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Registered number: 11518832
Saltrock Surfwear Limited
Annual Report and Financial Statements
For the 52 week period ended 29 December 2024
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Saltrock Surfwear Limited
Company Information
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Ryan Fox (appointed 1 May 2024)
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Chartered Accountants & Statutory Auditor
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168 Shoreditch High Street
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Saltrock Surfwear Limited
Contents
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Independent Auditor's Report
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Statement of Income and Retained Earnings
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Notes to the Financial Statements
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Saltrock Surfwear Limited
Strategic Report
For the 52 week period ended 29 December 2024
The Directors present their strategic report together with the audited financial statements for the 52 week period ended 29 December 2024.
Saltrock offers surf-inspired leisure clothing and accessories for the whole family. All our garments are designed in-house in Devon and our graphics-led prints are influenced by the coastal lifestyle that we love. Our products are sold through our Saltrock branded retail stores, online and through independent wholesale accounts.
Business Review and Key Performance Indicators
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Store revenue grew by 10.3% year on year due to adding 7 new stores in 2024 as we continue to expand UK store locations nationally (ie beyond out historic regions of the South West and Wales) within outlet centres and suitable tourist locations and market towns. LFL performance for stores was +4% v 2023 the start of the year was impacted by poor stock availability with growth gaining momentum through AW24. At the end of 2024 the business operated 76 retail stores (2023 - 69 stores).
Ecomm revenue grew by 18.5% during 2024, but wholesale revenue fell by 12% as cost of living crisis affected our independent wholesale accounts more than our own stores.
EBITDA fell from £3.2m in 2023 to £2.1m in 2024. This was driven by a number of factors: in 2024 stores were impacted in the first half of the year with late deliveries of spring/summer stock and the annualization of stores opened in 2023, along with weather in our summer peak combined with a continuation of the cost of living crisis and consequent discounting measures along with much of the high street. Overhead costs, as in previous years, remain under close management.
The income statement is set out and shows the profit for the year. The profit for the year after tax amounted to £1,050,044 (2023 - £1,962,144)
The Company monitors a range of key performance indicators (KPls) on a regular basis to manage the business, enable timely decision-making and to react quickly to a rapidly changing trading environment. Particular attention is paid to the weekly KPls and trading information with variances to budget and forecasts for individual product ranges and channels to market being reviewed. The two primary KPl's are turnover and EBITDA.
The Directors remain cautious in their trading outlook but are committed to the strategy of offering a lifestyle brand to the whole family which matches a value proposition with strong graphics inspired by the British coast. The business has historically focussed its retail stores in its traditional heartland of the South West and Wales but is now exploring the potential of opening stores in locations across the UK which share our passion for an outdoors lifestyle.
We maintain a disciplined approach to promotions to benefit our margins and working capital and further maintain the integrity and strength of the brand.
Page 1
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Saltrock Surfwear Limited
Strategic Report (continued)
For the 52 week period ended 29 December 2024
Principal risks and uncertainties
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Saltrock is a well-established brand, with a loyal customer following. However we acknowledge and manage the following risks:
Trading risk
The company, as with all retailers, faces uncertainties in its trading environment.
A positive economic and favourable legislative environment is key to the overall success of the retail sector in the UK.
A significant challenge is attracting new and retaining existing customers in a very competitive and promotional retail environment. The management remain cognisant of the UK retail market, competitor activity and consumer behaviours in order to react and make the correct decisions required to satisfy customers and drive the business forward.
Financial Risk Management
The existence of various financial instruments, primarily loans, cash, trade debtors and trade creditors, exposes the Company to a number of financial risks, which are described in more detail below.
The main risks arising from the Company's financial instruments are currency risk, liquidity risk and credit risk.
The directors review and agree policies for managing each of these risks and they are summarised below.
These policies have remained substantially unchanged from previous years.
Currency risk
The company is significantly reliant on production overseas and therefore is exposed to foreign exchange risk principally in US Dollars. Fluctuations in the exchange rates of the US Dollar is continually monitored and Saltrock may from time to time enter into forward currency contracts to hedge future inventory purchases.
Liquidity risk
The Company seeks to manage liquidity risk by regularly forecasting future cashflows and monitoring banking facilities to ensure sufficient funds are available to meet the Company's financial obligations for the foreseeable future.
Credit risk
The Company's principal financial assets are cash and trade debtors. Credit risk associated with trade debtors is managed by the Company monitoring the financial position of the counterparties involved.
In order to manage credit risk arising from trade debtors, the directors set limits for customers based on a combination of payment history and size of account. Credit limits are reviewed on a regular basis in conjunction with debt ageing and collection history, and credit limits are adjusted on a regular basis.
Credit risk also arises from cash and cash equivalents and deposits with banks and financial institutions. For banks and financial institutions, only independently rated parties with minimum "A" are accepted.
Page 2
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Saltrock Surfwear Limited
Strategic Report (continued)
For the 52 week period ended 29 December 2024
Current trading and outlook
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The Covid pandemic which widely affected 2020 and 2021 trading activity has largely moved on and we are dealing with fresh challenges around cost of living crisis throughout 2022 and 2023. During 2023 this has affected both the number of visitors to the UK’s key holiday destinations and their spending behaviour when on holiday. The cost of living crisis is currently showing signs of easing (inflation has fallen to Government targets, real wages are rising and mortgage rate are likely to fall in the second half of 2024) but we expect to continue to influence our customers spending choices well into 2025.
The Company's business activities, together with the factors likely to affect its future development, performance and position are set out in the principal activities and business review on page 1.
The financial position of the Company has remained stable during the year, despite the challenging market conditions.
The main financial risks arising from the activities of the Company are set out in this report on page 2, together with the Company's policies and processes for managing these risks.
The Company has prepared forecasts which take into account possible changes in trading which have been reviewed by the directors. These forecasts show that the Company should be able to operate within the existing working capital facilities.
The Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. The directors therefore continue to adopt the going concern basis of accounting in preparing the annual financial statements for the Company.
This report was approved by the board on and signed on its behalf.
This report was approved by the board and signed on its behalf.
Page 3
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Saltrock Surfwear Limited
Directors' Report
For the 52 week period ended 29 December 2024
The Directors present their report and the financial statements for the period ended 29 December 2024.
Directors' responsibilities statement
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The Directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare the financial statements in accordance with 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 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:
∙select suitable accounting policies for the Company's financial statements and then apply them consistently;
∙make judgements and accounting estimates that are reasonable and prudent;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company 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 to 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.
The principal activity of the company is to design and create surf-inspired clothing and accessories for sale through its stores and website.
The profit for the period, after taxation, amounted to £1,050,044 (2023 - £1,962,144).
The Directors who served during the period were:
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Ryan Fox (appointed 1 May 2024)
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There have been no significant events affecting the Company since the year end.
Page 4
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Saltrock Surfwear Limited
Directors' Report (continued)
For the 52 week period ended 29 December 2024
Engagement with employees
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We continually engage with our employees and have been focussing on employee safety, wellbeing and morale, especially since the 2020/21 pandemic.
Members of the senior management team are regularly invited to present to the Directors and their advisors allowing for direct and meaningful interaction and engagement. Similarly key employees are invited to present project progress, commercial proposals, business updates etc to the Senior Management Team. We have maintained full onboarding and induction for new starters and company-wide e-learning. Since 2022 we have adopted a flexible working (home v office) policy which is under review in 2024 as attitudes to home-working continue to evolve. We allow reasonable flexible working requests from all staff, have invested in a company wide mental health awareness programme with paid referral if necessary. Relevant corporate performance measures are shared with all staff to ensure that they are aware of annual performance targets and progress against them.
Disclosure of information to auditor
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Each of the persons who are Directors at the time when this Directors' Report is approved has confirmed that:
∙so far as the Director is aware, there is no relevant audit information of which the Company's auditor is unaware, and
∙the Director has taken all the steps that ought to have been taken as a Director in order to be aware of any relevant audit information and to establish that the Company's auditor is aware of that information.
Post balance sheet events
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There have been no significant events affecting the Company since the year end.
The auditors, Kreston Reeves LLP, will 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.
Page 5
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Saltrock Surfwear Limited
Independent Auditor's Report to the Members of Saltrock Surfwear Limited
We have audited the financial statements of Saltrock Surfwear Limited (the 'Company') for the period ended 29 December 2024, which comprise the Statement of Income and Retained Earnings, the Balance Sheet and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
∙give a true and fair view of the state of the Company's affairs as at 29 December 2024 and of its profit for the period then ended;
∙have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
∙have been prepared in accordance with the requirements of the Companies Act 2006.
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 United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
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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.
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.
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Saltrock Surfwear Limited
Independent Auditor's Report to the Members of Saltrock Surfwear Limited (continued)
Opinion on other matters prescribed by the Companies Act 2006
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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 period 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
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In the light of the knowledge and understanding of the Company 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.
Responsibilities of directors
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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 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.
Page 7
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Saltrock Surfwear Limited
Independent Auditor's Report to the Members of Saltrock Surfwear Limited (continued)
Auditor's responsibilities for the audit of the financial statements
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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.
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. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
Capability of the audit in detecting irregularities, including fraud
Based on our understanding of the company and industry, and through discussion with the directors and other management (as required by auditing standards), we identified that the principal risks of non-compliance with laws and regulations related to health and safety, anti-bribery and employment law. 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, Statement of Recommended Practice, taxation and pension legislation.
We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit. 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 posting inappropriate journal entries to increase revenue or reduce expenditure, and management bias in accounting estimates and judgemental areas of the financial statements. Audit procedures performed by the engagement team included:
∙Discussions with management and assessment of known or suspected instances of non-compliance with laws and regulations (including health and safety, anti-bribery and employment law) and fraud; and
∙Further assessment of the company's compliance with laws and regulations was undertaken by ensuring the engagement team were made aware of the identified laws and regulations to ensure they remained alert to any indications of non-compliance;
∙Identifying and assessing the design effectiveness of controls that management has in place to prevent and detect fraud;
∙Challenging assumptions and judgements made by management in its significant accounting estimates; and
∙Performing low level analytical procedures to any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud; and
∙Identifying and testing journal entries, in particular any manual entries made at the year end for financial statement preparation.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
Page 8
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Saltrock Surfwear Limited
Independent Auditor's Report to the Members of Saltrock Surfwear Limited (continued)
As part of an audit in accordance with ISAs (UK), we exercise professional judgement and maintain professional scepticism throughout the audit. We also:
∙Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
∙Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion of the effectiveness of the Company's internal control.
∙Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Directors.
∙Conclude on the appropriateness of the Directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our Auditor's Report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our Auditor's Report. However, future events or conditions may cause the Company to cease to continue as a going concern.
∙Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditor's Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
Tracey Becker (Senior Statutory Auditor)
for and on behalf of
Kreston Reeves LLP
Chartered Accountants
Statutory Auditor
London
30 September 2025
Page 9
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Saltrock Surfwear Limited
Statement of Income and Retained Earnings
For the 52 week period ended 29 December 2024
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52 weeks ended
29 December
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53 weeks ended
31 December
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Retained earnings at the beginning of the period
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Retained earnings at the end of the period
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There were no recognised gains and losses for 2024 or 2023 other than those included in the statement of income and retained earnings.
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The notes on pages 12 to 25 form part of these financial statements.
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Page 10
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Saltrock Surfwear Limited
Registered number: 11518832
Balance Sheet
As at 29 December 2024
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Provisions for liabilities
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The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 12 to 25 form part of these financial statements.
Page 11
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Saltrock Surfwear Limited
Notes to the Financial Statements
For the 52 week period ended 29 December 2024
Saltrock Surfwear Limited is a private company limited by shares and is incorporated in England and Wales. The address of the registered office and principal place of business is The Drapery, Kingston Hall Road, Kingston Upon Thames, KT1 2BQ.
The principal activity of the company is to create clothing and accessories for sale through its retail stores and website.
2.Accounting policies
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Basis of preparation of financial statements
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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 Company's functional and presentational currency is pounds sterling.
The Company's financial statements are presented to the nearest pound.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:
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Financial Reporting Standard 102 - reduced disclosure exemptions
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The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
∙the requirements of Section 7 Statement of Cash Flows;
∙the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
∙the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
∙the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
∙the requirements of Section 33 Related Party Disclosures paragraph 33.7.
This information is included in the consolidated financial statements of Broadgate 1960 Company Ltd. as at 29 December 2024 and these financial statements may be obtained from Companies House.
Page 12
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Saltrock Surfwear Limited
Notes to the Financial Statements
For the 52 week period ended 29 December 2024
2.Accounting policies (continued)
The Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future.
The Directors have reviewed management forecasts, sensitivities and mitigating actions available to management which take into account possible changes in trading. These forecasts show that the Company should be able to operate within the existing working capital facilities.
The liquidity requirements of the Company have been assessed by the directors and believe them to be adequate for a period of at least 12 months from the date of signing these financial statements and therefore have adopted the going concern basis in preparation of the financial statements.
Revenue is the total amount receivable by the company, less credits and returns, in the ordinary course of business with customers for goods supplied, excluding VAT and trade discounts. Revenue is recognised when the risks and rewards of owning the goods have passed to the customer, which is generally on the point of sale. Online and wholesale sales are recognised on dispatch of goods to the customer.
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Operating leases: the Company as lessee
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Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.
Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.
Defined contribution pension plan
The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.
The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance Sheet. The assets of the plan are held separately from the Company in independently administered funds.
Page 13
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Saltrock Surfwear Limited
Notes to the Financial Statements
For the 52 week period ended 29 December 2024
2.Accounting policies (continued)
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Current and deferred taxation
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The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates 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; and
∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
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.
Goodwill
Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight-line basis to the Statement of Income and Retained Earnings over its useful economic life.
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.
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
The estimated useful lives range as follows:
Page 14
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Saltrock Surfwear Limited
Notes to the Financial Statements
For the 52 week period ended 29 December 2024
2.Accounting policies (continued)
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
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.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
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Short-term leasehold property
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The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis.
At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.
Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
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Cash and cash equivalents
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Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” 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.
Page 15
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Saltrock Surfwear Limited
Notes to the Financial Statements
For the 52 week period ended 29 December 2024
2.Accounting policies (continued)
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Financial instruments (continued)
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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 trade and other debtors, cash and bank balances, are initially measured at their transaction price (adjusted for transaction costs except in the initial measurement of financial assets that are subsequently measured at fair value through profit and loss) and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, 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.
Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other debtors due with the operating cycle fall into this category of financial instruments.
Impairment of financial assets
At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. 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.
Page 16
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Saltrock Surfwear Limited
Notes to the Financial Statements
For the 52 week period ended 29 December 2024
2.Accounting policies (continued)
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Financial instruments (continued)
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Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.
If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.
Basic 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 the deduction of all its liabilities.
Basic financial liabilities, which include trade and other creditors, bank loans and other loans are initially measured at their transaction price (adjusting for transaction costs except in the initial measurement of financial liabilities that are subsequently measured at fair value through profit and loss). When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future payments discounted at a market rate of interest, discounting is omitted where the effect of discounting is immaterial.
Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.
Trade creditors are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade creditors are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade creditors are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.
Derecognition of financial instruments
Derecognition of financial assets
Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Company transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Company will continue to recognise the value of the portion of the risks and rewards retained.
Derecognition of financial liabilities
Financial liabilities are derecognised when the Company's contractual obligations expire or are discharged or cancelled.
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.
Page 17
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Saltrock Surfwear Limited
Notes to the Financial Statements
For the 52 week period ended 29 December 2024
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Judgements in applying accounting policies and key sources of estimation uncertainty
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The preparation of the financial statements requires the directors to make judgements, estimates and assumptions that can affect the amounts reported for assets and liabilities, and the results for the year. The nature of estimation is such though that actual outcomes could differ significantly from those estimates.
In preparing these financial statements, the Directors have made the following judgements:
Goodwill
The company has recognised goodwill, following its acquisition of trade and assets from the administrators of the former company, Saltrock Surfwear Limited, with a carrying value of £162,092 at the reporting date (see note 8). On acquisition, the company determines a reliable estimate regarding the value of goodwill based upon forecasts of expected future results. The company has considered the useful life of goodwill based upon factors such as the expected use of the acquired trade and assets, forecasts of expected future results and cash flows, and any legal, regulatory or contractual provisions that can limit useful life. At each subsequent reporting date, the directors consider whether there are any factors such as technological advances or changes in market conditions that indicate a need to reconsider the useful life of goodwill.
Tangible fixed assets
The company has recognised tangible fixed assets with a carrying value of £1,884,950 at the reporting date (see note 9). These assets are stated at their cost less provision for depreciation and impairment. The company's accounting policy sets out the approach to calculating depreciation for assets. The company determines at acquisition reliable estimates for the useful life of the asset and its residual value. These estimates are based upon such factors as the expected use of the acquired assets and market conditions. At subsequent reporting dates the directors consider whether there are any factors such as technological advances or changes in market conditions that indicate a need to reconsider the estimates used.
Where there are indicators that the carrying value of tangible assets may be impaired the company undertakes tests to determine the recoverable value of assets. Recoverable value assessments include consideration of issues such as future market conditions, the remaining life of the asset and disposal values.
Taxation
Provision has been made in the financial statements for a deferred tax liability amounting to £158,887 (2023: £339,486) at the reporting date (see note 13). This provision is based upon estimates of availability of future taxable profits, the timing reversal of timing differences upon which the provision is based and the tax rates that will be in force at that time together with an assessment of the impact of future tax planning strategies.
The whole of the turnover is attributable to the one principal activity of the Company..
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All turnover arose within the United Kingdom.
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Page 18
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Saltrock Surfwear Limited
Notes to the Financial Statements
For the 52 week period ended 29 December 2024
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During the period, the Company obtained the following services from the Company's auditor:
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52 weeks ended
29 December
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53 weeks ended
31 December
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Fees payable to the Company's auditor for the audit of the Company's financial statements
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The Company has taken advantage of the exemption not to disclose amounts paid for non-audit services as these are disclosed in the consolidated accounts of the parent Company.
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Staff costs were as follows:
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52 weeks ended
29 December
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53 weeks ended
31 December
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Cost of defined contribution scheme
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The average monthly number of employees, including the Directors, during the period was as follows:
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52 weeks ended
29 December
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53 weeks ended
31 December
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Control and administration
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Page 19
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Saltrock Surfwear Limited
Notes to the Financial Statements
For the 52 week period ended 29 December 2024
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52 weeks ended
29 December
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53 weeks ended
31 December
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Current tax on profits for the year
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Origination and reversal of timing differences
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Factors affecting tax charge for the period
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The tax assessed for the period is higher than (2023 - higher than) the standard rate of corporation tax in the UK of 25% (2023 - 23%). The differences are explained below:
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52 weeks ended
29 December
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53 weeks ended
31 December
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Profit on ordinary activities before tax
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Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2023 - 23%)
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Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
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Capital allowances for period in excess of depreciation
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Remeasurement of deferred tax for changes in tax rate
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Adjustments to tax charge in respect of prior periods
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Other differences leading to an increase (decrease) in the tax charge
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Total tax charge for the period
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Page 20
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Saltrock Surfwear Limited
Notes to the Financial Statements
For the 52 week period ended 29 December 2024
7.Taxation (continued)
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Factors that may affect future tax charges
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There were no factors that may affect future tax charges.
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Charge for the period on owned assets
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Page 21
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Saltrock Surfwear Limited
Notes to the Financial Statements
For the 52 week period ended 29 December 2024
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Short-term leasehold property
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Finished goods and goods for resale
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Prepayments and accrued income
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Page 22
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Saltrock Surfwear Limited
Notes to the Financial Statements
For the 52 week period ended 29 December 2024
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Cash and cash equivalents
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Creditors: Amounts falling due within one year
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Amounts owed to group undertakings
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Other taxation and social security
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Accruals and deferred income
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Amounts due to group undertakings are unsecured, interest free and repayable on demand.
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Charged to profit or loss
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The provision for deferred taxation is made up as follows:
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Accelerated capital allowances
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Other short term timing differences
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Page 23
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Saltrock Surfwear Limited
Notes to the Financial Statements
For the 52 week period ended 29 December 2024
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Allotted, called up and fully paid
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2 (2023 - 2) Ordinary shares of £1.00 each
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Profit and loss account
The profit and loss account represents cumulative profits or losses, net of dividends paid and other
adjustments.
The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £117,203 (2023: £95,124) Contributions totalling £23,714 (2023: £21,642) were payable to the fund at the balance sheet date and are included in creditors.
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Commitments under operating leases
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At 29 December 2024 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
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Later than 1 year and not later than 5 years
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Related party transactions
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The Company has taken advantage of the exemption from disclosing related party transactions with its fellow group members as permitted by FRS 102 Section 33.
Included within creditors falling due within one year is an amount due to a company under common control. As at 31 December 2024, the balance due amounted to £NIL (2023: £2,698,241).
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Page 24
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Saltrock Surfwear Limited
Notes to the Financial Statements
For the 52 week period ended 29 December 2024
The Company's immediate parent undertaking is Broadgate 1960 Company Limited which is registered in England. Copies of this company's group financial statements may be obtained from its registered office The Drapery, Kingston Hall Road, Kingston Upon Thames, KT21 2BQ.
The ultimate parent company is New Wishes 2020 Limited. New Wishes 2020 Limited is incorporated in Gibraltar.
The ultimate controlling party of the group is Menoshi Shina who is also a Director of the Company.
Page 25
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