Company registration number 11127556 (England and Wales)
NANUSHKA LTD.
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
NANUSHKA LTD.
COMPANY INFORMATION
Director
P. Baldaszti
Company number
11127556
Registered office
30 Bruton Street
London
England
W1J 6QR
Auditor
Gerald Edelman LLP
73 Cornhill
London
EC3V 3QQ
NANUSHKA LTD.
CONTENTS
Page
Director's report
1
Independent auditor's report
2 - 4
Profit and loss account
5
Balance sheet
6
Statement of changes in equity
7
Notes to the financial statements
8 - 16
NANUSHKA LTD.
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The director presents his annual report and financial statements for the year ended 31 December 2023.
Principal activities
The principal activity of the company continued to be that of the retail sale of clothing.
Director
The director who held office during the year and up to the date of signature of the financial statements was as follows:
P. Baldaszti
Auditor
Gerald Edelman LLP were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
Statement of director's responsibilities
The director is responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the director to prepare financial statements for each financial year. Under that law the director has elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the director must not approve the financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the director is required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The director is responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. He is 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.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
Small companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the small companies exemption.
On behalf of the board
P. Baldaszti
Director
30 January 2025
NANUSHKA LTD.
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF NANUSHKA LTD.
- 2 -
Opinion
We have audited the financial statements of Nanushka Ltd. (the 'company') for the year ended 31 December 2023 which comprise the profit and loss account, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 December 2023 and of its loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's 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 UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Material uncertainty relating to going concern
In forming our opinion on the financial statements, which is not modified, we have considered the adequacy of the disclosures made in the directors' report and note 1.2 to the financial statements concerning the company's ability to continue as a going concern and the directors' future plans for the company.
The company's ability to continue as a going concern is highly dependent on the successful implementation of the group's strategic growth plan. These events and circumstances, as described in note 1.2, indicate the existence of significant uncertainties that may cast substantial doubt on the company’s ability to continue as a going concern.
Accordingly, the financial statements do not include adjustments that would result if the company was unable to continue as a going concern.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The director is responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. 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.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the director's report has been prepared in accordance with applicable legal requirements.
NANUSHKA LTD.
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF NANUSHKA LTD. (CONTINUED)
- 3 -
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 director's 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 remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit; or
the director was not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemption in preparing the director's report and from the requirement to prepare a strategic report.
Responsibilities of director
As explained more fully in the director's responsibilities statement, the director is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the director determines 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 director is 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 director either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
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 planned our audit so that we have a reasonable expectation of detecting material misstatements in the financial statements resulting from irregularities, fraud or non-compliance with law or regulations.
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, our procedures included the following:
The engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations.
Enquiring of management of whether they are aware of any non-compliance with laws and regulations.
Enquiring of management whether they have knowledge of any actual, suspected or alleged fraud.
Enquiring of management their internal controls established to mitigate risk related to fraud or non-compliance with laws and regulations.
Discussions amongst the engagement team on how and where fraud might occur in the financial statements and any potential indicators of fraud. As part of this discussion, we evaluated management’s incentive and opportunities for fraudulent manipulation of the financial statements, including risk of override of controls and determined that the principal risk was related to the posting of inappropriate journal entries.
Obtaining understanding of the legal and regulatory framework the company operates in focusing on those laws and regulations that had a direct effect on the financial statements or that had a fundamental effect on the operations. The key laws and regulations we considered in this context included the UK Companies Act, applicable tax legislation, employment and health and safety.
NANUSHKA LTD.
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF NANUSHKA LTD. (CONTINUED)
- 4 -
Fraud due to management override
To address the risk of fraud through management bias and override of controls, we:
Performed analytical procedures to identify any unusual or unexpected relationships.
Auditing the risk of management override of controls, including through testing journal entries for appropriateness.
Irregularities and non-compliance with laws and regulations
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but are not limited to:
Agreeing financial statement disclosures to underlying supporting documentation.
Enquiring of management as to actual and potential litigation claims.
Confirming with management that there had been no non-compliance with any of the legislation discussed above.
Reviewing relevant profit and loss account items for evidence of litigation.
The test nature and other inherent limitations of an audit, together with the inherent limitations of any accounting and internal control system, mean that there is an unavoidable risk that even some material misstatements in respect of irregularities may remain undiscovered even though the audit is properly planned and performed in accordance with ISAs (UK). Furthermore, the more removed that laws and regulations are from financial transactions, the less likely that we would become aware of non-compliance.
Our examination should therefore not be relied upon to disclose all such material misstatements or frauds, errors or instances of non-compliance that might exist. The responsibility for safeguarding the assets of the company and for the prevention and detection of fraud, error and non-compliance with law or regulations rests with the directors of Nanushka Limited.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in 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.
Hiten Patel FCCA
Senior Statutory Auditor
For and on behalf of Gerald Edelman LLP
30 January 2025
Chartered Accountants
Statutory Auditor
73 Cornhill
London
EC3V 3QQ
NANUSHKA LTD.
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 5 -
2023
2022
Notes
£
£
Turnover
3
1,461,873
1,632,129
Cost of sales
(725,510)
(618,335)
Gross profit
736,363
1,013,794
Administrative expenses
(3,582,079)
(3,358,835)
Other operating income
1,530,232
1,349,448
Operating loss
(1,315,484)
(995,593)
Interest payable and similar expenses
5
(196,281)
(167,049)
Loss before taxation
(1,511,765)
(1,162,642)
Tax on loss
Loss for the financial year
(1,511,765)
(1,162,642)
The profit and loss account has been prepared on the basis that all operations are continuing operations.
NANUSHKA LTD.
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 6 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
6
2,069,641
2,264,063
Current assets
Stocks
7
367,597
356,167
Debtors
8
496,861
2,803,799
Cash at bank and in hand
56,713
33,913
921,171
3,193,879
Creditors: amounts falling due within one year
9
(1,395,838)
(4,082,837)
Net current liabilities
(474,667)
(888,958)
Total assets less current liabilities
1,594,974
1,375,105
Creditors: amounts falling due after more than one year
10
(6,646,143)
(4,914,509)
Net liabilities
(5,051,169)
(3,539,404)
Capital and reserves
Called up share capital
13
1,000
1,000
Profit and loss reserves
(5,052,169)
(3,540,404)
Total equity
(5,051,169)
(3,539,404)
These financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements were approved and signed by the director and authorised for issue on 30 January 2025
P. Baldaszti
Director
Company registration number 11127556 (England and Wales)
NANUSHKA LTD.
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 7 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 January 2022
1,000
(2,377,762)
(2,376,762)
Year ended 31 December 2022:
Loss and total comprehensive income
-
(1,162,642)
(1,162,642)
Balance at 31 December 2022
1,000
(3,540,404)
(3,539,404)
Year ended 31 December 2023:
Loss and total comprehensive income
-
(1,511,765)
(1,511,765)
Balance at 31 December 2023
1,000
(5,052,169)
(5,051,169)
NANUSHKA LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
1
Accounting policies
Company information
Nanushka Ltd. is a private company limited by shares incorporated in England and Wales. The registered office is 30 Bruton Street, London, England, W1J 6QR.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Vanguards Fashion Group Zartkoruen Mukodo Reszvenytarsasag. These consolidated financial statements are available from its registered office.
NANUSHKA LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 9 -
1.2
Going concern
In determining the appropriate basis of preparation of the financial statements, the directors are required to consider whether the company can continue in operational existence for the foreseeable future, being a minimum period of 12 months from the date of approval of the financial statements.
During the year, the company reported a pre-tax loss of £1.5m, with net liabilities of £5.1m and cash reserves of £56k. Losses of a similar scale continued post year-end while projections indicate that, despite these challenges, the UK store is expected to demonstrate an improving trend in performance going forward.
The company remains reliant on financial support from the group, which also incurred losses for the period ended 31 March 2024. The group’s activities have been significantly affected by the global economic environment in recent years, including a decline in the luxury fashion market. These factors have fundamentally disrupted previously established business operations and economic relationships, introducing a challenging period for the group to achieve its strategic objectives.
Despite these difficulties, the group has identified numerous business opportunities, particularly in improving sales channels and adjusting pricing strategies. Revenue growth is anticipated through strategic operational restructuring, alongside the continued expansion of retail and e-commerce platforms. The group’s geographic expansion, particularly in Asian markets and China, presents significant business opportunities. Substantial progress has already been made in these regions, including strengthening its online presence and solidifying its retail footprint during 2024.
The group strategic growth plan include:
Growth in e-commerce sales is driven by factors such as:
Enhancing user experience by rebuilding the technological foundations of nanushka.com.
Launching sales on Tmall, China’s leading online marketplace.
Growth in retail sales is influenced by:
Retail campaigns and offline events.
Expanding the brand’s in-store presence (e.g., cafés, small accessories).
A travelling pop-up concept for key retail events (e.g., Los Angeles, London).
The return of Chinese travellers to the global luxury market, which is expected to significantly boost traffic in New York, London, and Budapest stores.
Black Friday and the holiday season, traditionally the strongest sales periods of the year, especially on the dotcom platform.
Growth in wholesale sales is enabled by:
Restoring the delivery schedule to normal operations, which is expected to improve liquidity.
More advantageous in-season trading campaigns to establish a stronger footing.
Furthermore, to improve the liquidity, in May 2023 the group successfully obtained a loan worth €10 million from a financial institution. As of the date of this report, the entire €10 million loan facility has been drawn down, with repayment due by 31 March 2030. However, in the event of a breach of obligations, the lender may demand immediate repayment of the full amount, which would severely impact the Company’s ability to operate.
The group’s strategic plan anticipates substantial revenue growth and margin improvement. Achieving these objectives is contingent upon the implementation of strict management measures and the continued availability of financial resources. Management is confident in the effectiveness of these actions, the viability of the strategic plan, and the group’s ability to comply with the covenants agreed upon with investors and lenders.
While there are no long-term, verifiable outcomes yet for the measures implemented, and the group fell significantly short of its business plan last year, management and the Board of Directors are confident that sufficient resources are available for the company and group to continue operations.
Accordingly, the financial statements have been prepared under the going concern assumption.
NANUSHKA LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 10 -
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
1.4
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Leasehold land and buildings
4 - 7% on cost
Fixtures and fittings
33% on cost
Computers
25% on cost
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.5
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.6
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
NANUSHKA LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 11 -
1.7
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
NANUSHKA LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 12 -
1.10
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.11
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.12
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
1.13
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the director is required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Stock valuation
Stock is valued at the lower of cost and net realisable value. Net realisable value includes, where necessary, provisions for slow moving or obsolete stocks. Calculation of these provisions requires judgements to be made, which include forecasted consumer demand, the economic environment, future promotions, and inventory loss trends.
Fixed asset impairment
The company conducts regular impairment assessment reviews of fixed assets held, designed to ensure accurate financial reporting by promptly recognising losses impacting the carrying value of such assets. The responsibility for conducting these assessments lies with the relevant department. The process involves gathering pertinent information and determining recoverable amounts through unbiased analysis, and recognising impairment losses where necessary.
NANUSHKA LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
2
Judgements and key sources of estimation uncertainty
(Continued)
- 13 -
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Depreciation rates
The director has decided to use the depreciation rates as laid out in Note 1.4 - these depreciation rates are reviewed annually.
3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Sales
1,461,873
1,632,129
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
1,461,873
1,632,129
2023
2022
£
£
Other revenue
Group recharges
1,530,232
1,349,448
4
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Total
28
26
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
1,633,924
1,556,697
Social security costs
142,981
163,511
Pension costs
23,246
18,738
1,800,151
1,738,946
NANUSHKA LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 14 -
5
Interest payable and similar expenses
2023
2022
£
£
Interest payable and similar expenses includes the following:
Interest payable to group undertakings
196,281
167,049
6
Tangible fixed assets
Land and buildings
Plant and machinery etc
Total
£
£
£
Cost
At 1 January 2023
2,448,301
148,314
2,596,615
Additions
6,731
6,731
At 31 December 2023
2,448,301
155,045
2,603,346
Depreciation and impairment
At 1 January 2023
260,267
72,285
332,552
Depreciation charged in the year
160,053
41,100
201,153
At 31 December 2023
420,320
113,385
533,705
Carrying amount
At 31 December 2023
2,027,981
41,660
2,069,641
At 31 December 2022
2,188,034
76,029
2,264,063
7
Stocks
2023
2022
£
£
Finished goods and goods for resale
367,597
356,167
8
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
30,562
73,008
Amounts owed by group undertakings
265,580
2,144,992
Other debtors
200,719
585,799
496,861
2,803,799
NANUSHKA LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 15 -
9
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
302,180
845,200
Amounts owed to group undertakings
108,392
2,137,862
Taxation and social security
385,514
283,034
Other creditors
599,752
816,741
1,395,838
4,082,837
10
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Loans from group undertakings
11
6,076,912
4,541,559
Accrued interest
569,231
372,950
6,646,143
4,914,509
11
Loans and overdrafts
2023
2022
£
£
Loans from group undertakings
6,076,912
4,541,559
Payable after one year
6,076,912
4,541,559
The long-term loans are provided by the parent company Nanushka International Zartkoruen Mukodo Reszvenytarsasag at an annual interest rate of 3.85%, with a final repayment date of 31st December 2027.
12
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
23,246
18,738
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
13
Called up share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
1,000
1,000
1,000
1,000
NANUSHKA LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
13
Called up share capital
(Continued)
- 16 -
14
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, as follows:
2023
2022
£
£
5,808,082
6,333,082
15
Related party transactions
2023
2022
Amounts due to related parties
£
£
Entities with control, joint control or significant influence over the company
6,754,535
7,052,371
The following amounts were outstanding at the reporting end date:
2023
2022
Amounts due from related parties
£
£
Entities with control, joint control or significant influence over the company
265,580
2,144,992
16
Parent company
Nanushka Limited is 100% owned by Nanushka International Zertkoruen Mukodo Reszvenytarsasag, a company registered in Hungary at 1122 Budapest, Varosmajor utca 12-14 C. Ep, under the registration number: 01-10-049880.
The majority owner of Nanushka International Zrt. is Vanguards Fashion Group Zartkoruen Mukodo Reszvenytarsasag, which is majority owned by EXIM Cross-Border PE Fund, managed by GB & Partners Kockazati-Tokealapkezelo Zartkoruen Mukodo Reszvenytarsasag, a company registered in Hungary at 1122 Budapest, Varosmajor utca 12-14 C. Ep, under the registration number: 01-10-047426.
The smallest group into which the entity is consolidated is Vanguards Fashion Group Zartkoruen Mukodo Reszvenytarsasag.
The largest group into which the entity is consolidated is EXIM Cross-Border PE Fund, managed by GB & Partners Kockazati-Tokealapkezelo Zartkoruen Mukodo Reszvenytarsasag.
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