Company registration number 12679030 (England and Wales)
ATR BRANDS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 29 FEBRUARY 2024
ATR BRANDS LIMITED
COMPANY INFORMATION
Directors
Graham Clements
Michael Lewis
Philip Press
Anthony Brittan
(Appointed 2 May 2023)
Kirsty Glenne
(Appointed 2 May 2023)
Felicity Mcgahan
(Appointed 2 May 2023)
Company number
12679030
Registered office
1st Floor
38/39 Hampstead High Street
London
NW3 1QE
Auditor
UHY Hacker Young
Quadrant House
4 Thomas More Square
London
E1W 1YW
ATR BRANDS LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4 - 5
Independent auditor's report
6 - 9
Statement of comprehensive income
10
Balance sheet
11
Statement of changes in equity
12
Statement of cash flows
13
Notes to the financial statements
14 - 28
ATR BRANDS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 1 -

The directors present the strategic report for the year ended 29 February 2024.

Principal activities

The principal activity of the company is that of a omni-channel retailer providing high quality luggage, travel bags and accessories.

Review of the business

Turnover for the 12 months to 29 February 2024 was £17.90m (28 Feb 23: £11.75m), representing a 52% increase on the prior year. Sales growth was driven by the continued success of our digital doors alongside the activation of several wholesale partners.

 

The year to 29 February 2024 was a transformative year for Antler; the brand was reimagined in May 2023, notable NPD launched through H2 and the employee headcount was increased to support growth ambitions. These items helped drive the growth of Antler and provide a solid foundation for the business to build upon in future years.

Principal risks and uncertainties

In addition to the opportunities to grow and develop the business, the company faces a range of risks and uncertainties as part of its day-to-day operations and their corporate activities. These include the impact of a general economic downturn, regulatory changes, major incidents, global shipping disruption and labour and energy costs. The company strives to mitigate the impact from such risks by implementing the appropriate corporate governance policies.

Key performance indicators

In line with the company’s operating objective, the directors use both financial and non-financial Key Performance Indicators (“KPIs”). Where relevant, KPIs are used as the primary measure of whether the company is achieving its objectives, however, the scale and size of the company’s operations means that other detailed performance measures are used in addition to KPIs. The directors also use KPIs to measure performance against the primary objectives of scaling the business to create value for the company’s shareholders. Qualitative assessments are used to judge progress against the company’s objectives in areas where numerical measures are less relevant.

 

The KPIs used to measure performance include turnover, gross profit, administrative expenses % and EBIT. The directors benchmark these measures against the appropriate industry competitors and make the necessary controls to ensure the target ratios are achieved. The KPIs below relate to the company’s activities.

Year ended
Year ended
Unit
29 February 2024
28 February 2023
Turnover
£'000
17,902
11,732
Gross profit
£'000
10,749
7,373
Gross profit
%
60.00%
62.70%
Administrative expenses
%
66.20%
60.00%
EBIT
£'000
(1,099)
83

The Administrative Expenses % and EBIT were within expectations for the period given the investment the company has made in reimagining and scaling the brand.

ATR BRANDS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 2 -

Financial Risk Management Objectives and Policies

The main risks arising from the company’s financial instruments are liquidity risk, credit risk and foreign exchange risk. The directors review and agree policies for managing each of these risks and they are summarised below. These policies have remained unchanged from previous periods.

 

Liquidity Risk

The company manages its cash and borrowing requirements centrally to minimise interest expense and to ensure the company has sufficient liquid resources to meet the operating needs of the business. The company is funded primarily through trade receipts and intercompany loans.

 

Market Risk

The company is subject to market risk for the competitive nature of the luggage and travel lifestyle industry and an unpredictable trading environment impacted by macroeconomic factors, including the ongoing cost of living crisis. The company’s ability to compete in this market is reliant on the continued strength of the brand and its distribution network.

 

Credit Risk

Receivable balances are monitored on an ongoing basis.

 

Foreign Exchange Risk

The company’s inventory value is affected by movements in the US Dollar / Sterling exchange rate. The company purchases forward contracts on this GBP:USD exposure to help provide certainty on their inventory costings for future periods.

 

Section 172(1) statement

The company achieved strong growth through the year as reflected in our results. Guided by the company’s strategic drivers, the company expects to continue to scale in 24/25 and to create value for customers, employees, suppliers, and shareholders.

 

The directors are conscientious about their responsibilities and duties under section 172 of the Companies Act 2006. In fulfilling our duties under the Act we have taken into account the following factors:

 

The Customers

Our customers are at the core of everything we do. We continue to focus on providing an exceptional customer experience with high quality products at attainable prices.

 

The Employees

We want the company to be a great place to work, where employees are empowered to make decisions and can develop their skills and capabilities to deliver the company’s strategy and serve our customers’ needs. Our employees are crucial to our success, and we continue to invest in talent and employee engagement initiatives.

 

The Environment

We are committed to operating in a responsible and sustainable manner. We believe that, as a general matter, our policies, practises, and procedures are properly designed to prevent unreasonable risk of environmental damage, and of resulting financial liability, in connection with our business.

 

The Shareholders

We continue to create long-term, sustainable value for our shareholders, by investing in scaling our business in our chosen markets.

ATR BRANDS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 3 -

The Suppliers

We continue to strengthen the partnerships we have with our suppliers to deliver great quality products to our customers.

On behalf of the board

Graham Clements
Director
11 September 2024
ATR BRANDS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 4 -

The directors present their annual report and financial statements for the year ended 29 February 2024.

Results and dividends

The results for the year are set out on page 10.

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

Graham Clements
Michael Lewis
Philip Press
Anthony Brittan
(Appointed 2 May 2023)
Kirsty Glenne
(Appointed 2 May 2023)
Felicity Mcgahan
(Appointed 2 May 2023)
Auditor

The auditor, UHY Hacker Young, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

Statement of directors' responsibilities

The directors are responsible for preparing the annual 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 profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

 

 

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 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 hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

ATR BRANDS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 5 -
Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually 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 auditor is aware of that information.

Medium-sized companies exemption

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

On behalf of the board
Graham Clements
Director
11 September 2024
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF ATR BRANDS LIMITED
- 6 -
Opinion

We have audited the financial statements of ATR Brands Limited (the 'company') for the year ended 29 February 2024 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

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 qualified 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 company'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.

INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF ATR BRANDS LIMITED
- 7 -

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. 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

Except for the possible effects of the matter described in the basis for qualified opinion section of our report, in our opinion, based on the work undertaken in the course of the audit:

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:

 

Responsibilities of directors

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, 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 company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF ATR BRANDS LIMITED
- 8 -
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 these financial statements.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

Based on our understanding of the company, the group and the baggage industry in which it operates; we identified that the principal risks of non-compliance with laws and regulations related to the acts by the company, which were contrary to applicable laws and regulations including tax legislation, pensions legislation, employment and health and safety regulation, anti-bribery, corruption and fraud. We considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to revenue recognition and management override of controls.

Audit procedures performed included:

 

 

 

 

 

 

INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF ATR BRANDS LIMITED
- 9 -

There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

This report is made solely to the company's member 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 member those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.

Matthew Granger (Senior Statutory Auditor)
For and on behalf of UHY Hacker Young
11 September 2024
Chartered Accountants
Statutory Auditor
ATR BRANDS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 10 -
2024
2023
Notes
£
£
Turnover
2
17,901,732
11,751,882
Cost of sales
(7,152,427)
(4,378,812)
Gross profit
10,749,305
7,373,070
Administrative expenses
(11,848,754)
(7,289,892)
Operating (loss)/profit
3
(1,099,449)
83,178
Interest receivable and similar income
5
181
-
0
Interest payable and similar expenses
6
(521,976)
(400,318)
Loss before taxation
(1,621,244)
(317,140)
Tax on loss
7
405,677
89,895
Loss for the financial year
(1,215,567)
(227,245)
Other comprehensive income
Cash flow hedges loss arising in the year
(44,411)
-
0
Tax relating to other comprehensive income
8,438
-
0
Total comprehensive income for the year
(1,251,540)
(227,245)

The profit and loss account has been prepared on the basis that all operations are continuing operations.

ATR BRANDS LIMITED
BALANCE SHEET
AS AT 29 FEBRUARY 2024
29 February 2024
- 11 -
29 February 2024
28 February 2023
Notes
£
£
£
£
Fixed assets
Goodwill
8
1,296,365
1,483,075
Other intangible assets
8
2,887,505
3,337,506
Total intangible assets
4,183,870
4,820,581
Tangible assets
9
295,304
131,577
Investments
10
1
1
4,479,175
4,952,159
Current assets
Stocks
13
1,656,945
1,920,690
Debtors
14
6,724,014
5,932,799
Cash at bank and in hand
390,763
155,653
8,771,722
8,009,142
Creditors: amounts falling due within one year
15
(15,521,429)
(13,980,293)
Net current liabilities
(6,749,707)
(5,971,151)
Net liabilities
(2,270,532)
(1,018,992)
Capital and reserves
Called up share capital
18
1
1
Hedging reserve
(35,973)
-
0
Profit and loss reserves
(2,234,560)
(1,018,993)
Total equity
(2,270,532)
(1,018,992)

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.

The financial statements were approved by the board of directors and authorised for issue on 11 September 2024 and are signed on its behalf by:
Graham Clements
Director
Company registration number 12679030 (England and Wales)
ATR BRANDS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 12 -
Share capital
Hedging reserve
Profit and loss reserves
Total
£
£
£
£
Balance at 1 March 2022
1
-
0
(791,748)
(791,747)
Year ended 28 February 2023:
Loss and total comprehensive income
-
-
(227,245)
(227,245)
Balance at 28 February 2023
1
-
0
(1,018,993)
(1,018,992)
Year ended 29 February 2024:
Loss
-
-
(1,215,567)
(1,215,567)
Other comprehensive income:
Cash flow hedges gains
-
(44,411)
-
(44,411)
Tax relating to other comprehensive income
-
8,438
-
0
8,438
Total comprehensive income
-
(35,973)
(1,215,567)
(1,251,540)
Balance at 29 February 2024
1
(35,973)
(2,234,560)
(2,270,532)
ATR BRANDS LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 13 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
20
1,012,131
398,197
Interest paid
(521,976)
(400,318)
Net cash inflow/(outflow) from operating activities
490,155
(2,121)
Investing activities
Purchase of tangible fixed assets
(255,226)
(147,122)
Interest received
181
-
0
Net cash used in investing activities
(255,045)
(147,122)
Net increase/(decrease) in cash and cash equivalents
235,110
(149,243)
Cash and cash equivalents at beginning of year
155,653
304,896
Cash and cash equivalents at end of year
390,763
155,653
ATR BRANDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 14 -
1
Accounting policies
Company information

ATR Brands Limited is a private company limited by shares incorporated in England and Wales. The registered office is 1st Floor, 38/39 Hampstead High Street, London, NW3 1QE.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

The company has taken advantage of the exemption under section 402 of the Companies Act 2006 not to prepare consolidated accounts when all its subsidiaries may be excluded from consolidation. The financial statements present information about the company as an individual entity and not about its group.

1.2
Going concern

At the period-end, the company had net liabilities of £2,270,532 (2023: £1,018,922) and suffered a loss of £1,251,540 (2023: £227,245) for the period. true

 

The company receives working capital loans from fellow group companies and the directors of the group intend to continue to provide such working capital as is necessary for the company to be able to meet its liabilities as they fall due. For this reason, the directors consider it appropriate that the financial statements have been prepared on the going concern basis.

1.3
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

 

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

ATR BRANDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 FEBRUARY 2024
1
Accounting policies
(Continued)
- 15 -
1.4
Intangible fixed assets - goodwill

Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 10 years.

 

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

1.5
Intangible fixed assets other than goodwill

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

 

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following base:

Intellectual Property
10 years straight line
1.6
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Computers
3 years straight line

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

1.7
Fixed asset investments

Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

ATR BRANDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 FEBRUARY 2024
1
Accounting policies
(Continued)
- 16 -

A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.

Entities in which the company has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.

1.8
Impairment of fixed assets

At each reporting period end date, the company 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). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.9
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

 

Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

ATR BRANDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 FEBRUARY 2024
1
Accounting policies
(Continued)
- 17 -

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

1.10
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.11
Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

ATR BRANDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 FEBRUARY 2024
1
Accounting policies
(Continued)
- 18 -
Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

ATR BRANDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 FEBRUARY 2024
1
Accounting policies
(Continued)
- 19 -
1.12
Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

1.13
Hedge accounting

The company designates certain hedging instruments, including derivatives, embedded derivatives and non-derivatives, as either fair value hedges or cash flow hedges. At the inception of the hedge relationship, the company documents the relationship between the hedging instrument and the hedged item along with risk management objectives and strategy for undertaking various hedge transactions. At the inception of the hedge and on an ongoing basis, the company documents whether the hedging instrument is highly effective in offsetting changes in fair values or cash flows of the hedged item.

Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.

For derivatives that are designated and qualify as cash flow hedges, the effective portion of changes in the fair value of the hedge is recognised in other comprehensive income. The gain or loss relating to the ineffective portion is recognised immediately in profit or loss.

 

Any gain or loss previously recognised in other comprehensive income is reclassified to profit or loss when the hedge relationship ends. This occurs when the hedging instrument expires or no longer meets the hedging criteria, the forecast transaction is no longer highly probable, the hedged debt instrument is derecognised, or the hedging instrument is terminated.

1.14
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

ATR BRANDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 FEBRUARY 2024
1
Accounting policies
(Continued)
- 20 -
Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.15
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.16
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.17
Leases

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

1.18
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

ATR BRANDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 21 -
2
Turnover and other revenue
2024
2023
£
£
Turnover analysed by class of business
Retail sales
13,384,796
8,246,194
Wholesale sales
2,363,424
1,675,852
Royalties
2,153,512
1,829,836
17,901,732
11,751,882
2024
2023
£
£
Turnover analysed by geographical market
United Kingdom
15,314,238
9,623,138
Europe
433,982
298,907
Rest of the world
2,153,512
1,829,837
17,901,732
11,751,882
2024
2023
£
£
Other revenue
Interest income
181
-
3
Operating (loss)/profit
2024
2023
Operating (loss)/profit for the year is stated after charging/(crediting):
£
£
Exchange (gains)/losses
(36,232)
179,719
Fees payable to the company's auditor for the audit of the company's financial statements
20,250
19,000
Depreciation of owned tangible fixed assets
91,499
48,333
Amortisation of intangible assets
636,711
636,712
Operating lease charges
248,047
130,312
ATR BRANDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 22 -
4
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2024
2023
Number
Number
Sales
4
3
Administrative
13
7
Total
17
10

Their aggregate remuneration comprised:

2024
2023
£
£
Wages and salaries
1,710,855
1,007,507
Social security costs
160,543
115,000
Pension costs
25,535
9,477
1,896,933
1,131,984

The directors are remunerated by other groups companies and it is not practical to recharge the proportion of their remuneration which relates to acting as directors of the company.

5
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
181
-
0
2024
2023
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
181
-
0
ATR BRANDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 23 -
6
Interest payable and similar expenses
2024
2023
£
£
Interest on financial liabilities measured at amortised cost:
Other interest on financial liabilities
521,976
400,318
7
Taxation
2024
2023
£
£
Deferred tax
Origination and reversal of timing differences
(405,677)
(89,895)

The actual credit for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:

2024
2023
£
£
Loss before taxation
(1,621,244)
(317,140)
Expected tax credit based on the standard rate of corporation tax in the UK of 24.49% (2023: 19.00%)
(397,043)
(60,257)
Tax effect of expenses that are not deductible in determining taxable profit
-
0
279
Effect of change in corporation tax rate
(8,427)
(21,531)
Fixed asset differences
(207)
(8,386)
Taxation credit for the year
(405,677)
(89,895)

In addition to the amount credited to the profit and loss account, the following amounts relating to tax have been recognised directly in other comprehensive income:

2024
2023
£
£
Deferred tax arising on:
Revaluation of financial instruments treated as cash flow hedges
(8,438)
-
0

Changes to the UK corporation tax rates were enacted as part of the Finance Bill 2021. Effective from 1 April 2023, the rate of corporation tax in the UK for the company increased from 19% to 25%. As a result, the applicable rate for the year ended 29 February 2024 is 24.49%.

ATR BRANDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 24 -
8
Intangible fixed assets
Goodwill
Intellectual Property
Total
£
£
£
Cost
At 1 March 2023 and 29 February 2024
1,867,105
4,500,007
6,367,112
Amortisation and impairment
At 1 March 2023
384,030
1,162,501
1,546,531
Amortisation charged for the year
186,710
450,001
636,711
At 29 February 2024
570,740
1,612,502
2,183,242
Carrying amount
At 29 February 2024
1,296,365
2,887,505
4,183,870
At 28 February 2023
1,483,075
3,337,506
4,820,581
9
Tangible fixed assets
Computers
£
Cost
At 1 March 2023
207,683
Additions
255,226
At 29 February 2024
462,909
Depreciation and impairment
At 1 March 2023
76,106
Depreciation charged in the year
91,499
At 29 February 2024
167,605
Carrying amount
At 29 February 2024
295,304
At 28 February 2023
131,577
10
Fixed asset investments
2024
2023
Notes
£
£
Investments in subsidiaries
11
1
1
ATR BRANDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 25 -
11
Subsidiaries

Details of the company's subsidiaries at 29 February 2024 are as follows:

Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Antler Limited
Quandrant House - Floor 6, 4 Thomas More Square, London. E1W 1YW
Ordinary
100.00
12
Financial instruments
2024
2023
£
£
Carrying amount of financial liabilities
Measured at fair value through profit or loss
- Other financial liabilities
44,411
-
13
Stocks
2024
2023
£
£
Finished goods and goods for resale
1,656,945
1,920,690
14
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
935,695
1,001,821
Amounts owed by group undertakings
2,894,176
3,864,766
Other debtors
99,218
98,960
Prepayments and accrued income
1,728,255
314,714
5,657,344
5,280,261
2024
2023
Amounts falling due after more than one year:
£
£
Deferred tax asset (note 16)
1,066,670
652,538
Total debtors
6,724,014
5,932,799
ATR BRANDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 26 -
15
Creditors: amounts falling due within one year
2024
2023
£
£
Trade creditors
447,816
497,945
Amounts owed to group undertakings
13,555,724
12,482,229
Taxation and social security
499,686
420,784
Derivative financial instruments
44,411
-
0
Other creditors
287,418
192,240
Accruals and deferred income
686,374
387,095
15,521,429
13,980,293

As at the period-end, included within creditors are loans of £6,184,185 (2023: £6,075,077 ) owed to Strandbags Group Pty Limited. Interest is charged on these loans at a rate of 6% per annum. The loans are repayable on demand.

16
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

Assets
Assets
2024
2023
Balances:
£
£
Accelerated Capital Allowances
(43,442)
(18,848)
Tax losses
1,100,932
671,386
Other short term timing differences
742
-
Hedge accounting
8,438
-
1,066,670
652,538
2024
Movements in the year:
£
Asset at 1 March 2023
(652,538)
Credit to profit or loss
(405,694)
Credit to other comprehensive income
(8,438)
Asset at 29 February 2024
(1,066,670)
ATR BRANDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 27 -
17
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
25,535
9,477

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

18
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
1
1
1
1
19
Ultimate controlling party

The parent company of ATR Brands Limited is Strandbags Holdings Pty Ltd, a company incorporated in Australia. Its registered office is Level 2 83 Bowman Street Pyrmont, New South Wales, 2009 Australia.

20
Cash generated from operations
2024
2023
£
£
Loss for the year after tax
(1,215,567)
(227,245)
Adjustments for:
Taxation credited
(405,677)
(89,895)
Finance costs
521,976
400,318
Investment income
(181)
-
0
Amortisation and impairment of intangible assets
636,711
636,712
Depreciation and impairment of tangible fixed assets
91,499
48,333
Movements in working capital:
Decrease/(increase) in stocks
263,745
(1,329,972)
Increase in debtors
(377,100)
(3,469,827)
Increase in creditors
1,496,725
4,429,773
Cash generated from operations
1,012,131
398,197
ATR BRANDS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 29 FEBRUARY 2024
- 28 -
21
Analysis of changes in net funds
1 March 2023
Cash flows
Market value movements
29 February 2024
£
£
£
£
Cash at bank and in hand
155,653
235,110
-
390,763
Derivatives relating to debt
-
(44,411)
44,411
-
155,653
190,699
44,411
390,763
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