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Registered number: 06357041
















BEAUTYNET LIMITED




ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023


































img261b.png


BEAUTYNET LIMITED

 
COMPANY INFORMATION


DIRECTORS
L De Glanville 
J De Glanville 




COMPANY SECRETARY
H De Glanville



REGISTERED NUMBER
06357041



REGISTERED OFFICE
Newminster House
27-29 Baldwin Street

Bristol

BS1 1LT




INDEPENDENT AUDITORS
Bishop Fleming LLP
Chartered Accountants & Statutory Auditors

10 Temple Back

Bristol

BS1 6FL






BEAUTYNET LIMITED


CONTENTS



Page
Strategic Report
 
1 - 2
Directors' Report
 
3
Directors' Responsibilities Statement
 
4
Independent Auditors' Report
 
5 - 8
Statement of Comprehensive Income
 
9
Statement of Financial Position
 
10
Statement of Changes in Equity
 
11
Statement of Cash Flows
 
12
Notes to the Financial Statements
 
13 - 25



BEAUTYNET LIMITED

 
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

INTRODUCTION
 
Beautynet Limited is a second-generation family business operating within the health and beauty industry. Our values of trust, reliability and discretion have been handed down and still guide our business today, allowing us to build long-lasting trusted partnerships. 
Beautynet has been trading in the UK since 2008 and in 2023 had a turnover of £20.5m (2022: £19.4m) with 17 staff and 2 directors (2021: 14 staff and 2 directors).

BUSINESS REVIEW
 
In 2023, Beautynet achieved a 5% increase in turnover despite heightened market competition. This growth reflects the company’s continued focus on delivering excellent customer and supplier service. Beautynet has also made significant investments in expanding its customer and supplier base, adopting advanced technologies and developing a state-of-the-art market monitoring analytics engine creating a new data sharing revenue stream. 
These strategic initiatives have strengthened its market position and provide a solid foundation for future growth.

PRINCIPAL RISKS AND UNCERTAINTIES
 
1. Market/policy changes
As has been the case for the last few years there are an increasing number of competitors entering the fast-moving consumer goods market. Beautynet can differentiate itself through a combination of reputation, quality of service, use of technology and its ability to commit to purchasing significant volumes of stock.
2. Supply risks
Beautynet's dependence for some of its products on a small number of manufacturers is a risk. However, Beautynet has in place a number of projects focussed on increasing the number of supplier and manufacturers it works with. During 2023 Beautynet continued the roll-out of new services for its suppliers focussed on maximising supplier profitability.
3. Investment in new customers
Beautynet continues to invest heavily in increasing the number of customers and geographies with which it trades and will continue to do so over the coming years. Beautynet continues the roll-out of several new services in 2023 focussed on providing customers with the ability to reduce risks associated with price and volume fluctuations.
4. Investment in technology
Beautynet has invested in a bespoke IT system which leverages the latest technologies to support its purchasing, sales, and decision-making processes. This system, which went live in 2019 is being actively invested in and will continue to be extended during 2024.
5. Impact of COVID-19
While sales and margins were affected in 2019, we are now seeing an improvement in margins. However, supply remains a challenge for some products.  Beautynet continues to operate as a going concern.

KEY PERFORMANCE INDICATORS
 
The gross margin decreased slightly from 22% in 2022 to 19% in 2023, a change that was anticipated as the market began to recover from the short-term supply challenges experienced in 2022.
Throughout 2023, Beautynet continued its significant investment in expanding its network of key suppliers. Additionally, the company saw over a 15% increase in the number of key customers, a trend that is expected to continue into 2024.
Debtor days have remained stable, consistently below 28 days.

Page 1


BEAUTYNET LIMITED


STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023


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



J De Glanville
Director

Date: 24 September 2024

Page 2


BEAUTYNET LIMITED

 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

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

RESULTS AND DIVIDENDS

The profit for the year, after taxation, amounted to £1,073,413 (2022: £2,332,181).

DIRECTORS

The directors who served during the year were:

L De Glanville 
J De Glanville 

MATTERS COVERED IN THE STRATEGIC REPORT

The Companies Act 2006 (Strategic Report and Directors' Report) Regulations 2013 requires a Strategic Report to be prepared. Where mandatory disclosures in the Directors' Report are considered by the Directors to be of strategic importance, these have been included in the Strategic Report rather than the Directors' Report. 

DISCLOSURE OF INFORMATION TO AUDITORS

Each of the persons who are directors at the time when this Directors' report is approved has confirmed that:

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'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's auditors are aware of that information.

POST BALANCE SHEET EVENTS

There have been no significant events affecting the Company since the year end.

AUDITORS

The auditorsBishop Fleming LLPwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

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






J De Glanville
Director

Date: 24 September 2024

Newminster House
27-29 Baldwin Street
Bristol
BS1 1LT

Page 3


BEAUTYNET LIMITED

 
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023

The directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.

 In preparing these financial statements, the directors are required to:

select suitable accounting policies for the Company's financial statements and then apply them consistently;

make judgements and accounting estimates that are reasonable and prudent;


prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

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

Page 4


BEAUTYNET LIMITED

 
INDEPENDENT AUDITORS' REPORT TO THE SHAREHOLDERS OF BEAUTYNET LIMITED
OPINION


We have audited the financial statements of Beautynet Limited (the 'Company') for the year ended 31 December 2023, which comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Cash Flows, the Statement of Changes in Equity and the related notes, including a summary of significant accounting policiesThe financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).


In our opinion the financial statements:


give a true and fair view of the state of the Company's affairs as at 31 December 2023 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.


BASIS FOR OPINION


We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the 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.


Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for a period of at least twelve months from when the 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.


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.


Page 5


BEAUTYNET LIMITED
 
 
INDEPENDENT AUDITORS' REPORT TO THE SHAREHOLDERS OF BEAUTYNET LIMITED (CONTINUED)

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 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 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 Company and its environment obtained in the course of the audit, we have not identified material misstatements in the 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, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.


RESPONSIBILITIES OF DIRECTORS
 

As explained more fully in the Directors' Responsibilities Statement set out on page 4, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.


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


Page 6


BEAUTYNET LIMITED
 
 
INDEPENDENT AUDITORS' REPORT TO THE SHAREHOLDERS OF BEAUTYNET 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:

We have considered the nature of the sector, control environment and financial performance of the entity;
We have considered the results of enquiries with management and Directors in relation to their own identification and assessment of the risk of irregularities within the entity;
We have reviewed the documentation of key processes and controls and performed walkthroughs of transactions to confirm that the systems are operating in line with documentation; and
We have considered the matters discussed among the audit engagement team regarding how and where fraud might occur in the financial statements and potential indicators of fraud.

As a result of these procedures, we have considered the opportunities and incentives that may exist within the organisation for fraud and identified the highest area of risk to be in relation to revenue recognition, with a particular risk in relation to year-end cut off. In common with all audits under ISAs (UK) we are also required to perform specific procedures to respond to the risk of management override.
We have also obtained understanding of the legal and regulatory frameworks that the Company operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included the Companies Act, FRS 102 and UK tax legislation. 
In addition, we considered the provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which may be fundamental to the Company's ability to operate or avoid a material penalty. These included data protection regulations, health and safety regulations and employment legislation.
Our procedures to respond to the risks identified included the following:
 
Reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;
Performing analytical procedures to identify unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;
Reviewing board meeting minutes;
Enquiring of management in relation to actual and potential claims and litigations;
Performing detailed transactional testing in relation to the recognition of revenue with a particular focus around year-end cut off;
In addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; assessing whether the judgements made in accounting estimates are indicative of potential bias; and evaluating the business rationale of significant transactions that are unusual or outside the normal course of business.

We also communicated identified laws and regulations and potential fraud risks to all members of the engagement team  and remained alert to any possible indicators of fraud or non-compliance with laws and regulations throughout the audit.

Page 7


BEAUTYNET LIMITED
 
 
INDEPENDENT AUDITORS' REPORT TO THE SHAREHOLDERS OF BEAUTYNET LIMITED (CONTINUED)


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 2006Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditors' 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.






Ria Burridge FCCA (Senior Statutory Auditor)
for and on behalf of
Bishop Fleming LLP
Chartered Accountants
Statutory Auditors
10 Temple Back
Bristol
BS1 6FL

24 September 2024
Page 8


BEAUTYNET LIMITED

 
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023

2023
2022
Note
£
£

  

Turnover
 4 
20,534,357
19,390,839

Cost of sales
  
(16,628,396)
(15,154,489)

Gross profit
  
3,905,961
4,236,350

Administrative expenses
  
(2,475,913)
(1,456,765)

Operating profit
 5 
1,430,048
2,779,585

Interest receivable and similar income
  
6,070
2,007

Profit before tax
  
1,436,118
2,781,592

Tax on profit
 9 
(362,705)
(449,411)

Profit for the financial year
  
1,073,413
2,332,181

There were no recognised gains and losses for 2023 or 2022 other than those included in the statement of comprehensive income.

There was no other comprehensive income for 2023 (2022:£NIL).

The notes on pages 13 to 25 form part of these financial statements.

Page 9


BEAUTYNET LIMITED
REGISTERED NUMBER:06357041

STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023

2023
2022
Note
£
£

  

Intangible assets
 10 
-
-

  
-
-

Current assets
  

Stocks
 11 
5,808,104
4,924,983

Debtors
 12 
849,172
1,350,559

Cash at bank and in hand
 13 
2,485,246
2,551,215

  
9,142,522
8,826,757

Creditors: amounts falling due within one year
 14 
(2,518,457)
(3,276,105)

Net current assets
  
 
 
6,624,065
 
 
5,550,652

Total assets less current liabilities
  
6,624,065
5,550,652

  

Net assets
  
6,624,065
5,550,652


Capital and reserves
  

Called up share capital 
 17 
1,888
1,888

Share premium account
 18 
242,346
242,346

Profit and loss account
 18 
6,379,831
5,306,418

  
6,624,065
5,550,652


The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 





J De Glanville
Director

Date: 24 September 2024

The notes on pages 13 to 25 form part of these financial statements.

Page 10


BEAUTYNET LIMITED


STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023


Called up share capital
Share premium account
Profit and loss account
Total equity

£
£
£
£


At 1 January 2022
1,888
242,346
2,974,237
3,218,471


Comprehensive income for the year

Profit for the year
-
-
2,332,181
2,332,181



At 1 January 2023
1,888
242,346
5,306,418
5,550,652


Comprehensive income for the year

Profit for the year
-
-
1,073,413
1,073,413


At 31 December 2023
1,888
242,346
6,379,831
6,624,065


The notes on pages 13 to 25 form part of these financial statements.

Page 11


BEAUTYNET LIMITED


STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023

2023
2022
£
£

Cash flows from operating activities

Profit for the financial year
1,073,413
2,332,181

Adjustments for:

Interest received
(6,070)
(2,007)

Taxation charge
362,705
449,411

(Increase) in stocks
(883,121)
(2,790,128)

Decrease/(increase) in debtors
501,387
(684,010)

Increase/(decrease) in creditors
235,922
(129,749)

Corporation tax (paid)
(436,244)
(48,796)

Net cash generated from operating activities

847,992
(873,098)


Cash flows from investing activities

Interest received
6,070
2,007

Net cash from investing activities

6,070
2,007

Cash flows from financing activities

Repayment of loans
(920,031)
(687,971)

Net cash used in financing activities
(920,031)
(687,971)

Net (decrease) in cash and cash equivalents
(65,969)
(1,559,062)

Cash and cash equivalents at beginning of year
2,551,215
4,110,277

Cash and cash equivalents at the end of year
2,485,246
2,551,215


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
2,485,246
2,551,215

2,485,246
2,551,215


The notes on pages 13 to 25 form part of these financial statements.

Page 12


BEAUTYNET LIMITED

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1.


GENERAL INFORMATION

Beautynet Limited is a limited liability company incorporated in the United Kingdom. The registered office is Newminster House, 27-29 Baldwin Street, Bristol, Somerset, BS1 1LT.

2.ACCOUNTING POLICIES

 
2.1

BASIS OF PREPARATION OF FINANCIAL STATEMENTS

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies (see note 3).

The following principal accounting policies have been applied:

 
2.2

GOING CONCERN

The financial statements have been prepared on a going concern basis. The company made a profit for the year of £1,073,413 (2022: profit £2,332,181) and has net current assets of £6,624,065 (2022: £5,550,652).

 
2.3

FOREIGN CURRENCY TRANSLATION

Functional and presentation currency

The Company's functional and presentational currency is GBP.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.

Page 13


BEAUTYNET LIMITED

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.ACCOUNTING POLICIES (continued)

 
2.4

REVENUE

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Sale of goods

Revenue from the sale of goods is recognised when all of the following conditions are satisfied:
the Company has transferred the significant risks and rewards of ownership to the buyer;
the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
the amount of revenue can be measured reliably;
it is probable that the Company will receive the consideration due under the transaction; and
the costs incurred or to be incurred in respect of the transaction can be measured reliably.

 
2.5

OPERATING LEASES: THE COMPANY AS LESSEE

Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.

 
2.6

INTEREST INCOME

Interest income is recognised in profit or loss using the effective interest method.

 
2.7

BORROWING COSTS

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

 
2.8

PENSIONS

DEFINED CONTRIBUTION PENSION PLAN

The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of Financial Position. The assets of the plan are held separately from the Company in independently administered funds.

Page 14


BEAUTYNET LIMITED

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.ACCOUNTING POLICIES (continued)

 
2.9

CURRENT AND DEFERRED TAXATION

The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

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

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the reporting date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.

 
2.10

INTANGIBLE ASSETS

                 GOODWILL

 Goodwill represents the difference between amounts paid on the cost of a business combination     and the acquirer’s interest in the fair value of its identifiable assets and liabilities of the acquiree at    the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less      accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight-   line basis to the Statement of comprehensive income over its useful economic life

                 OTHER INTANGIBLE ASSETS

Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.

 The estimated useful lives range as follows:

Goodwill
-
3
years

Page 15


BEAUTYNET LIMITED

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.ACCOUNTING POLICIES (continued)

 
2.11

STOCKS

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include labour and attributable overheads.

At each reporting date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.

 
2.12

DEBTORS

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

 
2.13

CASH AND CASH EQUIVALENTS

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

In the Statement of Cash Flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Company's cash management.

 
2.14

CREDITORS

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

 
2.15

FINANCIAL INSTRUMENTS

The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.

The Company has elected to apply the recognition and measurement provisions of IFRS 9 Financial Instruments (as adopted by the UK Endorsement Board) with the disclosure requirements of Sections 11 and 12 and the other presentation requirements of FRS 102.

Financial instruments are recognised in the Company's Statement of Financial Position when the Company becomes party to the contractual provisions of the instrument.

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

Basic financial assets

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

Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash
Page 16


BEAUTYNET LIMITED

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.ACCOUNTING POLICIES (continued)


2.15
FINANCIAL INSTRUMENTS (CONTINUED)

equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.

Other financial assets

Other financial assets, which includes investments in equity instruments which are not classified as subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the recognised transaction price. Such assets are subsequently measured at fair value with the changes in fair value being recognised in the profit or loss. Where other financial assets are not publicly traded, hence their fair value cannot be measured reliably, they are measured at cost less impairment.

Impairment of financial assets

Financial assets are assessed for indicators of impairment at each reporting date. 

Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.

If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.

Financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instruments any contract that evidences a residual interest in the assets of the Company after the deduction of all its liabilities.

Basic financial liabilities, which include trade and other payables, bank loans and other loans are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.

Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.

Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.

Other financial instruments

Derivatives, including forward exchange contracts, futures contracts and interest rate swaps, are not classified as basic financial instruments. These are initially recognised at fair value on the date the derivative contract is entered into, with costs being charged to the profit or loss. They are subsequently measured at fair value with changes in the profit or loss.

Debt instruments that do not meet the conditions as set out in FRS 102 paragraph 11.9 are
Page 17


BEAUTYNET LIMITED

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.ACCOUNTING POLICIES (continued)


2.15
FINANCIAL INSTRUMENTS (CONTINUED)

subsequently measured at fair value through the profit or loss. This recognition and measurement would also apply to financial instruments where the performance is evaluated on a fair value basis as with a documented risk management or investment strategy.

Derecognition of financial instruments

Derecognition of financial assets

Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Company transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Company will continue to recognise the value of the portion of the risks and rewards retained.

Derecognition of financial liabilities

Financial liabilities are derecognised when the Company's contractual obligations expire or are discharged or cancelled.


3.



JUDGEMENTS IN APPLYING ACCOUNTING POLICIES AND KEY SOURCES OF ESTIMATION UNCERTAINTY

Preparation of the financial statements requires management to make significant judgements and estimates. These judgements and estimates are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.


4.


TURNOVER

An analysis of turnover by class of business is as follows:


2023
2022
£
£

Sale of beauty products
20,514,763
19,387,928

Distribution and carriage
19,594
2,911

20,534,357
19,390,839


Analysis of turnover by country of destination:

2023
2022
£
£

United Kingdom
5,442,724
5,004,846

Rest of Europe
14,912,761
14,314,627

Rest of the world
178,872
71,366

20,534,357
19,390,839


Page 18


BEAUTYNET LIMITED

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

5.


OPERATING PROFIT

The operating profit is stated after charging:

2023
2022
£
£

Exchange differences
16,724
(17,766)

Other operating lease rentals
50,958
47,348

Defined contribution pension cost
12,906
9,377


6.


AUDITORS' REMUNERATION

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


2023
2022
£
£

Fees payable to the Company's auditors for the audit of the Company's financial statements
10,100
9,460

7.


EMPLOYEES

Staff costs, including directors' remuneration, were as follows:


2023
2022
£
£

Wages and salaries
1,204,002
693,358

Social security costs
137,786
72,802

Cost of defined contribution scheme
12,906
9,377

1,354,694
775,537


The average monthly number of employees, including the directors, during the year was as follows:


        2023
        2022
            No.
            No.







18
16

Page 19


BEAUTYNET LIMITED

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

8.


DIRECTORS' REMUNERATION

2023
2022
£
£

Directors' emoluments
202,553
46,016

202,553
46,016


The highest paid director received remuneration of £87,691 (2022: £20,866).

The value of the Company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £NIL (2022: £NIL).


9.


TAXATION


2023
2022
£
£

CORPORATION TAX


Current tax on profits for the year
349,627
436,526


TOTAL CURRENT TAX
349,627
436,526

DEFERRED TAX


Origination and reversal of timing differences
13,078
12,885

TOTAL DEFERRED TAX
13,078
12,885


TAXATION ON PROFIT ON ORDINARY ACTIVITIES
362,705
449,411
Page 20


BEAUTYNET LIMITED

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
 
9.TAXATION (CONTINUED)


FACTORS AFFECTING TAX CHARGE FOR THE YEAR

The tax assessed for the year is lower than (2022: lower than) the standard rate of corporation tax in the UK of 23.52% (2022: 19%). The differences are explained below:

2023
2022
£
£


Profit on ordinary activities before tax
1,436,118
2,781,592


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 23.52% (2022: 19%)
360,420
528,502

EFFECTS OF:


Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
1,496
624

Adjustments to tax charge in respect of prior periods
15
-

Adjustment in research and development tax credit leading to an increase (decrease) in the tax charge
-
(82,808)

Remeasurement of deferred tax for changes in tax rates
774
3,093

TOTAL TAX CHARGE FOR THE YEAR
362,705
449,411


10.


INTANGIBLE ASSETS




Goodwill

£



COST


At 1 January 2023
3,081,962



At 31 December 2023

3,081,962



AMORTISATION


At 1 January 2023
3,081,962



At 31 December 2023

3,081,962



NET BOOK VALUE



At 31 December 2023
-



At 31 December 2022
-



Page 21


BEAUTYNET LIMITED

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

11.


STOCKS

2023
2022
£
£

Finished goods and goods for resale
5,808,104
4,924,983

5,808,104
4,924,983



12.


DEBTORS

2023
2022
£
£



Trade debtors
688,639
602,046

Other debtors
160,251
540,654

Prepayments and accrued income
-
194,499

Deferred taxation
282
13,360

849,172
1,350,559



13.


CASH AND CASH EQUIVALENTS

2023
2022
£
£

Cash at bank and in hand
2,485,246
2,551,215

2,485,246
2,551,215



14.


CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2023
2022
£
£

Other loans
1,833,068
2,753,099

Trade creditors
259,999
30,489

Corporation tax
362,987
436,526

Other taxation and social security
46,692
42,490

Other creditors
5,611
4,901

Accruals and deferred income
10,100
8,600

2,518,457
3,276,105


Included within other loans is £1,833,068 (2022: £2,753,099) owed to a former director. This has been summarised in note 21. No interest has been charged on these amounts during the year. The balances are repayable on demand.  

Page 22


BEAUTYNET LIMITED

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

15.


FINANCIAL INSTRUMENTS

2023
2022
£
£

FINANCIAL ASSETS


Financial assets measured at fair value through profit or loss
2,485,246
2,551,215

Financial assets that are debt instruments measured at amortised cost
820,308
997,150

3,305,554
3,548,365


FINANCIAL LIABILITIES


Financial liabilities measured at amortised cost
(2,108,758)
(2,796,994)


Financial assets that are debt instruments measured at amortised cost comprise cash at bank, trade debtors and other debtors.


Financial liabilities measured at amortised cost comprise trade creditors, other creditors and accruals.


16.


DEFERRED TAXATION




2023
2022


£

£






At beginning of year
13,360
26,245


Charged to profit or loss
(13,078)
(12,885)



AT END OF YEAR
282
13,360

The deferred tax asset is made up as follows:

2023
2022
£
£


Short term timing differences
282
13,360

282
13,360

Page 23


BEAUTYNET LIMITED

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

17.


SHARE CAPITAL

2023
2022
£
£
ALLOTTED, CALLED UP AND FULLY PAID



5,867 (2022: 5,867) A Ordinary shares of £0.25 each
1,467
1,467
1,683 (2022: 1,683) C Ordinary shares of £0.25 each
421
421

1,888

1,888



18.


RESERVES

Share premium

This includes any premiums received on issue of share capital. Any transaction costs associated with
the issuing of shares are deducted from share premium.

Profit and loss account

This includes all current and prior period retained profits and losses.


19.


PENSION COMMITMENTS

The group operates a defined contribution pension scheme. The assets of the scheme are held separately
from those of the group in an independently administered fund. The pension cost charge represents
contributions payable by the group to the fund and amounted to £12,906 (2022: £9,377). At the year
end there were outstanding contributions of £Nil (2022: £Nil).


20.


COMMITMENTS UNDER OPERATING LEASES

At 31 December 2023 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

2023
2022
£
£


Not later than 1 year
6,779
6,779

Later than 1 year and not later than 5 years
283
7,062

7,062
13,841

Page 24


BEAUTYNET LIMITED

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

21.


RELATED PARTY TRANSACTIONS

Related party transactions and balances are as follows:


2023
2022
£
£

Purchases from entities under common ownership
236,346
94,545
Purchases from shareholders
233,338
117,702
Amounts owed to former directors
1,833,068
2,636,661
Amounts owed from directors
39,165
150,500
Amounts owed to directors
20
95
Amounts owed to entities under common ownership
137,100
12,406

Amounts owed to directors at year end are inluded within other creditors falling due within one year. Amounts owed by directors at year end are included within other debtors falling due within one year. Both of these balances relate to loan accounts held with directors. No interest has been charged on these amounts during the year. The balances are repayable on demand.

Page 25