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Bremont Watch Company Limited

Registered number: 05414485
Annual Report
For the year ended 30 June 2023

 
BREMONT WATCH COMPANY LIMITED
 
 
COMPANY INFORMATION


Directors
N S C English 
E Guillemin 
C E Jeneson 
R O H Morley 
D Cerrato 
M Parker 




Company secretary
N S C English



Registered number
05414485



Registered office
Manufacturing and Technology Centre
Reading Road

Henley On Thames

Oxfordshire

RG9 4GE




Independent auditor
Forvis Mazars LLP
Chartered Accountants & Statutory Auditor

5th Floor

Merck House

Seldown Lane

Poole

BH15 1TW




Bankers
HSBC
59 Old Christchurch Road

Bournemouth

Dorset

BH1 1EH





 
BREMONT WATCH COMPANY LIMITED
 

CONTENTS



Page
Strategic Report
 
1 - 2
Directors' Report
 
3 - 5
Independent Auditor's Report
 
6 - 9
Consolidated Profit and Loss Account
 
10
Consolidated Statement of Comprehensive Income
 
11
Consolidated Balance Sheet
 
12 - 13
Company Balance Sheet
 
14 - 15
Consolidated Statement of Changes in Equity
 
16
Company Statement of Changes in Equity
 
17
Consolidated Statement of Cash Flows
 
18 - 19
Notes to the Financial Statements
 
20 - 54


 
BREMONT WATCH COMPANY LIMITED
 
 
STRATEGIC REPORT
FOR THE YEAR ENDED 30 JUNE 2023

Business review

Bremont makes highly durable luxury watches that celebrate the tradition of British adventure and exploration at “The Wing”, its 35,000 sq. ft. state-of-the-art Manufacturing and Technology Centre in Henley-on-Thames. 
The business achieved sales of £20.4 million which was down from £22.1 million in the prior year, and recorded an EBITDA loss of £11.0 million (prior year £0.1 million).
Results for the year were impacted by the commitment of significant resources to the development of the ENG 300 movement and the in-house design and manufacture of components which constrained capacity to produce other watches. The company also had exceptional costs of £5.7 million, primarily consisting of stock provisions, fixed asset impairment and credit note provisions.
The business finished the year with cash of £17.7 million (prior year £3.0 million) and net current assets £21.4 million (prior year £4.2 million). 

Business developments

The end of the year saw the appointment of Davide Cerrato as CEO and the launch of an ambitious multi-year strategy aimed at building on Bremont’s impressive legacy to create a British national champion in the global luxury watch market. 
Bremont is fortunate to have inspirational founders, a much-loved brand, a world-class management team and a highly skilled workforce and is now investing heavily in people, technology and operations to support future growth


Principal risks and uncertainties
 
Currency 
Whilst sourcing and supply chain operations are always changing, the company continually monitors exchange rate movements, in particular the US dollar and Swiss franc, and works with suppliers to secure a reliable supply of components at advantageous prices. Our global presence offers an element of natural hedging and our ability to utilise trade contracts allows us to limit the impact of currency fluctuations.
Economic
The Group is exposed to the economic changes and challenges globally which the Group monitors. The Group is agile and adapts its strategy through price point, product offering and its diverse sales channels.
Liquidity
Management of the Groups liquidity to meet its needs, commitments and future growth. The Group invests excess cash to maximise return and support the growth plans and is supported by its shareholders and through banking arrangements with HSBC.

- 1 -

 
BREMONT WATCH COMPANY LIMITED
 

GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023

Financial key performance indicators

      2023
      2022
      2021
      2020
Turnover

£20.4m

£22.1m

£17.3m
 
£14.3m
 
Turnover Growth

(8%)

28%

21%
 
(25%)
 
EBITDA

(£11.0m)

£0.1m

£0.6m
 
(£2.9m)
 
EBITDA (Excluding Forex)

(£10.6m)

(£0.6m)

£1.2m
 
(£3.1m)
 
Net Assets

£24.5m

£8.9m

£8.8m
 
£5.3m
 
Capital expenditure

£2.1m

£3.0m

£3.7m
 
£0.3m
 

Following the additional investment received in the year, the company has strategically reviewed the inventory in the market, distribution networks, and excessive stock holdings and 2023 is a year of consolidation, laying the foundation for future growth.
The Group continued to invest in the capital expenditure aligned with future growth plans.

This report was approved by the board and signed on its behalf by:



R O H Morley
Director

Date: 8 August 2024

- 2 -

 
BREMONT WATCH COMPANY LIMITED
 
 
 
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 JUNE 2023

The Directors present their report and the audited consolidated financial statements for the year ended 30 June 2023.

Principal activity

The principal activity of the Group is that of design, production and distribution of watches.
During the year, the Group secured substantial investment from existing shareholder, Hellcat LLP and welcomed a new investor. Therefore, the Group's controlling party changed to Hellcat LLP.

Result and dividends

The loss for the period, after taxation and before other comprehensive income, amounted to £14,128,819 (2022: loss of £1,665,679).

No dividends are recommended for payment (2022: £nil).

Directors

The Directors who served during the year and to the date of this report were:

E G English (resigned 24 May 2024)
N S C English 
E Guillemin 
C L J Reynolds (resigned 21 June 2023)
R O H Morley (appointed 2 November 2022)
D Cerrato (appointed 18 May 2023)
S J Clark (resigned 21 March 2023)
M Parker (appointed 25 June 2024) 
C E Jeneson (appointed 6 July 2022)
 
- 3 -

 
BREMONT WATCH COMPANY LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023

Directors' responsibilities statement

The Directors are responsible for preparing the Group Strategic Report, the Directors' Report and the audited consolidated financial statements in accordance with applicable law and regulations.
 
Company law requires the Directors to prepare audited consolidated financial statements for each financial year. Under that law the Directors have elected to prepare the audited consolidated financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the Directors must not approve the audited consolidated 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 audited consolidated financial statements, the Directors are required to:


select suitable accounting policies for the Group's financial statements and then apply them consistently;

make judgements and accounting estimates that are reasonable and prudent;

state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

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

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

Matters covered in the Strategic Report

The mandatory disclosures in relation to the principal risks and uncertainties and the future developments of the Group are considered by the Directors to be of strategic importance. These have therefore been included in the Strategic Report.

Qualifying third party indemnity provisions

The Directors benefit from a third party qualifying indemnity provision in the form permitted by Section 234 of the Companies Act 2006 in respect of certain third party actions against directors. No claim or notice of claim in respect of these indemnities has been received in the year. The qualifying indemnity provision was in force throughout the financial year and up to the date of approval of the Directors' Report.

Provision of information to auditor

Each of the persons who are Directors at the time when this Directors' Report is approved has confirmed that:
 
so far as the Directors are aware, there is no relevant audit information of which the Company and the Group's auditor is unaware, and

the Directors have taken all the steps that ought to have been taken as a Director in order to be aware of any relevant audit information and to establish that the Company and the Group's auditor is aware of that information.

- 4 -

 
BREMONT WATCH COMPANY LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023

Post balance sheet events

There have been no significant events affecting the Company and the Group since the year end.

Going concern

Bremont continues its growth strategy, investing in people and infrastructure to support the future growth plans of the business. The Group monitors the position of the business monthly and takes the appropriate actions to ensure the business grows. Significant resources were absorbed by the development of the ENG 300 movement and the in-house design and manufacture of case components and bracelets which constrained capacity to produce other watches. Furthermore, the Company had exceptional costs of £5.7 million, primarily consisting of stock provision, fixed asset impairment and credit note provision.
 
Following the in-depth review of the Group, the shareholders confirmed their financial support for the business for a period of not less than 12 months from the date of approval of these financial statements. Accordingly, the directors are of the opinion that the Group has adequate financial resources to continue in operational existence for at least 12 months from the date of these financial statements.

Economic impact of global events

UK businesses are facing many uncertainties and challenges caused by political, economic, social, technological, legal and environmental factors. These uncertainties have contributed to an environment where there exists a range of issues and risks, including inflation, rising interest rates, labour shortages, disrupted supply chains and new ways of working.
The Directors have carried out an assessment of the potential impact of these uncertainties on the business, including the impact of mitigation measures, and have concluded that these are non-adjusting events with the greatest impact on the business expected to be from the economic ripple effect on the global economy. The Directors have taken account of these potential impacts in their going concern assessment.
Bremont Watch Company Limited continues to work with its partners to minimise any impacts of these events and maximise the realisation of any opportunities they may provide to the business.

Auditor

The auditor, Forvis Mazars LLPwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board and signed on its behalf by:
 





R O H Morley
Director

Date: 8 August 2024

- 5 -

 
BREMONT WATCH COMPANY LIMITED
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF BREMONT WATCH COMPANY LIMITED
 

Opinion

We have audited the financial statements of Bremont Watch Company Limited (the ‘Parent Company’) and its subsidiaries (the ‘Group’) for the year ended 30 June 2023 which comprise the Consolidated Profit and Loss Account, the Consolidated Statement of Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, the Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Statement of Cash Flows and notes to the financial statements, including a summary of significant accounting policies. 
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (United Kingdom Generally Accepted Accounting Practice).

In our opinion, the financial statements:

give a true and fair view of the state of the Parent Company and the Group's affairs as at 30 June 2023 and of the Group's  loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the “Auditor’s responsibilities for the audit of the financial statements” section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Parent Company and the Group's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. 
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The Directors are responsible for the other information contained within the annual report.  Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
- 6 -

 
BREMONT WATCH COMPANY LIMITED
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF BREMONT WATCH COMPANY LIMITED
 

Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:
 
the information given in the Strategic Report and the Directors’ Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the Strategic Report and the Directors’ Report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In light of the knowledge and understanding of the Group and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors’ Report.

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

adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the 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.

- 7 -

 
BREMONT WATCH COMPANY LIMITED
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF BREMONT WATCH COMPANY LIMITED
 

Responsibilities of Directors

As explained more fully in the Directors’ responsibilities statement set out on page 4, the Directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Directors are responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements. 
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. 
Based on our understanding of the Parent Company and the Group and its industry, we considered that non-compliance with the following laws and regulations might have a material effect on the financial statements: employment regulation, health and safety regulation, data protection and Bribery Act 2010.  
To help us identify instances of non-compliance with these laws and regulations, and in identifying and assessing the risks of material misstatement in respect to non-compliance, our procedures included, but were not limited to:
 
Inquiring of management and, where appropriate, those charged with governance, as to whether the Group is in compliance with laws and regulations, and discussing their policies and procedures regarding compliance with laws and regulations;
Inspecting correspondence, if any, with relevant licensing or regulatory authorities;
Communicating identified laws and regulations to the engagement team and remaining alert to any indications of non-compliance throughout our audit; and
Considering the risk of acts by the Group which were contrary to applicable laws and regulations, including fraud.

We also considered those laws and regulations that have a direct effect on the preparation of the financial statements, such as tax legislation, PAYE legislation, the Companies Act 2006.

- 8 -

 
BREMONT WATCH COMPANY LIMITED
 
 
 
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF BREMONT WATCH COMPANY LIMITED
 

In addition, we evaluated the Directors’ and management’s incentives and opportunities for fraudulent manipulation of the financial statements, including the risk of management override of controls, and determined that the principal risks related to posting manual journal entries to manipulate financial performance, management bias through judgements and assumptions in significant accounting estimates, in particular in relation to stock provision, warranty provision, impairment of development costs, credit note provision, recoverability of intercompany debtors, labour rate/ standard cost and share based payments, revenue recognition (which we pinpointed to the cut off of contract revenue), going concern and significant one-off or unusual transactions. 

Our audit procedures in relation to fraud included but were not limited to:
Making enquiries of the directors and management on whether they had knowledge of any actual, suspected or alleged fraud;
Gaining an understanding of the internal controls established to mitigate risks related to fraud;
Discussing amongst the engagement team the risks of fraud; and
Addressing the risks of fraud through management override of controls by performing journal entry testing.

There are inherent limitations in the audit procedures described above and the primary responsibility for the prevention and detection of irregularities including fraud rests with management. As with any audit, there remained a risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal controls.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.



Use of the audit report

This report is made solely to the Group’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 Group’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 Group and the Group’s members as a body for our audit work, for this report, or for the opinions we have formed.




Stephen Mills (Senior statutory auditor) 
for and on behalf of Forvis Mazars LLP
  
Chartered Accountant and Statutory Auditor

5th Floor
Merck House
Seldown Lane
Poole
Dorset
BH15 1TW

8 August 2024
- 9 -

 
BREMONT WATCH COMPANY LIMITED
 
 
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 30 JUNE 2023

2023
2022
Note
£
£

  

Turnover
 4 
20,392,222
22,090,886

Cost of sales
  
(9,415,322)
(8,824,884)

Exceptional cost of sales
 5 
(4,175,888)
-

Gross profit
  
6,801,012
13,266,002

Distribution costs
  
(7,884,803)
(6,502,175)

Administrative expenses
  
(11,234,709)
(7,918,736)

Exceptional administrative expenses
 5 
(1,548,698)
-

Other operating income
 6 
-
1,710

Operating loss
 7 
(13,867,198)
(1,153,199)

Interest receivable and similar income
 11 
216,050
639

Interest payable and similar expenses
 12 
(664,651)
(474,229)

Loss before tax
  
(14,315,799)
(1,626,789)

Tax on loss
 13 
186,980
(38,890)

Loss for the financial year
  
(14,128,819)
(1,665,679)

Loss for the year attributable to:
  

Non-controlling interests
  
428,022
(335,069)

Owners of the parent
  
(14,556,841)
(1,330,610)

  
(14,128,819)
(1,665,679)

The Consolidated Profit and Loss Account has been prepared on the basis that all operations are continuing operations.

The notes on pages 20 to 54 form part of these financial statements.

- 10 -

 
BREMONT WATCH COMPANY LIMITED
 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2023

2023
2022
£
£


Loss for the financial year

(14,128,819)
(1,665,679)

Other comprehensive income


Movement on foreign exchange
(67,121)
(1,176,306)

Total comprehensive income for the year
(14,195,940)
(2,841,985)


Total comprehensive income attributable to:


Non-controlling interest
428,022
(335,069)

Owners of the parent Company
(14,623,962)
(2,506,916)

(14,195,940)
(2,841,985)

The notes on pages 20 to 54 form part of these financial statements.

- 11 -

 
BREMONT WATCH COMPANY LIMITED
REGISTERED NUMBER: 05414485

CONSOLIDATED BALANCE SHEET
AS AT 30 JUNE 2023

2023
2022
Note
£
£

Fixed assets
  

Intangible assets
 14 
580,449
1,929,839

Tangible fixed assets
 15 
6,770,480
6,398,454

  
7,350,929
8,328,293

Current assets
  

Stocks
 17 
12,282,053
12,151,805

Debtors: amounts falling due within one year
 18 
4,299,866
6,126,945

Cash and cash equivalents
 19 
17,721,907
2,985,005

  
34,303,826
21,263,755

Creditors: amounts falling due within one year
 20 
(12,928,379)
(17,059,949)

Net current assets
  
 
 
21,375,447
 
 
4,203,806

Total assets less current liabilities
  
28,726,376
12,532,099

Creditors: amounts falling due after more than one year
 21 
(2,484,197)
(2,486,898)

Provisions for liabilities
  

Deferred taxation
 24 
(691,103)
(725,001)

Provisions
 25 
(822,830)
(458,864)

  
 
 
(1,513,933)
 
 
(1,183,865)

Net assets
  
24,728,246
8,861,336


Capital and reserves
  

Called up share capital 
 26 
482,172
9,796,248

Share premium account
 27 
40,011,367
10,444,654

Capital redemption reserve
 27 
9,810,213
-

Share option reserve
 27 
28,114
433,284

Profit and loss account
 27 
(25,721,664)
(11,504,018)

Non-controlling interests
 27 
118,044
(308,832)

Total equity
  
24,728,246
8,861,336


- 12 -

 
BREMONT WATCH COMPANY LIMITED
REGISTERED NUMBER: 05414485
    
CONSOLIDATED BALANCE SHEET (CONTINUED)
AS AT 30 JUNE 2023

The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 




R O H Morley
Director

Date: 8 August 2024

The notes on pages 20 to 54 form part of these financial statements.

- 13 -

 
BREMONT WATCH COMPANY LIMITED
REGISTERED NUMBER: 05414485

COMPANY BALANCE SHEET
AS AT 30 JUNE 2023

2023
2022
Note
£
£

Fixed assets
  

Intangible assets
 14 
547,363
1,912,699

Tangible fixed assets
 15 
6,225,012
5,889,981

Investments
 16 
70,137
70,137

  
6,842,512
7,872,817

Current assets
  

Stocks
 17 
11,670,240
11,406,712

Debtors: amounts falling due after more than one year
 18 
4,737,794
-

Debtors: amounts falling due within one year
 18 
4,826,719
13,594,350

Cash and cash equivalents
 19 
17,416,008
2,198,461

  
38,650,761
27,199,523

Creditors: amounts falling due within one year
 20 
(11,012,036)
(14,818,974)

Net current assets
  
 
 
27,638,725
 
 
12,380,549

Total assets less current liabilities
  
34,481,237
20,253,366

  

Creditors: amounts falling due after more than one year
 21 
(2,484,197)
(2,486,898)

Provisions for liabilities
  

Deferred taxation
 24 
(691,103)
(725,001)

Provisions
 25 
(808,158)
(458,864)

  
 
 
(1,499,261)
 
 
(1,183,865)

Net assets
  
30,497,779
16,582,603


Capital and reserves
  

Called up share capital 
 26 
482,172
9,796,248

Share premium account
 27 
40,011,367
10,444,654

Capital redemption reserve
 27 
9,810,213
-

Share option reserve
 27 
28,114
433,284

Profit and loss account
 27 
(19,834,087)
(4,091,583)

Total equity
  
30,497,779
16,582,603


- 14 -

 
BREMONT WATCH COMPANY LIMITED
REGISTERED NUMBER: 05414485
    
COMPANY BALANCE SHEET (CONTINUED)
AS AT 30 JUNE 2023

The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Profit and Loss Account in these financial statements. The loss after tax of the parent Company for the year was £16,147,674 (2022: loss of £107,839).
The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 
 


R O H Morley
Director

Date: 8 August 2024

The notes on pages 20 to 54 form part of these financial statements.

- 15 -

 
BREMONT WATCH COMPANY LIMITED
 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2023


Called up share capital
Share premium account
Capital redemption reserve
Share option reserve
Profit and loss account
Non-controlling interests
Total equity

£
£
£
£
£
£
£


At 1 July 2021
9,770,017
7,720,850
-
348,117
(8,997,102)
-
8,841,882



Loss for the year
-
-
-
-
(1,330,610)
(335,069)
(1,665,679)

Movement on foreign exchange
-
-
-
-
(1,176,306)
-
(1,176,306)

Shares issued during the year
26,231
2,723,804
-
-
-
-
2,750,035

Sale of non-controlling interest in a subsidiary
-
-
-
-
-
26,237
26,237

Share based payment
-
-
-
85,167
-
-
85,167



At 1 July 2022
9,796,248
10,444,654
-
433,284
(11,504,018)
(308,832)
8,861,336



Loss for the year
-
-
-
-
(14,556,841)
428,022
(14,128,819)

Movement on foreign exchange
-
-
-
-
(65,975)
(1,146)
(67,121)

Shares issued during the year
125,330
29,937,520
-
-
-
-
30,062,850

Shares bought back during the year
(9,439,406)
(370,807)
9,810,213
-
-
-
-

Share options for the shares exercised
-
-
-
(405,170)
405,170
-
-


At 30 June 2023
482,172
40,011,367
9,810,213
28,114
(25,721,664)
118,044
24,728,246


The notes on pages 20 to 54 form part of these financial statements.

- 16 -

 
BREMONT WATCH COMPANY LIMITED
 

COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2023


Called up share capital
Share premium account
Capital redemption reserve
Share option reserve
Profit and loss account
Total equity

£
£
£
£
£
£


At 1 July 2021
9,770,017
7,720,850
-
348,117
(3,983,744)
13,855,240



Loss for the year
-
-
-
-
(107,839)
(107,839)

Shares issued during the year
26,231
2,723,804
-
-
-
2,750,035

Share based payment
-
-
-
85,167
-
85,167



At 1 July 2022
9,796,248
10,444,654
-
433,284
(4,091,583)
16,582,603



Loss for the year
-
-
-
-
(16,147,674)
(16,147,674)

Shares issued during the year
125,330
29,937,520
-
-
-
30,062,850

Shares bought back during the year
(9,439,406)
(370,807)
9,810,213
-
-
-

Share options for the shares exercised
-
-
-
(405,170)
405,170
-


At 30 June 2023
482,172
40,011,367
9,810,213
28,114
(19,834,087)
30,497,779


The notes on pages 20 to 54 form part of these financial statements.

- 17 -

 
BREMONT WATCH COMPANY LIMITED
 

CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2023

2023
2022
£
£

Cash flows from operating activities

Loss for the financial year
(14,128,819)
(1,665,679)

Adjustments for:

Amortisation of intangible assets
205,103
130,447

Depreciation of tangible fixed assets
920,436
876,837

Impairments of fixed assets
1,702,195
-

Change of non-controlling interest in a subsidiary
(1,164)
26,237

Interest paid
664,651
474,229

Interest received
(216,050)
(639)

Increase in stocks
(130,248)
(1,818,378)

Decrease/(increase) in debtors
1,830,204
(690,256)

Increase in creditors
1,223,704
3,310,673

Increase in provisions
363,966
67,369

Corporation tax (credit)/charge
(186,980)
38,890

Foreign exchange
9,862
(1,215,210)

Taxation refunded/(paid)
153,400
(1,349)

Share options expense
-
85,167

Net cash used in operating activities

(7,589,740)
(381,662)


Cash flows from investing activities

Purchase of intangible assets
(122,501)
(1,043,268)

Proceeds from sale of intangible assets
40,690
-

Payments to acquire tangible fixed assets
(2,033,269)
(1,821,150)

Proceeds from sale of tangible fixed assets
188,891
-

Interest received
216,050
639

HP interest
(20,545)
(35,703)

Net cash used in investing activities

(1,730,684)
(2,899,482)

Cash flows from financing activities

Net movement of issue and cancellation/buy back of ordinary shares
30,062,850
2,750,035

New loans
-
500,000

Repayment of loans
(4,458,333)
(500,000)

Movements in finance leases
(323,638)
(307,390)

New trade credit
6,151,605
5,528,374

Repayment of trade credit
(6,192,273)
(4,782,426)

Interest paid
(644,106)
(438,526)

Net cash generated from financing activities
24,596,105
2,750,067
- 18 -

 
BREMONT WATCH COMPANY LIMITED
 

CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2023


2023
2022

£
£


Net increase/(decrease) in cash and cash equivalents
15,275,681
(531,077)

Cash and cash equivalents at beginning of year
2,429,125
2,960,202

Cash and cash equivalents at the end of year
17,704,806
2,429,125


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
17,721,907
2,985,005

Bank overdrafts
(17,101)
(555,880)

17,704,806
2,429,125


- 19 -

 
BREMONT WATCH COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

1.


General information

Bremont Watch Company Limited (Registered Number - 05414485) is a private limited company, limited by shares and incorporated in England & Wales under the Companies Act whose principal activity is that of design, production and distribution of watches.
The registered office of the Company is Manufacturing and Technology Centre, Reading Road, Henley On Thames, Oxfordshire, RG9 4GE.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

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

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgement in applying the Group's accounting policies (see note 3).

The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements.
The Company is a qualifying entity for the purposes of FRS 102 and has elected to take the exemption under FRS 102, para 1.12 (b) not to present the Company Statement of Cash Flows.
The financial statements have been presented in Pounds Sterling as this is the currency of the primary economic environment in which the Group operates and is rounded to the nearest pound.

The following principal accounting policies have been applied:

 
2.2

Basis of consolidation

The consolidated financial statements present the results of the Group and its subsidiaries ("the Group") as they formed a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.

 
2.3

Going concern

Bremont continues its growth strategy, investing in people and infrastructure to support the future growth plans of the business. The Group monitors the position of the business monthly and takes the appropriate actions to ensure the business grows. Significant resources were absorbed by the development of the ENG 300 movement and the in-house design and manufacture of case components and bracelets which constrained capacity to produce other watches. Furthermore, the Company had exceptional costs of £5.7 million, primarily consisting of stock provision, fixed asset impairment and credit note provision.
 
Following the in-depth review of the Group, the shareholders confirmed their financial support for the business for a period of not less than 12 months from the date of approval of these financial statements. Accordingly, the directors are of the opinion that the Group has adequate financial resources to continue in operational existence for at least 12 months from the date of these financial statements..

- 20 -

 
BREMONT WATCH COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

2.Accounting policies (continued)

 
2.4

Turnover

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

Sale of goods
 the Group has transferred the significant risks and rewards of ownership to the buyer;
 the amount of revenue can be measured reliably;
 it is probable that the Group will receive the consideration due under the transaction; and
 the costs incurred or to be incurred in respect of the transaction can be measured reliably.

 
2.5

Intangible assets

Trademarks
Amortisation on trademarks is charged to write off the cost on a straight line basis over their estimated useful life, which is normally assessed as the term of the trademark.
Development costs
The expected useful economic life of development costs are estimated based upon business plans which set out the development plan and time to market for the associated project. Amortisation is charged from the point the project is launched.
Computer software
Computer software relates to website and accounting system costs. Amortisation on computer software is charged to write off the cost on a straight line basis over their estimated useful life of 5 years, which is assessed on the capacity to provide future benefits.

At each reporting date the company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.
Amortisation is provided on the following basis:
         Trademarks                          -                Over the term of the trademark
         Development costs               -                20 years
         Computer software               -                5 years
Amortisation of intangible assets is included within administrative expenses.

- 21 -

 
BREMONT WATCH COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

2.Accounting policies (continued)

 
2.6

Tangible fixed assets

Tangible fixed assets are stated at cost less depreciation. Depreciation is provided at rates calculated to write off the cost of fixed assets, less their estimated residual value, over their expected useful lives.
At each reporting date the Group assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.

Depreciation is provided on the following basis:

Leasehold property improvements
-
Over the term of the lease
Plant and machinery
-
10% straight line and 25% straight line
Fixtures and fittings
-
20% straight line, 25% straight line and 33% straight line
Computer equipment
-
25% straight line and 33% straight line
Assets under construction
-
Not depreciated until they are ready to be used

Depreciation of tangible fixed assets is included within administrative expenses. 

- 22 -

 
BREMONT WATCH COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

2.Accounting policies (continued)

 
2.7

Operating leases: the Group as lessor

Where assets are financed by leasing agreements that give rights approximating to ownership (finance leases), the assets are treated as if they had been purchased outright. The amount capitalised is the present value of the minimum lease payments payable over the term of the lease, the corresponding leasing commitments are shown as amounts payable to the lessor. Depreciation on the relevant assets is charged to the Consolidated Profit and Loss Account over the shorter of estimated useful economic life and the term of the lease.
Lease payments are analysed between capital and interest components so that the interest element of the payment is charged to the Consolidated Profit and Loss Account over the term of the lease and is calculated to that it represents a constant proportion of the balance of capital repayments outstanding. The capital part reduced the amount payable to the lessor.
All other leases are treated as operating leases. Their annual rentals are charged to the Consolidated Profit and Loss Account on a straight-line basis over the term of the lease.
The Group has taken advantage of the optional exemption available on transition to FRS 102 which allows lease incentives on leases entered into before the date of transition to the standard 01 January 2016 to continue to be charged over the period to the first market rent review rather than the term of the lease.
For leases entered into on or after 1 January 2016, reverse premiums and similar incentives received to enter into operating lease agreements are released to the Consolidated Profit and Loss Account over the term of the lease.
Where the Group has a legal obligation, a dilapidation's provision is created on inception of a lease. These provisions are a best estimate of the cost required to return leased properties to their original condition upon termination of the lease. Where the obligation arises from ‘wear and tear’, the provision is accrued as the ‘wear and tear’ occurs.

 
2.8

Impairment of fixed assets and goodwill

Assets that are subject to depreciation or amortisation are assessed at each balance sheet date to determine whether there is any indication that the assets are impaired. Where there is any indication that an asset may be impaired, the carrying value of the asset (or cash-generating unit to which the asset has been allocated) is tested for impairment. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's (or CGU's) fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (CGUs). Non-financial assets that have been previously impaired are reviewed at each balance sheet date to assess whether there is any indication that the impairment losses recognised in prior periods may no longer exist or may have decreased.

 
2.9

Valuation of investments

Investment in subsidiaries are valued at cost less accumulated impairment. 

- 23 -

 
BREMONT WATCH COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

2.Accounting policies (continued)

 
2.10

Stocks

Stock value is based upon cost of purchase on a first in, first out basis. Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less additional costs to complete and sell. Work in progress and finished goods include labour and attributable overheads.
At each reporting date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete the sell. The impairment loss is recognised immediately in the Statement of Comprehensive Income.

 
2.11

Debtors: Amounts falling due within one year

Short term debtors are measured at transaction price, less impairment.

 
2.12

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. In the Consolidated Statement of Cash Flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Group's cash management.

 
2.13

Financial instruments

The Group only enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities like trade and other accounts receivable and payable, loans from banks and other third parties, loans to related parties and investments in ordinary shares.
Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows. Debt instruments that are payable or receivable within one year, typically trade payables or receivables, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration, expected to be paid or received.
Financial assets are measured at cost.  If objective evidence of impairment is found, an impairment loss is recognised in the Consolidated Profit and Loss Account.
For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.
For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate, which is an approximation of the amount that the Group would receive for the asset if it were to be sold at the balance sheet date.

 
2.14

Creditors

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

- 24 -

 
BREMONT WATCH COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

2.Accounting policies (continued)

 
2.15

Foreign currency translation

Functional and presentation currency

Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates ('the functional currency'). The consolidated financial statements are presented in 'Pounds sterling', which is the Company's functional and Group's presentation currency.

Transactions and balances

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

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

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

 
2.16

Interest payable and similar expenses

Finance costs are charged to the Consolidated Profit and Loss Account over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

- 25 -

 
BREMONT WATCH COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

2.Accounting policies (continued)

 
2.17

Share based payments

Where share options are awarded to employees, the fair value of the options at the date of grant is charged to the Consolidated Profit and Loss Account over the vesting period. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each balance sheet date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options that eventually vest. Market vesting conditions are factored into the fair value of the options granted. The cumulative expense is not adjusted for failure to achieve a market vesting condition.
The fair value of the award also takes into account non-vesting conditions. These are either factors beyond the control of either party (such as a target based on an index) or factors which are within the control of one or other of the parties (such as the Group keeping the scheme open or the employee maintaining any contributions required by the scheme).
Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to the Consolidated Profit and Loss Account over the remaining vesting period.
Where equity instruments are granted to persons other than employees, profit or loss is charged with fair value of goods and services received.

 
2.18

Pensions

The Group operates a defined contribution pension scheme and the pension charge represents the amounts payable by the Company to the fund in respect of the year. Contributions are charged to the Consolidated Profit and Loss Account in the period in which they become payable.

 
2.19

Interest receivable and similar income

Interest income is recognised in the Consolidated Profit and Loss Account using the effective interest method.

 
2.20

Borrowing costs

All borrowing costs are recognised in the Consolidated Profit and Loss Account in the year in which they are incurred.

 
2.21

Warranty provision

The Group provides a three year warranty on all watches sold and subsequently registered. The warranty provision is based on historic data for returns and the average cost of repairing those watches that are under the three year warranty.

  
2.22

Onerous lease provision

The Group has recognised provisions for liabilities of uncertain timing or amount including those for onerous leases. The provision is measured at the best estimate of the expenditure required to settle the obligation at the reporting date, discounted at a pre-tax rate reflecting current market assessments of the time value of money and risks specific to the liability. 

- 26 -

 
BREMONT WATCH COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

2.Accounting policies (continued)

 
2.23

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in the Consolidated Profit and Loss Account except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company and the Group operate and generate income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits;
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met; and
Where they relate to timing differences in respect of interests in subsidiaries, associates, branches and joint ventures and the Group can control the reversal of the timing differences and such reversal is not considered probable in the foreseeable future.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred income tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.

- 27 -

 
BREMONT WATCH COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

2.Accounting policies (continued)

 
2.24

Research and development

In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research shall be recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured. The capitalised development costs are subsequently amortised on a straight line basis over their useful economic lives.
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.

  
2.25

Holiday pay accrual

A liability is recognised to the extent of any unused holiday pay entitlement which has accrued at the balance sheet date and carried forward to future periods. This is measured at the undiscounted salary cost of the future holiday entitlement so accrued at the balance sheet date.

 
2.26

Exceptional items

Exceptional items are transactions that fall within the ordinary activities of the Group but are presented separately due to their size or incidence (Note 5).

- 28 -

 
BREMONT WATCH COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

3.


Judgements in applying accounting policies and key sources of estimation uncertainty

In applying the Group’s accounting policies, the directors are required to make judgements, estimates and assumptions in determining the carrying amounts of assets and liabilities. The directors’ judgements, estimates and assumptions are based on the best and most reliable evidence available at the time when the decisions are made, and are based on historical experience and other factors that are considered to be applicable. Due to the inherent subjectivity involved in making such judgements, estimates and assumptions, the actual results and outcomes may differ.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods, if the revision affects both current and future periods.
3.1 Critical judgements in applying the Group’s accounting policies
The critical judgements that the directors have made in the process of applying the Group's accounting policies and that have the most significant effect on the amounts recognised in the statutory financial statements are discussed below.
Leases
Determine whether leases entered into by the Group either as a lessor or a lessee are operating or finance leases. These decisions depend on an assessment of whether the risks and rewards of ownership have been transferred from the lessor to the lessee on a lease by lease basis.
Fixed assets
These include, development and trademark costs, plant and equipment, property improvements, fixtures and fittings. On purchasing a new asset, the Group assesses which type of asset category it belongs to and assigns a useful life based on historical and current evidence.  The assets is then depreciated over that useful life.
Capitalisation of development expenditures
In determining the development expenditures to be capitalised, the Group makes estimates and assumptions based on expected future economic benefits generated by products and components that are the result of these development expenditures. Other important estimates and assumptions in this assessment process are to distinguish whether the expenditure meets the criteria of R&D capitalisation and the estimated useful life this asset.
3.2 Key sources of estimation uncertainty
The key assumptions concerning the future, and other key sources of estimation uncertainty, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
 
- 29 -

 
BREMONT WATCH COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

3.Judgements in applying accounting policies (continued)

Warranty
A three year warranty cover is provided on all watches sold, providing labour and parts necessary to repair watches for issues covered by the warranty, during the warranty period. The estimated warranty costs are accounted for by accruing these costs for each watch upon recognition of the watch sale. The estimated warranty costs are based on historical product performance and costs to repair. Based upon historical service records, the charge of average cost of a warranty repair per watch is calculated to determine the estimated warranty charge. The actual product performance and/or cost profiles may differ, and in those cases we adjust our warranty reserves accordingly. Future warranty expenses may exceed estimates, which could lead to an increase in cost of sales.
Treatment of fixed assets
At each reporting date, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Recoverable amount is the higher of fair value less costs to sell and value in use.
Stock provision
Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items. A provision is made against potentially slow moving or obsolete stock based on historical estimates of the realisable value for these items.
Recoverability of debtors
The Group and Company establishes a provision for debtors that are estimated not to be recoverable. When assessing recoverability the Directors have considered factors such as the aging of the debtors, past experience of recoverability, and the credit profile of individual or groups of customers.
At company level, the Directors also consider the intercompany debt recoverable.


4.


Turnover

The whole of the turnover is attributable to the principal activity of the Group.

Analysis of turnover by country of destination:

2023
2022
£
£

United Kingdom
14,547,982
15,969,826

EU
438,884
534,250

North America
4,205,428
4,238,477

Asia
496,654
654,985

Rest of world
703,274
693,348

20,392,222
22,090,886


- 30 -

 
BREMONT WATCH COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

5.


Exceptional items

2023
2022
£
£


Credit note provision
1,017,914
-

Stock provision
3,157,974
-

China investment
(815,382)
-

Investment costs
661,885
-

Fixed asset impairment
1,702,195
-

5,724,586
-

Following the additional investment received in the year, the company has strategically reviewed the inventory in the market, distribution networks, and excessive stock holdings and 2023 is a year of consolidation and laying the foundation for future growth.


6.


Other operating income

2023
2022
£
£

Interest waived on the CBILS government loan
-
1,710



7.


Operating loss

The operating loss is stated after charging/(crediting):

2023
2022
£
£

Depreciation of tangible fixed assets - owned
696,267
655,945

Depreciation of tangible fixed assets - leased
224,169
220,892

Amortisation of intangible assets
205,103
130,447

Other operating lease rentals
1,942,668
1,841,833

Research & development costs
732,027
561,183

Exchange losses/gain
464,785
(671,142)

- 31 -

 
BREMONT WATCH COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

8.


Auditor's remuneration

2023
2022
£
£


Fees payable to the Group's auditor for the audit of the Group's annual accounts
79,204
72,454

79,204
72,454

Fees payable to the Group's auditor in respect of:


Preparation of accounts
4,950
4,400

Taxation services
10,235
9,720

15,185
14,120




9.


Employees

Staff costs, including Directors' remuneration, were as follows:


Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£


Wages and salaries
8,447,124
6,514,487
7,100,275
5,280,900

Social security costs
921,151
659,607
826,514
587,274

Cost of defined contribution scheme
317,445
259,976
283,163
239,318

9,685,720
7,434,070
8,209,952
6,107,492


The average monthly number of employees, including the Directors, during the year was as follows:



Group
Group
Company
Company
        2023
        2022
        2023
        2022
            No.
            No.
            No.
            No.









Directors
6
5
6
5



Selling & distribution
68
55
48
38



Administration
45
40
41
39



Operations
53
41
53
41

172
141
148
123

- 32 -

 
BREMONT WATCH COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

10.


Directors' remuneration

2023
2022
£
£

Directors' emoluments
1,048,212
471,556

Contributions to pension schemes
51,078
13,645

Share based payment expense
-
80,084

1,099,290
565,285


During the year retirement benefits were accruing to 6 Directors (2022: 3) in respect of defined contribution pension schemes.

The highest paid Director received remuneration of £266,639 (2022: £210,778).

The value of the Group's contributions paid to a defined contribution pension scheme in respect of the highest paid Director amounted to £5,050 (2022: £6,373).

During the year nil Director received shares under the long-term incentive schemes (2022: 1)

In the year, fees of £69,665 were paid to Clark Equity Partners Ltd, a related party, in relation to the Director services (2022: £207,349). These fees are excluded from the above total. 
The Directors of the Company are considered to be key management personnel. 


11.


Interest receivable and similar income

2023
2022
£
£


Other interest receivable
216,050
639


12.


Interest payable and similar expenses

2023
2022
£
£


Bank interest payable
575,173
420,184

Related party interest payable
68,933
18,342

Finance leases and hire purchase contracts
20,545
35,703

664,651
474,229

- 33 -

 
BREMONT WATCH COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

13.


Taxation


2023
2022
£
£

Corporation tax


Current tax on loss for the year
-
-

R&D tax credits claimed
(153,082)
(189,965)

Adjustments in respect of prior periods
-
(40)

(153,082)
(190,005)

Foreign tax


Foreign tax on income for the year
-
1,295

-
1,295

Total current tax
(153,082)
(188,710)

Deferred tax


Origination and reversal of timing differences
(33,898)
146,210

Adjustments in respect of prior periods
-
81,390

Total deferred tax
(33,898)
227,600


Taxation on loss
(186,980)
38,890
- 34 -

 
BREMONT WATCH COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
 
13.Taxation (continued)


Factors affecting tax (credit)/charge for the year

The effective rate for the year is higher than (2022: higher than) the standard rate of corporation tax in the UK of 20.50% (2022:19%). The differences are explained below:

2023
2022
£
£


Loss before tax
(14,315,799)
(1,626,790)


Loss before tax multiplied by standard rate of corporation tax in the UK of 20.50% (2022: 19%)
(2,925,151)
(309,090)

Effects of:


Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
386,399
17,135

Capital allowances for year in excess of depreciation
(22,793)
(68,191)

Other permanent differences
3,884
-

Adjustments to tax charge in respect of previous periods
-
(40)

Adjustment in research and development tax credit leading to an decrease in the tax charge
(153,082)
(189,965)

Surrender of tax losses for R&D tax
credit refund
121,215
-

Remeasurement of deferred tax for changes in tax rates
(535,426)
-

Movement in deferred tax not recognised
2,937,974
-

Unrecognised tax losses
-
589,041

Total tax (credit)/charge for the year
(186,980)
38,890


Factors that may affect future tax charges

The UK Government announced in the 2021 budget that from 1 April 2023, the rate of corporation tax in the United Kingdom will increase from 19% to 25%. Companies with profits of £50,000 or less will continue to be taxed at 19%, which is a new small profits rate. Where taxable profits are between £50,000 and £250,000, the higher 25% rate will apply but with a marginal relief applying as profits increase.

- 35 -

 
BREMONT WATCH COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

14.


Intangible assets

Group





Development costs
Trademarks
Computer software
Total

£
£
£
£



Cost


At 1 July 2022
1,486,565
261,632
576,244
2,324,441


Additions
-
107,142
15,359
122,501


Disposals
(23,550)
(18,202)
-
(41,752)



At 30 June 2023

1,463,015
350,572
591,603
2,405,190



Amortisation and impairment


At 1 July 2022
137,789
112,106
144,707
394,602


Charge for the year
72,518
26,993
105,592
205,103


On disposals
-
(1,062)
-
(1,062)


Impairment charge
1,226,098
-
-
1,226,098



At 30 June 2023

1,436,405
138,037
250,299
1,824,741



Net book value



At 30 June 2023
26,610
212,535
341,304
580,449



At 30 June 2022
1,348,776
149,526
431,537
1,929,839



- 36 -

 
BREMONT WATCH COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
 
           14.Intangible assets (continued)

Company




Development costs
Trademarks
Computer software
Total

£
£
£
£



Cost


At 1 July 2022
1,486,565
243,430
576,244
2,306,239


Additions
-
70,115
15,359
85,474


Disposals
(23,550)
-
-
(23,550)



At 30 June 2023

1,463,015
313,545
591,603
2,368,163



Amortisation and impairment


At 1 July 2022
137,789
111,044
144,707
393,540


Charge for the year
72,518
23,052
105,592
201,162


Impairment charge
1,226,098
-
-
1,226,098



At 30 June 2023

1,436,405
134,096
250,299
1,820,800



Net book value



At 30 June 2023
26,610
179,449
341,304
547,363



At 30 June 2022
1,348,776
132,386
431,537
1,912,699

- 37 -

 
BREMONT WATCH COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

15.


Tangible fixed assets

Group






L/Term Leasehold Property
Plant & machinery
Fixtures & fittings
Computer equipment
Assets under construction
Total

£
£
£
£
£
£



Cost


At 1 July 2022
4,500,000
3,890,383
2,593,456
653,624
-
11,637,463


Additions
48,458
733,502
594,245
55,164
601,900
2,033,269


Disposals
(209,798)
(9,109)
-
-
-
(218,907)


Exchange adjustments
(77,995)
-
(52,146)
3,446
-
(126,695)



At 30 June 2023

4,260,665
4,614,776
3,135,555
712,234
601,900
13,325,130



Depreciation and
impairment


At 1 July 2022
1,758,291
1,932,998
1,001,594
546,126
-
5,239,009


Charge for the year
223,879
386,244
269,219
41,094
-
920,436


Disposals
(30,016)
-
-
-
-
(30,016)


Impairment charge
-
476,097
-
-
-
476,097


Exchange adjustments
(50,986)
(1,207)
2,738
(1,421)
-
(50,876)



At 30 June 2023

1,901,168
2,794,132
1,273,551
585,799
-
6,554,650



Net book value



At 30 June 2023
2,359,497
1,820,644
1,862,004
126,435
601,900
6,770,480



At 30 June 2022
2,741,709
1,957,385
1,591,862
107,498
-
6,398,454

- 38 -

 
BREMONT WATCH COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

           15.Tangible fixed assets (continued)




The net book value of land and buildings may be further analysed as follows:


2023
2022
£
£

Long leasehold
2,359,497
2,741,708

2,359,497
2,741,708


The net book value of assets held under finance leases or hire purchase contracts totalled £2,490,882 (2022: £2,753,901), of which £672,087 (2022: £831,668) relates to plant and machinery and £1,818,795 (2022: £1,922,233) relates to leasehold improvements. Depreciation on these leased assets for the year totalled £224,169 (2022: £220,892).

- 39 -

 
BREMONT WATCH COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

           15.Tangible fixed assets (continued)


Company






Leasehold property improvements
Plant & machinery
Fixtures & fittings
Computer equipment
Assets under construction
Total

£
£
£
£
£
£

Cost


At 1 July 2022
3,061,367
3,890,383
2,372,627
634,694
-
9,959,071


Additions
9,871
733,493
544,118
53,177
318,723
1,659,382


Disposals
(22,500)
(9,109)
-
-
-
(31,609)



At 30 June 2023

3,048,738
4,614,767
2,916,745
687,871
318,723
11,586,844



Depreciation and impairment


At 1 July 2022
684,576
1,905,978
958,014
520,522
-
4,069,090


Charge for the year
155,951
386,389
234,658
39,647
-
816,645


Impairment charge
-
476,097
-
-
-
476,097



At 30 June 2023

840,527
2,768,464
1,192,672
560,169
-
5,361,832



Net book value



At 30 June 2023
2,208,211
1,846,303
1,724,073
127,702
318,723
6,225,012



At 30 June 2022
2,376,791
1,984,405
1,414,613
114,172
-
5,889,981

The net book value of assets held under finance leases or hire purchase contracts totalled £2,490,882 (2022: £2,753,901), of which £672,087 (2022: £831,668) relates to plant and machinery and £1,818,795 (2022: £1,922,233) relates to leasehold improvements. Depreciation on these leased assets for the year totalled £224,169 (2022: £220,892).








- 40 -

 
BREMONT WATCH COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

16.


Investments

Company





Investments in subsidiary companies

£



Cost


At 1 July 2022
70,137


Capital contributions
2,064,051



At 30 June 2023

2,134,188



Impairment


Charge for the year
2,064,051



At 30 June 2023

2,064,051



Net book value



At 30 June 2023
70,137



At 30 June 2022
70,137

During the year, interest-free intercompany loans held with subsidiaries were remeasured at their present value. The difference between the book value of these loans and the discounted present value has been shown above as a capital contribution to the subsidiaries.

- 41 -

 
BREMONT WATCH COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

Subsidiary undertakings


The following were subsidiary undertakings of the Company:

Name

Registered office

Principal activity

Class of shares

Holding

Bremont Watch Company Inc
501 Madison Avenue, New York, NY 10022
Sales and distribution
Ordinary
100%
Bremont Asia Limited
Rm 303, 3rd Floor, St George's Building, 2 Ice House Street, Hong Kong
Sales and distribution
Ordinary
100%
Bremont Watch Company Australia PTY Limited
L 15, 390 ST Kilda Road, Melbourne, Vic 3004, Australia
Sales and distribution
Ordinary
100%
Bremont Watch Company Asia Ltd
18/F, Unit C -D, Billion Plaza 2, 10 Cheung Yue Street, Cheung Sha Wan, Kowloon, Hong Kong
Holding company
Ordinary
75%
Bremont Shanghai Limited*
N144 & N146, North Piazza, HKRI Taikoo Hui, 789 West Nanjing Road, Shanghai
Sales and distribution
Ordinary
75%

Bremont Watch Company Inc is a company incorporated in the USA. Bremont Asia Limited and Bremont Watch Company Asia Limited are companies incorporated in Hong Kong. Bremont Watch Company  Australia Pty is a company incorporated in Australia. Bremont Shanghai Limited is a company incorporated in China. 
*This entity is indirectly held by the Company.


17.


Stocks

Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£

Finished goods, raw materials and consumables
12,282,053
12,151,805
11,670,240
11,406,712


Stocks are stated net of provisions for impairment of £4,106,266 (2022: £1,256,816).
The difference between purchase price or production cost of stocks and their replacement cost is not material.

- 42 -

 
BREMONT WATCH COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

18.


Debtors

Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£

Amounts falling due more than one year

Amounts owed by group undertakings
-
-
4,737,794
-

-
-
4,737,794
-


The amounts owed by group undertakings of £4,737,794 (2022: £nil) are unsecured, interest free and repayable on 30 June 2028 and the loans have been disounted to present value with the difference shown in note 16.

Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£

Amounts falling due within one year

Trade debtors
1,973,423
4,408,666
1,804,874
4,037,479

Amounts owed by group companies
-
-
1,069,624
8,328,272

Other debtors
835,928
392,862
553,493
195,897

Prepayments and accrued income
1,487,390
1,325,417
1,395,603
1,032,702

Tax recoverable
3,125
-
3,125
-

4,299,866
6,126,945
4,826,719
13,594,350


Trade debtors are stated after bad debt provisions of £68,445 (2022: £22,341). 
The amounts owed by group undertakings of £nil (2022: £1,329,331) were unsecured, beared interest at 4.45% and were repaid on 31 December 2022. 
The amounts owed by group undertakings of £1,069,624 (2022: £6,998,941) are unsecured, interest free and repayable on demand. 


19.


Cash and cash equivalents

Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£

Cash and cash equivalents
17,721,907
2,985,005
17,416,008
2,198,461

Less: bank overdrafts
(17,101)
(555,880)
(23,005)
(552,480)

17,704,806
2,429,125
17,393,003
1,645,981


- 43 -

 
BREMONT WATCH COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

20.


Creditors: Amounts falling due within one year

Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£

Bank overdrafts
17,101
555,880
23,005
552,480

Bank loans
-
4,458,333
-
4,458,333

Trade credit facilities
2,610,439
2,651,107
2,610,439
2,651,107

Amounts owed to related party (note 31)
216,933
1,026,634
-
-

Trade creditors
3,796,092
3,574,290
3,441,892
3,227,530

Amounts owed to jointly controlled operations (note 31)
61,892
67,343
61,892
67,343

Corporation tax
3,443
-
-
-

Other taxation and social security
620,054
761,313
615,658
730,246

Obligations under finance lease and hire purchase contracts
346,543
464,454
346,543
421,940

Other creditors
306,238
63,705
37,722
58,929

Accruals and deferred income
4,949,644
3,436,890
3,874,885
2,651,066

12,928,379
17,059,949
11,012,036
14,818,974


The Company's bank loan, overdrafts and trade credit facilities are guaranteed by an unsecured debenture dated 21 August 2012, incorporating a fixed and floating charge over the Company's current and future assets.
Included within bank loans is an amount of £nil (2022: £2,000,000) that relates to a revolving credit facility which bears interest at 2.95% + LIBOR% (2022: 2.95% + LIBOR) and was repaid during the year.
Included within bank loans is an amount of £nil (2022: £500,000) that relates to a recovery loan which is secured, bears interest at 3.99% (2022: 3.99%) per annum over the Bank of England rate and was repaid during the year.
The rest of the balance within bank loans of £nil (2022: £1,958,333) is made up of a CBILS loan which bears interest at 3.99% + BoE base rate% (2022: 3.99% + BoE base rate) and was repaid in full during the year.
The Company has also granted the bank a general pledge dated 14 August 2013.
The amount owed to related party of £216,933 (2022: £1,026,634) is unsecured, bears interest at 3.85% (2022: 3.85%) and repayable in December 2023. 
The amount owed to jointly controlled operations of £61,892 (2022: £67,343) is unsecured, interest free and repayable on demand. 
The amounts owed on finance leases are secured on the assets to which they relate.
The Company has issued a bank guarantee in favour of HSBC Bank USA amounting to $310,000. 

- 44 -

 
BREMONT WATCH COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

21.


Creditors: Amounts falling due after more than one year

Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£

Obligations under finance leases and hire purchase contracts
2,129,034
2,014,436
2,129,034
2,014,436

Trade creditors
355,163
472,462
355,163
472,462

2,484,197
2,486,898
2,484,197
2,486,898





22.


Hire purchase and finance leases


Minimum lease payments under hire purchase fall due as follows:

Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£

Within one year
346,543
464,454
346,543
421,940

Between 1-2 years
348,306
484,229
295,541
484,229

Between 2-5 years
1,780,728
1,530,207
1,833,493
1,530,207

2,475,577
2,478,890
2,475,577
2,436,376

- 45 -

 
BREMONT WATCH COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

23.


Financial instruments

Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£

Financial assets that are debt instruments measured at amortised cost
20,531,259
7,599,693
27,645,844
14,570,144



Financial liabilities measured at amortised cost
(13,548,210)
(17,574,973)
(11,955,034)
(15,491,891)


Financial assets measured at amortised cost comprise cash, trade debtors, other debtors and amounts owed by group undertakings.


Financial liabilities measured at amortised cost comprise bank loans and overdrafts, trade creditors, other creditors, accruals, amounts owed to related party, trade credit facilities, amounts owed to jointly controlled operations and obligations under finance lease and hire purchase contracts.
Information regarding the Group's exposure to and management of credit risk, liquidity risk, cash flow interest rate risk, and foreign exchange risk is included in the Directors' Report.

- 46 -

 
BREMONT WATCH COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

24.


Deferred taxation


Group and Company



2023
2022


£

£






At beginning of year
(725,001)
(497,401)


Charged to the Consolidated Profit and Loss Account
33,898
(227,600)



At end of year
(691,103)
(725,001)

The provision for deferred taxation is made up as follows:

Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£

Accelerated capital allowances
(705,065)
(733,343)
(705,065)
(733,343)

Other timing differences
13,962
8,342
13,962
8,342

(691,103)
(725,001)
(691,103)
(725,001)


Of the total losses available for future relief £Nil (2022: £Nil) has been recognised as a deferred tax asset and £3,753,373 (2022: £1,495,642) has not been recognised as a deferred tax asset.

- 47 -

 
BREMONT WATCH COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

25.


Provisions


Group



Warranty
Dilapidation
Onerous lease
Total

£
£
£
£





At 1 July 2022
445,746
13,118
-
458,864


Provided for during the year
24,544
20,672
318,750
363,966



At 30 June 2023
470,290
33,790
318,750
822,830

Company


Warranty
Dilapidation
Onerous lease
Total

£
£
£
£





At 1 July 2022
445,746
13,118
-
458,864


Provided for during the year
24,544
6,000
318,750
349,294



At 30 June 2023
470,290
19,118
318,750
808,158

The warranty provision is to cover the cost of anticipated returns, under the Group's three year warranty provision.
The dilapidation provision is based on estimated costs to return the properties back to original state at the end of the lease.
The onerous lease provision is based as the best estimate of the expenditure required to settle the obligation of contracts.

- 48 -

 
BREMONT WATCH COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

26.


Share capital

2023
2022
£
£
Allotted, called up and fully paid



nil (2022: 116,877) Ordinary shares of £3.21172 each
-
375,376
nil (2022: 50,231) E Ordinary shares of £3.21172 each
-
161,328
nil (2022: 97,628) Deferred shares of £3.21172 each
-
313,554
nil (2022: 41,115) Series A shares of £3.21172 each
-
132,050
36,303 (2022: 7,709) Preferred shares of £1.00000 each
36,303
7,709
nil (2022: 5,750,000) M18 shares of £1.00000 each
-
5,750,000
nil (2022: 250,000) M19A shares of £1.00000 each
-
250,000
nil (2022: 1,050,000) M19B shares of £1.00000 each
-
1,050,000
nil (2022: 1,700,000) M19 shares of £1.00000 each
-
1,700,000
nil (2022: 3,000,000) M 21 shares of £0.01000 each
-
30,000
339,208 (2022: 6,231) Ordinary £1 shares of £1.00000 each
339,208
6,231
nil (2022: 2,000,000) M22 shares of £0.01000 each
-
20,000
40,365 (2022: nil) Series A shares of £1.00000 each
40,365
-
65,810 (2022: nil) Non-voting convertible shares of £1.00000 each
65,810
-
4,860 (2022: nil) Ordinary shares of £0.10000 each
486
-

482,172

9,796,248

Summary of class rights:
Ordinary shares are entitled pari passu to dividend payments or any other distributions. These shares are entitled to the balance of the surplus assets on liquidation after Series A, M18, M19, M19A, M19B, M21, M22, Preferred share payments and Deferred shares payments. Each ordinary share is entitled to one vote in any circumstance.
Class E ordinary shares are entitled pari passu to dividend payments or any other distributions. These shares are entitled to the balance of the surplus assets on liquidation after Series A, M18, M19, M19A, M19B, M21, M22, Preferred share payments and Deferred shares payments. Each class E ordinary share is entitled to one vote in any circumstance.
Deferred shares are not entitled to any dividend payment. These shares are paid the sum of 1p per share on sale or liquidation after Series A share and Preferred share payments. Deferred shares have no voting rights attached to them.
Series A shares are entitled pari passu to dividend payments or any other distributions. These shares are paid the sum of £243.22 per share on sale or liquidation in priority to all other shares. Each Series A share is entitled to one vote in any circumstance.
Preferred shares are entitled pari passu to dividend payments or any other distributions. These shares are paid the sum of £243.22 per share on sale or liquidation after Series A payments. Each Preferred share is entitled to one vote in any circumstance.


- 49 -

 
BREMONT WATCH COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

26.


Called up share capital (continued)

M18, M19, M19A, M19B, M21 and M22 shares are entitled pari passu to dividend payments or any other distributions. These shares are entitled to be paid the preference amount of the shares (per the Articles) on sale or liquidation after the Series A share but in priority to other shares. Each M18, M19, M19A, M19B, M21 and M22 shares is entitled to one vote for every Ordinary share they would be convertible into.
On 19 October 2022, the Company issued 4,460 ordinary shares with a nominal value of £0.01 at par value. Also the Company issued 400 ordinary shares with a nominal value of £0.01 for total consideration of £31,140. Consideration in excess of nominal value of £31,136 was transferred to the share premium account.
On 19 October 2022, the Company issued 640 ordinary shares with a nominal value of £3.21172 for total consideration of £49,824. Consideration in excess of nominal value of £47,768 was transferred to the share premium account. Also the Company issued 608 ordinary shares with a nominal value of £3.21172 for total consideration of £45,965. Consideration in excess of nominal value of £44,012 was transferred to the share premium account.
On 19 October 2022, the Company issued 3 MIS shares and 2 Z shares both with a nominal value of £0.1 at par value.
On 19 October 2022, M21, M22, MIS, Z and E Ordinary were converted into Ordinary and Deferred shares. Then 8,969,660 Deferred shares were cancelled. 
On 19 October 2022, 41,115 series A shares with a nominal value of £3.21172 were converted into 40,365 series A shares with a nominal value of £1.
On 19 October 2022, the Company issued a change of designation of class of shares from the existing ordianry £1 shares to 65,810 non-voting convertible shares with a nominal value of £1.
On 19 October 2022, the Company issued 44,402 ordinary shares with a nominal value of £1 for a total consideration of £10,999,996. Consideration in excess of nominal value of £10,955,594 was transferred to the share premium account.
On 19 October 2022, the Company issued 36,303 preferred shares each with a nominal value of £1 for total consideration of £8,993,578. Consideration in excess of nominal value of £8,957,275 was transferred to the share premium account.
On 13 April 2023, the Company issued 36,767 ordinary shares each with a nominal value of £1 for total consideration of £9,108,528. Consideration in excess of nominal value of £9,071,761 was transferred to the share premium account.
On 9 May 2023, the Company issued 3,364 ordinary shares each with a nominal value of £1 for total consideration of £833,386. Consideration in excess of nominal value of £830,022 was transferred to the share premium account.

- 50 -

 
BREMONT WATCH COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

27.


Reserves

Share premium account

The share premium account included the premium on issue of equity shares, net of any issue costs.

Capital redemption reserve

The capital redemption reserve is a non-distributable reserve and represents paid up share capital.

Share option reserve

This reserve represents the accumulated fair value of share options and warrants granted by the Group.

Non-controlling interest

This reserve represents amounts of equity which are due to shareholders outside of the Group. 

Profit and loss account

This reserve reflects the accumulated consolidated results for the Group and Company to 30 June 2023 and the gains and losses on consolidation of foreign subsidiaries reflecting the prevailing exchange rates at the time of consolidation.

- 51 -

 
BREMONT WATCH COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

28.


Share based payments

In August and November 2013, the Company established an EMI scheme for certain employees. In total 6 employees were awarded options. The contractual life of each option is 5 years. Options are exercisable on change of control of the Company or at the Director’s discretion. No performance conditions were included in the fair value calculations. The Black Scholes options pricing model was used to value the share-based payment awards as it was considered that this approach would result in materially accurate estimate of the fair value of options granted.
On 12 August 2017, 12,970 further options over ordinary shares were issued.
On 21 February 2020, 5,345 further options over ordinary shares were issued.
On 22 April 2021 the Company established a new EMI scheme for a total of 3 employees. Performance conditions are attached to these shares and the directors assessment is that any associated share option expense in the year would be immaterial, so no adjustment has been made in respect of these.
On 4 October 2021, 1,430 further options over ordinary shares were issued.
During the year, on 19 October 2022 6,108 of these share options were exercised. The remaining share options are in relation to the initial EMI scheme.
Options over shares in the Company have been awarded to certain employees as follows:

Weighted average exercise price
(£)
2023
Number
2023
Weighted average exercise price
(£)
2022
Number
2022

Outstanding at the beginning of the year

76.09

6,707

90.79
 
5,277
 
Granted during the year


-

21.85
 
1,430
 
Exercised during the year

20.86

(6,108)

 
-
 
Expired during the year

-

-

-
 
-
 
Outstanding at the end of the year
63.9

599

76.09
 
6,707
 

2023
2022
Weighted average share price (£)


76.45

25.82
 
Exercise price (£)


77.85

77.85
 
Weighted average contractual life (years)


4.36

4.84
 
Expected volatility


39%

39%
 
Expected dividend growth rate


Nil

Nil
 
Risk-free interest rate


0.34%

0.34%
 

- 52 -

 
BREMONT WATCH COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

28.Share based payments (continued)

2023
2022


Equity-settled schemes
-
85,167

The expected volatility is based on historical volatility of similar shares in this type of industry as estimated by the Directors. The expected life is the average expected period to exercise at the date of grant. The risk free rate of return is the yield on zero-coupon UK government bonds of a term consistent with the assumed option life.


29.


Pension commitments

Several pension schemes are operated by the Group. The assets of the schemes are held separately from those of the Group in independently administered funds. The pension cost charge represents contributions payable by the Group to the funds and amounted to £317,445 (2022: £259,976). Contributions totalling £44,800 (2022: £29,544) were payable by the Group to the funds at the balance sheet date and are included in creditors.


30.


Commitments under operating leases

At 30 June 2023 the Group and the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:


Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£

Not later than 1 year
1,886,800
1,944,712
1,101,920
865,794

Later than 1 year and not later than 5 years
8,593,590
7,566,108
4,666,891
3,303,986

Later than 5 years
9,978,603
10,670,641
8,417,364
8,029,728

20,458,993
20,181,461
14,186,175
12,199,508

The Group had other financial commitments totalling £322,000 (2022: £355,000) outstanding at the balance sheet date.

- 53 -

 
BREMONT WATCH COMPANY LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023

31.


Related party transactions

During the year, the Group paid Clark Equity Partners Ltd, a company of which S J Clark is a member, fees of £76,332 (2022: £247,266). At the year end, Bremont Watch Company owed Clark Equity Partners Ltd £Nil (2022: £47,208).
During the year, the Group owed £216,933 (2022: £1,026,634) to Melchers GmbH, a shareholder. The loan is unsecured, bear interest at 3.85% and repayable in December 2023. During the year, the Group paid £68,933 (2022: £18,342) as an interest payable.
During the year, the Group owed £61,892 (2022: £67,343) to Signet Jewellers, a entity in joint operations with the Group. The amount is unsecured, interest free and repayable on demand. 
Advantage has been taken of the exemption available under paragraph 33.1A of FRS 102 not to disclose transactions with wholly-owned members of the Group.


32.


Post balance sheet events

There have been no significant events affecting the Company and the Group since the year end.


33.


Controlling party

The Group's controlling party is Hellcat Acquisitions LP, by virtue of its shareholding in the Group.

34.


Consolidated analysis of net debt






At 1 July 2022
Cash flows
Repayment of debt 
Repayment of finance leases
At 30 June 2023
£

£

£

£

£

Cash at bank and in hand

2,985,005

14,736,902

-

-

17,721,907

Bank overdrafts

(555,880)

538,779

-

-

(17,101)

Debt due within 1 year

(8,136,074)

850,369

4,458,333

-

(2,827,372)

Finance leases

(2,478,890)

(637,483)

-

640,796

(2,475,577)


(8,185,839)
15,488,567
4,458,333
640,796
12,401,857

- 54 -