Heni Holdings Limited - Limited company accounts 18.2

REGISTERED NUMBER: 11078584 (England and Wales)

Group Strategic Report, Report of the Director and

Consolidated Financial Statements

for the Period 23 November 2017 to 31 December 2018

for

HENI HOLDINGS LIMITED

Page

Company Information

1

Group Strategic Report

2

Report of the Director

3

Report of the Independent Auditors

5

Consolidated Income Statement

7

Consolidated Other Comprehensive Income

8

Consolidated Balance Sheet

9

Company Balance Sheet

10

Consolidated Statement of Changes in Equity

11

Company Statement of Changes in Equity

12

Consolidated Cash Flow Statement

13

Notes to the Consolidated Financial Statements

14

DIRECTOR:

S D Trood

REGISTERED OFFICE:

3rd Floor

126-134 Baker Street

London

W1U 6UE

REGISTERED NUMBER:

11078584 (England and Wales)

AUDITORS:

Butler & Co LLP

Chartered Accountants

& Statutory Auditor

Third Floor

126-134 Baker Street

London

W1U 6UE

The director presents his strategic report of the company and the group for the period 23 November 2017 to

31 December 2018.

REVIEW OF BUSINESS

The company is a non-trading holding company. The group trades as an international art services business. The principal

trading activities involve working with leading artists and estates across publishing, print-making, digital, film and art

research.

Group turnover for the period was £12.0m, gross profit was £7.0m, and the average number of employees was 137. The

group loss of £3.2m is mainly due to impairment of goodwill, and is not indicative of the underlying performance of the

group.

PRINCIPAL RISKS AND UNCERTAINTIES

The principal risks and uncertainties faced by the group are:

Foreign Currency Risk

The group's activities expose it to the financial risk of changes in foreign currency, principally the Euro and US dollar.

The group manages the risk by using appropriate hedging techniques.

Liquidity Risk

The group monitors cash as part of its day-to-day control procedures. The group does not use derivative financial

instruments for speculative purposes.

Credit Risk

The group's credit risk is primarily due to trade receivables.

FUTURE DEVELOPMENT

The directors expect the company to continue as a non-trading holding company, and the group to continue to trade as an

international art services business, for the foreseeable future. The group continues to seek improvements in operational

efficiency and effective cost management.

KEY PERFORMANCE INDICATORS

The directors use both financial and non-financial performance indicators to monitor the group's position.

The key financial performance indicators are sales of £12.0m and gross profit of £7.0m.

The key non-financial performance indicators are artist and stakeholder relationships.

The directors are of the belief that the monitoring of the above-mentioned indicators is an effective aspect of business

performance review.

ON BEHALF OF THE BOARD:

S D Trood - Director

4 November 2019

The director presents his report with the financial statements of the company and the group for the period

23 November 2017 to 31 December 2018.

INCORPORATION

The group was incorporated on 23 November 2017 .

DIVIDENDS

No dividends will be distributed for the period ended 31 December 2018.

EVENTS SINCE THE END OF THE PERIOD

Information relating to events since the end of the period is given in the notes to the financial statements.

DIRECTORS

The directors who have held office during the period from 23 November 2017 to the date of this report are as follows:

R Rajagopal - appointed 23 November 2017 - resigned 4 October 2018

S D Trood - appointed 4 October 2018

DISCLOSURE IN THE STRATEGIC REPORT

The principal risks and uncertainties that the company is exposed to in respect of foreign currency risk, liquidity risk and

credit risk have been disclosed in the strategic report.

DIRECTOR'S RESPONSIBILITIES STATEMENT

The director is responsible for preparing the Group Strategic Report, the Report of the Director and the financial

statements in accordance with applicable law and regulations.

Company law requires the director to prepare financial statements for each financial year. Under that law the director has

elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice

(United Kingdom Accounting Standards and applicable law). Under company law the director must not approve the

financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the company and the

group and of the profit or loss of the group for that period. In preparing these financial statements, the director is required

to:

-	select suitable accounting policies and then apply them consistently;

-	make judgements and accounting estimates that are reasonable and prudent;

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

The director is responsible for keeping adequate accounting records that are sufficient to show and explain the company's

and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and

the group and enable him to ensure that the financial statements comply with the Companies Act 2006. He is 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.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the director is aware, there is no relevant audit information (as defined by Section 418 of the Companies Act

2006) of which the group's auditors are unaware, and he has taken all the steps that he ought to have taken as a director in

order to make himself aware of any relevant audit information and to establish that the group's auditors are aware of that

information.

AUDITORS

The auditors, Butler & Co LLP, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

S D Trood - Director

4 November 2019

Opinion

We have audited the financial statements of Heni Holdings Limited (the 'parent company') and its subsidiaries (the

'group') for the period ended 31 December 2018 which comprise the Consolidated Income Statement, Consolidated Other

Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in

Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Financial

Statements, 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 the financial statements:

-	give a true and fair view of the state of the group's and of the parent company affairs as at 31 December 2018 and of the group's loss for the period then ended;

-	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

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

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law.

Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the

financial statements section of our report. We are independent of the group 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

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to

you where:

-	the director's use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

-

the director has not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the group's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

Other information

The director is responsible for the other information. The other information comprises the information in the Group

Strategic Report and the Report of the Director, but does not include the financial statements and our Report of the

Auditors thereon.

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.

In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or

apparent material misstatements, we are required to determine whether there is a material misstatement in the financial

statements or a material misstatement of the other information. 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 the audit:

-	the information given in the Group Strategic Report and the Report of the Director for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Group Strategic Report and the Report of the Director have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the

course of the audit, we have not identified material misstatements in the Group Strategic Report or the Report of the

Director.

We have nothing to report in respect of the following matters where 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 director's remuneration specified by law are not made; or

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

Responsibilities of director

As explained more fully in the Director's Responsibilities Statement set out on page three, the director is responsible for

the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal

control as the director determines necessary to enable the preparation of financial statements that are free from material

misstatement, whether due to fraud or error.

In preparing the financial statements, the director is responsible for assessing the 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 director either intends to liquidate the group or the parent company or to cease operations,

or has no realistic alternative but to do so.

Auditors' responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material

misstatement, whether due to fraud or error, and to issue a Report of the Auditors 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.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting

Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the

Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters

we are required to state to them in a Report of the Auditors 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.

Mr Rajesh Patel (Senior Statutory Auditor)

for and on behalf of Butler & Co LLP

Chartered Accountants

& Statutory Auditor

Third Floor

126-134 Baker Street

London

W1U 6UE

4 November 2019

TURNOVER

3

12,022,567

Cost of sales

5,042,290

GROSS PROFIT

6,980,277

Distribution costs

61,601

Administrative expenses

8,775,485

8,837,086

(1,856,809

)

Other operating income

1,369,128

OPERATING LOSS

5

(487,681

)

Interest receivable and similar income

1,371

(486,310

)

Impairment of goodwill

7

2,155,067

(2,641,377

)

Interest payable and similar expenses

8

457,877

LOSS BEFORE TAXATION

(3,099,254

)

Tax on loss

9

124,175

LOSS FOR THE FINANCIAL PERIOD

(3,223,429

)

Loss attributable to:

Owners of the parent

(3,210,970

)

Non-controlling interests

(12,459

)

(3,223,429

)

LOSS FOR THE PERIOD

(3,223,429

)

OTHER COMPREHENSIVE INCOME

Currency translation difference

(165,616

)

Pre acquisition loss adjustment

28,755

Increase in other reserves

108,903

Income tax relating to components of other comprehensive income

-

OTHER COMPREHENSIVE INCOME FOR THE PERIOD, NET OF INCOME TAX

(27,958

)

TOTAL COMPREHENSIVE INCOME FOR THE PERIOD

(3,251,387

)

Total comprehensive income attributable to:

Owners of the parent

(3,238,928

)

Non-controlling interests

(12,459

)

(3,251,387

)

FIXED ASSETS

Intangible assets

11

1,954,747

Tangible assets

12

2,808,188

Investments

13

-

4,762,935

CURRENT ASSETS

Stocks

14

6,910,569

Debtors

15

6,618,807

Cash at bank and in hand

697,636

14,227,012

CREDITORS

Amounts falling due within one year

16

7,213,809

NET CURRENT ASSETS

7,013,203

TOTAL ASSETS LESS CURRENT LIABILITIES

11,776,138

CREDITORS

Amounts falling due after more than one year

17

(14,571,636

)

PROVISIONS FOR LIABILITIES

21

(187,077

)

NET LIABILITIES

(2,982,575

)

CAPITAL AND RESERVES

Called up share capital

22

100

Other reserves

23

108,903

Retained earnings

23

(3,347,831

)

SHAREHOLDERS' FUNDS

(3,238,828

)

NON-CONTROLLING INTERESTS

24

256,253

TOTAL EQUITY

(2,982,575

)

The financial statements were authorised for issue by the director on 4 November 2019 and were signed by:

S D Trood - Director

FIXED ASSETS

Intangible assets

11

-

Tangible assets

12

-

Investments

13

100

100

CURRENT ASSETS

Debtors

15

351,650

CREDITORS

Amounts falling due within one year

16

2,534,002

NET CURRENT LIABILITIES

(2,182,352

)

TOTAL ASSETS LESS CURRENT LIABILITIES

(2,182,252

)

CAPITAL AND RESERVES

Called up share capital

22

100

Retained earnings

23

(2,182,352

)

SHAREHOLDERS' FUNDS

(2,182,252

)

Company's loss for the financial year

(2,182,352

)

The financial statements were authorised for issue by the director on 4 November 2019 and were signed by:

S D Trood - Director

Called up

share

Retained

Other

capital

earnings

reserves

£

£

£

Changes in equity

Issue of share capital

100

-

-

Total comprehensive income

-

(3,347,831

)

108,903

100

(3,347,831

)

108,903

Acquisition of non-controlling interest

-

-

-

Balance at 31 December 2018

100

(3,347,831

)

108,903

Non-controlling

Total

Total

interests

equity

£

£

£

Changes in equity

Issue of share capital

100

-

100

Total comprehensive income

(3,238,928

)

(12,459

)

(3,251,387

)

(3,238,828

)

(12,459

)

(3,251,287

)

Acquisition of non-controlling interest

-

268,712

268,712

Balance at 31 December 2018

(3,238,828

)

256,253

(2,982,575

)

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Changes in equity

Issue of share capital

100

-

100

Total comprehensive income

-

(2,182,352

)

(2,182,352

)

Balance at 31 December 2018

100

(2,182,352

)

(2,182,252

)

Cash flows from operating activities

Cash generated from operations

28

(1,886,113

)

Interest paid

(55,106

)

Interest element of hire purchase payments paid

(119

)

Tax paid

(174,642

)

Net cash from operating activities

(2,115,980

)

Cash flows from investing activities

Purchase of intangible fixed assets

(107,941

)

Purchase of tangible fixed assets

(1,011,989

)

Purchase of fixed asset investments

(2,868,248

)

Sale of tangible fixed assets

169,254

Cash at start of year

864,358

Interest received

1,371

Net cash from investing activities

(2,953,195

)

Cash flows from financing activities

New loans in year

5,952,600

Loan repayments in year

(183,188

)

Capital repayments in year

(5,663

)

Share issue

100

Net cash from financing activities

5,763,849

Increase in cash and cash equivalents

694,674

Cash and cash equivalents at beginning of period

29

-

Cash and cash equivalents at end of period

29

694,674

1.	STATUTORY INFORMATION

Heni Holdings Limited is a private company, limited by shares , registered in England and Wales. The company's

registered number and registered office address can be found on the General Information page.

The presentation currency of the financial statements is the Pound Sterling (£).

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Going Concern

The group made a loss before taxation for the period of £3,223,429, which was mainly due to impairment losses of

£2,155,067, arising from the impairment of goodwill.

At the balance sheet date, the group had net liabilities of £2,982,575. Included in creditors falling due after more

than one year is a loan of £14.3m owed by one of the group companies. The directors of the group and the

relevant group company have received confirmation from the creditor that they will not seek repayment of this

loan until such time when the group company is in a position to repay it.

Therefore, in the opinion of the directors, the group has adequate resources to meet its liabilities as and when they

fall due and to continue in operational existence for the foreseeable future. The directors continue to adopt the

going concern basis of accounting in preparing the financial statements.

Basis of consolidation

The group financial statements consolidate the financial statements of Heni Holdings Limited and all its subsidiary

undertakings drawn up to 31 December each year. No profit and loss account is presented for Heni Holdings

Limited as permitted by section 408 of the Companies Act 2006.

Subsidiaries are consolidated from the date of their acquisition, being the date on which the Group obtains control

and continue to be consolidated until the date that such control ceases. Control comprises the power to govern the

financial and operating policies of the investee so as to obtain benefit from its activities.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies

used in 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.

Critical accounting judgements and key sources of estimation uncertainty

The preparation of the financial statements requires the directors to make significant judgements and estimates.

These estimates and judgements are continually reviewed and are based on experience and other factors

including expectations of future events that are believed to be reasonable under the circumstances.

The areas of judgement and estimates applied by the directors are not considered sufficiently significant to

require disclosure in these financial statements.

Turnover

Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates,

value added tax and other sales taxes.

Turnover is recognised when the group has delivered goods and no other significant obligation remains unfulfilled

that may affect the customer's acceptance of the products.

Goodwill

Goodwill, being the amount paid in connection with the acquisition of a business in 2010, is being amortised evenly over its estimated useful life of ten years.

Goodwill, in one of the foreign subsidiary companies, is being amortised evenly over its estimated useful life of

fifteen years.

Positive goodwill acquired on each business combination is capitalised, classified as an asset on the statement of

financial position and amortised on a straight line basis over its useful life.

Goodwill acquired in a business combination is, from the acquisition date, allocated to each cash generating unit

that is expected to benefit from the synergies of the combination.

If a subsidiary, associate or business is subsequently sold or discontinued, any goodwill arising on acquisition that

has not been amortised through the profit and loss account is taken into account in determining the profit or loss

on sale or discontinuance.

Intangible assets

Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less

any accumulated amortisation and any accumulated impairment losses.

Patents and licences are being amortised evenly over their estimated useful life of ten years.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Freehold property

3% on cost

Leasehold improvements

over the lease term

Plant and machinery

33.33% and 20% on cost

Fixtures and fittings

33.33% and 20% on cost

Motor vehicles

25% and 20% on cost

Computer equipment

33.33% on cost

Stocks

Stocks and work in progress are valued at the lower of cost and net realisable value, after making due allowance

for obsolete and slow moving items.

Cost is calculated using the first-in, first-out method and includes all purchase, transport, and handling costs in

bringing stocks to their present location and condition.

Financial instruments

Financial liabilities and equity instruments are classified according to the substance of the contractual

arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of

the entity after deducting all of its financial liabilities.

Where the contractual obligations of financial instruments (including share capital) are equivalent to a similar

debt instrument, those financial instruments are classed as financial liabilities. Financial liabilities are presented

as such in the balance sheet. Financial costs and gains or losses relating to financial liabilities are included in the

profit and loss account. Finance costs are calculated so as to produce a constant rate of return on the outstanding

liability.

Where the contractual terms of share capital do not have any terms meeting the definition of a financial liability

then this is classed as an equity instrument. Dividends and distributions relating to equity instruments are debited

direct to equity.

Taxation

Taxation for the period comprises current and deferred tax. Tax is recognised in the Consolidated Income

Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in

equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or

substantively enacted by the balance sheet date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance

sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from

those in which they are recognised in the financial statements. Deferred tax is measured using tax rates and laws

that have been enacted or substantively enacted by the period end and that are expected to apply to the reversal of

the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they

will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Foreign currencies

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance

sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date

of transaction. Exchange differences are taken into account in arriving at the operating result.

Hire purchase and leasing commitments

Assets obtained under hire purchase contracts or finance leases are capitalised in the balance sheet. Those held

under hire purchase contracts are depreciated over their estimated useful lives. Those held under finance leases

are depreciated over their estimated useful lives or the lease term, whichever is the shorter.

The interest element of these obligations is charged to profit or loss over the relevant period. The capital element

of the future payments is treated as a liability.

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the

lease.

Pension costs and other post-retirement benefits

The group operates a defined contribution pension scheme. Contributions payable to the group's pension scheme

are charged to profit or loss in the period to which they relate.

Financial statement of foreign subsidiaries

The assets and liabilities of foreign subsidiaries are translated from the foreign subsidiary's functional currency

to the Group's reporting currency, GBP, at foreign exchange rates prevailing at the balance sheet date. Revenues

and expenses of foreign subsidiaries are translated to GBP at average rates that approximate the foreign

exchange rates prevailing at each of the transaction dates. Translation differences arising from the translation of

the net investment in foreign subsidiaries are recognised in other comprehensive income.

3.

TURNOVER

The turnover and loss before taxation are attributable to the one principal activity of the group.

An analysis of turnover by class of business is given below:

£

Editions

7,134,071

Artwork mounting

2,117,037

Fine Art Photography

1,253,371

Sculpture & Contemporary Art

966,858

Publishing

129,546

Others

421,684

12,022,567

An analysis of turnover by geographical market is given below:

£

United Kingdom

3,255,396

Europe

4,335,666

United States of America

828,287

Rest of the world

3,603,218

12,022,567

4.	EMPLOYEES AND DIRECTORS

£

Wages and salaries

4,372,269

Social security costs

708,411

Other pension costs

40,283

5,120,963

The average number of employees during the period was as follows:

Direct Production

88

Administration

49

137

The average number of employees by undertakings that were proportionately consolidated during the period was

29 .

£

Directors' remuneration

150,000

Directors' pension contributions to money purchase schemes

2,400

The number of directors to whom retirement benefits were accruing was as follows:

Money purchase schemes

1