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Registered number: 07306044
HEDONISM DRINKS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
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HEDONISM DRINKS LIMITED
COMPANY INFORMATION
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T Artemev (appointed 13 October 2025)
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T Fokina (resigned 22 October 2025)
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Chartered Accountants & Statutory Auditor
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HEDONISM DRINKS LIMITED
CONTENTS
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Independent Auditors' Report
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Consolidated Statement of Comprehensive Income
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Consolidated Statement of Financial Position
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Company Statement of Financial Position
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Consolidated Statement of Changes in Equity
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Company Statement of Changes in Equity
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Consolidated Statement of Cash Flows
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Notes to the Financial Statements
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HEDONISM DRINKS LIMITED
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 JULY 2024
Hedonism Drinks Limited ("the Company") is principally engaged in the retail of alcoholic beverages in the UK and internationally through its flagship retail store in London and via its e-commerce platform. The Group also includes subsidiaries 85 Piccadilly Limited and 5 White Horse Limited, which operate in the hospitality sector. Collectively, the Company and its subsidiaries are referred to as "the Group".
The Board of Directors monitors the Group’s performance on a regular basis, comparing its results with peer companies in the same sector to ensure that the business continues to perform competitively.
Despite macroeconomic challenges, the Group achieved relatively strong trading during the year. The global wine and spirits markets experienced price corrections over the past 24 months; while the downward trend has slowed, prices have not yet recovered. As such, the business has remained focused on maintaining a fast-moving inventory.
In anticipation of this market shift, Hedonism undertook a deliberate sale of aged inventory between November 2023 and March 2024 to mitigate the risk of holding depreciating stock. Inventory turnover continues to be closely monitored, with approximately 85–90% of current stock acquired within the past 24 months sold within six months of purchase. The Group has also increased the proportion of products acquired on consignment, allowing the sales team to market items speculatively without committing capital. Although consignment sales achieve a lower average margin (around 20%), they significantly reduce the risk of holding unsellable stock.
Due to heightened competition and increased customer price awareness, the business has prioritised competitive pricing. Hedonism is at or below market pricing on approximately 300–500 lines at any given time, ensuring continued competitiveness.
Spirit sales increased 11% year on year (YOY), while wine sales rose by 17% YOY, with a further 23% increase in the final quarter of the financial year.
E-commerce continues to demonstrate strong growth. Improved website functionality, enhanced user experience, and increased SEO investment have resulted in online sales doubling over the past two years.
Innovation has also contributed to revenue growth. During the year, the Group entered new markets, including Whisky Cask Sales, In Bond, and En Primeur sales, which have produced encouraging results.
The Group has reported a pre-tax loss of £1,279,665 compared to a profit of £725,310 in the previous year.
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HEDONISM DRINKS LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
Principal risks and uncertainties
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Business Environment
The drinks industry remains highly competitive, with numerous retail and online operators offering similar products. The Group mitigates this risk by maintaining a distinctive product range, providing exceptional customer service, and ensuring operational efficiency.
Sales Strategy
The Group’s retail operation remains unique within the sector, attracting customers from across the UK, Europe, and beyond. Its extensive product range caters to diverse clientele, and pricing is continuously reviewed to maintain competitiveness. Customer satisfaction remains central to the Group’s ethos, with a quality guarantee offered on all stocked products.
To support sales growth, the team expanded by 33% during the year. The fine wine and rare spirits specialists within the business possess extensive industry experience and deep product knowledge, enabling them to deliver expert service to clients.
Purchasing Strategy
The Group sources products through a wide network of suppliers in both primary and secondary markets. While this broad supply base strengthens product diversity, it also presents logistical challenges. These are mitigated through strong supply chain management and the employment of highly experienced procurement and logistics professionals.
Administration
The Group continues to invest in capable administrative and finance professionals who ensure effective financial control, reporting, and compliance across all operations.
Financial key performance indicators
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The Board reviews business performance monthly and benchmarks annual results against industry peers. For the year under review, the gross profit margin was 17% for the Company and 30% for the Group, which the Directors consider satisfactory in the current market environment.
Risk Management
As required by the Companies Act 2006, the Group discloses principal risks and mitigation strategies. The Board is responsible for risk management and control processes, which are reviewed regularly.
Foreign exchange
The Group sources products globally and is therefore exposed to currency fluctuations. To mitigate this risk, the Company uses financial instruments such as forward contracts and regularly reviews exchange providers to secure favourable rates. All sales prices, both retail and online, are denominated in GBP to reduce exposure to foreign exchange volatility.
Subsidiaries
85 Piccadilly Ltd (trading as HIDE) continues to operate as a fine dining restaurant in Mayfair. The business remains focused on improving profitability through operational efficiencies. The Parent Company continues to provide financial support while the restaurant works towards self-sustainability.
5 White Horse Ltd, operating as a wine bar in London W1, benefits from proximity to HIDE and access to Hedonism’s extensive wine list. The venue is becoming a popular destination for both private events and casual clientele. However, subsequent to the year end, the directors made the decision to cease trading and to wind down the operations of 5 White Horse Limited. As a result, the financial statements for the subsidiary for the year ending 31 July 2024 will be prepared on a break-up basis rather than a going concern basis.
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HEDONISM DRINKS LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
Directors' statement of compliance with duty to promote the success of the Group
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The Directors, together with Senior Management, reviewed business practices and operational models across the Group to enhance resilience and profitability during challenging economic conditions. The Board believes that the actions taken during the year have strengthened the Group’s ability to adapt and maintain long-term success.
Hedonism Drinks Limited
The Directors initiated the development of an Inventory Tracking Tool to improve stock monitoring and decision-making. Due to continued pressure on industry margins, strategic pricing adjustments were implemented to stimulate turnover and maintain market position.
85 Piccadilly Limited
The Managing Director engaged stakeholders across operations, finance, and HR to evaluate restructuring opportunities. This resulted in the successful merger of the “Above” and “Ground” restaurants into a single high-volume operation with an adjoining cocktail bar. Minor refurbishment, kitchen optimisation, and staff training were completed between May and July 2023, with reopening on 1 August 2023.
5 White Horse Limited
The downstairs area of The White Horse was converted into staff facilities, including changing rooms and rest areas. Despite limited visibility due to external building works nearby, the venue achieved continued organic year-on-year growth. However, subsequent to the year end, the directors made the decision to cease the trading of 5 White Horse Limited and to wind down the operations of the Company.
This report was approved by the board and signed on its behalf.
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HEDONISM DRINKS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 JULY 2024
The directors present their report and the financial statements for the year ended 31 July 2024.
Directors' responsibilities statement
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The directors are responsible for preparing the Group Strategic Report, the Directors' Report and the consolidated 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 the Group 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 for the Group's financial statements and then apply them consistently;
∙make judgments 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 financial statements;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group 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 the Group and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The loss for the year, after taxation, amounted to £1,291,625 (2023 - profit £538,639).
The directors who served during the year were:
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T Fokina (resigned 22 October 2025)
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The business continues to look out for opportunities to increase its turnover, gross profit and net profit margins across the group.
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HEDONISM DRINKS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
Engagement with employees
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The Company policy is collaborative and open with suggestions for business improvements encouraged from departmental level to the senior managers. A series of consultation meetings were held to discuss potential changes to the businesses, providing support for a radical change to 85 Piccadilly Ltd. The MD also held broader discussions with all managers and stakeholders throughout the year, taking suggestions into account to inform strategy.
The Company employs a diverse workforce, with EDI structured into recruitment as applicants of all genders, ethnicities, sexuality and religions are encouraged to apply on the strength of their skills. Visa sponsorship is also available to candidates applying for positions at Hedonism Drinks Ltd and 85 Piccadilly Ltd, allowing for international applicants to join the UK workforce.
Engagement with suppliers, customers and others
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The Group engaged a PR Consultant to support the reach of the business, reestablishing the Group within London and National Press and developing PR strategy to promote to new customers and reengage with previous clients.
The Events, Reservations and Sales Teams ensure a best practice manner with clients, offering individualised proposals to ensure all are catered for.
Operational teams and the Finance Team provide open communication with suppliers, ensuring good terms are kept and/or developed.
The Company views all applicants as equal and encourages disabled persons to apply for suitable roles within the Group.
The Company ensures the best practice is followed in regards to the Equality Act, as disabled employees are supported during employment with reasonable adjustments made to ensure their comfort and success as a team members. Senior management ensure welfare checks and frequent support meetings for disabled colleagues and signpost to mental health support offered by the Group.
Greenhouse gas emissions, energy consumption and energy efficiency action
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The Group has not disclosed information in respect of greenhouse gas emissions, energy consumption and energy efficiency action as its energy consumption in the United Kingdom for the year is 40,000kWh or lower.
Disclosure of information to auditors
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Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
∙so far as the director is aware, there is no relevant audit information of which the Company and the Group's auditors are unaware, and
∙the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company and the Group's auditors are aware of that information.
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HEDONISM DRINKS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
Post balance sheet events
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Subsequent to the year end, the directors made the decision to cease the trading of 5 White Horse Limited and to wind down the operations of the Company. As a result, the financial statements of 5 White Horse Limited for the year ending 31 July 2024 will be prepared on a break-up basis rather than a going concern basis.
The wind-down of operations is expected to give rise to various closure costs, including redundancy payments, contract termination costs, and professional and administrative expenses associated with the cessation of trade. Redundancy costs are expected to represent the most material component of these expenses. Expenses relating to the Company’s lease will be settled in the normal course and will lapse on expiry.
The directors are assessing the financial implications of this event; however, it is not possible to quantify the financial effect at this stage.
These costs have not been recognised in the financial statements for the year ended 31 July 2024, as the decision to cease operations was made after the balance sheet date, and therefore represents a non-adjusting event under FRS 102.
Under section 487(2) of the Companies Act 2006, BKL Audit LLP will be deemed to have been reappointed as auditors 28 days after these financial statements were sent to members or 28 days after the latest date prescribed for filing the accounts with the registrar, whichever is earlier.
This report was approved by the board and signed on its behalf.
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HEDONISM DRINKS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF HEDONISM DRINKS LIMITED
We have audited the financial statements of Hedonism Drinks Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 July 2024, which comprise the Consolidated Statement of Comprehensive Income, the Consolidated Statement of Financial Position, the Company Statement of Financial Position, the Consolidated Statement of Cash Flows, the Consolidated Statement of Changes in Equity, the Company Statement of Changes in Equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
In our opinion, except for the effects of the matter described in the basis for qualified opinion section, in our opinion the financial statements:
∙give a true and fair view of the state of the Group's and of the parent Company's affairs as at 31 July 2024 and of the Group's loss for the year then ended;
∙have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
∙have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for qualified opinion
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We were unable to observe the counting of physical stock as at 31 July 2024. We were unable to satisfy ourselves by alternative means concerning the stock quantities held at 31 July 2024, which are included in the Consolidated Statement of Financial Position at £6,979,987, by using other audit procedures. Consequently, we were unable to determine whether any adjustment to this amount was necessary.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the 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 qualified opinion.
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HEDONISM DRINKS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF HEDONISM DRINKS LIMITED (CONTINUED)
Material uncertainty related to going concern
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We draw attention to note 2.3 in the financial statements, which indicates that the Group has incurred a substantial loss in the current year and is reliant on existing shareholder loans not being recalled. As stated in note 2.3, these events or conditions, along with the other matters as set forth in note 2.3, indicate that a material uncertainty exists that may cast significant doubt on the Group's or the parent Company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the directors' assessment of the Group's ability to continue to adopt the going concern basis of accounting included reviewing management’s cash flow forecasts covering a period of at least twelve months from the date of approval of the financial statements, assessing the key assumptions used, and considering the availability of existing and potential financing facilities.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Key audit matters
Except for the matter described in the basis for qualified opinion section, we have determined that there are no key audit matters to be communicated in our report.
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 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.
As described in the basis for qualified opinion section of our report, we were unable to satisfy ourselves concerning the stock quantities of £6,979,987 held at 31 July 2024. We have concluded that where the other information refers to the stock balance or related balances such as cost of sales, it may be materially misstated for the same reason.
Opinion on other matters prescribed by the Companies Act 2006
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Except for the possible effects of the matter described in the basis for qualified opinion section of our report, in our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Group Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Group Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
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HEDONISM DRINKS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF HEDONISM DRINKS LIMITED (CONTINUED)
Matters on which we are required to report by exception
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Except for the matter described in the basis for qualified opinion section of our report, in the light of the knowledge and understanding of the Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Directors' Report.
Arising solely from the limitation on the scope of our work relating to stock, referred to above:
∙we have not obtained all the information and explanations that we considered necessary for the purpose of our audit; and
∙we were unable to determine whether adequate accounting records have been kept.
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:
∙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.
Responsibilities of directors
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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 Group's and the parent Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or the parent Company or to cease operations, or have no realistic alternative but to do so.
Auditors' responsibilities for the audit of the financial statements
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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 Group financial statements.
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HEDONISM DRINKS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF HEDONISM DRINKS LIMITED (CONTINUED)
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
∙Enquiring of management and those charged with governance around actual and potential litigation and claims;
∙Reviewing the general ledger in detail for all transactions with related parties;
∙Performing walkthrough testing to ensure systems and controls are operating as recorded where appropriate;
∙Performing audit work over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for bias.
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.
As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. We also:
∙Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
∙Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion of the effectiveness of the Company's internal control.
∙Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
∙Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our Auditors' Report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our Auditors' Report. However, future events or conditions may cause the Company to cease to continue as a going concern.
∙Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
∙Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion.
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HEDONISM DRINKS LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF HEDONISM DRINKS LIMITED (CONTINUED)
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
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 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.
Myfanwy Beynon-Pollitt FCA (Senior Statutory Auditor)
for and on behalf of
BKL Audit LLP
Chartered Accountants
Statutory Auditor
35 Ballards Lane
London
N3 1XW
2 December 2025
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HEDONISM DRINKS LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 JULY 2024
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Interest receivable and similar income
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Interest payable and similar expenses
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(Loss)/profit before taxation
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(Loss)/profit for the financial year
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(Loss)/profit for the year attributable to:
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Owners of the parent Company
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There was no other comprehensive income for 2024 (2023:£NIL).
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The notes on pages 20 to 39 form part of these financial statements.
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HEDONISM DRINKS LIMITED
REGISTERED NUMBER: 07306044
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 JULY 2024
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Debtors: amounts falling due after more than one year
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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Provisions for liabilities
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Equity attributable to owners of the parent Company
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The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 20 to 39 form part of these financial statements.
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HEDONISM DRINKS LIMITED
REGISTERED NUMBER: 07306044
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 JULY 2024
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Debtors: amounts falling due after more than one year
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Net current (liabilities)/assets
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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Provisions for liabilities
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Profit and loss account brought forward
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Loss/(profit) for the year
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Profit and loss account carried forward
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HEDONISM DRINKS LIMITED
REGISTERED NUMBER: 07306044
COMPANY STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 JULY 2024
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 20 to 39 form part of these financial statements.
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HEDONISM DRINKS LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JULY 2024
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Equity attributable to owners of parent Company
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Comprehensive income for the year
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Comprehensive income for the year
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The notes on pages 20 to 39 form part of these financial statements.
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HEDONISM DRINKS LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JULY 2024
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Comprehensive income for the year
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Comprehensive income for the year
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The notes on pages 20 to 39 form part of these financial statements.
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|
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HEDONISM DRINKS LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 JULY 2024
Cash flows from operating activities
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(Loss)/profit for the financial year
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Depreciation of tangible assets
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|
Loss on disposal of tangible assets
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(Increase)/decrease in debtors
|
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Increase/(decrease)) in amounts owed to join ventures
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Net cash generated from operating activities
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|
Cash flows from investing activities
|
|
|
Purchase of tangible fixed assets
|
|
|
Sale of tangible fixed assets
|
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|
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|
|
Net cash from investing activities
|
|
|
|
|
HEDONISM DRINKS LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
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Cash flows from financing activities
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Net cash used in financing activities
|
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Net (decrease)/increase in cash and cash equivalents
|
|
|
Cash and cash equivalents at beginning of year
|
|
|
Cash and cash equivalents at the end of year
|
|
|
|
|
|
|
Cash and cash equivalents at the end of year comprise:
|
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|
The notes on pages 20 to 39 form part of these financial statements.
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|
|
HEDONISM DRINKS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
Hedonism Drinks Ltd’s ("the Company") principal activity remains the retail of alcoholic beverages in the UK and across the globe through its retail unit located in the United Kingdom and its website, whilst its subsidiaries 85 Piccadilly Limited and 5 White Horse Limited are within the hospitality industry. Together the Company and its subsidiaries are referred to as "the Group".
The Company is a private company limited by shares and is incorporated in England and Wales.
The Registered Office address is Connaught House, 1-3 Mount Street, London, England, W1K 3NB.
2.Accounting policies
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|
|
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 ("FRS 102") 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 Group management to exercise judgment in applying the Group's accounting policies (see note 3).
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements.
The following principal accounting policies have been applied:
The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Statement of Financial Position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Statement of Comprehensive Income from the date on which control is obtained. They are deconsolidated from the date control ceases.
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|
HEDONISM DRINKS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
2.Accounting policies (continued)
The Company financial statements show a loss for the year of £20,972,668 (2023 - profit £2,015,793) and net assets of £1,642,479 (2023 - £22,615,147).
The Group showed a loss after tax of £1,291,625 (2023: profit £538,639) and had net assets of £3,848,053 (2023: £5,139,678).
As at 31 July 2024, Mr Chichvarkin, a director and the ultimate controlling party, was owed £5,689,656 (2023: £3,703,465). Mr Chichvarkin has pledged his ongoing support for the Company and Group and has confirmed that he will not seek repayment of any amounts due to him if it would prejudice the company to make the repayments.
The directors are confident, based on the ongoing support from its Shareholders and the Group’s forecast cash flows, that adequate funding will be secured to meet liabilities as they fall due. However, if for whatever reason these shareholder loans are recalled this would place significant pressure on the Group’s liquidity position.
These conditions indicate the existence of a material uncertainty which may cast significant doubt on the Group’s ability to continue as a going concern. The financial statements do not include the adjustments that would result if the Group were unable to continue as a going concern.
The Company and Group have prepared cash flow forecasts until December 2026, under the current economic conditions and based on the key assumptions that the restaurant and wine store will remain open for the foreseeable future, general footfall is expected to increase and the refinancing of existing loans will be achieved. The forecasts incorporate profit improvement measures including controlling energy costs and securing favourable fixed prices, general cost efficiencies, and marketing campaigns to drive footfall.
As a result of these projections, and continued support from the ultimate controlling party, the directors are confident that the Company’s access to working capital and future profit generation will be sufficient to support the business in the foreseeable future, and accordingly, consider it appropriate to prepare the financial statements on a going concern basis.
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Foreign currency translation
|
Functional and presentation currency
The Group's functional and presentational currency is Sterling.
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.
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|
HEDONISM DRINKS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
2.Accounting policies (continued)
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group 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.
Revenue from the sale of goods is recognised when the goods are made available to the customer.
For in-store purchases this is upon payment and for online purchases, this is when the goods are shipped to the customer.
Revenue arising from the sale of food and drink is net of value added tax and income arising as a result of service charges relating to the sale of this food and drink.
Revenue is recognised when food and drink is provided to the customer.
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|
Operating leases: the Group as lessee
|
Rentals paid under operating leases are charged to the Consolidated Statement of Comprehensive Income on a straight-line basis over the lease term.
Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term.
Interest income is recognised in the Consolidated Statement of Comprehensive Income using the effective interest method.
Finance costs are charged to the Consolidated Statement of Comprehensive Income over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
Defined contribution pension plan
The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group 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 Group in independently administered funds.
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|
HEDONISM DRINKS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
2.Accounting policies (continued)
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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 and the Group operate and generate 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;
∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met; and
∙Where they relate to timing differences in respect of interests in subsidiaries, associates, branches and joint ventures and the Group can control the reversal of the timing differences and such reversal is not considered probable in the foreseeable future.
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.
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
At each reporting date the Group assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
|
|
HEDONISM DRINKS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
2.Accounting policies (continued)
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Tangible fixed assets (continued)
|
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
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Long-term leasehold property
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The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Investments in subsidiaries are measured at cost less accumulated impairment.
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.
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 the Consolidated Statement of Comprehensive Income.
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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 Consolidated 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 Group's cash management.
|
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|
Provisions for liabilities
|
Provisions are recognised when an event has taken place that gives rise to a legal or constructive obligation, a transfer of economic benefits is probable and a reliable estimate can be made.
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
Increases in provisions are generally charged as an expense to profit or loss.
|
|
HEDONISM DRINKS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
2.Accounting policies (continued)
The Group only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.
(i) Financial assets
Basic financial assets, including trade and other debtors, cash and bank balances are initially recognised at transaction price, 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.
Such assets are subsequently carried at amortised cost using the effective interest method. At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. If an asset is impaired the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in the Statement of Comprehensive Income.
Financial assets are derecognised when (a) the contractual rights to the cash flows from the asset expire or are settled, or (b) substantially all the risks and rewards of the ownership of the asset are transferred to another party or (c) control of the asset has been transferred to another party who has the practical ability to unilaterally sell the asset to an unrelated third party without imposing additional restrictions.
(ii) Financial liabilities
Basic financial liabilities, including trade and other creditors and accruals, are initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade creditors 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.
Financial liabilities are derecognised when the liability is extinguished, that is when the contractual obligation is discharged, cancelled or expires.
(iii) Offsetting
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.
|
|
HEDONISM DRINKS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
|
|
Judgements in applying accounting policies and key sources of estimation uncertainty
|
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported for assets and liabilities as at the Statement of Financial Position date and the amounts reported for revenues and expenses during the year. However, the nature of estimation means that actual outcomes could differ from those estimates.
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
Tangible fixed assets - useful economic life & recoverable value
Tangible fixed assets are depreciated over their useful lives taking into account residual values, where appropriate. The actual lives of the assets and residual values may vary depending on a number of factors.
Fixed assets are considered for impairment when events or circumstances indicate that there may be adjustments required to their carrying value. This review requires an assessment of the recoverable amount of the asset, and where the carrying value exceeds its estimated recoverable amount, the asset is written down to that value. The recoverable amount is the greater of its fair value less costs to sell and value in use.
The outcome of such an assessment is subjective and the result is sensitive to the assumed future cashflows for the value in use.
Valuation of trade debtors
The Directors recognise trade debtors net of provisions for any irrecoverable amounts. The recoverable amounts are considered to be those debts recovered post year-end and provisions are recognised for all debts outstanding at the date of the financial statements, that are past their due date.
Valuation of stock
A stock provision is allocated once the realisable value from the sale of the goods is estimated to be lower than the stock carrying figure. The Directors have estimated the stock provisioning for different products and believe that there are no expected losses associated with slow moving items.
|
|
HEDONISM DRINKS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
|
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|
|
An analysis of turnover by class of business is as follows:
|
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|
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|
|
Analysis of turnover by country of destination:
|
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|
|
The operating (loss)/profit is stated after charging:
|
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Rent operating lease rentals
|
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|
|
|
HEDONISM DRINKS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
|
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|
During the year, the Group obtained the following services from the Company's auditors and their associates:
|
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|
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|
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Fees payable to the Company's auditors for the audit of the consolidated and parent Company's financial statements
|
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|
|
Fees payable to the Copmany's auditors in respect of:
|
|
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|
|
The auditing of subsidiary companies
|
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|
Taxation compliance services
|
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|
|
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|
|
Staff costs, including directors' remuneration, were as follows:
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Cost of defined contribution scheme
|
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|
|
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|
|
|
|
|
|
The average monthly number of employees, including the directors, during the year was as follows:
|
|
|
HEDONISM DRINKS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
|
|
The highest paid director received remuneration of £436,815 (2023 - £452,352).
|
|
|
The value of the Group's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £1,321 (2023 - £NIL).
|
|
|
Interest payable and similar expenses
|
|
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|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
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|
|
Current tax on profits for the year
|
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|
|
|
|
|
|
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|
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|
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Origination and reversal of timing differences
|
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|
|
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|
|
|
|
|
|
Taxation on (loss)/profit on ordinary activities
|
|
|
|
|
HEDONISM DRINKS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
11.Taxation (continued)
|
|
Factors affecting tax charge for the year
|
|
|
The tax assessed for the year is higher than (2023 - higher than) the standard rate of corporation tax in the UK of 25% (2023 - 21.01%). The differences are explained below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss)/profit on ordinary activities before tax
|
|
|
|
|
(Loss)/profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2023 - 21.01%)
|
|
|
|
|
|
|
|
|
|
Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
|
|
|
|
|
Capital allowances for year in excess of depreciation
|
|
|
|
|
Movement in deferred tax not recognised
|
|
|
|
|
Remeasurement of deferred tax for change in tax rates
|
|
|
|
|
Total tax charge for the year
|
|
|
|
|
Factors that may affect future tax charges
|
There were no factors that may affect future tax charges.
|
|
Parent company profit for the year
|
The loss after tax of the parent Company for the year was £20,972,668 (2023 - profit £2,015,793).
|
|
HEDONISM DRINKS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
|
|
Long-term leasehold property
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
Reclassified to held for sale
|
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|
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|
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|
|
Charge for the year on owned assets
|
|
|
|
|
|
|
|
|
|
|
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|
|
Reclassified to held for sale
|
|
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|
|
|
|
|
|
HEDONISM DRINKS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
13.Tangible fixed assets (continued)
|
|
Long-term leasehold property
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charge for the year on owned assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
HEDONISM DRINKS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
|
|
Investments in subsidiary companies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
The following were subsidiary undertakings of the Company:
|
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|
|
|
|
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|
|
5 White Horse Street, London, England, W1J 7LQ
|
|
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|
|
|
5 White Horse Street, London, England, W1J 7LQ
|
|
|
|
|
Finished goods and goods for resale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The carrying value of stocks are stated net of impairment losses. There were no impairments made to stock during the year (2022: £Nil).
The difference between the purchase price of stocks and their replacement cost is not material.
|
|
|
HEDONISM DRINKS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
|
|
Due after more than one year
|
|
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|
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|
|
Amounts owed by group undertakings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prepayments and accrued income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
|
|
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|
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|
|
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|
|
|
|
|
|
|
|
HEDONISM DRINKS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
|
|
Creditors: Amounts falling due within one year
|
|
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|
|
Other taxation and social security
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accruals and deferred income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
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Included within other creditors at group level is £5,689,656 owed to one of the group's shareholders. The loan is interest free and is repayable on demand.
The Company has a related party loan within other loans of £4,000,000 which interest accrues at 11% per annum and is payable on the date the loan is repaid or becomes repayable. The loan is repayable in full on demand by the lender.
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Creditors: Amounts falling due after more than one year
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HEDONISM DRINKS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
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Analysis of the maturity of loans is given below:
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Amounts falling due within one year
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Other loans (See Note 18)
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Amounts falling due 1-2 years
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Amounts falling due 2-5 years
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As at July 2023 there were three separate bank loans on which interest was accruing at a rate of between 4% and 5.75%. The loans were being repaid in monthly installments with the latest repayment date in 2027. During 2024, the Company repaid the bank loan in full.
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Charged to profit or loss
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HEDONISM DRINKS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
21.Deferred taxation (continued)
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Charged to profit or loss
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Fixed asset timing differences
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Short term timing differences
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Allotted, called up and fully paid
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1 (2023 - 1) Ordinary share of £1.00
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The comparative information in the financial statements has been restated from the figures previously reported in the prior year financial statements as follows:
A prior year restatement was necessary to reclassify rent deposits between debtors due within one year and due after more than one year. This restatement resulted in a decrease in debtors due within one year by £1,257,358 and an increase in debtors due after more than one year by the same amount.
A second prior year restatement was necessary to reclassify prepayments incorrectly included within other debtors. This restatement resulted in a decrease in other debtors due within one year by £543,047 and an increase in prepayments by the same amount.
Overall, the above prior year restatements had no impact on net assets or profit of the previous year.
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HEDONISM DRINKS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
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 total pension cost for the Group was £159,598 (2023: £159,013). Contributions totaling £46,598 (2023: £46,069) were payable to the fund at the year end date.
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Commitments under operating leases
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At 31 July 2024 the Group and the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
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Later than 1 year and not later than 5 years
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Related party transactions
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The Company and one of its subsidiaries has a shareholder loan within other creditors totaling £5,689,656. The loan is interest free and is repayable on demand.
The Company has a related party loan within other loans of £4,000,000 which interest accrues at 11% per annum and is payable on the date the loan is repaid or becomes repayable. The loan is repayable in full on demand by the lender.
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Post balance sheet events
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Subsequent to the year end, the directors made the decision to cease the trading of 5 White Horse Limited and to wind down the operations of the company. As a result, the financial statements of 5 White Horse Limited for the year ending 31 July 2024 will be prepared on a break-up basis rather than a going concern basis.
The wind-down of operations is expected to give rise to various closure costs, including redundancy payments, contract termination costs, and professional and administrative expenses associated with the cessation of trade. Redundancy costs are expected to represent the most material component of these expenses. Expenses relating to the company’s lease will be settled in the normal course and will lapse on expiry.
The directors are assessing the financial implications of this event; however, it is not possible to quantify the financial effect at this stage.
These costs have not been recognised in the financial statements for the year ended 31 July 2024, as the decision to cease operations was made after the balance sheet date, and therefore represents a non-adjusting event under FRS 102.
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HEDONISM DRINKS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
The ultimate controlling party is E Chichvarkin.
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