNF LIMITED

 
 
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2023


2023
2022
Note
£
£

Cash flows from operating activities
  

Profit for the year
  
981,862
1,895,815

Adjustments for
  

Depreciation of property, plant and equipment
 14 
450,819
410,016

Amortisation of intangible fixed assets
 15 
3,510
66,729

Gain on reversal of inventory write down
  
(288,606)
(284,339)

Finance expense
  
145,657
105,501

Income tax expense
 13 
347,396
651,301

  
1,640,638
2,845,023

Movements in working capital:
  

Increase in trade and other receivables
  
(126,540)
(550,273)

Increase in related parties
  
(129,545)
(145,596)

Decrease/(increase) in inventories
  
1,057,752
(2,378,153)

Prepaid expenses
  
(160,796)
(77,138)

Increase/(decrease) in trade and other payables
  
533,100
(249,383)

Cash generated from operations
  
2,814,609
(555,520)

  

Income taxes paid
  
(1,197,639)
(1,398,300)

Net cash from/(used in) operating activities

  
1,616,970
(1,953,820)

Cash flows from investing activities
  

Purchases of property, plant and equipment
  
(33,537)
(338,468)

Interest paid
  
-
(8,140)

Net cash used in investing activities

  
(33,537)
(346,608)
Page 19

 
HSNF LIMITED

 
 
COMPANY STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023









2023
2022




£
£



Cash flows from financing activities
  

Repayment of bank borrowings
  
(39,693)
(9,420)

Dividends paid to the holders of the parent
  
(300,000)
(1,034,992)

Payment of lease liabilities
  
(331,833)
(381,659)

Net cash used in financing activities
  
(671,526)
(1,426,071)

Net increase/(decrease) in cash and cash equivalents
  
911,907
(3,726,499)

  

Cash and cash equivalents at the beginning of year
  
2,005,340
5,731,839

Cash and cash equivalents at the end of the year
  
2,917,247
2,005,340

The notes on pages 21 to 61 form part of these financial statements.

Page 20

 
HSNF LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

1.Accounting policies

 
1.1

Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and entities (including structured entities) controlled by the Company and its subsidiaries. Control is achieved when the Company:
has power over the investee;
is exposed, or has rights, to variable returns from its involvement with the investee; and
has the ability to use its power to affect its returns.

The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above.

When the Company has less than a majority of the voting rights of an investee, it has power over the investee when the voting rights are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally. The Company considers all relevant facts and circumstances in assessing whether or not the Company's voting rights in an investee are sufficient to give it power, including:
the size of the Company's holding of voting rights relative to the size and dispersion of holdings of the other vote holders;
potential voting rights held by the Company, other vote holders or other parties;
rights arising from other contractual arrangements; and
any additional facts and circumstances that indicate that the Company has, or does not have, the current ability to direct the relevant activities at this time that decisions need to be made, including voting patterns at previous shareholders' meetings.

Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary. Specifically, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated statement of profit or loss and other comprehensive income from the date the Company gains control until the date when the Company ceases to control the subsidiary.

Profit or loss and each component of other comprehensive income are attributed to the owners of the Company and to the non-controlling interests. Total comprehensive income of subsidiaries is attributed to the owners of the Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the Group's accounting policies.

All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.

Page 21

 
HSNF LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

1.Accounting policies (continued)


1.1
Basis of consolidation (continued)


Changes in the Group's ownership interests in existing subsidiaries

Changes in the Group's ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group's interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to owners of the Company.

When the Group loses control of a subsidiary, a gain or loss is recognised in profit or loss and its calculated as the difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any non-controlling interests. All amounts previously recognised in other comprehensive income in relation to that subsidiary are accounted for as if the Group had directly disposed of the related assets or liabilities of the subsidiary (i.e. reclassified to profit or loss or transferred to another category of equity as specified/permitted by applicable IFRSs). The fair value of any investment retained in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent account under IAS 39, when applicable, the cost on initial recognition of an investment in an associate or a joint venture.


1.2

Going concern

During the year ended 30 June 2023, the Group made a net profit £670,099, the Group had significant cash reserves at the year end of £3,356,483, and net assets of £9,627,607.
In considering the appropriateness of adopting the going concern basis in preparing the financial statements, the directors have assessed the potential cash generation of the Group for the foreseeable future (being twelve months from the date of approving these financial statements).
While there remains an inherent volatility in all retail markets, the Group considers that it is well placed to continue generating profits and positive cash flows in the future.  

 
1.3

Goodwill

Goodwill arising on an acquisition of a business is carried at cost as established at the date of acquisition of the business less accumulated impairment losses, if any.

For the purposes of impairment testing, goodwill is allocated to each of the Group's cash-generating units (or groups of cash-generating units) that is expected to benefit from the synergies of the combination.

A cash-generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro rata based on the carrying amount of each asset in the unit. Any impairment loss for goodwill is recognised directly in profit or loss. An impairment loss recognised for goodwill is not reversed in subsequent periods.

On disposal of the relevant cash-generating unit, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.

Page 22

 
HSNF LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

1.Accounting policies (continued)

 
1.4

Revenue

Revenue is measured based on the consideration specified in a contract with a customer and excludes amounts collected on behalf of third parties. The Group recognises revenue when it transfers control over a product or service to a customer.

The Group does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, the Group does not adjust any of the transaction prices for the time value of money.

The Group assess its revenue arrangements against specific criteria in order to determine if it is acting as a principal or agent. The Group has concluded that it is acting as principal in all of its revenue arrangements because it controls the goods before transferring them to the customer.
Sale of goods
Revenue from sales of goods represent a single performance obligation. Transaction price of sales, which excludes discounts, returns, rebats and sales taxes, is normally recieved at the time of sale. The amount of transaction price is recognised when control over the goods has passed to the buyer, which happens when the customer has recieved the products.
Revenue from sale of goods is recognised at point in time once the performance obligation to the customer is satisfied. Payment of the transaction price is due immediately at the point the customer purchased the goods.
Significant financing component
The Group applies the practical expedient to not adjust the promised amount of consideration for the effects of significant financing component because the Group expects that the period between the transfer of the promised goods and services, and payment is one year or less.
Contract liabilities
A contract liability is recognised if a payment is recieved or a payment is due (whichever is earlier) from the customer before the Group transfers the related goods or services. Contract liabilities are recognised as revenue when the Group performs under the contract.

  
1.5

Leasing

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.


The Group as a lessee

The Group assesses whether a contract is or contains a lease, at inception of a contract. The Group recognises a right-of-use asset and a corresponding lease liability with respect to all lease agreements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low-value assets. For these leases, the Group recognises the lease payments as an operating expense on a straight-line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Group uses its incremental borrowing rate, based on the Bank of England base rate at the time of the lease starting.

Page 23

 
HSNF LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

1.Accounting policies (continued)


1.5
Leasing (continued)


 The Group as a lessee (continued)

Lease payments included in the measurement of the lease liability comprise:

fixed lease payments (including in-substance fixed payments), less any lease incentives;


The lease liability is included in the 'Loans and borrowings' line in the Consolidated statement of financial position.

The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made.

The Group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:

the lease term has changed or there is a change in the assessment of exercise of a purchase option, in which case the lease liability is remeasured by discounting the revised discount rate.

a lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate.

The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses.

Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset. If a lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the Group expects to exercise a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation starts at the commencement date of the lease.

The right-of-use assets are included in the 'Property, Plant and Equipment' and 'Investment Property' lines, as applicable, in the Consolidated statement of financial position.

The Group applies IAS 36 to determine whether a right-of-use asset is impaired and accounts for any identified impairment loss as described in note 1.11.

As a practical expedient, IFRS 16 permits a lessee not to separate non-lease components, and instead account for any lease and associated non-lease components as a single arrangement. The Group has not used this practical expedient.

Page 24

 
HSNF LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

1.Accounting policies (continued)

 
1.6

Foreign currency

In preparing the financial statements of each individual group entity, transactions in currencies other than the entity's functional currency (foreign currencies) are recognised at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

Exchange differences on monetary items are recognised in profit or loss in the period in which they arise except for:
exchange differences on foreign currency borrowings relating to assets under construction for future productive use, which are included in the cost of those assets when they are regarded as an adjustment to interest costs on those foreign currency borrowings;
exchange differences on transactions entered into in order to hedge certain foreign currency risks (see  for hedging accounting policies); and
exchange differences on monetary items receivable from or payable to foreign operation for which settlement is neither planned nor likely to occur (therefore forming part of the net investment in the foreign operation), which are recognised initially in other comprehensive income and reclassified from equity to profit or loss on repayment of the monetary items.

For the purposes of presenting these consolidated financial statements, the assets and liabilities of the Group's foreign operations are translated into pounds using exchange rates prevailing at the end of each reporting period. Income and expense items are translated at the average exchange rates for the period, unless exchange rates fluctuate significantly during that period, in which case the exchange rates at the dates of the transactions are used. Exchange differences arising, if any, are recognised in other comprehensive income and accumulated in equity (and attributed to non-controlling interests as appropriate).

On the disposal of a foreign operation (i.e. a disposal of the Group's entire interest in a foreign operation, a disposal involving loss of control over a subsidiary that includes a foreign operation, or a partial disposal of an interest in a joint arrangement or an associate that includes a foreign operation of which the retained interest becomes a financial asset), all of the exchange differences accumulated in equity in respect of that operation attributable to the owners of the Company are reclassified to profit or loss.

In addition, in relation to a partial disposal of a subsidiary that includes a foreign operation that does not result in the Group losing control over the subsidiary, the proportionate share of accumulated exchange differences are re-attributed to non-controlling interests and are not recognised in profit or loss. For all other partial disposals (i.e. partial disposals of associates or joint arrangements that do not result in the Group losing significant influence or joint control), the proportionate share of the accumulated exchange differences is reclassified to profit or loss.

Goodwill and fair value adjustments to identifiable assets acquired and liabilities assumed through acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the rate of exchange prevailing at the end of each reporting period. Exchange differences arising are recognised in other comprehensive income.

Page 25

 
HSNF LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

1.Accounting policies (continued)


1.7

Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.

All other borrowing costs are recognised in profit or loss in the period in which they are incurred.

  
1.8

Employee benefits


Contributions from employees to third parties to defined benefit plans

Discretionary contributions made by employees or third parties reduce service cost upon payment of these contributions to the plan.

When the formal terms of the plans specify that there will be contributions from employees or third parties, the accounting depends on whether the contributions are linked to service, as follows:
If the contributions are not linked to services (e.g. contributions are required to reduce a deficit arising from losses on plan assets or from actuarial losses), they are reflected in the remeasurement of the net defined benefit liability (asset).
If contributions are linked to services, they reduce service costs. For the amount of contribution that is dependent on the number of years of service, the entity reduces service cost by attributing the contributions to periods of service using the attribution method required by IAS 19 paragraph 70 for the gross benefits. For the amount of contribution that is independent of the number of years of service, the entity reduces service cost by attributing contributions to the employees’ periods of service in accordance with IAS 19 paragraph 70.

Page 26

 
HSNF LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

1.Accounting policies (continued)

 
1.9

Share-based payments


Share-based payment transactions of the Company

Equity-settled share-based payments to employees and others providing similar services are measured at the fair value of the equity instruments at the grant date. Details regarding the determination of the fair value of equity-settled share-based transactions are set out in note 28.

The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Group's estimate of equity instruments that will eventually vest, with a corresponding increase in equity. At the end of each reporting period, the Group revises its estimate of the number of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognised in profit or loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to the equity-settled employee benefits reserve.

Equity-settled share-based payment transactions with parties other than employees are measured at the fair value of the goods or services received, except where that fair value cannot be estimated reliably, in which case they are measured at the fair value of the equity instruments granted, measured at the date the entity obtains the goods or the counterparty renders the service.

For cash-settled share-based payments, a liability is recognised for the goods or services acquired, measured initially at the fair value of the liability. At the end of each reporting period until the liability is settled, and at the date of settlement, the fair value of the liability is remeasured, with any changes in fair value recognised in profit or loss for the year.

 
1.10

Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.


(i) Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from ‘profit before tax’ as reported in the consolidated statement of profit or loss and other comprehensive income because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Group's current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.

Page 27

 
HSNF LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

1.Accounting policies (continued)


1.10
Taxation (continued)


(ii) Deferred tax

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. In addition, deferred tax liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill.

Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries and associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

For the purposes of measuring deferred tax liabilities and deferred tax assets for investment properties that are measured using the fair value model, the carrying amounts of such properties are presumed to be recovered entirely through sale, unless the presumption is rebutted. The presumption is rebutted when the investment property is depreciable and is held within a business model whose objective is to consume substantially all of the economic benefits embodied in the investment property over time, rather than through sale. The directors of the Group reviewed the Group's investment property portfolios and concluded that none of the Group's investment properties are held under a business model whose objective is to consume substantially all of the economic benefits embodied in the investment properties over time, rather than through sale. Therefore, the directors have determined that the ‘sale’ presumption set out in the amendments to IAS 12 is not rebutted. As a result, the Group has not recognised any deferred taxes on changes in fair value of the investment properties as the Group is not subject to any income taxes on the fair value changes of the investment properties on disposal.

Page 28

 
HSNF LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

1.Accounting policies (continued)


1.10
Taxation (continued)


(iii) Current and deferred tax for the year

Current and deferred tax are recognised in profit or loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other comprehensive income or directly in equity respectively. Where current tax or deferred tax arises from the initial accounting for a business combination, the tax effect is included in the accounting for the business combination.

 
1.11

Property, plant and equipment

Items of property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment losses.

If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment. Any gain or loss on disposal of an item of property, plant and equipment is recognised in profit or loss. Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the Group.

Depreciation is provided on all other items of property, plant and equipment so as to write off their carrying value over their expected useful economic lives. It is provided at the following rates:

Long-term leasehold property
5 years straight line
Right of use assets
The length of the lease
Plant and machinery
5 years straight line
Fixtures and fittings
3 years straight line
Computer equipment
3 years straight line
Other property, plant and equipment
5 years straight line

 
1.12

Intangible assets


Intangible assets acquired separately

Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated amortisation and accumulated impairment losses. Amortisation is recognised on a straight-line basis over their estimated useful lives. The estimated useful life and amortisation method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis. Intangible assets with indefinite useful lives that are acquired separately are carried at cost less accumulated impairment losses.

Development expenditure
3 years straight line
Licences
10 years straight line

 
1.13

Inventories

Inventories are stated at the lower of cost and net realisable value. Costs of inventories are determined on a first in, first out basis. Net realisable value represents the estimated selling price for inventories less all estimated costs of completion and costs necessary to make the sale.

Page 29

 
HSNF LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

1.Accounting policies (continued)

 
1.14

Financial instruments

Financial assets and financial liabilities are recognised when a Group entity becomes a party to the contractual provisions of the instruments.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.

 
1.15

Dividends

Dividends are recognised when they become legally payable. In the case of interim dividends to equity shareholders, this is when declared by the directors. In the case of final dividends, this is when approved by the shareholders at the AGM.

Dividends on preference shares, which are classified as a financial liability, are treated as finance costs and are recognised on an accruals basis when an obligation exists at the reporting date.


2.


Reporting entity

HSNF Limited (the 'Company') is a private company limited by shares incorporated in United Kingdom and registered in England and Wales. The registration number is 06945009. The Company's registered office is at Finsgate, 5-7 Cranwood Street, London, EC1V 9EE. These consolidated financial statements comprise the Company and its subsidiaries (collectively the 'Group' and individually 'Group companies'). The principal activities of the Group are e-commerce selling and distribution of beauty and cosmetic products.

Page 30

 
HSNF LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

3.


Basis of preparation

The Group's consolidated and the Company's individual financial statements have been prepared in accordance with International Financial Reporting Standards, International Accounting Standards and Interpretations as adopted by the UK (collectively IFRSs). They were authorised for issue by the Company's board of directors on 28 March 2024.

Details of the Group's accounting policies, including changes during the year, are included in note 1.

The Company has taken advantage of the exemption available under section 408 of the Companies Act 2006 and elected not to present its own Statement of comprehensive income in these financial statements.

In preparing these financial statements, management has made judgments, estimates and assumptions that affect the application of the Group accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised prospectively.

The areas where judgments and estimates have been made in preparing the consolidated financial statements and their effects are disclosed in note 5.


3.1 Basis of measurement

The financial statements have been prepared on the historical cost basis.





3.2 Changes in accounting policies

i) New standards, interpretations and amendments effective from 1 July 2022

Onerous Contracts – Cost of Fulfilling a Contract (Amendments to IAS 37)

IAS 37 defines an onerous contract as a contract in which the unavoidable costs (costs that the Group has committed to pursuant to the contract) of meeting the obligations under the contract exceed the economic benefits expected to be received under it.
 
The amendments to IAS 37.68A clarify, that the costs relating directly to the contract consist of both:
• The incremental costs of fulfilling that contract- e.g. direct labour and material; and
• An allocation of other costs that relate directly to fulfilling contracts: e.g. Allocation of depreciation charge   on property, plant and equipment used in fulfilling the contract.
These amendments had no impact on the year-end consolidated financial statements of the Group as there are no onerous contracts.

Page 31

 
HSNF LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

3.Basis of preparation (continued)


3.2 Changes in accounting policies (continued)


i) New standards, interpretations and amendments effective from 1 July 2022 (continued)

Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16)

The amendment to IAS 16 prohibits an entity from deducting from the cost of an item of PP&E any proceeds received from selling items produced while the entity is preparing the asset for its intended use . The proceeds from selling such samples, together with the costs of producing them, are now recognised in profit or loss.
These amendments had no impact on the year-end consolidated financial statements of the Group as there were no sales of such items produced by property, plant and equipment made available for use on or after the beginning of the earliest period presented.

Annual Improvements to IFRS Standards 2018-2020 (Amendments to IFRS 1, 9, 16 and IAS 41)

• IFRS 1: Subsidiary as a First-time Adopter (FTA)
• IFRS 9: Fees in the ‘10 per cent’ Test for Derecognition of Financial liabilities
• IAS 41: Taxation in Fair Value Measurements

References to Conceptual Framework (Amendments to IFRS 3)

In May 2020, the IASB issued amendments to IFRS 3, which update a reference to the Conceptual Framework for Financial Reporting without changing the accounting requirements for business combinations. 

ii) 

New standards, interpretations and amendments not yet effective

There are a number of standards, amendments to standards, and interpretations which have 
been issued by the IASB that are effective in future accounting periods that the Group has decided not to adopt early.


New standard or interpretation

EU Endorsement status

Mandatory effective date (period beginning)


Definition of Accounting Estimates - Amendments to IAS 8
Endorsed
1 January 2023

Disclosure of Accounting Policies - Amendments to IAS 1 and IFRS Practice Statements
Endorsed
1 January 2023

IFRS 17 Insurance Contracts
Endorsed
1 January 2023

Deferred Tax related to Assets and Liabilities arising from a single Transaction - Amendments to IAS 12
Endorsed
1 January 2023

International Tax Reform - Pillar Two Model Rules - Amendments to IAS 12
Endorsed
1 January 2023

Classification of Liabilities as Current or Non-current Liabilities with Covenato IAS 1
Endorsed
1 Janauary 2024
Page 32

 
HSNF LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

3.Basis of preparation (continued)


ii) New standards, interpretations and amendments not yet effective (continued)


Lease Liability in Sale and Leaseback - Amendments to IFRS 16
Endorsed
1 January 2024

Disclosures: Supplier Finance Arrangements - Amendments to IAS 7 and IFRS 7
Endorsed
1 January 2024

Lack of exchangeability - Amendments to IAS 21
Endorsed
1 January 2025

Sale or Contribution of Assets between an Investor and its Associate or Joint Venture - Amendements to IFRS 10 and IAS 28
Endorsed
1 January 2025

The directors anticipate that the adoption of these Standards in future periods may have an impact on the results and net assets of the Company, however, it is too early to quantify this.

The directors anticipate that the adoption of other Standards and interpretations that are not yet effective in future periods will only have an impact on the presentation in the financial statements of the Company. The Group does not expect any other standards issued by the IASB, but not yet effective, to have a material impact on the group.


4.


Functional and presentation currency

These consolidated financial statements are presented in pound sterling, which is the Company's functional currency. All amounts have been rounded to the nearest pound, unless otherwise indicated.

Page 33

 
HSNF LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

5.


Accounting estimates and judgments

5.1 Judgment

Classifying financial instruments 

The Group exercises judgements in classifying a financial instrument, or its component parts, on initial recognition as a financial asset, a financial liability, or a equity instrument in accordance with the substance of the contractual arrangement and the definition of a financial asset or liability. The substance of a financial instrument, rather than its legal form, governs its classification in the statements of financial position.
 
Determining the lease term - Group as lessee

In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise an extension option, or not exercise a termination option. Extension options (or period after termination options) are only included in the lease term if the lease is reasonably to be extended (or terminated). The Group considers the factors below as the most relevant in assessing the options:
- If the are significant penalties to terminate (or not extend), the Group is typically reasonably certain to
  extend (or terminate).
- If any leasehold improvements are expected to have a significant remaining value, the Group is
  typically reasonably certain to extend (or not to terminate).
- Otherwise, the Group considers other factors including historical lease durations and the costs and
  business disruption required to replace the leased asset.

Current and deferred income tax 

Significant judgement is required in determining the recorded income tax expense in profit or loss. There are many transactions and calculations for which the ultimate tax determination is uncertain in the ordinary course of business. The Group recognises liabilities for anticipated tax assessment issues when probable. The liabilities are based in assessment and judgement of whether additional taxes will be due.
Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the Group's income tax and deferred tax provision in the period in which such determination is made.
 


5.2 Estimates and assumptions

Fair Value measurement of financial instruments 

When the fair value of financial assets and financial liabilities recorded in the statement of financial position cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the discounted cash flow ("DCF") model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include consideration of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions relating to these factors could affect the reported fair value of financial instruments. 

Estimated useful lives of property, plant and equipment 

The useful life of each of the Group's items of property, plant and equipment is estimated based on the period over which the asset is expected to be available for use. Such estimation is based on a collective assessment of practices of similar business, internal technical evaluation and experience with similar
Page 34

 
HSNF LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

5.Accounting estimates and judgments (continued)


5.2 Estimates and assumptions (continued)

assets. The estimated useful life of each asset is reviewed periodically and updated if expectations differ from previous estimates due to physical wear and tear, technical or commercial obsolescence and legal or other limits on the use of the asset. It is possible, however, that future results of operations could be materially affected by changes in the amounts and timing of recorded expenses brought about by changes in the factors mentioned above. A change in the estimated useful life of any item of property, plant and equipment would impact the recorded cost and expenses and non-current assets.

Impairment of non-financial assets

Property, plant and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs disposal calculation is based on available data from binding sales transactions, conducted at arm's length, for similar assets or observable market prices less incremental costs of disposing of the asset. The value un use calculation is based on the DCF model.

Goodwill

Goodwill is reviewed for impairment, annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired. Impairment is determined for goodwill by assessing the recoverable amount of the CGU (or group of CGUs) to which the goodwill relates. Where the recoverable amount of the CGU (or group of CGUs) is less than the carrying amount of the CGU (or group of CGUs) to which goodwill has been allocated, an impairment loss is recognised immediately in the statement of income. The recoverable amount of the CGU is determined based on fair value less costs to sell.
The fair value of the CGU is determined using the cost approach, specifically the adjusted Net Asset Value (NAV) method. This method requires the measurement of the fair value of the individual assets and liabilities recognised in the CGU, as well as the fair value of any unrecognised assets and liabilities at the measurement date. The resulting net fair values of the assets and liabilities represents the fair value of the CGU. 

Page 35

 
HSNF LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

6.


Revenue


The following is an analysis of the Group's revenue for the year from continuing operations:


2023
2022
£
£


Sale of goods
39,806,205
34,808,377

Rent receivable
19,880
-

Other income
21,557
-

39,847,642
34,808,377


Analysis of revenue by country of destination:

2023
2022
£
£


United Kingdom
31,156,790
29,062,953

Europe
8,690,852
5,745,424

39,847,642
34,808,377

Only one segment is considered by the directors therefore no segmental reporting has been made.


7.


Other operating income

2023
2022
£
£


Government grants receivable
2,356
114

2,356
114


8.


Expenses by nature

2023
2022
£
£


Depreciation of property, plant and equipment
557,250
410,016

Amortisation of intangible assets
3,510
66,729

Foreign exchange loss
(3,050)
103,258

Loan provision
850,000
-

The company has provided against an associate company loan that was written off after year end.

Page 36

 
HSNF LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

9.


Auditors' remuneration

During the year, the Group obtained the following services from the Group's auditors:


2023
2022
£
£

Fees payable to the auditors for the audit of the consolidated and parent Company's financial statements
15,000
18,450


10.


Employee benefit expenses

Group & Company 


2023
2022
£
£

Employee benefit expenses (including directors) comprise:

Wages and salaries
3,312,333
2,839,299

National insurance
274,673
284,789

Defined contribution pension cost
47,473
41,393

3,634,479
3,165,481

Key management personnel compensation

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Group, including the directors of the Company listed on page 4, and the Financial Controller of the Company.


2023
2022
£
£


Salary
405,200
5,000

Other benefits
4,887
-

Defined contribution scheme costs
2,642
-

412,729
5,000

Page 37

 
HSNF LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

10.Employee benefit expenses (continued)

The monthly average number of persons, including the directors, employed by the Group during the year was as follows:


2023
2022
No.
No.

Directors
2
2

Staff
84
76

86
78


11.


Directors' remuneration

2023
2022
£
£


Directors' emoluments
405,200
5,000

Group contributions to pension schemes
2,642
-

Other benefits
4,887
-

412,729
5,000


The highest paid director's emoluments were as follows:


2023
2022
£
£


Total emoluments and amounts receivable under long-term incentive schemes (excluding shares)
237,468
-

237,468
-

Page 38

 
HSNF LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

12.


Finance income and expense

Recognised in profit or loss


2023
2022
£
£
Finance income

Interest on:
- Bank deposits
-
1

Total interest income arising from financial assets measured at amortised cost or FVOCI
-
1


Total finance income

-
1

Finance expense

Bank interest payable
1
3,800

Right of use asset notional interest
85,045
66,451

Other loan interest payable
59,352
5,427

Other interest payable
11,566
30,910

Total finance expense
155,964
106,588







Page 39

 
HSNF LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

13.


Tax expense

13.1 Income tax recognised in profit or loss



2023
2022
£
£

Current tax

Current tax on profits for the year
486,311
617,025

Adjustments in respect of prior years
(133,570)
-

Overseas tax
27,944
-

Total current tax
380,685
617,025


Deferred tax expense

Origination and reversal of timing differences
(4,883)
34,276

Total deferred tax
(4,883)
34,276


375,802
651,301


Total tax expense

Tax expense excluding tax on sale of discontinued operation and share of tax of equity accounted associates and joint ventures
375,802
651,301

375,802
651,301

Page 40

 
HSNF LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

13.Tax expense (continued)


13.1 Income tax recognised in profit or loss (continued)

The reasons for the difference between the actual tax charge for the year and the standard rate of corporation tax in the United Kingdom applied to profits for the year are as follows:


2023
2022
£
£


Profit for the year
670,100
1,844,000

Income tax expense (including income tax on associate, joint venture and discontinued operations)
375,802
651,301

Profit before income taxes
1,045,902
2,495,301


Tax using the Company's domestic tax rate of 23.5% (2022:19%)
261,476
474,107

Expenses not deductible for tax purposes, other than goodwill, amortisation and impairment
13,476
118,671

Capital allowances for the year in excess of depreciation
31,392
(13,396)

Changes in tax rates
(35,458)
-

Higher rate taxes on overseas earnings
27,944
-

Adjustments to tax charge in respect of prior periods
(133,570)
-

Other timing differences leading to an increase/(decrease) in taxation
210,542
-

Prior year adjustment
-
71,919

Total tax expense
375,802
651,301

Changes in tax rates and factors affecting the future tax charges

On 3 March 2021 the UK government announced that the standard rate of corporation tax in the UK would change from 19% to 25% from 2023. This has been substantively enacted at the balance sheet date.

13.2 Deferred tax balances

The following is the analysis of deferred tax assets/(liabilities) presented in the consolidated statement of financial position:


2023
2022
£
£


Deferred tax liabilities
(47,163)
(52,046)

(47,163)
(52,046)

Page 41

 


 
HSNF LIMITED


 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

14.


Property, plant and equipment


Group





Long-term leasehold property
Right of Use Assets
Plant and machinery
Fixtures and fittings
Computer equipment
Other property, plant and equipment
Total

£
£
£
£
£
£
£



Cost or valuation









At 1 July 2021
303,114
3,000,651
375,547
-
-
-
3,679,312


Additions
258,831
-
79,637
-
-
-
338,468


Revaluations
-
389,435
-
-
-
-
389,435



At 30 June 2022
561,945
3,390,086
455,184
-
-
-
4,407,215


Additions
15,888
222,654
18,607
57,121
2,669
28,788
345,727


Revaluations
-
145,849
-
-
-
-
145,849



At 30 June 2023
577,833
3,758,589
473,791
57,121
2,669
28,788
4,898,791

Page 42

 


 
HSNF LIMITED


 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

14.Property, plant and equipment (continued)


Long-term leasehold property
Right of use assets
Plant and machinery
Fixtures and fittings
Computer equipment
Other property, plant and equipment
Total

£
£
£
£
£
£
£



Accumulated depreciation and impairment









At 1 July 2021
78,554
835,614
214,363
-
-
-
1,128,531


Charge owned for the year
86,872
-
49,782
-
-
-
136,654


Charged financed for the year
-
273,362
-
-
-
-
273,362


On revalued assets
-
(4,542)
-
-
-
-
(4,542)



At 30 June 2022
165,426
1,104,434
264,145
-
-
-
1,534,005


Charge owned for the year
111,696
-
57,468
19,677
855
5,312
195,008


Charged financed for the year
184
362,058
-
-
-
-
362,242



At 30 June 2023
277,306
1,466,492
321,613
19,677
855
5,312
2,091,255



Net book value


At 1 July 2021
224,560
2,165,037
161,184
-
-
-
2,550,781


At 30 June 2022
396,519
2,285,652
191,039
-
-
-
2,873,210


At 30 June 2023
300,527
2,292,097
152,178
37,444
1,814
23,476
2,807,536

Page 43

 
HSNF LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

14.Property, plant and equipment (continued)


14.1. Assets held under leases


The net book value of owned and leased assets included as "Property, plant and equipment" in the Consolidated statement of financial position is as follows:

2023
2022
£
£


Property, plant and equipment owned
515,439
587,558

Right-of-use assets, excluding investment property
2,292,097
2,285,652

2,807,536
2,873,210

Information about right-of-use assets is summarised below:

Net book value

2023
2022
£
£

Property
2,292,097
2,285,652

2,292,097
2,285,652

Depreciation charge for the year ended

2023
2022
£
£

Property
362,242
273,362

362,242
273,362

Page 44

 
HSNF LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

Company





Long-term leasehold property
Right of use assets
Plant and machinery
Total

£
£
£
£



Cost or valuation






At 1 July 2021
303,114
3,000,651
375,547
3,679,312


Additions
258,831
-
79,637
338,468


Revaluations
-
389,435
-
389,435



At 30 June 2022
561,945
3,390,086
455,184
4,407,215


Additions
14,930
-
18,607
33,537


Revaluations
-
145,849
-
145,849



At 30 June 2023
576,875
3,535,935
473,791
4,586,601


Long-term leasehold property
Right of use assets
Plant and machinery
Total

£
£
£
£



Accumulated depreciation and impairment






At 1 July 2021
78,554
835,614
214,363
1,128,531


Charge owned for the year
86,872
-
49,782
136,654


Charged financed for the year
-
273,362
-
273,362


On revalued assets
-
(4,542)
-
(4,542)



At 30 June 2022
165,426
1,104,434
264,145
1,534,005


Charge owned for the year
111,696
-
57,468
169,164


Charged financed for the year
-
281,655
-
281,655



At 30 June 2023
277,122
1,386,089
321,613
1,984,824



Net book value


At 1 July 2021
224,560
2,165,037
161,184
2,550,781


At 30 June 2022
396,519
2,285,652
191,039
2,873,210


At 30 June 2023
299,753
2,149,846
152,178
2,601,777

Page 45

 
HSNF LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

14.Property, plant and equipment (continued)


14.2. Assets held under leases


The net book value of owned and leased assets included as "Property, plant and equipment" in the Company Statement of financial position is as follows:

2023
2022
£
£


Property, plant and equipment owned
451,931
587,558

Right-of-use assets, excluding investment property
2,149,846
2,285,652

2,601,777
2,873,210

Information about right-of-use assets is summarised below:

Net book value

2023
2022
£
£

Property
2,149,846
2,285,652

2,149,846
2,285,652

Depreciation charge for the year ended

2023
2022
£
£

Property
281,655
273,362

281,655
273,362

Page 46

 
HSNF LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

15.


Intangible assets

Group & Company





Development expenditure
Licences
Total

£
£
£



Cost





At 1 July 2021
227,888
35,100
262,988



At 30 June 2022
227,888
35,100
262,988



At 30 June 2023
227,888
35,100
262,988


Development expenditure
Licences
Total

£
£
£



Accumulated amortisation and impairment





At 1 July 2021
164,669
22,550
187,219


Charge for the year - owned
63,219
3,510
66,729



At 30 June 2022
227,888
26,060
253,948


Charge for the year - owned
-
3,510
3,510


At 30 June 2023
227,888
29,570
257,458



Net book value


At 1 July 2021
63,219
12,550
75,769


At 30 June 2022
-
9,040
9,040


At 30 June 2023
-
5,530
5,530

Page 47

 
HSNF LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

16.


Goodwill

Group


2023
2022
£
£


Cost
645,070
645,070

Accumulated impairment
(172,103)
-

472,967
645,070

2023
2022
£
£

Cost

At 1 July
645,070
645,070

At 30 June

645,070
645,070

Impairment charge
172,103
-


16.1 Allocation of goodwill to cash generating units

Goodwill is allocated to the Group's cash generating unit as follows:


2023
2022
£
£


BB Brands Limited
472,967
472,967

Perachem Limited
-
172,103

472,967
645,070

Page 48

 
HSNF LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

17.


Subsidiaries

Details of the Group's material subsidiaries at the end of the reporting period are as follows:

Name of subsidiary
Place of incorporation and operation
Proportion of ownership interest and voting power held by the Group (%)


2023
2022






1Pipkin Europe Limited


United Kingdom
 
100

100

2Perachem Limited


United Kingdom
 
100

100

3BB Brands Limited


United Kingdom
 
100

100

4Justbeauty Limited


United Kingdom
 
100

100

5Mylee Beauty Limited


United Kingdom
 
100

100

6HSNF (HK) Limited


Hong Kong
 
100

100

7HSNF IE Ltd


Ireland
 
100

100

8HSNF Poland


Poland
 
100

100


The Group has taken the exemption under section 405 of the Companies Act 2006 to exclude Justbeauty Limited, HSNF (HK) Limited, Mylee Beauty Limited and Pipkin Europe from the consolidation as their joint inclusion is not material for purpose of giving a true and fair view to the consolidated financial statements.
Perachem Limited and BB Brands Limited have taken advantage of the exemption to have an audit of their financial statements for the year end 30 June 2023, as permitted by section 479A of the UK Companies Act 2006. Under section 497C of the UK Companies Act 2006, we guarantee all the outstanding liabilities of Perachem Limited and BB Brands Limited as at 30 June 2023. 


18.

Other non-current investments


Group & Company

2023
2022
Note
£
£

Other fixed asset investments
  
11,470
11,469

  
11,470
11,469

Page 49

 
HSNF LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

19.


Inventories

Group & Company


2023
2022
£
£



Finished goods and goods for resale
7,178,196
8,235,948

7,178,196
8,235,948

The amount of inventories recognised as an expense during 2023 was £11,267,207 (2022 - £10,187,493).

Page 50

 
HSNF LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

20.


Trade and other receivables



Group

2023
2022
£
£


Trade receivables
2,705,778
2,249,744

Less: provision for impairment of trade receivables
(104,008)
(63,344)

Trade receivables - net
2,601,770
2,186,400

Receivables from related parties
-
145,157

Total financial assets other than cash and cash equivalents classified as loans and receivables
2,601,770
2,331,557

Prepayments and accrued income
561,442
348,649

Other receivables
528,034
770,179

Total trade and other receivables
3,691,246
3,450,385


Company

2023
2022
£
£


Trade receivables
2,669,213
2,211,680

Less: provision for impairment of trade receivables
(104,008)
(63,344)

Trade receivables - net
2,565,205
2,148,336

Receivables from related parties
324,908
195,260

Total financial assets other than cash and cash equivalents classified as loans and receivables
2,890,113
2,343,596

Prepayments and accrued income
509,445
348,649

Other receivables
478,499
768,778

Total trade and other receivables
3,878,057
3,461,023

Page 51

 
HSNF LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

21.


Trade and other payables



Group

2023
2022
£
£


Trade payables
2,756,591
2,845,147

Other payables
1,479,298
1,108,383

Accruals
241,389
121,692

Total financial liabilities, excluding loans and borrowings, classified as financial liabilities measured at amortised cost
4,477,278
4,075,222

Other payables - tax and social security payments
856,282
1,555,299

Total trade and other payables
5,333,560
5,630,521

Less: current portion - trade payables
(2,756,591)
(2,845,147)

Less: current portion - other payables
(2,335,580)
(2,663,682)

Less: current portion - accruals
(241,389)
(121,692)

Total current portion
(5,333,560)
(5,630,521)

Total non-current position
-
-


Company

2023
2022
£
£


Trade payables
3,226,957
3,378,104

Other payables
1,451,530
1,086,339

Accruals
264,348
144,651

Total financial liabilities, excluding loans and borrowings, classified as financial liabilities measured at amortised cost
4,942,835
4,609,094

Other payables - tax and social security payments
833,741
1,551,517

Total trade and other payables
5,776,576
6,160,611

Less: current portion - trade payables
(3,226,957)
(3,378,104)

Less: current portion - other payables
(2,285,271)
(2,637,856)

Less: current portion - accruals
(264,348)
(144,651)

Total current portion
(5,776,576)
(6,160,611)

Total non-current position
-
-

Page 52

 
HSNF LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

22.


Loans and borrowings


Group

2023
2022
£
£

Non-current

Bank loans - secured
47,587
80,954

Lease liabilities
2,081,150
2,151,338

2,128,737
2,232,292

Current

Overdrafts
408
-

Bank loans - secured
19,801
45,337

Lease liabilities
366,152
410,934

386,361
456,271

Total loans and borrowings
2,515,098
2,688,563


Company

2023
2022
£
£

Non-current

Bank loans - secured
-
39,693

Lease liabilities
2,081,150
2,151,338

2,081,150
2,191,031

Current

Lease liabilities
204,873
410,934

204,873
410,934

Total loans and borrowings
2,286,023
2,601,965

These amounts are secured by a fixed and floating charge against all tangible fixed assets.


23.


Employee benefit liabilities

At the year end, there was a liability totalling £19,668 (2022: £18,893) related to the defined benefit pension scheme.

Page 53

 
HSNF LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
24.


Share capital

Authorised

2023
2023
2022
2022
Number
£
Number
£

Shares treated as equity
Ordinary shares of £0.001 each

100,000

100

100,000
 
100
 
100,000

100

100,000
 
100
 

Issued and fully paid


2023
2023
2022
2022
Number
£
Number
£

Ordinary shares of £0.001 each

At 1 July and 30 June
100,000

100

100,000
 
100
 

Page 54

 
HSNF LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

25.


Reserves


Share premium

Includes consideration received for shares in excess of the nominal value. During the year, the share
premium was cancelled and the value transferred to the profit and loss account.

Foreign exchange reserve

Includes the gains and losses on the translation of foreign subsidiaries

Other reserves

Other reserves consist of share options granted.

Retained earnings

This reserve includes all current and prior year retained profit and losses. Also, the profit and loss account consists of share options measured at the fair value.

Page 55

 


 
HSNF LIMITED


 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

26.


Analysis of amounts recognised in other comprehensive income



Foreign exchange reserve



£



Year to 30 June 2023



Translation of foreign subsidary
(3,923)



(3,923)










Page 56

 
HSNF LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

27.


Leases


Group




(i) Leases as a lessee



The Group have various lease contracts for leasehold land and buildings used in the operations of the Group. The leases in respect of leasehold and buildings generally have lease terms between 1 and 10 years. The Group's obligations under its leases are secured by the lessor's title to the lease asset. Generally, the Group is restricted from assigning and subleasing the leased assets. Lease contracts sometimes include extension and termination options and variable lease payments.


Lease liabilities are due as follows:

2023
2022
£
£

Contractual undiscounted cash flows due

Not later than one year
312,862
410,934

Between one year and five years
982,862
664,824

Later than five years
1,456,583
1,486,514

2,752,307
2,562,272


Lease liabilities included in the Consolidated Statement of Financial Position at 30 June
2,447,302
2,562,272


Non-current
2,081,150
2,151,338

Current
366,152
410,934

Page 57

 
HSNF LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

Company




(ii) Leases as a lessee



The Group have various lease contracts for leasehold land and buildings used in the operations of the Group. The leases in respect of leasehold and buildings generally have lease terms between 1 and 10 years. The Group's obligations under its leases are secured by the lessor's title to the lease asset. Generally, the Group is restricted from assigning and subleasing the leased assets. Lease contracts sometimes include extension and termination options and variable lease payments.


Lease liabilities are due as follows:

2023
2022
£
£

Contractual undiscounted cash flows due

Not later than one year
225,750
410,934

Between one year and five years
903,000
664,824

Later than five years
1,456,583
1,486,514

2,585,333
2,562,272


Lease liabilities included in the Company Statement of Financial Position at 30 June
2,286,023
2,562,272


Non-current
2,081,150
2,151,338

Current
204,873
410,934


28.


Share based payments


28.1. Employee share option plan of the Company


Details of the employee share option of the Company

HSNF Limited has an equity-settled Enterprise Management Incentive Scheme ("EMI") which is available to UK employees who work for the Company and satisfy the qualifying conditions and the EMI working time requirements. The company also operates an unapproved option scheme.
The options vest over a period of up to 2 years from grant date. The Black-Scholes valuation method was used to determine the fair-value of the options vested during the year.
A total charge of £19,245 (2022: 
£15,403), has been recognised within the company and consolidated profit or loss in relation to the share-based payment transactions. 




Page 58

 
HSNF LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

29.


Related party transactions

Balances and transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on consolidation and are not disclosed in this note. Details of transactions between the Group and other related parties are disclosed below.

Details of transactions between the Company and its related parties are disclosed below.

29.1 Balance owed from related parties


2023
As restated 2022
£
£


BB Brands Limited
50,103
50,103

HSNF Poland
274,805
145,157

International Trade Corporation - company under common control
850,000
100,000

1,174,908
295,260

29.2 Balances owed to related parties


2023
2022
£
£


Hairstyle N Fashion - under control of connected party
60,000
60,000

Director
320,691
500,000

BB Brands Limited
533,123
533,150

913,814
1,093,150


30.


Controlling party

The ultimate controlling party of the Group is Ben White on the basis of his majority shareholding.


31.


Capital management

The Group is exposed to a variety of financial risks arising from financial instruments namely credit risk and currency risk. The Group's overall risk management program focuses on the unpredictability of financial markets, aims to achieve an appropriate balance between risk and return and seeks to minimise potential adverse affects on the Group's financial performance.
 
Policy for managing these risks is set by the Board following recommendations from the Finance Director. These policies and procedures enable management to make strategic and informed decision with regard to the operations of the Group. The policy for each of the above risks is described in more detail below.

The Group is not subject to any externally imposed capital requirements.

Page 59

 
HSNF LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

31.Capital management (continued)

The gearing ratios at 30 June 2023 and 30 June 2022 were as follows:

2023
2022
£
£


Cash and cash equivalents 
3,356,483
2,388,193

Trade and other receivables
4,541,246
3,429,737

Trade and other payables
(5,403,346)
(5,578,499)

Loans and borrowings
(2,514,690)
(2,562,272)

Net debt
(20,307)
(2,322,841)


Capital and reserves
9,627,607
9,242,184

Total equity
9,627,607
9,242,184

Page 60

 
HSNF LIMITED
 
 
 
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

31.Capital management (continued)

Credit risk
Credit risk arises from deposits with banks, as well as credit exposure on amounts receivable from employees and other third parties. The Group's exposure to credit risk arises from the default of the counterparty, with a maximum exposure equal to the carrying amount of these financial assets. The risks includes loss of principal, disruption to cash flows and increased collection costs. The Group's credit risk stems from two sources:
- Customers
- Banks and financial institutions
Customers
The Group faces minimal credit risk from trade receivable as customers pay for their orders in full at the time of purchase and the majority of third-party sales are to a small number of large established corporations
Bank and financial institutions
The Group holds accounts in several banks and financial institutions to facilitate the collection and payment of funds from/to customers and other parties. The maximum exposure to credit risk at the reporting time is the fair value of cash in bank, prepaid expenses and other receivables at the staments of financial position date. Credit risk of derivative assets is mitigated by cash collateral held.
Currency risk
The Group is exposed to currency risk primarily through transactions that are denominated in currencies other than the presentational currency of the Group, Great British Pound (GBP) to which they relate. The currencies giving rise to this risk are primarily US dollars (USD) and Euro dollars (EUR). The Group monitors whether there is a requirement for foreign currency on a monthly basis. The Group considers this policy minimises any unnecessary foreign exchange exposure.
Capital risk management
The Group monitors its level of capital which comprises all components of equity.
The Group's objective when maintaining capital is to safeguard the Group's ability to continue as a going concern so that it can continue to provide returns to shareholders and benefits for other stakeholders. In order to maintain the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or seek assets to reduce debt.
The Group is not subject to externally imposed capital requirements.

Page 61