Company registration number 01096654 (England and Wales)
HAINENKO LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2024
HAINENKO LIMITED
COMPANY INFORMATION
Directors
H P Laubis
N C Thomas
C M Yao
(Appointed 14 March 2025)
Secretary
L K Fallon
Company number
01096654
Registered office
284 Chase Road
Southgate
London
N14 6HF
Auditors
Charterhouse (Audit) Limited
166 College Road
Harrow
Middlesex
HA1 1RA
Middlesex
HA1 1RA
Business address
284 Chase Road
Southgate
London
N14 6HF
HAINENKO LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 7
Group statement of comprehensive income
8
Group balance sheet
9
Company balance sheet
10
Group statement of changes in equity
11
Company statement of changes in equity
12
Group statement of cash flows
13
Company statement of cash flows
14
Notes to the financial statements
15 - 28
HAINENKO LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 AUGUST 2024
- 1 -
The directors present the strategic report for the year ended 31 August 2024.
Fair review of the business
The economic climate created by recent Governments in the UK has not been conducive to growth and this has been coupled with rising costs. Despite this the company had a profitable year and continues to perform in a difficult market.
Principal risks and uncertainties
The group's principal financial instruments comprise bank balances (including foreign currency bank balances), trade debtors, trade creditors and loans to the group. The main purpose of these instruments is to raise funds for the group's operations and to finance the group's trading activities.
Due to the nature of the financial instruments used there is no exposure to price risk. The group's approach to managing other risks applicable to the financial instruments concerned is described below.
In respect of bank balances the liquidity risk is managed by maintaining sufficient balances in liquid form for the immediate and future needs of the group. Balances are also held in foreign currencies in order for the group to trade with suppliers and customers.
Trade debtors are managed in respect of credit and cash flow risk by policies concerning the credit offered to customers and the regular monitoring of amounts outstanding for both time and credit limits.
Trade creditors liquidity risk is managed by ensuring sufficient funds are available to meet amounts due.
There are loans from the directors. The directors are aware of the group's finance requirements and have determined that these will only be repaid, in whole or in part, when sufficient funds are available.
Currency exchange risk is managed by the use of forward contracts to hedge against currency fluctuations.
Key performance indicators
The key financial highlights are as follows:
2024
2023
£
£
Turnover
17,645,141
18,322,286
Gross profit
3,924,994
4,149,002
Gross profit margin
22.24%
22.64%
Earnings before interest, tax, depreciation and amortisation (EBITDA)
1,206,874
1,313,828
Gross profit margin and EBITDA as a percentage of turnover
The directors view EBITDA as a key performance indicator for the business and this is reviewed regularly. EBITDA as a percentage of sales has decreased to 6.84% (2023: 7.2%). The results are considered acceptable in light of the challenging market conditions.
The gross profit margin is a more comparable measure of the perfomance of the business and this has slightly decreased to 22.24% (2023: 22.64%). The main factor for the decrease in the gross profit margin and EBITDA was the reduction in turnover as customer ordering patterns stabilized following the fluctuations brought about by Covid and supply chain issues.
HAINENKO LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
- 2 -
Future developments
The change in ownership of the group will bring benefits for the group, with representation at an important manufacturing plant giving us improved delivery lead times and more competitive sourcing for other product ranges. The focus will be to increase our eco-friendly range with all manufacturers and looking at other products which can be complementary to the stationery market.
C M Yao
Director
16 May 2025
HAINENKO LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 AUGUST 2024
- 3 -
The directors present their annual report and financial statements for the year ended 31 August 2024.
Principal activities
The principal activity of the company and the group continued to be that of the import and resale of stationery products.
Results and dividends
The results for the year are set out on page 8.
Ordinary dividends were paid amounting to £1,000,000. The directors do not recommend payment of a further dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
D E J Ashpole
(Resigned 14 March 2025)
H P Laubis
N C Thomas
C M Yao
(Appointed 14 March 2025)
Post reporting date events
On 25 February 2025 Mr Yao Changyin became the ultimate controlling party of the group owning 100% of the shares. On 14 March 2025 Douglas Ashpole resigned as director and Mr Yao Changyin was appointed as director.
Energy and carbon report
As the group has not consumed more than 40,000 kWh of energy in this reporting period, it qualifies as a low energy user under these regulations and is not required to report on its emissions, energy consumption or energy efficiency activities.
Statement of directors' responsibilities
The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the ;
prepare the on the going concern basis unless it is inappropriate to presume that the group and company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
HAINENKO LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
- 4 -
Statement of disclosure to auditors
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 auditors of the company are 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 auditors of the company are aware of that information.
On behalf of the board
C M Yao
Director
HAINENKO LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF HAINENKO LIMITED
- 5 -
Opinion
We have audited the financial statements of Hainenko Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 August 2024 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows, the company statement of cash flows 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 group's and the parent company's affairs as at 31 August 2024 and of the group's 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.
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 group and parent 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.
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 group's and 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.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are 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 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.
HAINENKO LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF HAINENKO LIMITED
- 6 -
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 their 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 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, 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 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 parent company or to cease operations, or have 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 the audit was considered capable of detecting irregularities including fraud
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
the client partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify and recognise non-compliance with applicable laws and regulations;
we identified the laws and regulations applicable to the company through discussions with directors, key management personnel and from our commercial knowledge and experience.
we focused on specific laws and regulations which we considered may have a direct effect on the financial statements or the operations of the company including the Companies Act 2006, current taxation legislation, data protection, anti-bribery and money laundering, employment and health and safety legislation;
we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management;
identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
HAINENKO LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF HAINENKO LIMITED
- 7 -
We assessed the susceptibility of the company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur by;
making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual suspected and alleged fraud; and
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
To address the risk of fraud through management bias and override of controls, we:
performed analytical procedures to identify any unusual or unexpected relationships;
tested journal entries to identify unusual transactions;
investigated the rationale behind significant or unusual transactions.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
agreeing financial statements disclosures to underlying supporting documentation;
enquiring of management as to actual and potential litigation and claims; and
reviewing correspondence with HMRC, enquiring of management over health and safety.
There are inherent limitations in our audit procedures described above. Auditing standards also limit the audit procedures required to identifying non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
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.
.......................................................
Nirav Sheth(Senior Statutory Auditor)
For and on behalf of Charterhouse (Audit) Limited
Statutory Auditor
Charterhouse (Audit) Limited
166 College Road
Harrow
Middlesex
HA1 1RA
HAINENKO LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 AUGUST 2024
- 8 -
2024
2023
Notes
£
£
Turnover
3
17,645,141
18,322,286
Cost of sales
(13,720,147)
(14,173,284)
Gross profit
3,924,994
4,149,002
Distribution costs
(1,658,836)
(1,652,173)
Administrative expenses
(1,105,832)
(1,233,835)
Other operating income
-
1,954
Operating profit
4
1,160,326
1,264,948
Interest receivable and similar income
8
463
48
Interest payable and similar expenses
9
(13,342)
(43,832)
Profit before taxation
1,147,447
1,221,164
Tax on profit
10
(281,259)
(285,448)
Profit for the financial year
866,188
935,716
Profit for the financial year is all attributable to the owners of the parent company.
Total comprehensive income for the year is all attributable to the owners of the parent company.
HAINENKO LIMITED
GROUP BALANCE SHEET
AS AT
31 AUGUST 2024
31 August 2024
- 9 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
12
154,483
156,100
Current assets
Stocks
15
2,647,995
3,968,055
Debtors
16
4,630,963
4,885,453
Cash at bank and in hand
381,666
46,270
7,660,624
8,899,778
Creditors: amounts falling due within one year
17
(2,119,032)
(3,218,891)
Net current assets
5,541,592
5,680,887
Total assets less current liabilities
5,696,075
5,836,987
Provisions for liabilities
Deferred tax liability
18
25,760
32,860
(25,760)
(32,860)
Net assets
5,670,315
5,804,127
Capital and reserves
Called up share capital
20
100
100
Profit and loss reserves
5,670,215
5,804,027
Total equity
5,670,315
5,804,127
The financial statements were approved by the board of directors and authorised for issue on 16 May 2025 and are signed on its behalf by:
16 May 2025
C M Yao
Director
Company registration number 01096654 (England and Wales)
HAINENKO LIMITED
COMPANY BALANCE SHEET
AS AT 31 AUGUST 2024
31 August 2024
- 10 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
12
154,483
156,100
Investments
13
88
88
154,571
156,188
Current assets
Stocks
15
2,647,995
3,968,055
Debtors
16
4,647,085
4,891,403
Cash at bank and in hand
350,509
17,961
7,645,589
8,877,419
Creditors: amounts falling due within one year
17
(2,118,522)
(3,207,789)
Net current assets
5,527,067
5,669,630
Total assets less current liabilities
5,681,638
5,825,818
Provisions for liabilities
Deferred tax liability
18
25,760
32,860
(25,760)
(32,860)
Net assets
5,655,878
5,792,958
Capital and reserves
Called up share capital
20
100
100
Profit and loss reserves
5,655,778
5,792,858
Total equity
5,655,878
5,792,958
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £862,920 (2023 - £931,723 profit).
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved by the board of directors and authorised for issue on 16 May 2025 and are signed on its behalf by:
16 May 2025
C M Yao
Director
Company registration number 01096654 (England and Wales)
HAINENKO LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 AUGUST 2024
- 11 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 September 2022
100
5,368,311
5,368,411
Year ended 31 August 2023:
Profit and total comprehensive income
-
935,716
935,716
Dividends
11
-
(500,000)
(500,000)
Balance at 31 August 2023
100
5,804,027
5,804,127
Year ended 31 August 2024:
Profit and total comprehensive income
-
866,188
866,188
Dividends
11
-
(1,000,000)
(1,000,000)
Balance at 31 August 2024
100
5,670,215
5,670,315
HAINENKO LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 AUGUST 2024
- 12 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 September 2022
100
5,361,135
5,361,235
Year ended 31 August 2023:
Profit and total comprehensive income for the year
-
931,723
931,723
Dividends
11
-
(500,000)
(500,000)
Balance at 31 August 2023
100
5,792,858
5,792,958
Year ended 31 August 2024:
Profit and total comprehensive income
-
862,920
862,920
Dividends
11
-
(1,000,000)
(1,000,000)
Balance at 31 August 2024
100
5,655,778
5,655,878
HAINENKO LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 AUGUST 2024
- 13 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
26
1,662,601
553,101
Interest paid
(13,342)
(43,832)
Income taxes paid
(269,396)
(22,039)
Net cash inflow from operating activities
1,379,863
487,230
Investing activities
Purchase of tangible fixed assets
(52,127)
(73,577)
Proceeds from disposal of tangible fixed assets
7,197
-
Interest received
463
48
Net cash used in investing activities
(44,467)
(73,529)
Financing activities
Dividends paid to equity shareholders
(1,000,000)
(500,000)
Net cash used in financing activities
(1,000,000)
(500,000)
Net increase/(decrease) in cash and cash equivalents
335,396
(86,299)
Cash and cash equivalents at beginning of year
46,270
132,569
Cash and cash equivalents at end of year
381,666
46,270
HAINENKO LIMITED
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 AUGUST 2024
- 14 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
27
1,659,302
544,030
Interest paid
(13,342)
(43,806)
Income taxes paid
(268,945)
(21,970)
Net cash inflow from operating activities
1,377,015
478,254
Investing activities
Purchase of tangible fixed assets
(52,127)
(73,577)
Proceeds from disposal of tangible fixed assets
7,197
Interest received
463
48
Net cash used in investing activities
(44,467)
(73,529)
Financing activities
Dividends paid to equity shareholders
(1,000,000)
(500,000)
Net cash used in financing activities
(1,000,000)
(500,000)
Net increase/(decrease) in cash and cash equivalents
332,548
(95,275)
Cash and cash equivalents at beginning of year
17,961
113,236
Cash and cash equivalents at end of year
350,509
17,961
HAINENKO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2024
- 15 -
1
Accounting policies
Company information
Hainenko Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office and business address is 284 Chase Road, Southgate, London, N14 6HF.
The group consists of Hainenko Limited and all of its subsidiaries.
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.
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.
1.2
Basis of consolidation
The consolidated group financial statements consist of the financial statements of the parent company Hainenko Limited together with all entities controlled by the parent company (its subsidiaries).
All financial statements are made up to 31 August 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for sale of stationery in the normal course of business, and is shown net of VAT. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Revenue from the sale of stationery is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (the earlier of invoice date or dispatch of the goods), The amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
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 improvements
Over lease term of 10 years
Plant and equipment
15% reducing balance
Fixtures and fittings
15% to 33 1/3% reducing balance
Motor vehicles
25% reducing balance
HAINENKO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
1
Accounting policies
(Continued)
- 16 -
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 recognised in the profit and loss account.
1.5
Fixed asset investments
In the parent company financial statements, investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
1.6
Impairment of fixed assets
At each reporting period end date, the group 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).
1.7
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises of invoice price.
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.
1.8
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.9
Financial instruments
The group 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 group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and 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 measured at transaction price including transaction costs. Financial assets classified as receivable within one year are not amortised.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the recoverable amount. The impairment loss is recognised in profit or loss.
HAINENKO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
1
Accounting policies
(Continued)
- 17 -
Basic financial liabilities
Basic financial liabilities, including creditors are recognised at transaction price unless the arrangement constitutes a financing transaction. Financial liabilities classified as payable within one year are not amortised.
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.
Other financial liabilities
Derivatives, including forward foreign exchange contracts, are not basic financial instruments. Derivatives are recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in or in the cost of sales.
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.
1.10
Equity instruments
Equity instruments issued by the group 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 group.
1.11
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13
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 leased asset are consumed.
HAINENKO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
1
Accounting policies
(Continued)
- 18 -
1.14
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
1.15
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 group’s accounting policies, the directors are 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.
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.
Inventory provision
The group is involved in the distribution of stationery. To be able to service the customers promptly, they hold significant stock levels on many products. As a result it is necessary to consider the recoverability of the cost of inventory and the associated provisioning required. When calculating the inventory provision, management consider the length of time a particular stock line has not been purchased or sold, if no movement has occurred for several years, then a provision is made. Any significant reduction in the level of inventory provision would have positive impact on the operating result. The level of provision required is reviewed on an on-going basis and has been disclosed in note 15.
Provision for doubtful debts
The group makes an estimate of the recoverable value of the trade and other debtors. The group uses estimates based on historical experience determining the level of debts, which the group believes, will not be collected. These estimates include such factors as the current credit rating of the debtor, the ageing profile of the debtors and historical experience. Any significant reduction in the level of customers that default on payments or other significant improvements that resulted in a reduction in the level of bad debt provision would have a positive impact on the operating results. The level of provision required is reviewed on an on-going basis and is disclosed in note 16.
HAINENKO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
- 19 -
3
Turnover
2024
2023
£
£
Turnover analysed by class of business
Sales
17,645,141
18,322,286
In the opinion of the directors, it would be seriously prejudicial to the interests of the group to disclose the geographical market breakdown of turnover in these financial statements.
4
Operating profit
2024
2023
£
£
Operating profit for the year is stated after charging/(crediting):
Exchange losses/(gains)
47,458
(138,315)
Government grants
-
(1,954)
Depreciation of owned tangible fixed assets
49,524
48,878
(Profit)/loss on disposal of tangible fixed assets
(2,977)
1,010
5
Auditor's remuneration
2024
2023
Fees payable to the company's auditors and associates:
£
£
For audit services
Audit of the financial statements of the group and company
17,500
17,000
6
Employees
The average monthly number of persons (including directors) employed by the group and company during the year was:
Group
Company
2024
2023
2024
2023
Number
Number
Number
Number
Distribution staff
6
5
6
5
Administrative staff
15
15
15
15
Directors
3
3
3
3
Total
24
23
24
23
HAINENKO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
6
Employees
(Continued)
- 20 -
Their aggregate remuneration comprised:
Group
Company
2024
2023
2024
2023
£
£
£
£
Wages and salaries
942,487
904,875
942,487
904,875
Social security costs
88,332
83,698
88,332
83,698
Pension costs
13,689
12,206
13,689
12,206
1,044,508
1,000,779
1,044,508
1,000,779
7
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
223,763
226,536
Directors are the only key management personnel.
8
Interest receivable and similar income
2024
2023
£
£
Interest income
Other interest income
463
48
9
Interest payable and similar expenses
2024
2023
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
25
13
Other finance costs:
Other interest
13,317
43,819
Total finance costs
13,342
43,832
10
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
288,360
268,977
HAINENKO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
10
Taxation
2024
2023
£
£
(Continued)
- 21 -
Deferred tax
Origination and reversal of timing differences
(7,101)
16,471
Total tax charge
281,259
285,448
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2024
2023
£
£
Profit before taxation
1,147,447
1,221,164
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 19.00%)
286,862
232,021
Tax effect of expenses that are not deductible in determining taxable profit
7,973
114,918
Effect of change in corporation tax rate
-
37,844
Effect of overseas tax rates
(479)
(703)
Deferred tax adjustments in respect of timing differences
(7,101)
(16,471)
Loss on disposal of fixed assets
(744)
Capital allowances
(5,252)
(82,161)
Taxation charge
281,259
285,448
11
Dividends
2024
2023
Recognised as distributions to equity holders:
£
£
Interim paid
1,000,000
500,000
HAINENKO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
- 22 -
12
Tangible fixed assets
Group
Leasehold improvements
Plant and equipment
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 September 2023
18,926
773,336
234,805
295,156
1,322,223
Additions
6,851
45,276
52,127
Disposals
(8,094)
(34,449)
(42,543)
At 31 August 2024
18,926
773,336
233,562
305,983
1,331,807
Depreciation and impairment
At 1 September 2023
15,143
754,778
183,956
212,246
1,166,123
Depreciation charged in the year
1,893
2,785
13,662
31,184
49,524
Eliminated in respect of disposals
(7,323)
(31,000)
(38,323)
At 31 August 2024
17,036
757,563
190,295
212,430
1,177,324
Carrying amount
At 31 August 2024
1,890
15,773
43,267
93,553
154,483
At 31 August 2023
3,783
18,558
50,849
82,910
156,100
Company
Leasehold improvements
Plant and equipment
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 September 2023
18,926
773,336
234,805
295,156
1,322,223
Additions
6,851
45,276
52,127
Disposals
(8,094)
(34,449)
(42,543)
At 31 August 2024
18,926
773,336
233,562
305,983
1,331,807
Depreciation and impairment
At 1 September 2023
15,143
754,778
183,956
212,246
1,166,123
Depreciation charged in the year
1,893
2,785
13,662
31,184
49,524
Eliminated in respect of disposals
(7,323)
(31,000)
(38,323)
At 31 August 2024
17,036
757,563
190,295
212,430
1,177,324
Carrying amount
At 31 August 2024
1,890
15,773
43,267
93,553
154,483
At 31 August 2023
3,783
18,558
50,849
82,910
156,100
HAINENKO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
- 23 -
13
Fixed asset investments
Group
Company
2024
2023
2024
2023
Notes
£
£
£
£
Investments in subsidiaries
14
88
88
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 1 September 2023 and 31 August 2024
88
Carrying amount
At 31 August 2024
88
At 31 August 2023
88
14
Subsidiaries
Details of the company's subsidiaries at 31 August 2024 are as follows:
Name of undertaking
Registered office
Nature of business
Class of
% Held
shares held
Direct
Hainenko (EU) Ltd
City of Burgas 8011, k/s Meden Rudnik, Industrial are South-West, Bulgaria
Production and distribution of office materials, trade, import and export of goods
Ordinary
100.00
The aggregate capital and reserves and the result for the year of the subsidiaries noted above was as follows:
Name of undertaking
Capital and Reserves
Profit/(Loss)
£
£
Hainenko (EU) Ltd
14,525
3,419
15
Stocks
Group
Company
2024
2023
2024
2023
£
£
£
£
Finished goods and goods for resale
2,647,995
3,968,055
2,647,995
3,968,055
Stock is stated after provisions for impairment of £229,740 (2023: £150,260).
HAINENKO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
- 24 -
16
Debtors
Group
Company
2024
2023
2024
2023
Amounts falling due within one year:
£
£
£
£
Trade debtors
4,338,119
4,761,293
4,295,627
4,707,428
Amounts owed by group undertakings
-
-
59,190
60,352
Other debtors
292,844
124,160
292,268
123,623
4,630,963
4,885,453
4,647,085
4,891,403
17
Creditors: amounts falling due within one year
Group
Company
2024
2023
2024
2023
£
£
£
£
Trade creditors
359,983
675,460
359,490
664,462
Corporation tax payable
287,263
268,300
287,263
268,300
Other taxation and social security
188,998
219,116
188,998
219,116
Other creditors
393,417
1,709,841
393,400
1,709,737
Accruals and deferred income
889,371
346,174
889,371
346,174
2,119,032
3,218,891
2,118,522
3,207,789
18
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
Liabilities
Liabilities
2024
2023
Group
£
£
Accelerated capital allowances
25,760
32,860
Liabilities
Liabilities
2024
2023
Company
£
£
Accelerated capital allowances
25,760
32,860
HAINENKO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
18
Deferred taxation
(Continued)
- 25 -
Group
Company
2024
2024
Movements in the year:
£
£
Liability at 1 September 2023
32,860
32,860
Credit to profit or loss
(7,100)
(7,100)
Liability at 31 August 2024
25,760
25,760
19
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
13,689
12,206
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
20
Share capital
Group and company
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
100
100
100
100
21
Operating lease commitments
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
Group
Company
2024
2023
2024
2023
£
£
£
£
Between two and five years
434,001
660,437
434,001
660,437
434,001
660,437
434,001
660,437
HAINENKO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
- 26 -
22
Capital commitments
Amounts contracted for but not provided in the financial statements:
Group
Company
2024
2023
2024
2023
£
£
£
£
Forward Contracts
2,765,757
2,693,403
2,765,757
2,693,403
The group enters into forward contracts to hedge against currency fluctuations and to speculate against currency movements. The obligations above existed at the balance sheet date.
23
Related party transactions
Group
At the year end the director loan account balance was £nil (2023: company owed the director £349,479) and no interest was charged (2023: £2,421).
Company
At the year end the director loan account balance was £nil (2023: company owed the director £349,479) and no interest was charged (2023: £2,421).
24
Controlling party
The company is ultimately controlled by the director D E J Ashpole as at the year end.
25
Events after the reporting date
On 25 February 2025 Mr Yao Changyin became the ultimate controlling party of the group owning 100% of the shares. On 14 March 2025 Douglas Ashpole resigned as director and Mr Yao Changyin was appointed as director.
HAINENKO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
- 27 -
26
Cash generated from group operations
2024
2023
£
£
Profit for the year after tax
866,188
935,716
Adjustments for:
Taxation charged
281,259
285,448
Finance costs
13,342
43,832
Investment income
(463)
(48)
(Gain)/loss on disposal of tangible fixed assets
(2,977)
1,010
Depreciation and impairment of tangible fixed assets
49,524
48,878
Movements in working capital:
Decrease/(increase) in stocks
1,320,060
(1,353,856)
Decrease/(increase) in debtors
254,490
(286,948)
(Decrease)/increase in creditors
(1,118,822)
879,069
Cash generated from operations
1,662,601
553,101
27
Cash generated from operations - company
2024
2023
£
£
Profit for the year after tax
862,920
931,723
Adjustments for:
Taxation charged
280,808
285,379
Finance costs
13,342
43,806
Investment income
(463)
(48)
(Gain)/loss on disposal of tangible fixed assets
(2,977)
1,010
Depreciation and impairment of tangible fixed assets
49,524
48,878
Movements in working capital:
Decrease/(increase) in stocks
1,320,060
(1,362,431)
Decrease/(increase) in debtors
244,318
(279,193)
(Decrease)/increase in creditors
(1,108,230)
874,906
Cash generated from operations
1,659,302
544,030
28
Analysis of changes in net funds - group
1 September 2023
Cash flows
31 August 2024
£
£
£
Cash at bank and in hand
46,270
335,396
381,666
HAINENKO LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2024
- 28 -
29
Analysis of changes in net funds - company
1 September 2023
Cash flows
31 August 2024
£
£
£
Cash at bank and in hand
17,961
332,548
350,509
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