Directors Report 1

The directors present their report and financial statements for the year ended 31 December 2013.
BUSINESS REVIEW
The group has the full confidence and continuing support of the ANS group of companies and its principal creditor. Sheet2 The directors are satisfied with the results for the year and look to the future with confidence. PRINCIPAL RISKS AND UNCERTAINTIES
The group's principal financial instruments comprise bank balances, trade creditors and trade debtors. The main purpose of these instruments is to raise funds for the group's operations and to finance the group's operations
Due to the nature of the financial instruments used by the group there is no exposure to price risk. The group's approach to managing other risks applicable to the financial instruments concerned is shown below.
In respect of bank balances the group makes use of money market facilities where funds are available.
Trade debtors are managed in respect of credit and cash flow risk by policies concerning the credit offered to customers and the regular monitoring of amounts outstanding for both time and credit limits.
Trade creditors liquidity risk is managed by ensuring sufficient funds are available to meet amounts due.

This report was approved by the board on 16 June 2015 and signed on its behalf.

A L E Dawson Secretary

Page 1 ADVANCED HAIR STUDIOS GROUP LIMITED

DIRECTORS' REPORT FOR THE YEAR ENDED 31 DECEMBER 2013
The directors present their report and the financial statements for the year ended 31 December 2013. PRINCIPAL ACTIVITIES The principal activity of the group and the company continued to be the provision of hair replacement services. DIRECTORS' RESPONSIBILITIES STATEMENT
The directors are responsible for preparing the Group strategic report, the Directors report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are-satisfied that they give a true and fair view of the state of affairs of the 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 and then apply them consistently; ?make judgments 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 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 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.
DIRECTORS
The directors who served during the year were:
C Howell B L Murray
DISCLOSURE OF INFORMATION TO AUDITORS
Each of the persons who are directors at the time when this Directors' report is approved has confirmed that: ?so far as that director is aware, there is no relevant audit information of which the company and the group's auditors are unaware, and ?that director has taken all the steps that might 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.
AUDITORS
Under section 487(2) of the Companies Act 2006, Harris & Trotter 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.

Page 2 ADVANCED HAIR STUDIOS GROUP LIMITED

DIRECTORS' REPORT FOR THE YEAR ENDED 31 DECEMBER 2013
In preparing this report, the directors have taken advantage of the small companies exemptions provided by section 415A of the Companies Act 2006.
This report was approved by the board on 16 June 2015 and signed on its behalf.
kr-eite A L E Dawson Secretary

Page 3 ADVANCED HAIR STUDIOS GROUP LIMITED

INDEPENDENT AUDITORS REPORT TO THE SHAREHOLDERS OF ADVANCED HAIR STUDIOS GROUP LIMITED

We have audited the financial statements of Advanced Hair Studios Group Limited for the year ended 31 December 2013, set out on pages 6 to 16. The financial reporting framework that has been applied in their preparation is applicable law and the Financial Reporting Standard for Smaller Entities (effective April 2008) (United Kingdom Generally. Accepted Accounting Practice applicable to Smaller Entities).
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.
RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS
As' explained more fully in the Directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law .and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.
SCOPE OF THE AUDIT OF THE FINANCIAL STATEMENTS
An audit- involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the group's and the parent company's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the Group strategic report and the Directors' report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report. OPINION ON FINANCIAL STATEMENTS In our opinion the financial statements: ?give a true and fair view of the state of the group's and the parent company's affairs as at 31 December 2013 and of the group's loss for the year then ended; ?have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice applicable to Smaller Entities; and ?have been prepared in accordance with the requirements of the Companies Act 2006. OPINION ON OTHER MATTER PRESCRIBED BY THE COMPANIES ACT 2006
In our opinion 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.

Page 4 ADVANCED HAIR STUDIOS GROUP LIMITED

INDEPENDENT AUDITORS REPORT TO THE SHAREHOLDERS OF ADVANCED HAIR STUDIOS GROUP LIMITED

MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION
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 directors' remuneration specified by law are not made; or ?we have not received all the information and explanations we require for our audit; or ?the directors were not entitled to prepare the financial statements in accordance with the small companies regime and to take advantage of the small companies' exemption in preparing the Directors' report.

Neville Newman (Senior statutory auditor) for and on behalf of Harris & Trotter LLP 64 New Cavendish Street London W1G 8TB
2015-06-16 00:00:00

Page 5 ADVANCED HAIR STUDIOS GROUP LIMITED

Directors Report 2

DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2012

The directors present their report and financial statements for the year ended 31 December 2012
Principal activities and review of the business The principal activity of the group and the company continued to be the provision of hair replacement services
The group has the full confidence and continuing support of the AHS group of companies and its principal creditor Sheet2 The Directors are satisfied with the results for the year and look to the future with confidence
Financial instruments The group's pnncipal financial instruments comprise bank balances, trade creditors and trade debtors The main purpose of these instruments is to raise funds for the group's operations and to finance the group's operations
Due to the nature of the financial instruments used by the group there is no exposure to pnce nsk The group's approach to managing other risks applicable to the financial instruments concerned is shown below
In respect of bank balances the group makes use of money market facilities where funds are available
Trade debtors are managed in respect of credit and cash flow nsk by policies concerning the credit offered to customers and the regular monitoring of amounts outstanding for both time and credit limits
Trade creditors liquidity risk is managed by ensunng sufficient funds are available to meet amounts due
Results and dividends The consolidated profit and loss account for the year is set out on 5
The directors do not recommend payment of an ordinary dividend
Future developments The group expects to consolidate its current position and continue to expand its trade thereby maintaining and improving its profits
Directors The following directors have held office since 1 January 2012
C Howell B L Murray
Auditors The auditors, Hams & Trotter LLP, are deemed to be reappointed under section 487(2) of the Companies Act 2006.0

- 1 -
1.0 ADVANCED HAIR STUDIOS GROUP LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2012

Statement of directors' responsibilities The directors are responsible for preparing the Directors' Report and the financial statements in accordance with applicable law and regulations
Company law requires the directors to prepare financial statements for each financial year Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law) Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of 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 and then apply them consistently, - make judgements and accounting estimates that are reasonable and prudent, - state whether applicable UK Accounting Standards have been followed, subject to any matenal 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 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
Statement of disclosure to auditors So far as the directors are aware, there is no relevant audit information of which the group's auditors are unaware Additionally, the directors have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the group's auditors are aware of that information
By order of the board

A L E Dawson Secretary 2013-09-17 00:00:00

- 2 -
% ADVANCED HAIR STUDIOS GROUP LIMITED
INDEPENDENT AUDITORS' REPORT
TO THE MEMBERS OF ADVANCED HAIR STUDIOS GROUP LIMITED

We have audited the group and parent company financial statements (the "financial statements") of Advanced Hair Studios Group Limited for the year ended 31 December 2012 set out on pages 5 to 22 The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice)
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
Respective responsibilities of directors and auditors As explained more fully in the Directors' Responsibilities Statement set out on pages 1 - 2, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland) Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors
Scope of the audit of the financial statements An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error This includes an assessment of whether the accounting policies are appropriate to the company's circumstances and have been consistently applied and adequately disclosed, the reasonableness of significant accounting estimates made by the directors, and the overall presentation of the financial statements In addition, we read all the financial and non-financial information in the Annual Report to identify material inconsistencies with the audited financial statements If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report
Opinion on financial statements In our opinion the financial statements give a true and fair view of the state of the group's and parent company's affairs as at 31 December 2012 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
Emphasis of matter In forming our opinion, we have considered the adequacy of the disclosures made in note 1 1 of the financial statements concerning the dependence of the group on the continuing support of a related company We consider that these disclosures should be drawn to your attention but our opinion is not qualified in this respect
Opinion on other matter prescribed by the Companies Act 2006 In our opinion the information given in the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements

- 3 -
i
t

ADVANCED HAIR STUDIOS GROUP LIMITED
INDEPENDENT AUDITORS' REPORT (CONTINUED)
TO THE MEMBERS OF ADVANCED HAIR STUDIOS GROUP LIMITED

Matters on which we are required to report by exception 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 directors' remuneration specified by law are not made, or

Neville Newman (Senior Statutory Auditor) for and on behalf of Harris & Trotter LLP 17 September 2013
Chartered Accountants Statutory Auditor 64 New Cavendish Street London WIG 81B

- 4 -
ADVANCED HAIR STUDIOS GROUP LIMITED

Directors Report 3

DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2011

The directors present their report and financial statements for the year ended 31 December 2011
Principal activities and review of the business The principal activity of the group and the company continued to be the provision of hair replacement services
The group has the full confidence and continuing support of the AHS group of companies and its principal creditor Sheet2 The Directors are satisfied with the results for the year and look to the future with confidence
Financial instruments The group's principal financial instruments comprise bank balances trade creditors and trade debtors The main purpose of these instruments is to raise funds for the group's operations and to finance the group's operations
Due to the nature of the financial instruments used by the group there is no exposure to price risk The group's approach to managing other risks applicable to the financial instruments concerned is shown below
In respect of bank balances the group makes use of money market facilities where funds are available
Trade debtors are managed in respect of credit and cash flow nsk by policies concerning the credit offered to customers and the regular monitoring of amounts outstanding for both time and credit limits
Trade creditors liquidity nsk is managed by ensunng sufficient funds are available to meet amounts due
Results and dividends The consolidated profit and loss account for the year is set out on 5
The directors do not recommend payment of an ordinary dividend
Future developments The group expects to consolidate its current position and continue to expand its trade thereby maintaining and improving its profits
Directors The following directors have held office since 1 January 2011
C Howell B L Murray
Auditors The auditors, Hams & Trotter LLP, are deemed to be reappointed under section 487(2) of the Companies Act 2006.0
ADVANCED HAIR STUDIOS GROUP LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2011

Statement of directors' responsibilities The directors are responsible for prepanng the Directors' Report and the financial statements in accordance with applicable law and regulations
Company law requires the directors to prepare financial statements for each financial year Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law) Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of 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 and then apply them consistently, - make judgements and accounting estimates that are reasonable and prudent, - state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements, - prepare the financial statements on the going concern basis unless it is inappropnate 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 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 irregulanties
Statement of disclosure to auditors So far as the directors are aware, there is no relevant audit information of which the group's auditors are unaware Additionally, the directors have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the group's auditors are aware of that information
By order of the board

A L E Dawson Secretary 2012-09-24 00:00:00
ADVANCED HAIR STUDIOS GROUP LIMITED
INDEPENDENT AUDITORS' REPORT
TO THE MEMBERS OF ADVANCED HAIR STUDIOS GROUP LIMITED

We have audited the group and parent company financial statements (the "financial statements") of Advanced Hair Studios Group Limited for the year ended 31 December 2011 set out on pages 5 to 23 The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice)
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
Respective responsibilities of directors and auditors As explained more fully in the Directors' Responsibilities Statement set out on pages 1 - 2, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view Our responsibility is to audit and express an opinion on the financial statements on accordance with applicable law and International Standards on Auditing (UK and Ireland) Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors
Scope of the audit of the financial statements An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from matenal misstatement, whether caused by fraud or error This includes an assessment of whether the accounting policies are appropriate to the company's circumstances and have been consistently applied and adequately disclosed, the reasonableness of significant accounting estimates made by the directors, and the overall presentation of the financial statements In addition, we read all the financial and non-financial information in the Annual Report to identify material inconsistencies with the audited financial statements If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report
Opinion on financial statements In our opinion the financial statements - give a true and fair view of the state of the group's and parent company's affairs as at 31 December 2011 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
Emphasis of matter In forming our opinion, we have considered the adequacy of the disclosures made in note 1 1 of the financial statements concerning the dependence of the group on the continuing support of a related company We consider that these disclosures should be drawn to your attention but our opinion is not qualified in this respect
Opinion on other matter prescribed by the Companies Act 2006 In our opinion the information given in the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements
ADVANCED HAIR STUDIOS GROUP LIMITED
INDEPENDENT AUDITORS' REPORT (CONTINUED)
TO THE MEMBERS OF ADVANCED HAIR STUDIOS GROUP LIMITED

Matters on which we are required to report by exception 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 directors' remuneration specified by law are not made, or we have not received all the information and explanations we require for our audit

Neville Newman (Senior Statutory Auditor) for and on behalf of Harris & Trotter LLP 24 September 2012
Chartered Accountants Statutory Auditor 64 New Cavendish Street London W1(3 8TB
ADVANCED HAIR STUDIOS GROUP LIMITED

Directors Report 4

DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2010

The directors present their report and financial statements for the year ended 31 December 2010
Principal activities and review of the business The pnncipal activity of the group and the company continued to be the provision of hair replacement services
The group has the full confidence and continuing support of the AHS group of companies and its principal creditor Sheet2 The Directors are satisfied with the results for the year and look to the future with confidence
Financial instruments The group's principal financial instruments compnse bank balances, trade creditors and trade debtors The main purpose of these instruments is to raise funds for the group's operations and to finance the group's operations
Due to the nature of the financial instruments used by the group there is no exposure to price risk The group's approach to managing other risks applicable to the financial instruments concerned is shown below
In respect of bank balances the group makes use of money market facilities where funds are available
Trade debtors are managed in respect of credit and cash flow risk by policies concerning the credit offered to customers and the regular monitonng of amounts outstanding for both time and credit limits
Trade creditors liquidity nsk is managed by ensuring sufficient funds are available to meet amounts due
Results and dividends The consolidated profit and loss account for the year is set out on 5
The directors do not recommend payment of an ordinary dividend
Future developments The group expects to consolidate its current position and continue to expand its trade thereby maintaining and improving its profits
Directors The following directors have held office since 1 January 2010
C Howell B L Murray
Auditors The auditors, Hams & Trotter LLP, are deemed to be reappointed under section 487(2) of the Companies Act 2006.0

- 1 -
ADVANCED HAIR STUDIOS GROUP LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2010

Statement of directors' responsibilities The directors are responsible for preparing the Directors' Report and the financial statements in accordance with applicable law and regulations
Company law requires the directors to prepare financial statements for each financial year Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law) Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of 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 and then apply them consistently, - make judgements and accounting estimates that are reasonable and prudent, - state whether applicable UK Accounting Standards have been followed, subject to any matenal 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 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
Statement of disclosure to auditors So far as the directors are aware, there is no relevant audit information of which the group's auditors are unaware Additionally, the directors have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the group's auditors are aware of that information
By order of the board AcimAsckThrak-- A L E Dawson Secretary 2011-12-15 00:00:00

- 2 -
ADVANCED HAIR STUDIOS GROUP LIMITED
INDEPENDENT AUDITORS' REPORT
TO THE MEMBERS OF ADVANCED HAIR STUDIOS GROUP LIMITED

We have audited the group and parent company financial statements (the "financial statements") of Advanced Hair Studios Group Limited for the year ended 31 December 2010 set out on pages 5 to 23 The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice)
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
Respective responsibilities of directors and auditors As explained more fully in the Directors' Responsibilities Statement set out on pages 1 - 2, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland) Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors
Scope of the audit of the financial statements An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error This includes an assessment of whether the accounting policies are appropriate to the company's circumstances and have been consistently applied and adequately disclosed, the reasonableness of significant accounting estimates made by the directors, and the overall presentation of the financial statements In addition, we read all the financial and non-financial information in the Annual Report to identify material inconsistencies with the audited financial statements If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report
Opinion on financial statements In our opinion the financial statements give a true and fair view of the state of the group's and parent company's affairs as at 31 December 2010 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
Emphasis of matter In forming our opinion, we have considered the adequacy of the disclosures made in note 1 1 of the financial statements concerning the dependence of the group on the continuing support of a related company We consider that these disclosures should be drawn to your attention but our opinion is not qualified in this respect
Opinion on other matter prescribed by the Companies Act 2006 In our opinion the information given in the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements

- 3 -
ADVANCED HAIR STUDIOS GROUP LIMITED
INDEPENDENT AUDITORS' REPORT (CONTINUED)
TO THE MEMBERS OF ADVANCED HAIR STUDIOS GROUP LIMITED

Matters on which we are required to report by exception 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 directors' remuneration specified by law are not made, or we have not received all the information and explanations we require for our audit

Neville Newman (Senior Statutory Auditor) for and on behalf of Harris & Trotter LLP 15 December 2011
Chartered Accountants Statutory Auditor 65 New Cavendish Street London WIG 7LS

- 4 -
ADVANCED HAIR STUDIOS GROUP LIMITED

Directors Report 5

DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2009

The directors present their report and financial statements for the year ended 31 December 2009
Principal activities and review of the business The principal activity of the group and the company continued to be the provision of hair replacement services
The group has the full confidence and continuing support of the AHS group of companies and its principal creditor Sheet2 The Directors are satisfied with the results for the year and look to the future with confidence , Financial instruments , , The group's principal financial instruments compnse bank balances trade creditors and trade debtors The main 1 purpose of these instruments is to raise funds for the group's operations and to finance the group's operations
Due to the nature of the financial instruments used by the group there is no exposure to price risk The group's approach to managing other risks applicable to the financial instruments concerned is shown below
In respect of bank balances the group makes use of money market facilities where funds are available
Trade debtors are managed in respect of credit and cash flow risk by policies concerning the credit offered to customers and the regular monitoring of amounts outstanding for both time and credit limits
Trade creditors liquidity risk is managed by ensuring sufficient funds are available to meet amounts due
Results and dividends The consolidated profit and loss account for the year is set out on page 5
The directors do not recommend payment of an ordinary dividend
Future developments The group expects to consolidate its current position and continue to expand its trade thereby maintaining and improving its profits
Directors The following directors have held office since 1 January 2009
C Howell B L Murray
Auditors The auditors, Hams & Trotter LLP, are deemed to be reappointed under section 487(2) of the Companies Act 2006.0

- 1 -
ADVANCED HAIR STUDIOS GROUP LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2009

Statement of directors' responsibilities The directors are responsible for preparing the Directors' Report and the financial statements in accordance with applicable law and regulations
Company law requires the directors to prepare financial statements for each financial year Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law) Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of 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 and then apply them consistently, - make judgements and accounting estimates that are reasonable and prudent, - state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the 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 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
Statement of disclosure to auditors So far as the directors are aware, there is no relevant audit information of which the group's auditors are unaware Additionally, the directors have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the group's auditors are aware of that information
By order of the board

A L E Dawson Secretary 2010-10-26 00:00:00

- 2 -
ADVANCED HAIR STUDIOS GROUP LIMITED
INDEPENDENT AUDITORS' REPORT
TO THE MEMBERS OF ADVANCED HAIR STUDIOS GROUP LIMITED

We have audited the group and parent company financial statements (the "financial statements") of Advanced Hair Studios Group Limited for the year ended 31 December 2009 set out on pages 5 to 19 The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice)
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
Respective responsibilities of directors and auditors As explained more fully in the Directors' Responsibilities Statement set out on pages 1 - 2, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view Our responsibility is to audit the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland) Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors
Scope of the audit of the financial statements An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error This includes an assessment of whether the accounting policies are appropriate to the group's and the company's circumstances and have been consistently applied and adequately disclosed, the reasonableness of significant accounting estimates made by the directors, and the overall presentation of the financial statements
Opinion on financial statements In our opinion the financial statements give a true and fair view of the state of the group's and parent company's affairs as at 31 December 2009 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
Emphasis of matter In forming our opinion, we have considered the adequacy of the disclosures made in note 1 1 of the financial statements concerning the dependence of the group on the continuing support of a related company We consider that these disclosures should be drawn to your attention but our opinion is not qualified in this respect
Opinion on other matter prescribed by the Companies Act 2006 In our opinion the information given in the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements

- 3 -
ADVANCED HAIR STUDIOS GROUP LIMITED
INDEPENDENT AUDITORS REPORT (CONTINUED)
TO THE MEMBERS OF ADVANCED HAIR STUDIOS GROUP LIMITED

Matters on which we are required to report by exception 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 directors' remuneration specified by law are not made, or we have not received all the information and explanations we require for our audit

Neville Newman (Senior Statutory Auditor) for and on behalf of Harris & Trotter LLP 26 October 2010
Chartered Accountants Statutory Auditor 65 New Cavendish Street London WIG 7LS

- 4 -
ADVANCED HAIR STUDIOS GROUP LIMITED

Directors Report 6

DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2008

The directors present their report and financial statements for the year ended 31 December 2008.
Principal activities and review of the business The principal activity of the company was the provision of hair replacement services.
The company has the full confidence and continuing support of the AHS group of companies and its principal creditor.
On 1 January 2008 the business and assets of Advanced Hair Studios (Newcastle) Limited were hived up into the company.
Sheet2 The Directors are satisfied with the results for the year and look to the future with confidence.
Financial instruments The company's principal financial instruments comprise bank balances, trade creditors and trade debtors. The main purpose of these instruments is to raise funds for the company's operations and to finance the company's operations.
Due to the nature of the financial instruments used by the company there is no exposure to price risk. The company's approach to managing other risks applicable to the financial instruments concerned is shown below.
In respect of bank balances the company makes use of money market facilities where funds are available.
Trade debtors are managed in respect of credit and cash flow risk by policies concerning the credit offered to customers and the regular monitoring of amounts outstanding for both time and credit limits.
Trade creditors liquidity risk is managed by ensuring sufficient funds are available to meet amounts due.
Results and dividends The results for the year are set out on page 4.
The directors do not recommend payment of an ordinary dividend.
Future developments The company expects to consolidate its current position and continue to expand its trade thereby maintaining and improving its profits.
Directors The following directors have held office since 1 January 2008:
C Howell B L Murray
ADVANCED HAIR STUDIOS GROUP LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2008

Auditors In accordance with section 385 of the Companies Act 1985, a resolution proposing that Harris & Trotter LLP be reappointed as auditors of the company will be put to the Annual General Meeting.
Directors' responsibilities The directors are responsible for preparing the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). The financial statements are required by law to give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to: - select suitable accounting policies and then apply them consistently; - make judgements and 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 directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 1985. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Statement of disclosure to auditors So far as the directors are aware, there is no relevant audit information of which the company's auditors are unaware. Additionally, the directors have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company's auditors are aware of that information.
By order of the board

A L E Dawson Secretary 2009-10-28 00:00:00

- 2 -
ADVANCED HAIR STUDIOS GROUP LIMITED
INDEPENDENT AUDITORS' REPORT TO ADVANCED HAIR STUDIOS GROUP LIMITED UNDER SECTION 247B OF THE COMPANIES ACT 1985

We have examined the abbreviated accounts set out on pages 4 to 15, together with the financial statements of Advanced Hair Studios Group Limited for the year ended 31 December 2008 prepared under section 226 of the Companies Act 1985.
This report is made solely to the company in accordance with section 247B of the Companies Act 1985. Our work has been undertaken so that we might state to the company those matters we are required to state to them in an auditors' report on abbreviated accounts 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, for our work, for this report, or for the opinions we have formed.
Respective responsibilities of directors and auditors The directors are responsible for preparing the abbreviated accounts in accordance with section 246A of the Companies Act 1985. It is our responsibility to form an independent opinion as to whether the company is entitled to deliver abbreviated accounts prepared in accordance with sections 246A(3) of the Act to the Registrar of Companies and whether the abbreviated accounts have been properly prepared in accordance with that provision and to report our opinion to you.
Basis of audit opinion We conducted our work in accordance with Bulletin 2006/3 "The special auditor's report on abbreviated accounts in the United Kingdom" issued by the Auditing Practices Board. In accordance with that Bulletin we have carried out the procedures we consider necessary to confirm, by reference to the financial statements, that the company is entitled to deliver abbreviated accounts and that the abbreviated accounts to be delivered are properly prepared.
Opinion In our opinion the company is entitled to deliver abbreviated accounts prepared in accordance with section 246A(3) of the Companies Act 1985, and the abbreviated accounts have been properly prepared in accordance with that provision.
Other information On 28 October 2009 we reported, as auditors of Advanced Hair Studios Group Limited, to the members on the financial statements prepared under section 226 of the Companies Act 1985 for the year ended 31 December 2008, and our report included the following paragraph:
"Emphasis of matter In forming our opinion, we have considered the adequacy of the disclosures made in note 1.1 of the financial statements concerning the dependence of the company on the continuing support of a related company. We consider that these disclosures should be drawn to your attention but our opinion is not qualified in this respect."

Harris & Trotter LLP
Chartered Accountants Registered Auditor
2009-10-28 00:00:00
65 New Cavendish Street

3-
ADVANCED HAIR STUDIOS GROUP LIMITED
ABBREVIATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 DECEMBER 2008
Sheet3
The profit and loss account has been prepared on the basis that all operations are continuing operations. There are no recognised gains and losses other than those passing through the profit and loss account.

- 4 -
ADVANCED HAIR STUDIOS GROUP LIMITED
ABBREVIATED BALANCE SHEET AS AT 31 DECEMBER 2008
Sheet4

These abbreviated accounts have been prepared in accordance with the special provisions of Part VII of the Companies Act 1985 relating to medium-sized companies.
Approved by the Board and authorised for issue on 28 October 2009 Company Registration No. 3868940

-5.

C How Director
ADVANCED HAIR STUDIOS GROUP LIMITED
CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2008
Sheet5

- 6 -

ADVANCED HAIR STUDIOS GROUP LIMITED
NOTES TO THE CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2008

1 Reconciliation of operating profit to net cash inflow from operating 2008 2007 activities ? ?
Operating profit Depreciation of tangible assets Amortisation of intangible assets Increase in stocks Decrease in debtors Increase in creditors within one year 11804.0
27183.0 -33989.0 -330977.0 906236.0 47724.0 35342.0 22182.0 -1933.0 26882.0 46317.0 Net cash inflow from operating activities 641,966 176,514

2 Analysis of net funds 1 January 2008

Cash flow Other non- 31 December cash changes 2008 e ? ? ? Net cash: Cash at bank and in hand 206,176 158,660 364,836 Bank overdrafts (109,207) 109,207 Net funds 96,969 267,867 364,836
3 Reconciliation of net cash flow to movement in net funds

Increase/(decrease) in cash in the year
Movement in net funds in the year Opening net funds
Closing net funds 2008 2007 ? e
267,867 (107,786)
267,867 (107,786) 96,969 204,755
364,836 96,969

- 7 -

ADVANCED HAIR STUDIOS GROUP LIMITED
NOTES TO THE ABBREVIATED ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2008

1 Accounting policies
1.1 Accounting convention The financial statements are prepared under the historical cost convention.
The financial statements have been drawn up on the going concern basis. The company is dependent upon the continuing support of a related company. The directors are confident that this support will continue. On this basis, the directors consider it appropriate to prepare the financial statements on the going concem basis. If the going concern basis were not appropriate, adjustments would have to be made to reduce the value of the company's assets to their recoverable amount, to provide for any further liabilities which may arise and to reclassify fixed assets as current assets and long term liabilities as current liabilities.
1.2 Compliance with accounting standards The financial statements are prepared in accordance with applicable United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), which have been applied consistently (except as otherwise stated).
1.3 Turnover Turnover represents amounts receivable for goods and services net of VAT and trade discounts.
1.4 Goodwill Acquired goodwill is written off in equal annual instalments over its estimated useful economic life.
1.5 Patents Franchise fees are valued at cost less accumulated amortisation. Amortisation is calculated to write off the cost in equal annual instalments over their estimated useful lives.
1.6 Tangible fixed assets and depreciation Tangible fixed assets other than freehold land are stated at cost less depreciation. Depreciation is provided at rates calculated to write off the cost less estimated residual value of each asset over its expected useful life, as follows:
Land and buildings Freehold 2% straight line Land and buildings Leasehold Straight line over the lease Fixtures, fittings & equipment 20% straight line
1.7 Leasing Rentals payable under operating leases are charged against income on a straight line basis over the lease term.
1.8 Investments Fixed asset investments are stated at cost less provision for diminution in value.
1.9 Stock Stock is valued at the lower of cost and net realisable value on a FIFO basis.
1.10 Deferred taxation Deferred tax is provided in full in respect of taxation deferred by timing differences between the treatment of certain items for taxation and accounting purposes.

- 8 -
ADVANCED HAIR STUDIOS GROUP LIMITED
NOTES TO THE ABBREVIATED ACCOUNTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2008

1 Accounting policies (continued)
1.11 Group accounts The financial statements present information about the company as an individual undertaking and not about its group. The company and its subsidiary undertakings comprise a medium-sized group. The company has therefore taken advantage of the exemptions provided by section 248 of the Companies Act 1985 not to prepare group accounts.
Sheet6

- 9 -

ADVANCED HAIR STUDIOS GROUP LIMITED
NOTES TO THE ABBREVIATED ACCOUNTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2008

5 Taxation Current tax charge

Factors affecting the tax charge for the year (Loss)/profit on ordinary activities before taxation

(Loss)/profit on ordinary activities before taxation multiplied by standard rate of UK corporation tax of 21.00% (2007 - 30.00%) 2008 2007

(133,989) 26,337

(28,138) 7,901
Effects of: Non deductible expenses 30,303 Depreciation add back 18,667 17,257 Capital allowances (16,491) (20,827) Tax losses utilised (4,415) (5,096) Other tax adjustments 74 765
28,138 (7,901)
Current tax charge

6 Intangible fixed assets Patents Goodwill Total ? ? Cost At 1 January 2008 Exchange differences Additions

460,000 243,622 703,622 100,000 100,000 457,090 457,090
560,000 700,712 1,260,712

At 31 December 2008

Amortisation At 1 January 2008 Exchange differences Charge for the year

444,444 86,523 530,967 95,000 95,000 15,000 12,183 27,183
554,444 98,706 653,150

At 31 December 2008

Net book value At 31 December 2008
At 31 December 2007
5,556 602,006 607,562
15,556 157,099 172,655

-10-

ADVANCED HAIR STUDIOS GROUP LIMITED
NOTES TO THE ABBREVIATED ACCOUNTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2008
Sheet7 ADVANCED HAIR STUDIOS GROUP LIMITED
NOTES TO THE ABBREVIATED ACCOUNTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2008

8 Fixed asset investments Sheet8

Holdings of more than 20% The company holds more than 20% of the share capital of the following companies:
Sheet9 The aggregate amount of capital and reserves and the results of these undertakings for the last relevant financial year were as follows:

Advanced Hair Studios (Romford) Limited Advanced Hair Studios (Cardiff) Limited Advanced Hair Studios (Newcastle) Limited Advanced Hair Studios (Brussels) Limited Advanced Hair Studios (Leeds) Limited Advanced Hair Studios (Dublin) Limited

Principal activity Hair replacement service Dissolved Hair replacement service Hair replacement service Dormant Hair replacement service Capital and reserves 2008.0
-94771.0 -100080.0
-568096.0 -47036.0 -311111.0 Profit/(loss) for the year 2008.0
-37170.0
144299.0 -44535.0
53411.0

- 12-

ADVANCED HAIR STUDIOS GROUP LIMITED
NOTES TO THE ABBREVIATED ACCOUNTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2008
Sheet10

- 13-

ADVANCED HAIR STUDIOS GROUP LIMITED
NOTES TO THE ABBREVIATED ACCOUNTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2008

13 Statement of movements on profit and loss account Sheet11 At 31 December 2008 the company was committed to making the following payments under non- cancellable operating leases in the year to 31 December 2009: Sheet12

16 Transactions with directors
During the year the company was invoiced by Advanced Hair Studios (International) Limited, a company of which C A Howell is a director, ?4,696,267 (2007: ?4,871,240) for purchases of hair and ancilliary costs. At the year end the company owed Advanced Hair Studios (International) Limited ?831,769 (2007: ?425,725).
During the year the company paid royalties and franchisor fees of ?379,716 (2007: ?367,195) to Advanced Hair Studios (Europe) Limited, the company's controlling party.
- 14-
ADVANCED HAIR STUDIOS GROUP LIMITED
NOTES TO THE ABBREVIATED ACCOUNTS (CONTINUED) FOR THE YEAR ENDED 3/ DECEMBER 2008

17 Employees
Number of employees The average monthly number of employees (including directors) during the year was: 2008 2007 Number Number
Administrative staff 37 24 Stylists 24 28
61 52

Employment costs 2008 2007

Wages and salaries Social security costs 1,193,197 1,043,045 105,273 120,846

1,298,470 1,163,891 18 Ultimate parent company
The ultimate parent company is Advanced Hair Studios (Europe) Limited, a company registered in Eire, of which C A Howell is the sole shareholder.

Directors Report 7

DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2007

The directors present their report and financial statements for the year ended 31 December 2007.
Principal activities and review of the business The principal activity of the company was the provision of hair replacement services.
The company has the full confidence and continuing support of the AHS group of companies and its principal creditor. Sheet2 The Directors are satisfied with the results for the year and look to the future with confidence.
Financial instruments The company's principal financial instruments comprise bank balances, trade creditors and trade debtors. The main purpose of these instruments is to raise funds for the company's operations and to finance the company's operations.
Due to the nature of the financial instruments used by the company there is no exposure to price risk, The company's approach to managing other risks applicable to the financial instruments concerned is shown below.
In respect of bank balances the company makes use of money market facilities where funds are available.
Trade debtors are managed in respect of credit and cash flow risk by policies concerning the credit offered to customers and the regular monitoring of amounts outstanding for both time and credit limits.
Trade creditors liquidity risk is managed by ensuring sufficient funds are available to meet amounts due.
Results and dividends The results for the year are set out on page 4.
The directors do not recommend payment of an ordinary dividend.
Future developments The company expects to consolidate its current position and continue to expand its trade thereby maintaining and improving its profits.
Directors The following directors have held office since 1 January 2007:
C Howell B L Murray
Auditors In accordance with section 385 of the Companies Act 1985, a resolution proposing that Harris & Trotter LLP be reappointed as auditors of the company will be put to the Annual General Meeting.
-1-
ADVANCED HAIR STUDIOS GROUP LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2007

Directors' responsibilities The directors are responsible for preparing the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). The financial statements are required by law to give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing those financial statements, the directors are required to: - select suitable accounting policies and then apply them consistently; - make judgements and 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 directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 1985. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Statement of disclosure to auditors So far as the directors are aware, there is no relevant audit information of which the company's auditors are unaware. Additionally, the directors have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company's auditors are aware of that information.
By order of the board

A L E Dawson Secretary 2008-12-03 00:00:00

- 2 -
ADVANCED HAIR STUDIOS GROUP LIMITED
INDEPENDENT AUDITORS' REPORT TO ADVANCED HAIR STUDIOS GROUP LIMITED UNDER SECTION 247B OF THE COMPANIES ACT 1985

We have examined the abbreviated accounts set out on pages 4 to 15, together with the financial statements of Advanced Hair Studios Group Limited for the year ended 31 December 2007 prepared under section 226 of the Companies Act 1985.
This report is made solely to the company in accordance with Section 2476 of the Companies Act 1985. Our work has been undertaken so that we might state to the company those matters we are required to state to them in an auditor's report on abbreviated accounts 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, for our work, for this report, or for the opinions we have formed.
Respective responsibilities of directors and auditors The directors are responsible for preparing the abbreviated accounts in accordance with section 246A of the Companies Act 1985, It is our responsibility to form an independent opinion as to whether the company is entitled to deliver abbreviated accounts prepared in accordance with section 246A(3) of the Act to the Registrar of Companies and whether the abbreviated accounts have been properly prepared in accordance with that provision and to report our opinion to you.
Basis of audit opinion We conducted our work in accordance with Bulletin 2006/3 "The special auditor's report on abbreviated accounts in the United Kingdom" issued by the Auditing Practices Board. In accordance with that Bulletin we have carried out the procedures we consider necessary to confirm, by reference to the financial statements, that the company is entitled to deliver abbreviated accounts and that the abbreviated accounts to be delivered are properly prepared.
Opinion In our opinion the company is entitled to deliver abbreviated accounts prepared in accordance with section 246A(3) of the Companies Act 1985, and the abbreviated accounts have been properly prepared in accordance ith that provision.

Harris & Trotter LLP
Chartered Accountants Registered Auditor 2008-12-03 00:00:00
65 New Cavendish Street London W 1G 7LS - 3.
ADVANCED HAIR STUDIOS GROUP LIMITED
ABBREVIATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 DECEMBER 2007
Sheet3
The profit and loss account has been prepared on the basis that all operations are continuing operations. There are no recognised gains and losses other than those passing through the profit and loss account.
ADVANCED HAIR STUDIOS GROUP LIMITED
ABBREVIATED BALANCE SHEET AS AT 31 DECEMBER 2007
Sheet4
These abbreviated accounts have been prepared in accordance with the special provisions of Part VII of the Companies Act 1985 relating to medium-sized companies.
Approved e Board and authorise or issue on 3 December 2008 - 5 -

rector
ADVANCED HAIR STUDIOS GROUP LIMITED
CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2007
Sheet5

- 6 -

ADVANCED HAIR STUDIOS GROUP LIMITED
NOTES TO THE CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2007

1 Reconciliation of operating profit to net cash inflow from operating 2007 2006 activities ? ?
Operating profit 47,724 374,002 Depreciation of tangible assets 35,342 27,453 Amortisation of intangible assets 22,182 28,780 (Increase)/decrease in stocks (1,933) 39,762 Decrease in debtors 26,882 243,454 Increase/(decrease) in creditors within one year 46,317 (291,957)
Net cash inflow from operating activities 2 Analysis of net funds Net cash: Cash at bank and in hand Bank overdrafts Net funds 176,514 713,957

1 January 2007 Cash flow Other non- 31 December cash changes 2007
? ? ? ?
404,972 (198,796) 206,176 (200,217) 91,010 (109,207)
204,755 (107,786) 96,969
204,755 (107,786) 96,969

3 Reconciliation of net cash flow to movement in net funds 2007 2006

Decrease in cash in the year (107,786) (197,915)

Movement in net funds in the year (107,786) (197,915) Opening net funds
204,755 402,670

Closing net funds
96,969 204,755 - 7 -
ADVANCED HAIR STUDIOS GROUP LIMITED
NOTES TO THE ABBREVIATED ACCOUNTS FOR THE YEAR 26 OCTOBER 1999 TO 31 DECEMBER 2007

1 Accounting policies
1.1 Accounting convention The financial statements are prepared under the historical cost convention.
1.2 Compliance with accounting standards The financial statements are prepared in accordance with applicable United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), which have been applied consistently (except as otherwise stated).
1.3 Turnover Turnover represents amounts receivable for goods and services net of VAT and trade discounts.
1.4 Goodwill Acquired goodwill is written off in equal annual instalments over its estimated useful economic life.
1.5 Franchise Fees Franchise fees are valued at cost less accumulated amortisation. Amortisation is calculated to write off the cost in equal annual instalments over their estimated useful lives.
1.6 Tangible fixed assets and depreciation Tangible fixed assets other than freehold land are stated at cost less depreciation. Depreciation is provided at rates calculated to write off the cost less estimated residual value of each asset over its expected useful life, as follows:
Land and buildings Freehold 2% straight line Land and buildings Leasehold Straight line over the lease Fixtures, fittings & equipment 20% straight line
1.7 Leasing Rentals payable under operating leases are charged against income on a straight line basis over the lease term.
1.8 Investments Fixed asset investments are stated at cost less provision for diminution in value.
1.9 Stock Stock is valued at the lower of cost and net realisable value on a FIFO basis.
1.10 Deferred taxation Deferred tax is provided in full in respect of taxation deferred by timing differences between the treatment of certain items for taxation and accounting purposes.
1.11 Group accounts The financial statements present information about the company as an individual undertaking and not about its group. The company and its subsidiary undertakings comprise a medium-sized group. The company has therefore taken advantage of the exemptions provided by section 248 of the Companies Act 1985 not to prepare group accounts.

- 8 -
ADVANCED HAIR STUDIOS GROUP LIMITED
NOTES TO THE ABBREVIATED ACCOUNTS (CONTINUED) FOR THE YEAR 26 OCTOBER 1999 TO 31 DECEMBER 2007

2007 2006 ? ? 2 Operating profit
Operating profit is stated after charging: Amortisation of intangible assets Depreciation of tangible assets Operating lease rentals Auditors' remuneration 22182.0 35342.0 285244.0 29948.0 28780.0 27453.0 297956.0 19308.0
3 Investment income 2007 2006 ? ?
Other interest 10,589

4 Interest payable 2007 2006 ? ?
On amounts payable to group companies 11,993 On bank loans and overdrafts 9,394 1,830

21,387 1,830

- 9 -

ADVANCED HAIR STUDIOS GROUP LIMITED
NOTES TO THE ABBREVIATED ACCOUNTS (CONTINUED) FOR THE YEAR 26 OCTOBER 1999 TO 31 DECEMBER 2007
Sheet6

On the basis of these financial statements no provision has been made for corporation tax.
Sheet7

-10-

ADVANCED HAIR STUDIOS GROUP LIMITED
NOTES TO THE ABBREVIATED ACCOUNTS (CONTINUED) FOR THE YEAR 26 OCTOBER 1999 TO 31 DECEMBER 2007
Sheet8 ADVANCED HAIR STUDIOS GROUP LIMITED
NOTES TO THE ABBREVIATED ACCOUNTS (CONTINUED) FOR THE YEAR 26 OCTOBER 1999 TO 31 DECEMBER 2007

8 Fixed asset investments
Shares in Shares in Total participating group

Cost All January 2007 & at 31 December 2007 Net book value At 31 December 2007

50 1,465

1515.0
1515.0

50 1,465

At 31 December 2006

50 1,465

1515.0
Holdings of more than 20% The company holds more than 20% of the share capital of the following companies:
Company Country of registration or Shares held incorporation Class Subsidiary undertakings Advanced Hair Studios (Romford) Limited England & Wales Advanced Hair Studios (Pty) Limited England & Wales Advanced Hair Studios (Glasgow) Limited England & Wales Advanced Hair Studios (Nottingham) Limited England & Wales Advanced Hair Studios (Cardiff) Limited England & Wales Advanced Hair Studios (Newcastle) Limited England & Wales Advanced Hair Studios (Brussels) Limited England & Wales Advanced Hair Studios (Leeds) Limited England & Wales Advanced Hair Studios (Dublin) Limited England & Wales
Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary
70.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 90.0 Participating interests Pentoc Limited England & Wales Ordinary 50.00
The aggregate amount of capital and reserves and the results of these undertakings for the last relevant financial year were as follows:

Principal activity Advanced Hair Studios (Romford) Limited Hair replacement service Advanced Hair Studios (Pty) Limited Dormant Advanced Hair Studios (Glasgow) Limited Dissolved Advanced Hair Studios (Nottingham) Limited Dormant Advanced Hair Studios (Cardiff) Limited Dormant Capital and reserves 2007.0 ? 591.0 -2934400.0 -374034.0 -83056.0
Profit/(loss) for the year 2007.0 ? 53608.0

Advanced Hair Studios (Newcastle) Limited Advanced Hair Studios (Brussels) Limited Advanced Hair Studios (Leeds) Limited Advanced Hair Studios (Dublin) Limited Pentoc Limited Hair replacement service Hair replacement service Dormant Hair replacement service Hair replacement service -144300.0 -523768.0 -47036.0 -276815.0
-48168.0 -85964.0
11312.0

- 12-

ADVANCED HAIR STUDIOS GROUP LIMITED
NOTES TO THE ABBREVIATED ACCOUNTS (CONTINUED) FOR THE YEAR 26 OCTOBER 1999 TO 31 DECEMBER 2007
Sheet9 Sheet10

- 13-

ADVANCED HAIR STUDIOS GROUP LIMITED
NOTES TO THE ABBREVIATED ACCOUNTS (CONTINUED) FOR THE YEAR 26 OCTOBER 1999 TO 31 DECEMBER 2007
Sheet11 At 31 December 2007 the company was committed to making the following payments under non- cancellable operating leases in the year to 31 December 2008: Sheet12

16 Transactions with directors and holding company
During the year the company was invoiced by Advanced Hair Studios International Limited, a company of which C A Howell is a director, ?4,871,240 (2006: ?4,509,138) for purchases of hair and ancilliary costs. At the year end the company owed Advanced Hair Studios International Limited ?425,725 (2006: ?192,387).
During the year the company paid royalties and franchisor fees of ?367,195 (2006: ?395,276) to Advanced Hair Studios Europe Limited, the company's controlling party.
- 14-
ADVANCED HAIR STUDIOS GROUP LIMITED
NOTES TO THE ABBREVIATED ACCOUNTS (CONTINUED) FOR THE YEAR 26 OCTOBER 1999 TO 31 DECEMBER 2007

17 Employees
Number of employees The average monthly number of employees (including directors) during the year was:

Administrative staff Stylists

Employment costs
2007 2006 Number Number
24 16 28 18
52 34

2007 2006

1,043,045 952,545 120,846 109,077
1,163,891 1,061,622
Wages and salaries Social security costs

18 Ultimate parent company
The ultimate parent company is Advanced Hair Studios (Europe) Limited, a company registered in Eire.

Directors Report 8

DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2006

The directors present their report and financial statements for the year ended 31 December 2006
Principal activities and review of the business The principal activity of the company was the provision of hair replacement services
The company has the full confidence and continuing support of the AHS group of companies and its principal creditor Sheet2 The Directors are satisfied with the results for the year and look to the future with confidence
Financial instruments The company's principal financial instruments comprise bank balances, trade creditors and trade debtors The main purpose of these instruments is to raise funds for the company's operations and to finance the company's operations
Due to the nature of the financial instruments used by the company there is no exposure to price risk The company's approach to managing other risks applicable to the financial instruments concerned is shown below
In respect of bank balances the company makes use of money market facilities where funds are available
Trade debtors are managed in respect of credit and cash flow risk by policies concerning the credit offered to customers and the regular monitoring of amounts outstanding for both time and credit limits
Trade creditors liquidity risk is managed by ensuring sufficient funds are available to meet amounts due
Results and dividends The results for the year are set out on page 4
The directors do not recommend payment of an ordinary dividend
Future developments The company expects to consolidate its current position and continue to expand its trade thereby maintaining and improving its profits
Directors The following directors have held office since 1 January 2006
C Howell B L Murray

- 1 -
ADVANCED HAIR STUDIOS GROUP LIMITED
, DIRECTORS' REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2006

Auditors In accordance with section 385 of the Companies Act 1985, a resolution proposing that Hams & Trotter LLP be reappointed as auditors of the company will be put to the Annual General Meeting
Directors' responsibilities The directors are responsible for preparing the financial statements in accordance with applicable law and regulations
Company law requires the directors to prepare financial statements for each financial year Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law) The financial statements are required by law to give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period In preparing those financial statements, the directors are required to - select suitable accounting policies and then apply them consistently, - make Judgements and 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 directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 1985 They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities
Statement of disclosure to auditors So far as the directors are aware, there is no relevant audit information of which the company's auditors are unaware Additionally, the directors have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company's auditors are aware of that information
By order of the board

A L E Dawson Secretary 2007-12-05 00:00:00

- 2 -
ADVANCED HAIR STUDIOS GROUP LIMITED
INDEPENDENT AUDITORS' REPORT TO ADVANCED HAIR STUDIOS GROUP LIMITED UNDER SECTION 247B OF THE COMPANIES ACT 1985

We have examined the abbreviated accounts set out on pages 4 to 15, together with the financial statements of Advanced Hair Studios Group Limited for the year ended 31 December 2006 prepared under section 226 of the Companies Act 1 985
This report is made solely to the company in accordance with Section 247B of the Companies Act 1985 Our work has been undertaken so that we might state to the company those matters we are required to state to them in an auditor's report on abbreviated accounts 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, for our work, for this report, or for the opinions we have formed
Respective responsibilities of directors and auditors The directors are responsible for preparing the abbreviated accounts in accordance with section 246A of the Companies Act 1985 It is our responsibility to form an independent opinion as to whether the company is entitled to deliver abbreviated accounts prepared in accordance with section 246A(3) of the Act to the Registrar of Companies and whether the abbreviated accounts have been properly prepared in accordance with that provision and to report our opinion to you
Basis of audit opinion We conducted our work in accordance with Bulletin 2006/3 The special auditor's report on abbreviated accounts in the United Kingdom" issued by the Auditing Practices Board In accordance with that Bulletin we have carried out the procedures we consider necessary to confirm, by reference to the financial statements, that the company is entitled to deliver abbreviated accounts and that the abbreviated accounts to be delivered are properly prepared
Opinion In our opinion the company is entitled to deliver abbreviated accounts prepared in accordance with section 246A(3) of the Companies Act 1985, and the abbreviated accounts have been properly prepared in accordance with that provision y7r t V
..-------.---- ems & Trotter LLP
Chartered Accountants 65 New Cavendish Street Registered Auditor London VV1G 7LS

- 3 -

4 c x?

2007-12-05 00:00:00
ADVANCED HAIR STUDIOS GROUP LIMITED
ABBREVIATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 DECEMBER 2006
Sheet3
The profit and loss account has been prepared on the basis that all operations are continuing operations There are no recognised gains and losses other than those passing through the profit and loss account

- 4 -
ADVANCED HAIR STUDIOS GROUP LIMITED
ABBREVIATED BALANCE SHEET AS AT 31 DECEMBER 2006
Sheet4

These abbreviated accounts have been prepared in accordance wth the special provisions of Part VII of the Companies Act 1985 relating to medium-sized companies
- 5 - Appr y the Board aid authonsed for issue on 5 December 2007

CH Director
ADVANCED HAIR STUDIOS GROUP LIMITED
CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2006
Sheet5

- 6 -

ADVANCED HAIR STUDIOS GROUP LIMITED
NOTES TO THE CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2006

1 Reconciliation of operating profit to net cash inflow from operating 2006 2005 activities ? ?
Operating profit 374,002 671,071 Depreciation of tangible assets 27,453 19,054 Amortisation of intangible assets 28,780 27,181 Decrease/(increase) in stocks 39,762 (44,080) Decrease/(increase) in debtors 286,525 (290,182) (Decrease)/Increase in creditors within one year (291,957) 27,525 Net cash inflow from operating activities 464,565 713,957

2 Analysis of net funds

1 January 2006 Cash flow Other non- 31 December cash changes 2006 ? ? ? ? Net cash Cash at bank and in hand 402,670 2,302 404,972 Bank overdrafts (200,217) (200,217)
402,670 (197,915) - 204,755
Net funds 402,670 (197,915) 204,755

3 Reconciliation of net cash flow to movement in net funds 2006 2005 ? ?
(Decrease)/increase in cash in the year (197,915) 208,091
Movement in net funds in the year (197,915) 208,091 Opening net funds 402,670 194,579
Closing net funds 204,755 402,670
ADVANCED HAIR STUDIOS GROUP LIMITED
NOTES TO THE ABBREVIATED ACCOUNTS FOR THE YEAR 26 OCTOBER 1999 TO 31 DECEMBER 2006

1 Accounting policies
1 1 Accounting convention The financial statements are prepared under the historical cost convention
The financial statements have been prepared on the going concern basis The company relies upon the provision of extended credit facilities from related companies The directors are confident that this support will continue for a period of at least twelve months from the date of approval of the financial statements On this basis, the directors consider it appropriate to prepare the financial statements on the going concern basis The financial statements do not include any adjustments that would result from a withdrawal of extended credit facilities from the related companies

1 2 Compliance with accounting standards The financial statements are prepared in accordance with applicable United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), which have been applied consistently (except as otherwise stated)
1 3 Turnover Turnover represents amounts receivable for goods and services net of VAT and trade discounts
1.4 Goodwill Acquired goodwill is written off in equal annual instalments over its estimated useful economic life
1.5 Franchise Fees Franchise fees are valued at cost less accumulated amortisation Amortisation is calculated to write off the cost in equal annual instalments over their estimated useful lives
1.6 Tangible fixed assets and depreciation Tangible fixed assets other than freehold land are stated at cost less depreciation Depreciation is provided at rates calculated to write off the cost less estimated residual value of each asset over its expected useful life, as follows
Land and buildings Freehold 2% straight line Land and buildings Leasehold Straight line over the lease ) Fixtures, fittings & equipment 20% straight line
1 7 Leasing Rentals payable under operating leases are charged against income on a straight line basis over the lease term
1 8 Investments Fixed asset investments are stated at cost less provision for diminution in value
1 9 Stock Stock is valued at the lower of cost and net realisable value on a FIFO basis

- 8 - )

)

ADVANCED HAIR STUDIOS GROUP LIMITED
NOTES TO THE ABBREVIATED ACCOUNTS (CONTINUED) FOR THE YEAR 26 OCTOBER 1999 TO 31 DECEMBER 2006

1 Accounting policies (continued)
110 Deferred taxation Deferred tax is provided in full in respect of taxation deferred by timing differences between the treatment of certain items for taxation and accounting purposes
1.11 Group accounts The financial statements present information about the company as an individual undertaking and not about its group The company and its subsidiary undertakings comprise a medium-sized group The company has therefore taken advantage of the exemptions provided by section 248 of the Companies Act 1985 not to prepare group accounts
Sheet6

- 9 -

ADVANCED HAIR STUDIOS GROUP LIMITED
NOTES TO THE ABBREVIATED ACCOUNTS (CONTINUED) FOR THE YEAR 26 OCTOBER 1999 TO 31 DECEMBER 2006

5 Taxation
Domestic current year tax U K corporation tax

Current tax charge

Factors affecting the tax charge for the year Profit on ordinary activities before taxation

Profit on ordinary activities before taxation multiplied by standard rate of UK corporation tax of 3000% (2005 19 00%) 2006 2005 ? ?
32,269 1,924
32,269 1,924

382,761 653,063

114,828 124,082
Effects of Depreciation add back 16,870 7,959 Capital allowances (10,458) 3,512 Tax losses utilised (88,971) (133,629)

(82,559) (122,158)
Current tax charge 32,269 1,924
6 Intangible fixed assets

Cost At 1 January 2006 & at 31 December 2006
Amortisation At 1 January 2006 Charge for the year
At 31 December 2006
Net book value At 31 December 2006
At 31 December 2005 Franchise Goodwill Total fees ? ? ?
460,000 243,622 703,622

417,844 62,160 480,004 16,600 12,181 28,781
434,444 74,341 508,785
25,556 169,281 194,837
6,600 181,462 188,062

-10-

ADVANCED HAIR STUDIOS GROUP LIMITED
NOTES TO THE ABBREVIATED ACCOUNTS (CONTINUED) FOR THE YEAR 26 OCTOBER 1999 TO 31 DECEMBER 2006
Sheet7 ) )
ADVANCED HAIR STUDIOS GROUP LIMITED
NOTES TO THE ABBREVIATED ACCOUNTS (CONTINUED) FOR THE YEAR 26 OCTOBER 1999 TO 31 DECEMBER 2006
8 Fixed asset investments

Cost At 1 January 2006 & at 31 December 2006 Net book value At 31 December 2006

Shares in Shares in participating group interests undertakings ? ?

Total

?
1515.0
1515.0

50 1,465

50 1,465

At 31 December 2005
50 1,465

1515.0
Holdings of more than 20% The company holds more than 20% of the share capital of the following companies
Company Country of registration or Shares held incorporation Class v. Subsidiary undertakings Advanced Hair Studios (Romford) Limited Advanced Hair Studios (Glasgow) Limited Advanced Hair Studios (Nottingham) Limited Advanced Hair Studios (Cardiff) Limited Advanced Hair Studios (Newcastle) Limited Advanced Hair Studios (Pty) Limtied Advanced Hair Studios (Brussels) Limited Advanced Hair Studios (Leeds) Limited Advanced Hair Studios (Dublin) Limited
England & Wales England & Wales England & Wales England & Wales England & Wales England & Wales England & Wales England & Wales England & Wales
Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary Ordinary
7000.0 10000.0 10000.0 10000.0 7500.0 10000.0 10000.0 10000.0 9000.0 Participating interests Pentoc Limited England & Wales Ordinary 50 00
The aggregate amount of capital and reserves and the results of these undertakings for the last relevant financial year were as follows

Principal activity Advanced Hair Studios (Romford) Limited Hair replacement service Advanced Hair Studios (Glasgow) Limited Dormant Advanced Hair Studios (Nottingham) Limited Dormant Advanced Hair Studios (Cardiff) Limited Dormant Advanced Hair Studios (Newcastle) Limited Hair replacement service Advanced Hair Studios (Pty) Limbed Dormant Advanced Hair Studios (Brussels) Limited Hair replacement service Capital and reserves 2006.0 ? -53017.0 -374035.0 -83056.0 - -96132.0 -2934400.0 -437804.0 Profiti(loss) for the year 2006.0 ? 21576.0

272574.0 -41514.0
-75462.0
-12-
ADVANCED HAIR STUDIOS GROUP LIMITED
NOTES TO THE ABBREVIATED ACCOUNTS (CONTINUED) FOR THE YEAR 26 OCTOBER 1999 TO 31 DECEMBER 2006
Sheet8

-13-

ADVANCED HAIR STUDIOS GROUP LIMITED
NOTES TO THE ABBREVIATED ACCOUNTS (CONTINUED) FOR THE YEAR 26 OCTOBER 1999 TO 31 DECEMBER 2006
12 Share capital
Authorised 1,000 Ordinary shares of ?1 each 2006 2005 ? ?
1,000 1,000

Allotted, called up and fully paid 910 Ordinary shares of ?1 each

910 910
13 Statement of movements on profit and loss account Profit and
account ?
Balance at 1 January 2006 187,974 Profit for the year 350,492
Balance at 31 December 2006 538,466 14 Reconciliation of movements in shareholders' funds

Profit for the financial year Opening shareholders' funds 2006 2005 ? ?
350,492 651,139 459,160 (191,979)
Closing shareholders' funds

539,376 459,160
15 Financial commitments
At 31 December 2006 the company was committed to making the following payments under non- cancellable operating leases in the year to 31 December 2007
Land and buildings 2006 2005 ? ? Operating leases which expire In over five years 159,000 159,000

-14-

ADVANCED HAIR STUDIOS GROUP LIMITED
NOTES TO THE ABBREVIATED ACCOUNTS (CONTINUED) FOR THE YEAR 26 OCTOBER 1999 TO 31 DECEMBER 2006

16 Transactions with directors and holding company
During the year the company was invoiced by Advanced Hair Studios International Limited, a company of which CA Howell is a director, ?4,509,138 (2005 ?4,851,124) for purchases of hair and ancilliary costs At the year end the company owed Advanced Hair Studios International Limited ?192,387 (2005 ?377,777)
During the year the company paid royalties and franchisor fees of ?395,276 (2005 ?425,310) to Sheet9

18 Ultimate parent company
The ultimate parent company is Advanced Hair Studios (Europe) Limited, a company registered in Eire

Directors Report 9

DIRECTORS' REPORT FOR THE YEAR ENDED 31 DECEMBER 2005

The directors present their report and financial statements for the year ended 31 December 2005.
Principal activities and review of the business The principal activity of the company was the provision of hair replacement services.
The company has built on its sound performance of last year and has grown its turnover and increased its profitability. New product and overhead reduction initiatives are continuing to improve the company's results.
The company has the full confidence and continuing support of the AHS group of companies and its principal creditor.
Results and dividends The results for the year are set out on page 4.
The directors do not recommend payment of an ordinary dividend.
It is proposed that the retained profit of ?651,139 is transferred to reserves.
Future developments The company expects to consolidate its current position and continue to expand its trade thereby maintaining and improving its profits.
Directors The following directors have held office since 1 January 2005:
C Howell B L Murray
Directors' interests The directors' interests in the shares of the company were as stated below: Ordinary shares of ? 1 each 31 December 2005 1 January 2005 C Howell B L Murray

C Howell B L Murray

2005-12-31 00:00:00

of each 2005-01-01 00:00:00

Auditors In accordance with section 385 of the Companies Act 1985, a resolution proposing that Harris & Trotter LLP be reappointed as auditors of the company will be put to the Annual General Meeting.

- 1 -
ADVANCED HAIR STUDIOS GROUP LIMITED
DIRECTORS' REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2005

Directors' responsibilities The directors are responsible for preparing the financial statements in accordance with applicable law and United Kingdom Generally Accepted Accounting Practice.
Company law requires the directors to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing those financial statements, the directors are required to: -select suitable accounting policies and then apply them consistently; -make judgements and 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 directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 1985. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
By order of the board

A L E Dawson Secretary 2006-12-01 00:00:00

- 2 -
ADVANCED HAIR STUDIOS GROUP LIMITED
INDEPENDENT AUDITORS' REPORT TO ADVANCED HAIR STUDIOS GROUP LIMITED UNDER SECTION 247B OF THE COMPANIES ACT 1985

We have examined the abbreviated accounts set out on pages 4 to 14, together with the financial statements of Advanced Hair Studios Group Limited for the year ended 31 December 2005 prepared under section 226 of the Companies Act 1985.
This report is made solely to the company in accordance with Section 247B of the Companies Act 1985. Our audit work has been undertaken so that we might state to the company those matters we are required to state to them in an auditor's report on abbreviated accounts 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, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of directors and auditors The directors are responsible for preparing the abbreviated accounts in accordance with section 246A of the Companies Act 1985. It is our responsibility to form an independent opinion as to whether the company is entitled to deliver abbreviated accounts prepared in accordance with section 246A(3) of the Act to the Registrar of Companies and whether the abbreviated accounts have been properly prepared in accordance with that provision and to report our opinion to you.
Basis of audit opinion We conducted our work in accordance with Bulletin 2006/3 "The special auditor's report on abbreviated accounts in the United Kingdom" issued by the Auditing Practices Board. In accordance with that Bulletin we have carried out the procedures we consider necessary to confirm, by reference to the financial statements, that the company is entitled to deliver abbreviated accounts and that the abbreviated accounts to be delivered are properly prepared.
Opinion In our opinio the company is entitled to deliver abbreviated accounts prepared in accordance with section 246A(3) ? the Companies Act 1985, and the abbreviated accounts have been properly prepared in accordS ce with that provision.

arris & Trotter LLP
Chartered Accountants Registered Auditor 2006-12-01 00:00:00
65 New Cavendish Street

- 3 -
ADVANCED HAIR STUDIOS GROUP LIMITED
ABBREVIATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 DECEMBER 2005
Sheet2 The profit and loss account has been prepared on the basis that all operations are continuing operations. There are no recognised gains and losses other than those passing through the profit and loss account.

- 4 -
ADVANCED HAIR STUDIOS GROUP LIMITED
ABBREVIATED BALANCE SHEET AS AT 31 DECEMBER 2005
Sheet3
These abbreviated accounts have been prepared in accordance with the special provisions of Part VII of the Companies Act 1985 relating to medium-sized companies.
Approved by thrBrd and authorised for is on 1 D ber 2006

Director

- 5 -
ADVANCED HAIR STUDIOS GROUP LIMITED
CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2005
Sheet4

- 6 -

ADVANCED HAIR STUDIOS GROUP LIMITED
NOTES TO THE CASH FLOW STATEMENT FOR THE YEAR ENDED 3/ DECEMBER 2005
Sheet5 Sheet6

- 7 -

ADVANCED HAIR STUDIOS GROUP LIMITED
NOTES TO THE ABBREVIATED ACCOUNTS FOR THE YEAR 26 OCTOBER 1999 TO 31 DECEMBER 2005

1 Accounting policies
1.1 Accounting convention The financial statements are prepared under the historical cost convention.
1.2 Turnover Turnover represents amounts receivable for goods and services net of VAT and trade discounts.
1.3 Goodwill Acquired goodwill is written off in equal annual instalments over its estimated useful economic life.
1.4 Franchise fees Franchise fees are valued at cost less accumulated amortisation. Amortisation is calculated to write off the cost in equal annual instalments over their estimated useful lives.
1.5 Tangible fixed assets and depreciation Tangible fixed assets other than freehold land are stated at cost less depreciation. Depreciation is provided at rates calculated to write off the cost less estimated residual value of each asset over its expected useful life, as follows:
Land and buildings Freehold 2% straight line Land and buildings Leasehold Straight line over the lease Fixtures, fittings & equipment 20% straight line
1.6 Leasing Rentals payable under operating leases are charged against income on a straight line basis over the lease term.
1.7 Investments Fixed asset investments are stated at cost less provision for diminution in value.
1.8 Stock Stock is valued at the lower of cost and net realisable value on a FIFO basis.
1.9 Deferred taxation Deferred tax is provided in full in respect of taxation deferred by timing differences between the treatment of certain items for taxation and accounting purposes.
1.10 Group accounts The financial statements present information about the company as an individual undertaking and not about its group. The company and its subsidiary undertakings comprise a medium-sized group. The company has therefore taken advantage of the exemptions provided by section 248 of the Companies Act 1985 not to prepare group accounts.

- 8 -
ADVANCED HAIR STUDIOS GROUP LIMITED
NOTES TO THE ABBREVIATED ACCOUNTS (CONTINUED) FOR THE YEAR 26 OCTOBER 1999 TO 31 DECEMBER 2005

2 Operating profit 2005 2004 ? ? Operating profit is stated after charging: Amortisation of intangible assets 27,181 38,482 Depreciation of tangible assets 19,054 10,898 Operating lease rentals 191,762 171,718 Auditors' remuneration 15,608 15,000

3 Interest payable 2005 2004 ? ?
On bank loans and overdrafts 18,008 Other interest 108,449
18,008 108,449

4 Taxation 2005 2004 ? ? Domestic current year tax U.K. corporation tax 1,924

Current tax charge 1,924

Factors affecting the tax charge for the year Profit on ordinary activities before taxation
653,063 171,499

Profit on ordinary activities before taxation multiplied by standard rate of UK corporation tax of 19.00% (2004: 19.00%)

124,082 32,585
Effects of: Non deductible expenses 60 Depreciation add back 7,959 2,070 Capital allowances 3,512 (3,022) Tax losses utilised (133,629) (31,693)
(122,158) (32,585)
Current tax charge 1,924

- 9 -

ADVANCED HAIR STUDIOS GROUP LIMITED
NOTES TO THE ABBREVIATED ACCOUNTS (CONTINUED) FOR THE YEAR 26 OCTOBER 1999 TO 31 DECEMBER 2005
Sheet7

- 10 -

ADVANCED HAIR STUDIOS GROUP LIMITED
NOTES TO THE ABBREVIATED ACCOUNTS (CONTINUED) FOR THE YEAR 26 OCTOBER 1999 TO 31 DECEMBER 2005

7 Fixed asset investments Sheet8 The aggregate amount of capital and reserves and the results of these undertakings for the last relevant financial year were as follows:

Advanced Hair Studios (Romford) Limited Advanced Hair Studios (Glasgow) Limited Advanced Hair Studios (Nottingham) Limited Advance Hair Studios (Cardiff) Limited Advanced Hair Studios (Newcastle) Limited Advanced Hair Studios (Pty) Limtied

Principal activity Hair replacement services Dormant Dormant Hair replacement service Hair replacement service Dormant Capital and reserves 2005.0
-74593.0 -374035.0 -83056.0 -270278.0 -54616.0 -2934400.0 Profit for the year 2005.0
-9105.0

53589.0 96531.0
. ADVANCED HAIR STUDIOS GROUP LIMITED
NOTES TO THE ABBREVIATED ACCOUNTS (CONTINUED) FOR THE YEAR 26 OCTOBER 1999 TO 31 DECEMBER 2005
Sheet9 Sheet10

- 12-

ADVANCED HAIR STUDIOS GROUP LIMITED
NOTES TO THE ABBREVIATED ACCOUNTS (CONTINUED) FOR THE YEAR 26 OCTOBER 1999 TO 31 DECEMBER 2005
11 Share capital
2005 2004
Authorised 1,000 Ordinary shares of ?1 each

1,000 1,000

Allotted, called up and fully paid 910 Ordinary shares of ?1 each

910 910 12 Statement of movements on profit and loss account Profit and loss

Sheet11 At 31 December 2005 the company was committed to making the following payments under non- cancellable operating leases in the year to 31 December 2006:
Land and buildings 2005 2004
Operating leases which expire: In over five years 159,000 159,000

- 13-

ADVANCED HAIR STUDIOS GROUP LIMITED
NOTES TO THE ABBREVIATED ACCOUNTS (CONTINUED) FOR THE YEAR 26 OCTOBER 1999 TO 31 DECEMBER 2005

15 Transactions with directors and holding company
During the year the company was invoiced by Advanced Hair Studios International Limited, a company of which CA Howell is a director, ?4,851,124 (2004: ?3,645,021) for purchases of hair and ancilliary costs. At the year end the company owed Advanced Hair Studios International Limited ?377,777 (2004: ?177,845).
During the year the company paid royalties and franchisor fees of ?425,310 (2004: ?309,785) to Advanced Hair Studios Europe Limited, the company's controlling party.
16 Employees
Number of employees The average monthly number of employees (including directors) during the year was: 2005 2004 Number Number
Administrative staff 16 16 Stylists 18 18
34 34 Employment costs
2005 2004 ? ?
Wages and salaries Social security costs

1,009,052 764,853 135,317 114,706

1,144,369 879,559 17 Ultimate parent company
The ultimate parent company is Advanced Hair Studios (Europe) Limited, a company registered in Eire.

Directors Report 10

DIRECTORS' REPORT FOR THE YEAR ENDED 31 DECEMBER 2004

The directors present their report and financial statements for the year ended 31 December 2004.
Principal activities and review of the business The principal activity of the company was the provision of hair replacement services.
The company has built on its sound performance of last year and has grown its turnover and increased its profitability. New product and overhead reduction initiatives are continuing to improve the company's results.
The company has the full confidence and continuing support of the AHS group of companies and its principal creditor.
Results and dividends The results for the year are set out on page 4.
The directors do not recommend payment of an ordinary dividend.
It is proposed that the retained profit of ?171,499 is transferred to reserves.
Future developments The company expects to consolidate its current position and continue to expand its trade thereby maintaining and improving its profits.
Directors The following directors have held office since 1 January 2004:
C Howell B L Murray
Directors' interests The directors' interests in the shares of the company were as stated below: Ordinary shares of ? 1 each 31 December 2004 1 January 2004 C Howell B L Murray
Auditors In accordance with section 385 of the Companies Act 1985, a resolution proposing that Harris & Trotter UP be reappointed as auditors of the company will be put to the Annual General Meeting.
ADVANCED HAIR STUDIOS GROUP LIMITED
DIRECTORS' REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2004

Directors responsibilities Company law requires the directors to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing those financial statements, the directors are required to: -select suitable accounting policies and then apply them consistently; -make judgements and 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 directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the company and to enable them to ensure that the financial statements comply with the Companies Act 1985. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
By order of the board A ja

A L E Dawson Secretary 2005-06-15 00:00:00

- 2 -
ADVANCED HAIR STUDIOS GROUP LIMITED
INDEPENDENT AUDITORS' REPORT TO ADVANCED HAIR STUDIOS GROUP LIMITED UNDER SECTION 247B OF THE COMPANIES ACT 1985

We have examined the abbreviated accounts set out on pages 4 to 15, together with the financial statements of the company for the year ended 31 December 2004 prepared under section 226 of the Companies Act 1985.
This report is made solely to the company's members, as a body, in accordance with Section 2478 of the Companies Act 1985. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of directors and auditors The directors are responsible for preparing the abbreviated accounts in accordance with section 246A of the Companies Act 1985. It is our responsibility to form an independent opinion as to whether the company is entitled to deliver abbreviated accounts prepared in accordance with section 246A(3) of the Act to the Registrar of Companies and whether the accounts to be delivered are properly prepared in accordance with that provision and to report our opinion to you.
Basis of audit opinion We have carried out the procedures we considered necessary to confirm, by reference to the financial statements, that the company is entitled to deliver abbreviated accounts and that the abbreviated accounts to be delivered are properly prepared. The scope of our work for the purpose of this report did not include examining or dealing with events after the date of our report on the financial statements.
Opinion In our opinion the company is entitled to deliver abbreviated accounts prepared in accordance with section 246A(3) of the Companies Act 1985, and the abbreviated accounts on pages 4 to 15 are properly prepared in accordance with that provision.
Other information On 15 June 2005 we reported, as auditors of Advanced Hair Studios Group Limited, to the members on the financial statements prepared under section 226 of the Companies Act 1985 for the year ended 31 December 2004, and our audit report included the following paragraph:
"Going concern In forming our opinion, we have considered the adequacy of the disclosures made in note 1 of the financial statements concerning the uncertainty as to the continuation of the credit facilities from Advanced Hair Studios (International) Limited in order to meet the company's medium term capital requirements. In view of the significance of is uncertainty we consider that it should be drawn to your attention but our opinion is not qualified i is respect."

Harris & Trotter LLP
Chartered Accountants Registered Auditor 2005-06-15 00:00:00
65 New Cavendish Street

- 3 -
ADVANCED HAIR STUDIOS GROUP LIMITED
ABBREVIATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 DECEMBER 2004
Sheet2
The profit and loss account has been prepared on the basis that all operations are continuing operations. There are no recognised gains and losses other than those passing through the profit and loss account.
ADVANCED HAIR STUDIOS GROUP LIMITED
ABBREVIATED BALANCE SHEET AS AT 3/ DECEMBER 2004
Sheet3

These abbreviated accounts have been prepared in accordance with the special provisions of Part VII of the Companies Act 1985 relating to medium-sized companies.
The financial statements were approved by the Board on 15 June 2005

C owell Director

- 5 -
ADVANCED HAIR STUDIOS GROUP LIMITED
CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2004
Sheet4 ADVANCED HAIR STUDIOS GROUP LIMITED
NOTES TO THE CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2004

1 Reconciliation of operating profit to net cash outflow from operating 2004 2003 activities

Operating profit 279,948 53,787 Depreciation of tangible assets 10,898 8,672 Amortisation of intangible assets 38,482 32,837 Increase in stocks (1,069) (462) Decreaseqincrease) in debtors 123 (60,663) Decrease in creditors within one year (346,168) (49,509)
Net cash outflow from operating activities (17,786) 713,957

2 Analysis of net funds 1 January 2004 Cash flow Other non- 31 December cash changes 2004

Net cash: Cash at bank and in hand 331,903 (137,324) 194,579
Net funds 331,903 (137,324) 194,579

3 Reconciliation of net cash flow to movement in net funds 2004 2003

Decrease in cash in the year (137,324) (11,676)
Movement in net funds in the year (137,324) (11,676) Opening net funds 331,903 343,579
Closing net funds 194,579 331,903
ADVANCED HAIR STUDIOS GROUP LIMITED
NOTES TO THE ABBREVIATED ACCOUNTS FOR THE YEAR 26 OCTOBER 1999 TO 31 DECEMBER 2004

1 Accounting policies
1.1 Accounting convention The financial statements are prepared under the historical cost convention.
The financial statements have been prepared on the going concern basis. The company relies on extended credit facilities from Advanced Hair Studios (International) Limited, in order to meet its medium term capital requirements. The directors are confident that this support will continue for a period of at least twelve months from the date of the approval of the financial statements.
On this basis the directors consider it appropriate to prepare the financial statements on the going concern basis. The financial statements do not include any adjustments that would result from a withdrawal of the extended credit facilities from Advanced Hair Studios (International) Limited.
1.2 Turnover Turnover represents amounts receivable for goods and services net of VAT and trade discounts.
1.3 Goodwill Acquired goodwill is written off in equal annual instalments over its estimated useful economic life.
1.4 Franchise fees Franchise fees are valued at cost less accumulated amortisation. Amortisation is calculated to write off the cost in equal annual instalments over their estimated useful lives.
1,5 Research and development Research expenditure is written off to the profit and loss account in the year in which it is incurred. Development expenditure is written off in the same way unless the directors are satisfied as to the technical, commercial and financial viability of individual projects. In this situation, the expenditure is deferred and amortised over the period during which the company is expected to benefit.
1.6 Tangible fixed assets and depreciation Tangible fixed assets are stated at cost less depreciation. Depreciation is provided at rates calculated to write off the cost less estimated residual value of each asset over its expected useful life, as follows:
Land and buildings Leasehold Straight line over the lease Fixtures, fittings & equipment 20% straight line
1.7 Leasing Rentals payable under operating leases are charged against income on a straight line basis over the lease term.
1.8 Investments Fixed asset investments are stated at cost less provision for diminution in value.
1.9 Stock Stock is valued at the lower of cost and net realisable value on a FIFO basis.
1.10 Deferred taxation Deferred tax is provided in full in respect of taxation deferred by timing differences between the treatment of certain items for taxation and accounting purposes.

-8.0
ADVANCED HAIR STUDIOS GROUP LIMITED
NOTES TO THE ABBREVIATED ACCOUNTS (CONTINUED) FOR THE YEAR 26 OCTOBER 1999 TO 31 DECEMBER 2004

1 Accounting policies (continued)
1.11 Group accounts The financial statements present information about the company as an individual undertaking and not about its group. The company and its subsidiary undertakings comprise a medium-sized group. The company has therefore taken advantage of the exemptions provided by section 248 of the Companies Act Sheet5 ADVANCED HAIR STUDIOS GROUP LIMITED
NOTES TO THE ABBREVIATED ACCOUNTS (CONTINUED) FOR THE YEAR 26 OCTOBER 1999 TO 31 DECEMBER 2004
Sheet6

At the year end the deferred tax of ?127,756 has not been recognised as the directors are uncertain as to when the conditions for recognising the asset will crystallise.
Sheet7

- 10-

ADVANCED HAIR STUDIOS GROUP LIMITED
NOTES TO THE ABBREVIATED ACCOUNTS (CONTINUED) FOR THE YEAR 26 OCTOBER 1999 TO 31 DECEMBER 2004
Sheet8 ADVANCED HAIR STUDIOS GROUP LIMITED
NOTES TO THE ABBREVIATED ACCOUNTS (CONTINUED) FOR THE YEAR 26 OCTOBER 1999 TO 31 DECEMBER 2004

8 Fixed asset investments Shares in Shares in Total participating group

Cost At 1 January 2004 & at 31 December 2004 50 1,445 1,495
Holdings of more than 20% The company holds more than 20% of the share capital of the following companies:
Company Country of registration or Shares held incorporation Class 070 Subsidiary undertakings Advanced Hair Studios (Romford) Limited England & Wales Advanced Hair Studios (Glasgow) Limited England & Wales Advanced Hair Studios (Nottingham) Limited England & Wales Advance Hair Studios (Cardiff) Limited England & Wales Advanced Hair Studios (Newcastle) Limited England & Wales Advanced Hair Studios (Romford) Limited England & Wales Advanced Hair Studios (BrusselIs) Limited England & Wales Adyanced Hair Studios (Leeds) Limited England & Wales Advanced Hair Studios (Dublin) Limited England &Wales Advanced Hair Studios (Pty) Limtied England & Wales
Ordinary 100 Ordinary 100 Ordinary 100 Ordinary 80 Ordinary 75 Ordinary 70 Ordinary 100 Ordinary 100 Ordinary 100 Ordinary 100 Participating interests Pentoc Limited England and Wales Ordinary 50
The aggregate amount of capital and reserves and the results of these undertakings for the last relevant financial year were as follows:
Capital and Profit for the

Advanced Hair Studios (Romford) Limited Advanced Hair Studios (Glasgow) Limited Advance Hair Studios (Cardiff) Limited Advanced Hair Studios (Newcastle) Limited Advanced Hair Studios (Romford) Limited Advanced Hair Studios (BrusselIs) Limited Adyanced Hair Studios (Leeds) Limited Advanced Hair Studios (Dublin) Limited Advanced Hair Studios (Pty) Limtied Pentoc Limited

Principal activity Hair replacement services Dormant Hair replacement service Hair replacement service Hair replacement service Hair replacement service Dormant Hair replacement service Dormant Hair replacement service reserves 2004.0
-12228.0 -374035.0 -83056.0 -323867.0 -151147.0 -65488.0 -338852.0 -47036.0 -648376.0 -293440.0 (77,905) year 2004.0
46614.0

-11684.0 72874.0 -6646.0 -41506.0
11317.0
-40002.0 Advanced Hair Studios (Nottingham) Limited Dormant
In all companies except Pentoc Limited the last relevant financial year was the year ended 31 December
-12-
ADVANCED HAIR STUDIOS GROUP LIMITED
NOTES TO THE ABBREVIATED ACCOUNTS (CONTINUED) FOR THE YEAR 26 OCTOBER 1999 TO 31 DECEMBER 2004
? Sheet9

- 13-

ADVANCED HAIR STUDIOS GROUP LIMITED
NOTES TO THE ABBREVIATED ACCOUNTS (CONTINUED) FOR THE YEAR 26 OCTOBER 1999 TO 31 DECEMBER 2004

13 Statement of movements on profit and loss account Sheet10 At 31 December 2004 the company was committed to making the following payments under non- cancellable operating leases in the year 31 December 2005:
Land and buildings 2004 2003
Operating leases which expire: In over five years

159,000 159,000
16 Transactions with directors and holding company
During the year the company was invoiced by Advanced Hair Studios International Limited, a company of which C A Howell is a director, ?3,645,021 (2003: ?2,803,956) for purchases of hair and ancilliary costs. At the year end the company owed Advanced Hair Studios International Limited ?177,845 (2003: ?773,565).
During the year the company paid royalties and franchisor fees of ?309,785 (2003: ?199,233) to Advanced Hair Studios Europe Limited, the company's controlling party. At the year end the company owed Advanced Hair Studios Europe Limited ?20,000 (2003: ?20,000).

- 14 - r
ADVANCED HAIR STUDIOS GROUP LIMITED
NOTES TO THE ABBREVIATED ACCOUNTS (CONTINUED) FOR THE YEAR 26 OCTOBER 1999 TO 31 DECEMBER 2004

17 Employees
Number of employees The average monthly number of employees (including directors) during the year was:

Administrative staff Stylists

Employment costs

Wages and salaries Social security costs

2004 2003 Number Number
16 16 18 21
34 37

2004 2003

764,853 728,007 114,706 80,180
879,559 808,187 18 Ultimate parent company
The ultimate parent company is Advanced Hair Studios (Europe) Limited, a company registered in Eire.

Directors Report 11

DIRECTORS' REPORT FOR THE YEAR ENDED 31 DECEMBER 2003

The directors present their report and financial statements for the year ended 31 December 2003.
Principal activities and review of the business The principal activity of the company was the provision of hair replacement services.
The directors are pleased to record that the the expenditure on advertising and marketing initiatives has generated substantially improved sales turnover and profit margins to the exrtent that it was the first year the company has made an overall profit.
Results and dividends The results for the year are set out on page 4.
The directors do not recommend payment of an ordinary dividend.
It is proposed that the retained profit of ?11,126 is transferred to reserves.
Future developments The directors expect the company to continue its improvements in operational performance and record another profit for the year. A new range of hair is due to be launched in the second half of the year which will generate increased sales and profits.
The company aims to build on the successes of 2003 and streamline its process without compromising its reputation for customer service.
Directors The following directors have held office since 1 January 2003:
C Howell B L Murray
Directors' interests The directors interests in the shares of the company were as stated below: Ordinary shares of C 1 each 31 December 2003 1 January 2003 C Howell B L Murray
Auditors In accordance with section 385 of the Companies Act 1985, a resolution proposing that Harris & Trotter LLP be reappointed as auditors of the company will be put to the Annual General Meeting.
ADVANCED HAIR STUDIOS GROUP LIMITED
DIRECTORS' REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2003

Directors' responsibilities Company law requires the directors to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing those financial statements, the directors are required to: -select suitable accounting policies and then apply them consistently; -make judgements and 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 directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the company and to enable them to ensure that the financial statements comply with the Companies Act 1985. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
By order of the board

A L E Dawson Secretary 2005-03-11 00:00:00

- 2 -
ADVANCED HAIR STUDIOS GROUP LIMITED
INDEPENDENT AUDITORS' REPORT TO ADVANCED HAIR STUDIOS GROUP LIMITED UNDER SECTION 247B OF THE COMPANIES ACT 1985

We have examined the abbreviated accounts set out on pages 4 to 15, together with the financial statements of the company for the year ended 31 December 2003 prepared under section 226 of the Companies Act 1985.
This report is made solely to the company's members, as a body, in accordance with Section 2478 of the Companies Act 1985. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of directors and auditors The directors are responsible for preparing the abbreviated accounts in accordance with section 246A of the Companies Act 1985. It is our responsibility to form an independent opinion as to whether the company is entitled to deliver abbreviated accounts prepared in accordance with section 246A(3) of the Act to the Registrar of Companies and whether the accounts to be delivered are properly prepared in accordance with that provision and to report our opinion to you.
Basis of audit opinion We have carried out the procedures we considered necessary to confirm, by reference to the financial statements, that the company is entitled to deliver abbreviated accounts and that the abbreviated accounts to be delivered are properly prepared. The scope of our work for the purpose of this report did not include examining or dealing with events after the date of our report on the financial statements.
Opinion In our opinion the company is entitled to deliver abbreviated accounts prepared in accordance with section 246A(3) of the Companies Act 1985, and the abbreviated accounts on pages 4 to 15 are properly prepared in accordance with that provision.
Other information On 11 March 2005 we reported, as auditors of Advanced Hair Studios Group Limited, to the members on the financial statements prepared under section 226 of the Companies Act 1985 for the year ended 31 December 2003, and our audit report included the following paragraph:

"Going concern In forming our opinion, we have considered the adequacy of the disclosures made in note 1 of the financial statements c9pcerning the uncertainty as to the continuation of the credit facilities from Advanced Hair Studios (lnternatio9 Limited in order to meet the company's medium term capital requirements. In view of the 5ignifica96f of this uncertainty we consider that it should be drawn to your attention but our opinion is not qua1if46 tA this respect."

Harris & Trotter LLP
Chartered Accountants Registered Auditor 2005-03-11 00:00:00
65 New Cavendish Street
- 3 -
ADVANCED HAIR STUDIOS GROUP LIMITED
ABBREVIATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 DECEMBER 2003
Sheet2
The profit and loss account has been prepared on the basis that all operations are continuing operations. There are no recognised gains and losses other than those passing through the profit and loss account.

-4.0
ADVANCED HAIR STUDIOS GROUP LIMITED
ABBREVIATED BALANCE SHEET AS AT 31 DECEMBER 2003
Sheet3

These abbreviated accounts have been prepared in accordance with the special provisions of Part VII of the Companies Act 1985 relating to medium-sized companies.
The financial statements were approved by the Board on 11 March 2005

Director

5-
ADVANCED HAIR STUDIOS GROUP LIMITED
CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2003
Sheet4 ADVANCED HAIR STUDIOS GROUP LIMITED
NOTES TO THE CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2003

1 Reconciliation of operating profit/(loss) to net cash inflow from operating activities

Operating profiti(loss) Depreciation of tangible assets Amortisation of intangible assets (Increase)/decrease in stocks (Increase)/decrease in debtors Decrease in creditors within one year 2003 2002

53,787 (163,211) 8,672 26,841 32,837 32,838 (462) 2,400 (17,592) 811,962 (49,509) (664,132)
Net cash inflow from operating activities

2 Analysis of net funds

Net cash: Cash at bank and in hand
Net funds
27,733 713,957

1 January 2003 Cash flow Other non- 31 December cash changes 2003

343,579 (11,676) 331,903
343,579 (11,676) 331,903
3 Reconciliation of net cash flow to movement in net funds

(Decrease)/increase in cash in the year
Movement in net funds in the year Opening net funds
Closing net funds 2003 2002

(11,676) 78,569
(11,676) 78,569 343,579 265,010
331,903 343,579
ADVANCED HAIR STUDIOS GROUP LIMITED
NOTES TO THE ABBREVIATED ACCOUNTS FOR THE YEAR 26 OCTOBER 1999 TO 31 DECEMBER 2003

1 Accounting policies
1.1 Accounting convention The financial statements are prepared under the historical cost convention.
The financial statements have been prepared on the going concern basis. The company relies on extended credit facilities from Advanced Hair Studios (International) Limited, in order to meet its medium term capital requirements. The directors are confident that this support will continue for a period of at least twelve months from the date of the approaval of the financial statements.
On this basis the directors consider it appropriate to prepare the financial statements on the going concern basis. The financial statements do not include any adjustments that would result from a withdrawal of the extended credit facilities from Advanced Hair Studios (International) Limited.
1.2 Turnover Turnover represents amounts receivable for goods and services net of VAT and trade discounts.
1.3 Goodwill Acquired goodwill is written off in equal annual instalments over its estimated useful economic life.
1.4 Franchise fees Franchise fees are valued at cost less accumulated amortisation. Amortisation is calculated to write off the cost in equal annual instalments over their estimated useful lives.
1.5 Research and development Research expenditure is written off to the profit and loss account in the year in which it is incurred. Development expenditure is written off in the same way unless the directors are satisfied as to the technical, commercial and financial viability of individual projects. In this situation, the expenditure is deferred and amortised over the period during which the company is expected to benefit.
1.6 Tangible fixed assets and depreciation Tangible fixed assets are stated at cost less depreciation. Depreciation is provided at rates calculated to write off the cost less estimated residual value of each asset over its expected useful life, as follows:
Land and buildings Leasehold Straight line over the lease Fixtures, fittings & equipment 20% straight line
1.7 Leasing Rentals payable under operating leases are charged against income on a straight line basis over the lease term.
1.8 Investments Fixed asset investments are stated at cost less provision for diminution in value.
1.9 Stock Stock is valued at the lower of cost and net realisable value on a FIFO basis.
1.10 Deferred taxation Deferred tax is provided in full in respect of taxation deferred by timing differences between the treatment of certain items for taxation and accounting purposes.

- 8 -
ADVANCED HAIR STUDIOS GROUP LIMITED
NOTES TO THE ABBREVIATED ACCOUNTS (CONTINUED) FOR THE YEAR 26 OCTOBER 1999 TO 31 DECEMBER 2003

1 Accounting policies (continued)
1.11 Group accounts The financial statements present information about the company as an individual undertaking and not about its group. The company and its subsidiary undertakings comprise a medium-sized group. The company has therefore taken advantage of the exemptions provided by section 248 of the Companies Act Sheet5

- 9 -

ADVANCED HAIR STUDIOS GROUP LIMITED
NOTES TO THE ABBREVIATED ACCOUNTS (CONTINUED) FOR THE YEAR 26 OCTOBER 1999 TO 31 DECEMBER 2003
Sheet6

At the year end the deferred tax of ?156,901 has not been recognised as the directors are uncertain as to when the conditions for recognising the asset will crystallise.
Sheet7

- 10-

ADVANCED HAIR STUDIOS GROUP LIMITED
NOTES TO THE ABBREVIATED ACCOUNTS (CONTINUED) FOR THE YEAR 26 OCTOBER 1999 TO 31 DECEMBER 2003
Sheet8 ADVANCED HAIR STUDIOS GROUP LIMITED
NOTES TO THE ABBREVIATED ACCOUNTS (CONTINUED) FOR THE YEAR 26 OCTOBER 1999 TO 31 DECEMBER 2003

8 Fixed asset investments
Shares in Shares in Total participating group

Cost At 1 January 2003 & at 31 December 2003 50 1,445 1,495
Holdings of more than 20% The company holds more than 20% of the share capital of the following companies:
Company Country of registration or Shares held incorporation Class Subsidiary undertakings Advanced Hair Studios (Pty) Limited England & Wales Ordinary Advanced Hair Studios (Glasgow) Limited England & Wales Ordinary Advanced Hair Studios (Nottingham) Limited England & Wales Ordinary Advance Hair Studios (Cardiff) Limited England & Wales Ordinary Advanced Hair Studios (Newcastle) Limited England & Wales Ordinary Advanced Hair Studios (Romford) Limited England & Wales Ordinary Advanced Hair Studios (BrusselIs) Limited England & Wales Ordinary Adyanced Hair Studios (Leeds) Limited England & Wales Ordinary
ciA
100.0 100.0 100.0 80.0 75.0 70.0 100.0 100.0 Participating interests Pentoc Limited England & Wales Ordinary 50
The aggregate amount of capital and reserves and the results of these undertakings for the last relevant financial year were as follows:
Capital and Profit for the

Advanced Hair Studios (Pty) Limited Advanced Hair Studios (Glasgow) Limited Advanced Hair Studios (Nottingham) Limited Advance Hair Studios (Cardiff) Limited Advanced Hair Studios (Newcastle) Limited Advanced Hair Studios (Romford) Limited Advanced Hair Studios (BrusselIs) Limited Adyanced Hair Studios (Leeds) Limited Pentoc Limited
Principal activity Dormant Dormant Dormant Hair replacement service Hair replacement service Hair replacement service Hair replacement service Dormant Hair replacement service reserves 2003.0
-293440.0 -374035.0 -83056.0 -312183.0 -224021.0 -58842.0 -297346.0 -47036.0 -77905.0 year 2003.0

-29113.0 27937.0 70446.0 -66938.0
-40002.0
The principal activity of all the above trading companies was that of hair replacement services.

-12 -
ADVANCED HAIR STUDIOS GROUP LIMITED
NOTES TO THE ABBREVIATED ACCOUNTS (CONTINUED) FOR THE YEAR 26 OCTOBER 1999 TO 31 DECEMBER 2003
Sheet9

- 13 -

ADVANCED HAIR STUDIOS GROUP LIMITED
NOTES TO THE ABBREVIATED ACCOUNTS (CONTINUED) FOR THE YEAR 26 OCTOBER 1999 TO 31 DECEMBER 2003

13 Statement of movements on profit and loss account Sheet10 At 31 December 2003 the company was committed to making the following payments under non- cancellable operating leases in the year 31 December 2004:
Land and buildings 2003 2002
Operating leases which expire: In over five years
159,000 159,000 16 Transactions with directors and holding company
The following transactions took place with companies of which CA Howell is a director:
During the year the company was invoiced by Advanced Hair Studios International Limited ? 2,803,956 (2002: ?2,879,654) for purchases of hair and ancilliary costs. At the year end the company owed Advanced Hair Studios International Limited ?773,565 (2002: ? 1,064,080).
During the year the company paid royalties and franchisor fees of ?199,233 (2002: ?172,726) to Advanced Hair Studios Europe Limited, the company's controlling party. At the year end the company owed Advanced Hair Studios Europe Limited ?20,000 (2002: ? Nil).

- 14-
ADVANCED HAIR STUDIOS GROUP LIMITED
NOTES TO THE ABBREVIATED ACCOUNTS (CONTINUED) FOR THE YEAR 26 OCTOBER 1999 TO 31 DECEMBER 2003

17 Employees
Number of employees The average monthly number of employees (including directors) during the year was:

Administrative staff Stylists

Employment costs

Wages and salaries Social security costs

2003 2002 Number Number
16 15 21 20
37 35

2003 2002 ? ?
728,007 663,492 80,180 57,367
808,187 720,859
18 Ultimate parent company
The ultimate parent company is Advanced Hair Studios (Europe) Limited, a company registered in Eire.

Directors Report 12

DIRECTORS' REPORT FOR THE YEAR ENDED 31 DECEMBER 2002

The directors present their report and financial statements for the year ended 31 December 2002.
Principal activities and review of the business The principal activity of the company was that of the provision of hair replacement services.
The Directors are pleased to record that the additional expenditure on advertising and marketing initiatives has generated substantially improved sales turnover and profit margins. Although the company has not made a profit overall, all studios have shown improvements over 2001.
2002 has been a year of consolidation evidenced by the integration of two new studios acquired in 2001 into the company and by the appointment of some new staff to some of the UK studios.
Results and dividends The results for the year are set out on page 4.
The directors do not recommend payment of an ordinary dividend.
It is proposed that the retained loss of ?163,755 is transferred to reserves.
Future developments The directors expect the company to continue its improvements in operational performance and record a profit for the year. A new range of hair is due to be launched in the second half of the year which will generate increased sales and profits.
The company aims to build on the successes of 2002 and streamline its process without compromising its reputation for customer service.
Directors The following directors have held office since 1 January 2002:
C Howell B L Murray
Directors' interests The directors' interests in the shares of the company were as stated below: Ordinary shares of ? 1 each 31 December 2002 1 January 2002 C Howell B L Murray
Auditors In accordance with section 385 of the Companies Act 1985, a resolution proposing that Harris & Trotter LLP be reappointed as auditors of the company will be put to the Annual General Meeting.
ADVANCED HAIR STUDIOS GROUP LIMITED
DIRECTORS' REPORT (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2002

Directors' responsibilities Company law requires the directors to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing those financial statements, the directors are required to: -select suitable accounting policies and then apply them consistently; - make judgements and 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 directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the company and to enable them to ensure that the financial statements comply with the Companies Act 1985. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
By order of the board

AZQ_ L LC:P5CCW-2--- 1.0 AL E Dawson Secretary 2004-03-10 00:00:00
ADVANCED HAIR STUDIOS GROUP LIMITED
INDEPENDENT AUDITORS' REPORT TO ADVANCED HAIR STUDIOS GROUP LIMITED UNDER SECTION 2473 OF THE COMPANIES ACT 1985

We have examined the abbreviated accounts set out on pages 4 to 14 ,together with the financial statements of the company for the year ended 31 December 2002 prepared under section 226 of the Companies Act 1985.
This report is made solely to the company, in accordance with Section 247B of the Companies Act 1985. Our work has been undertaken so that we might state to the company those matters we are required to state to it in a special 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, for our work, for this report, or for the opinions we have formed.
Respective responsibilities of directors and auditors The directors are responsible for preparing the abbreviated accounts in accordance with section 246A of the Companies Act 1985. It is our responsibility to form an independent opinion as to whether the company is entitled to deliver abbreviated accounts prepared in accordance with section 246A(3) of the Act to the Registrar of Companies and whether the accounts to be delivered are properly prepared in accordance with that provision and to report our opinion to you.
Basis of audit opinion We have carried out the procedures we considered necessary to confirm, by reference to the financial statements, that the company is entitled to deliver abbreviated accounts and that the abbreviated accounts to be delivered are properly prepared. The scope of our work for the purpose of this report did not include examining or dealing with events after the date of our report on the financial statements.
Opinion In our opinion the company is entitled to deliver abbreviated accounts prepared in accordance with section 246A(3) of the Companies Act 1985, and the abbreviated accounts on pages 4 to 14 are properly prepared in accordance with that provision.
Other information On 10 March 2004 we reported, as auditors of Advanced Hair Studios Group Limited, to the members on the financial statements prepared under section 226 of the Companies Act 1985 for the year ended 31 December 2002, and our audit report included the following paragraph:

"Going concern In forming our opinion, we have considered the adequacy of the disclosures made in note 1 of the financial statements concerning the uncertainty as to the continuation of the credit facilities from Advanced Hair Studios (International) Limited in order to meet its medium term capital requirements. In view of the significance of this uncertainty we consider that it should be drawn to your attention but our opinion is not qualified in this respect."

Harris & Trotter LLP
Chartered Accountants Registered Auditor

2004-03-10 00:00:00
65 New Cavendish Street
ADVANCED HAIR STUDIOS GROUP LIMITED
ABBREVIATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 DECEMBER 2002
Sheet2

ADVANCED HAIR STUDIOS GROUP LIMITED
ABBREVIATED BALANCE SHEET AS AT 31 DECEMBER 2002
Sheet3

These abbreviated accounts have been prepared in accordance with the special provisions of Part VII of the Companies Act 1985 relating to medium-sized companies.
? The financial statements were approved by the Board on 10 March 2004

C H ell Director

ADVANCED HAIR STUDIOS GROUP LIMITED
CASH FLOW STATEMENT FOR THE YEAR ENDED 3/ DECEMBER 2002
Sheet4 ADVANCED HAIR STUDIOS GROUP LIMITED
NOTES TO THE CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2002

1 Reconciliation of operating loss to net cash inflow from operating 2002 2001 activities

Operating loss (163,211) (213,948) Depreciation of tangible assets 26,841 30,262 Amortisation of intangible assets 32,838 36,517 Decrease/(increase) in stocks 2,400 (47,036) Decrease/(increase) in debtors 855,033 (1,803,750) (Decrease)Iincrease in creditors within one year (664,132) 2,711,912 Net cash inflow from operating activities
89,769 713,957

2 Analysis of net funds

1 January 2002 Cash flow Other non- 31 December cash changes 2002
Net cash: Cash at bank and in hand 265,010 78,569 343,579
Net funds 265,010 78,569 343,579

3 Reconciliation of net cash flow to movement in net funds 2002 2001

Increase in cash in the year 78,569 265,010
Movement in net funds in the year 78,569 265,010 Opening net funds 265,010

Closing net funds 343,579 265,010
ADVANCED HAIR STUDIOS GROUP LIMITED
NOTES TO THE ABBREVIATED ACCOUNTS FOR THE YEAR 26 OCTOBER 1999 TO 31 DECEMBER 2002

1 Accounting policies
1 .1 Accounting convention The financial statements are prepared under the historical cost convention.
The financial statements have been prepared on the going concern basis. The company relies on extended credit facilities from Advanced Hair Studios (International) Limited, in order to meet its medium term capital requirements. The directors are confident that this support will continue for a period of at least twelve months from the date of the approaval of the financial statements.
On this basis the directors consider it appropriate to prepare the financial statements on the going concern basis. The financial statements do not include any adjustments that would result from a withdrawal of the extended credit facilities from Advanced Hair Studios (International) Limited.
1 .2 Turnover Turnover represents amounts receivable for goods and services net of VAT and trade discounts.
1 .3 Goodwill Acquired goodwill is written off in equal annual instalments over its estimated useful economic life.
1 .4 Franchise fees Franchise fees are valued at cost less accumulated amortisation. Amortisation is calculated to write off the cost in equal annual instalments over their estimated useful lives.
1 .5 Tangible fixed assets and depreciation Tangible fixed assets are stated at cost less depreciation. Depreciation is provided at rates calculated to write off the cost less estimated residual value of each asset over its expected useful life, as follows:
Land and buildings Leasehold Straight line over the lease Fixtures, fittings & equipment 20% straight line
1 .6 Leasing Rentals payable under operating leases are charged against income on a straight line basis over the lease term.
1 .7 Investments Fixed asset investments are stated at cost less provision for diminution in value.
1 .8 Stock Stock is valued at the lower of cost and net realisable value on a FIFO basis.
1 .9 Deferred taxation Deferred tax is provided in full in respect of taxation deferred by timing differences between the treatment of certain items for taxation and accounting purposes.
At the year end the deferred tax of ?190,693 has not been recognised as the directors are uncertain as to when the conditions for recognising the asset will crystallise.

- 8 -
ADVANCED HAIR STUDIOS GROUP LIMITED
NOTES TO THE ABBREVIATED ACCOUNTS (CONTINUED) FOR THE YEAR 26 OCTOBER 1999 TO 31 DECEMBER 2002

1 Accounting policies (continued)
1 .10Group accounts The financial statements present information about the company as an individual undertaking and not about its group. The company and its subsidiary undertakings comprise a medium-sized group. The company has therefore taken advantage of the exemptions provided by section 248 of the Companies Act 1985 not to prepare group accounts.
Sheet5 ADVANCED HAIR STUDIOS GROUP LIMITED
NOTES TO THE ABBREVIATED ACCOUNTS (CONTINUED) FOR THE YEAR 26 OCTOBER 1999 TO 31 DECEMBER 2002
Sheet6 Sheet7

- 10 -

ADVANCED HAIR STUDIOS GROUP LIMITED
NOTES TO THE ABBREVIATED ACCOUNTS (CONTINUED) FOR THE YEAR 26 OCTOBER 1999 TO 31 DECEMBER 2002

7 Fixed asset investments
Shares in Shares in Total participating group

Cost At 1 January 2002 & at 31 December 2002 50 1,445 1,495

Holdings of more than 20% The company holds more than 20% of the share capital of the following companies:
Sheet8 The aggregate amount of capital and reserves and the results of these undertakings for the last relevant financial year were as follows:
Sheet9

The principal activity of all the above trading companies was that of hair replacement services.

ADVANCED HAIR STUDIOS GROUP LIMITED
NOTES TO THE ABBREVIATED ACCOUNTS FOR THE YEAR 26 OCTOBER 1999 TO 31 DECEMBER 2002
Sheet10

0.17

ADVANCED HAIR STUDIOS GROUP LIMITED
NOTES TO THE ABBREVIATED ACCOUNTS (CONTINUED) FOR THE YEAR 26 OCTOBER 1999 TO 31 DECEMBER 2002

12 Statement of movements on profit and loss account

Balance at 1 January 2002 Retained loss for the year Profit and loss account

-211759.0 -163755.0
Balance at 31 December 2002 (375,514)

13 Reconciliation of movements in shareholders' funds 2002 2001

Loss for the financial year (163,755) (212,778) Opening shareholders' funds (210,849) 1,929
Closing shareholders' funds (374,604) (210,849)

14 Financial commitments
At 31 December 2002 the company had annual commitments under non-cancellable operating leases as follows:
Land and buildings 2002 2001
Expiry date: Within one year 90,000 In over five years 159,000 59,000
159,000 149,000

15 Transactions with directors
The following transactions took place with companies in which C A Howell is a director:
During the year the company paid Advanced Hair Studios International Limited ? 2,879,654 (2001: ?3,077,593) for purchases of hair and ancilliary costs. At the year end the company owed Advanced Hair Studios International Limited ?1,064,080 (2001: ? 1,084,258).
During the year the company paid royalties and franchisor fees of ?172,726 (2001: ?152,542) to Advanced Hair Studios Europe Limited, the company's controlling party. There were no amounts outstanding as a result of these transactions at the year end.

-13-
ADVANCED HAIR STUDIOS GROUP LIMITED
NOTES TO THE ABBREVIATED ACCOUNTS (CONTINUED) FOR THE YEAR 26 OCTOBER 1999 TO 31 DECEMBER 2002
Sheet11

17 Ultimate parent company
The ultimate parent company is Advanced Hair Studios (Europe) Limited, a company registered in Eire.