ACCOUNTS - Final Accounts

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

MO FREEDOM LIMITED - Company Information

Caseware UK (AP4) 2020.0.247 2020.0.247 2020-08-312021-05-282021-05-282020-08-312020-08-312021-05-281falsetrue2019-09-01false1 09350386 2019-09-01 2020-08-31 09350386 2018-09-01 2019-08-31 09350386 2020-08-31 09350386 2019-08-31 09350386 2018-09-01 09350386 c:Director1 2019-09-01 2020-08-31 09350386 c:RegisteredOffice 2019-09-01 2020-08-31 09350386 d:Buildings d:ShortLeaseholdAssets 2019-09-01 2020-08-31 09350386 d:PlantMachinery 2019-09-01 2020-08-31 09350386 d:FurnitureFittings 2019-09-01 2020-08-31 09350386 d:Goodwill 2019-09-01 2020-08-31 09350386 d:CurrentFinancialInstruments 2020-08-31 09350386 d:CurrentFinancialInstruments 2019-08-31 09350386 d:CurrentFinancialInstruments d:WithinOneYear 2020-08-31 09350386 d:CurrentFinancialInstruments d:WithinOneYear 2019-08-31 09350386 d:ShareCapital 2020-08-31 09350386 d:ShareCapital 2019-08-31 09350386 d:ShareCapital 2018-09-01 09350386 d:RetainedEarningsAccumulatedLosses 2019-09-01 2020-08-31 09350386 d:RetainedEarningsAccumulatedLosses 2020-08-31 09350386 d:RetainedEarningsAccumulatedLosses 2018-09-01 2019-08-31 09350386 d:RetainedEarningsAccumulatedLosses 2019-08-31 09350386 d:RetainedEarningsAccumulatedLosses 2018-09-01 09350386 d:FinancialAssetsDesignatedFairValueThroughProfitOrLoss 2020-08-31 09350386 d:FinancialAssetsDesignatedFairValueThroughProfitOrLoss 2019-08-31 09350386 c:OrdinaryShareClass1 2019-09-01 2020-08-31 09350386 c:OrdinaryShareClass1 2020-08-31 09350386 c:OrdinaryShareClass1 2019-08-31 09350386 c:FRS102 2019-09-01 2020-08-31 09350386 c:Audited 2019-09-01 2020-08-31 09350386 c:FullAccounts 2019-09-01 2020-08-31 09350386 c:PrivateLimitedCompanyLtd 2019-09-01 2020-08-31 09350386 d:Subsidiary1 2019-09-01 2020-08-31 09350386 d:Subsidiary1 1 2019-09-01 2020-08-31 09350386 d:Subsidiary2 2019-09-01 2020-08-31 09350386 d:Subsidiary2 1 2019-09-01 2020-08-31 09350386 d:Subsidiary3 2019-09-01 2020-08-31 09350386 d:Subsidiary3 1 2019-09-01 2020-08-31 09350386 c:Consolidated 2020-08-31 09350386 c:ConsolidatedGroupCompanyAccounts 2019-09-01 2020-08-31 09350386 2 2019-09-01 2020-08-31 09350386 6 2019-09-01 2020-08-31 xbrli:shares iso4217:GBP xbrli:pure

Registered number: 09350386

MO FREEDOM LIMITED

ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 31 AUGUST 2020

MO FREEDOM LIMITED

COMPANY INFORMATION

Director	M Odabash


Registered number	09350386


Registered office	22 Bruton Street
	London
	W1J 6QE


Independent auditors	Simmons Gainsford LLP
	Chartered Accountants & Statutory Auditors
	7-10 Chandos Street
	London
	W1G 9DQ

MO FREEDOM LIMITED

CONTENTS

	Page
Group strategic report	1
Director's report	2 - 3
Independent auditors' report	4 - 6
Consolidated statement of comprehensive income	7
Consolidated balance sheet	8
Company balance sheet	9
Consolidated statement of changes in equity	10
Company statement of changes in equity	11
Consolidated Statement of cash flows	12
Notes to the financial statements	13 - 27

MO FREEDOM LIMITED

GROUP STRATEGIC REPORT

FOR THE PERIOD ENDED 31 AUGUST 2020

Introduction

The director presents her annual report and audited financial statements for the year ended 31 August 2019.

Business review

The principal activity of the group continued to be that of the design, manufacture and distribution of women’s holiday wear. There have been no major changes in the group’s core activities in the year under review.
Reduction in turnover mainly due to the closure of our retail outlet during Covid-19 lockdown during March to May 2020 as well as reduction in wholesale orders due to lockdown in various countries but the impact has been smoothened due to significant increase in online sales.
The total turnover forecasted for 2021 is expected to show another decline due to closure of retail outlets for 5 months. Furthermore, lockdown in various countries as well as Brexit are affecting the wholesale business too. On the other hand, further growth on our online business as well as growth in US wholesale is expected to reduce the overall impact of the decline.

Principal risks and uncertainties

The director is constantly reviewing market conditions and competitors’ activities in order to remain relevant and maintaining trade with existing customers and engaging new customers across various activities of the group.

Financial key performance indicators

The director believes that other than the statutory KPI’s of revenue, gross profit and operating profit set out in the Income statement, there are no other KPI’s required to be reported to give a full understanding of the business.
Revenue decreased by 4.4% from £12.2 to £11.7m, gross profit decreased by 15.1% from £7.4m to £6.3m and operating profit decreased by 72.1% from £1.8m to £510k.

This report was approved by the board on 28 May 2021 and signed on its behalf.

................................................

M Odabash

Director

Page 1

MO FREEDOM LIMITED

DIRECTOR'S REPORT

FOR THE PERIOD ENDED 31 AUGUST 2020

The director presents her report and the financial statements for the period ended 31 August 2020.

Principal activity

The principal activity of the company is that of a holding company for a group designing, manufacturing and selling beachwear.

Director

The director who served during the period was:

M Odabash

Director's responsibilities statement

The director is responsible for preparing the Group strategic report, the Director's report and the consolidated 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 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 director must not approve the financial statements unless she 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 for the Group's financial statements and then apply them consistently;

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

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

The director is responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and the Group and to enable her to ensure that the financial statements comply with the Companies Act 2006. She 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.

Results and dividends

The profit for the period, after taxation and minority interests, amounted to £339,179 (2019 - £1,179,702).

Dividends of £192,722 were paid during the year. The director does not propose a final dividend.

Future developments

The directors have indicated that the group will continue to trade in beachwear.

Matters covered in the strategic report

Principal risks and uncertainties are covered in the Strategic Report.

Page 2

MO FREEDOM LIMITED

DIRECTOR'S REPORT (CONTINUED)

FOR THE PERIOD ENDED 31 AUGUST 2020

Disclosure of information to auditors

The director at the time when this Director's report is approved has confirmed that:

∙so far as she is aware, there is no relevant audit information of which the Company and the Group's auditors are unaware, and

∙she 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.

Going concern

Prior to the balance sheet date, the World Health Organisation declared the Covid-19 virus to be a global pandemic and the UK Government introduced restrictions on certain activities and behaviours in an effort to prevent the virus’s spread and limit its longer term impact.
Whilst these restrictions have caused the Group to stop and then adapt its working practices, the director does not consider that the circumstances have caused any material change to the Groups ability to trade, nor affect its status as a Going Concern.

Auditors

The auditors, Simmons Gainsford LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board on 28 May 2021 and signed on its behalf.

................................................

M Odabash

Director

Page 3

MO FREEDOM LIMITED

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MO FREEDOM LIMITED

Opinion

We have audited the financial statements of MO Freedom Limited (the 'parent Company') and its subsidiaries (the 'Group') for the period ended 31 August 2020, which comprise the Group Statement of comprehensive income, the Group and Company Balance sheets, the Group Statement of cash flows, the Group and 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 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 August 2020 and of the Group's profit 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 United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

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 or the parent Company'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.

Page 4

MO FREEDOM LIMITED

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MO FREEDOM LIMITED (CONTINUED)

Other information

The director is responsible for the other information. The other information comprises the information included in the Annual Report, other than the financial statements and our Auditors' report 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.

Opinion on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

∙the information given in the Group strategic report and the Director's report for the financial period for which the financial statements are prepared is consistent with the financial statements; and

∙the Group strategic report and the Director's report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the 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 Director's report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

∙adequate accounting records have not been kept 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.

Page 5

MO FREEDOM LIMITED

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MO FREEDOM LIMITED (CONTINUED)

Responsibilities of directors

As explained more fully in the Director's responsibilities statement set out on page 2, the director is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the director determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the director is responsible for assessing the 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 have 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 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.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' report.

Use of our report

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

Abdultaiyab Pisavadi BSc FCA (Senior statutory auditor)

for and on behalf of

Simmons Gainsford LLP

Chartered Accountants

Statutory Auditors

7-10 Chandos Street

London

W1G 9DQ

28 May 2021

Page 6

MO FREEDOM LIMITED

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE PERIOD ENDED 31 AUGUST 2020

	2020	2019
Note	£	£


Turnover	4	11,651,324	12,193,553
Cost of sales		(5,330,512)	(4,749,744)
Gross profit		6,320,812	7,443,809
Distribution costs		(2,401,510)	(2,252,709)
Administrative expenses		(3,523,311)	(3,352,638)
Other operating income		114,910	-
Operating profit	5	510,901	1,838,462
Interest receivable and similar income	9	7,887	8,820
Interest payable and similar expenses	10	(6,459)	(7,036)
Profit before taxation		512,329	1,840,246
Tax on profit	11	(90,176)	(336,629)
Profit for the financial period		422,153	1,503,617

Profit for the period attributable to:
Non-controlling interests	82,974	323,915
Owners of the parent Company	339,179	1,179,702
	422,153	1,503,617

There was no other comprehensive income for 2020 (2019:£NIL).

The notes on pages 13 to 27 form part of these financial statements.

Page 7

MO FREEDOM LIMITED

REGISTERED NUMBER: 09350386

CONSOLIDATED BALANCE SHEET

AS AT 31 AUGUST 2020

		2020		2019
Note		£		£

Fixed assets
Intangible assets	14		238,560		291,574
Tangible assets	15		64,545		79,809
			303,105		371,383
Current assets
Stocks	17	1,154,894		1,429,654
Debtors: amounts falling due within one year	18	1,499,248		871,453
Cash at bank and in hand	19	4,878,916		4,592,717
		7,533,058		6,893,824
Creditors: amounts falling due within one year	20	(2,485,944)		(2,144,419)
Net current assets			5,047,114		4,749,405
Total assets less current liabilities			5,350,219		5,120,788
Net assets			5,350,219		5,120,788

Capital and reserves
Called up share capital	22	1	1
Profit and loss account	23	3,323,302	3,176,845
Equity attributable to owners of the parent Company		3,323,303	3,176,846
Non-controlling interests		2,026,916	1,943,942
Shareholders funds		5,350,219	5,120,788

The financial statements were approved and authorised for issue by the board and were signed on its behalf on 28 May 2021.

................................................

M Odabash

Director

The notes on pages 13 to 27 form part of these financial statements.

Page 8

MO FREEDOM LIMITED

REGISTERED NUMBER: 09350386

COMPANY BALANCE SHEET

AS AT 31 AUGUST 2020

		2020		2019
Note		£		£

Fixed assets
Investments	16		1,193,174		1,193,174
			1,193,174		1,193,174
Current assets
Debtors: amounts falling due within one year	18	66,008		300,000
Cash at bank and in hand	19	397,276		433,884
		463,284		733,884
Creditors: amounts falling due within one year	20	(438,787)		(782,991)
Net current assets/(liabilities)			24,497		(49,107)
Total assets less current liabilities			1,217,671		1,144,067


Net assets			1,217,671		1,144,067

Capital and reserves
Called up share capital	22		1		1
Profit and loss account brought forward		1,144,066		3,233,839
Profit for the period		266,326		744,269
Other changes in the profit and loss account		(192,722)		(2,834,042)
Profit and loss account carried forward			1,217,670		1,144,066
Shareholders funds			1,217,671		1,144,067

The financial statements were approved and authorised for issue by the board and were signed on its behalf on 28 May 2021.

................................................

M Odabash

Director

The notes on pages 13 to 27 form part of these financial statements.

Page 9

MO FREEDOM LIMITED

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE PERIOD ENDED 31 AUGUST 2020

	Called up share capital	Profit and loss account	Equity attributable to owners of parent Company	Non-controlling interests	Total equity
	£	£	£	£	£
At 1 September 2019	1	3,176,845	3,176,846	1,943,942	5,120,788

Profit for the period	-	339,179	339,179	82,974	422,153
Dividends: Equity capital	-	(192,722)	(192,722)	-	(192,722)
At 31 August 2020	1	3,323,302	3,323,303	2,026,916	5,350,219

The notes on pages 13 to 27 form part of these financial statements.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE PERIOD ENDED 31 AUGUST 2019

	Called up share capital	Profit and loss account	Equity attributable to owners of parent Company	Non-controlling interests	Total equity
	£	£	£	£	£
At 28 August 2017	1	4,831,185	4,831,186	1,620,027	6,451,213

Profit for the year	-	1,179,702	1,179,702	323,915	1,503,617
Dividends: Equity capital	-	(2,834,042)	(2,834,042)	-	(2,834,042)
At 31 August 2019	1	3,176,845	3,176,846	1,943,942	5,120,788

The notes on pages 13 to 27 form part of these financial statements.

Page 10

MO FREEDOM LIMITED

COMPANY STATEMENT OF CHANGES IN EQUITY

FOR THE PERIOD ENDED 31 AUGUST 2020

	Called up share capital	Profit and loss account	Total equity
	£	£	£
At 1 September 2019	1	1,144,066	1,144,067

Profit for the period	-	266,326	266,326
Dividends: Equity capital	-	(192,722)	(192,722)
At 31 August 2020	1	1,217,670	1,217,671

The notes on pages 13 to 27 form part of these financial statements.

COMPANY STATEMENT OF CHANGES IN EQUITY

FOR THE PERIOD ENDED 31 AUGUST 2019

	Called up share capital	Profit and loss account	Total equity
	£	£	£
At 1 September 2018	1	3,233,839	3,233,840

Profit for the year	-	744,269	744,269
Dividends: Equity capital	-	(2,834,042)	(2,834,042)
At 31 August 2019	1	1,144,066	1,144,067

The notes on pages 13 to 27 form part of these financial statements.

Page 11

MO FREEDOM LIMITED

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE PERIOD ENDED 31 AUGUST 2020

			2020	2019
			£	£

Cash flows from operating activities
Profit for the financial period	422,153	1,503,617
Adjustments for:
Amortisation of intangible assets	53,014	53,014
Depreciation of tangible assets	22,291	29,856
Government grants	(114,910)	-
Interest paid	6,459	7,036
Interest received	(7,887)	(8,820)
Taxation charge	90,176	336,629
Decrease/(increase) in stocks	274,760	(232,160)
(Increase) in debtors	(579,687)	(183,717)
Increase/(decrease) in creditors	423,939	(601,862)
Corporation tax (paid)	(220,698)	(387,713)
Net cash generated from operating activities	369,610	515,880

Cash flows from investing activities
Purchase of tangible fixed assets	(7,027)	(13,917)
Government grants received	114,910	-
Interest received	7,887	8,820
Net cash from investing activities	115,770	(5,097)
Cash flows from financing activities
Other new loans	-	4,375
Dividends paid	(192,722)	(2,834,042)
Interest paid	(6,459)	(7,036)
Net cash used in financing activities	(199,181)	(2,836,703)
Net increase/(decrease) in cash and cash equivalents	286,199	(2,325,920)
Cash and cash equivalents at beginning of period	4,592,717	6,918,637
Cash and cash equivalents at the end of period	4,878,916	4,592,717

Cash and cash equivalents at the end of period comprise:
Cash at bank and in hand	4,878,916	4,592,717

The notes on pages 13 to 27 form part of these financial statements.

Page 12

MO FREEDOM LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 31 AUGUST 2020

1.	General information

The company is a private company limited by shares, and is incorporated in England and Wales. The address of its registered office is 22 Bruton Street, London W1J 6QE.

2.Accounting policies

2.1

Basis of preparation of financial statements

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

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgement 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:

2.2

Basis of consolidation

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 Balance sheet, 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.

Page 13

MO FREEDOM LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 31 AUGUST 2020

2.Accounting policies (continued)

2.3

Turnover

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

Sale of goods

Turnover from the sale of goods is recognised when all of the following conditions are satisfied:

∙the Group has transferred the significant risks and rewards of ownership to the buyer;

∙the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;

∙the amount of turnover can be measured reliably;

∙it is probable that the Group will receive the consideration due under the transaction; and

∙the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Rendering of services

Turnover from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:

∙the amount of turnover can be measured reliably;

∙it is probable that the Group will receive the consideration due under the contract;

∙the stage of completion of the contract at the end of the reporting period can be measured reliably; and

∙the costs incurred and the costs to complete the contract can be measured reliably.

2.4

Intangible assets

Goodwill

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

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

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

Page 14

MO FREEDOM LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 31 AUGUST 2020

2.Accounting policies (continued)

2.5

Tangible fixed assets

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.

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:

Short-term leasehold property	-	Straight line over 10 years
Plant and machinery	-	20%-33% straight line
Fixtures and fittings	-	20%-33% Straight line

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.

2.6

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

2.7

Stocks

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

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

2.8

Debtors

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

2.9

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.

Page 15

MO FREEDOM LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 31 AUGUST 2020

2.Accounting policies (continued)

2.10

Financial instruments

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.

Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Consolidated statement of comprehensive income.

Financial assets and liabilities are offset and the net amount reported in the Balance sheet when there is an 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.

2.11

Creditors

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

2.12

Government grants

Grants are accounted under the accruals model as permitted by FRS 102. Grants relating to expenditure on tangible fixed assets are credited to profit or loss at the same rate as the depreciation on the assets to which the grant relates. The deferred element of grants is included in creditors as deferred income.
Grants of a revenue nature are recognised in the Consolidated statement of comprehensive income in the same period as the related expenditure.

Page 16

MO FREEDOM LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 31 AUGUST 2020

2.Accounting policies (continued)

2.13

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is GBP.

Transactions and balances

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

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

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

On consolidation, the results of overseas operations are translated into Sterling at rates approximating to those ruling when the transactions took place. All assets and liabilities of overseas operations are translated at the rate ruling at the reporting date. Exchange differences arising on translating the opening net assets at opening rate and the results of overseas operations at actual rate are recognised in other comprehensive income.

2.14

Finance costs

Finance costs are charged to profit or loss 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.

2.15

Dividends

Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.

2.16

Operating leases: the Group as lessee

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

Page 17

MO FREEDOM LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 31 AUGUST 2020

2.Accounting policies (continued)

2.17

Pensions

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 Balance sheet. The assets of the plan are held separately from the Group in independently administered funds.

2.18

Interest income

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

2.19

Borrowing costs

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

2.20

Taxation

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 balance sheet date in the countries where the Company and the Group operate and generate income.

3.	Judgements in applying accounting policies and key sources of estimation uncertainty

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.
The group makes estimates and assumptions concerning the future. Actual results may differ from these estimates. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Page 18

MO FREEDOM LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 31 AUGUST 2020

Other income	7,000	-
Beachwear wholesale	7,762,734	7,742,168
Beachwear retail	3,881,590	4,451,385
	11,651,324	12,193,553

Analysis of turnover by country of destination:

					2020	2019
					£	£

United Kingdom	3,407,220	4,022,610
Rest of Europe	3,105,094	3,096,867
Rest of the world	5,139,010	5,074,076
	11,651,324	12,193,553

	Exchange differences	155,757	(23,255)
	Other operating lease rentals	427,309	461,272

6.	Auditors' remuneration
		2020	2019
		£	£

Fees payable to the Group's auditor and its associates for the audit of the Group's annual financial statements

29,200

26,200

Page 19

MO FREEDOM LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 31 AUGUST 2020

7.	Employees
	Staff costs, including director's remuneration, were as follows:

Group	Group	Company	Company
2020	2019	2020	2019
£	£	£	£


Wages and salaries	1,475,566	1,463,553	36,000	36,000
Social security costs	118,805	131,191	3,768	3,794
Cost of defined contribution scheme	27,899	68,711	-	-
	1,622,270	1,663,455	39,768	39,794

The average monthly number of employees, including the director, during the period was as follows:

	Group	Group	Company	Company
	2020	2019	2020	2019
	No.	No.	No.	No.

Directors	1	1	1	1
Production	17	19	-	-
Administration	30	30	-	-

	48	50	1	1

8.	Director's remuneration
		2020	2019
		£	£

	Director's emoluments	36,000	36,000

9.	Interest receivable
		2020	2019
		£	£

Other interest receivable

7,887

8,820

Page 20

MO FREEDOM LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 31 AUGUST 2020

10.	Interest payable and similar expenses
		2020	2019
		£	£

Bank interest payable	13	-
Other loan interest payable	4,387	4,375
Other interest payable	2,059	2,661
	6,459	7,036

Corporation tax
Current tax on profits for the year	116,167	336,629
Adjustments in respect of previous periods	(25,991)	-

Total current tax	90,176	336,629

Profit on ordinary activities before tax

512,329

1,840,246

Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2019 - 19%)	97,343	349,647
Effects of:
Non-tax deductible amortisation of goodwill and impairment	10,073	10,073
Expenses not deductible for tax purposes, other than goodwill amortisation and impairment	640	2,173
Capital allowances for period in excess of depreciation	2,549	2,723
Utilisation of tax losses	(587)	-
Other timing differences leading to an increase (decrease) in taxation	(19,842)	(27,987)
Total tax charge for the period/year	90,176	336,629

Page 21

MO FREEDOM LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 31 AUGUST 2020

12.	Dividends
		2020	2019
		£	£

Ordinary dividends

192,722

2,834,042

13.	Parent company profit for the year

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 profit after tax of the parent Company for the period/year was £266,326 (2019 - £744,269).

14.	Intangible assets
	Group and Company

		Goodwill
		£
	Cost
	At 1 September 2019	530,136
	At 31 August 2020	530,136
	Amortisation
	At 1 September 2019	238,562
	Charge for the period on owned assets	53,014
	At 31 August 2020	291,576
	Net book value
	At 31 August 2020	238,560
	At 31 August 2019	291,574

Page 22

MO FREEDOM LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 31 AUGUST 2020

15.	Tangible fixed assets
	Group

	Long-term leasehold property	Plant and machinery	Fixtures and fittings	Total
	£	£	£	£
Cost or valuation
At 1 September 2019	120,954	130,775	305,855	557,584
Additions	-	899	6,128	7,027
At 31 August 2020	120,954	131,674	311,983	564,611
Depreciation
At 1 September 2019	76,530	130,359	270,886	477,775
Charge for the period on owned assets	7,174	663	14,454	22,291
At 31 August 2020	83,704	131,022	285,340	500,066
Net book value
At 31 August 2020	37,250	652	26,643	64,545
At 31 August 2019	44,424	416	34,969	79,809

Page 23

MO FREEDOM LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 31 AUGUST 2020

16.	Fixed asset investments

	Company

		Investments in subsidiary companies
		£
	Cost or valuation
	At 1 September 2019	1,193,174
	At 31 August 2020	1,193,174

Direct subsidiary undertakings
The following were direct subsidiary undertakings of the Company:
Name	Class of shares	Holding

Avalon Fashions Limited	Ordinary	60.16%
		%
		%

Indirect subsidiary undertakings
The following were indirect subsidiary undertakings of the Company:
Name	Class of shares	Holding

	Avalon Fashions II Limited	Ordinary	60.16%
	Avalon Fashions LLC	Ordinary	60.16%

17.	Stocks
		Group	Group
		2020	2019
		£	£

Raw materials and consumables	237,603	981,287
Finished goods and goods for resale	917,291	448,367
	1,154,894	1,429,654

Page 24

MO FREEDOM LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 31 AUGUST 2020

18.

Debtors

Group	Group	Company	Company
2020	2019	2020	2019
£	£	£	£


Trade debtors	1,032,586	408,150	27,312	-
Other debtors	458,829	400,461	-	-
Prepayments and accrued income	7,833	62,842	38,696	300,000
	1,499,248	871,453	66,008	300,000

19.	Cash and cash equivalents
		Group	Group	Company	Company
		2020	2019	2020	2019
		£	£	£	£

	Cash at bank and in hand	4,878,916	4,592,717	397,276	433,884

20.	Creditors: Amounts falling due within one year
		Group	Group	Company	Company
		2020	2019	2020	2019
		£	£	£	£

Other loans	124,573	120,186	124,573	120,186
Trade creditors	481,100	559,788	2,218	-
Amounts owed to group undertakings	-	-	135,798	131,762
Corporation tax	64,056	146,470	64,056	98,901
Other taxation and social security	122,398	118,343	26,857	80,087
Other creditors	83,103	124,404	26,510	111,269
Accruals and deferred income	1,610,714	1,075,228	58,775	240,786
	2,485,944	2,144,419	438,787	782,991

Page 25

MO FREEDOM LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 31 AUGUST 2020

21.	Financial instruments
		Group	Group	Company	Company
		2020	2019	2020	2019
		£	£	£	£

	Financial assets
	Financial assets measured at fair value through profit or loss	4,878,916	4,592,717	397,276	433,884

Financial assets measured at fair value through profit or loss comprise of cash at bank and in hand.

22.	Share capital
		2020	2019
		£	£

Allotted, called up and fully paid

1 (2019 - 1) Ordinary share of £1.00	1	1

23.

Reserves

Profit and loss account

The company's reserves of £1,217,670 (2019: £1,144,066) are all distributable.

24.	Pension commitments

The group operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the group in an independently administrated fund. The pension cost charge represents contributions payable by the group to the fund an amounted to £27,899 (2019: £68,711).
Contributions totalling £4,625 (2019: £4,709) were payable to the fund at the balance sheet date and are included in creditors.

Page 26

MO FREEDOM LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 31 AUGUST 2020

25.	Commitments under operating leases
	At 31 August 2020 the Group and the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

		Group	Group
		2020	2019
		£	£

Not later than 1 year	286,828	299,408
Later than 1 year and not later than 5 years	225,127	464,350
	511,955	763,758

26.

Related party transactions

Company
At the period end, a balance of £24,375 (2019: £111,269) was owed to the director. No interest was charged on this balance.
At period end, a balance of £124,573 (2019: £120,186) was owed to Talitha D, a company in which the director has a material interest. Interest of £4,387 (2019: £4,375) was charged on this balance.
During the period interest of £4,035 (2019: £4,035) was charged by a subsidiary of the company.
During the period, consultancy fees of £421,028 (2019: £1,305,120) were charged to subsidiaries.
Group
At the period end, a balance of £35,923 (2019: £123,904) was owed to the director. No interest was charged on this balance.
Remuneration to key management personnel for the year was £328,409 (2019: £317,540).

27.	Controlling party

The ultimate controlling party is the director and sole shareholder, Melissa Odabash.

Page 27