Company registration number 02481321 (England and Wales)
KOSTAL UK LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
KOSTAL UK LIMITED
COMPANY INFORMATION
Directors
S Bennett
H Hermann
Dr T Naumann
Company number
02481321
Registered office
The Balance Pinfold Street
Suite 6F
Sheffield
S1 2GU
Auditor
Kingswood LLP
3 Coldbath Square
London
EC1R 5HL
KOSTAL UK LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4
Directors' responsibilities statement
5
Independent auditor's report
6 - 8
Profit and loss account
9
Balance sheet
10
Statement of changes in equity
11
Notes to the financial statements
12 - 23
KOSTAL UK LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
- 1 -

The directors present their strategic report on the company for the year ended 31 December 2024.

Review of the business and future developments

 

The automotive industry in Europe suffered from significant uncertainty in 2024, with the expected shift to electrified vehicles being significantly slower than forecasted, particularly by the legacy carmakers. With Chinese vehicle manufacturers also starting to take a notable market share, legacy carmakers in Europe saw further reductions in demand.

 

The impact of Russia’s invasion of Ukraine on shipping routes and supply chain has continued to have ripples of impact, though clearly not to the extent that was seen at the start of the conflict. The Red Sea and Suez Canal are still disrupted and transcontinental rail routes are restricted by a lack of access to northern routes via Russia and significant backlogs and severe long term weather disruption in the Caspian Sea. This has made component delivery somewhat challenging.

 

High volatility on the currency market decreased exchange losses to £345,356 (2023: losses £671,500) mainly due to the revaluation of EURO denominated balance sheet accounts (a movement of a gain of £111,194 vs a loss of £456,550).

 

The company’s profit after tax for the year was £910,625 (2023: £1,341,701). The directors did not pay a dividend in 2024 (2023: £41,700,000).

 

The performance of the major customer of KOSTAL UK has, however, been better than market average and Sales for 2024 were above budget. This has given stability to the UK site in commissions.

 

For 2024 the revenues of KOSTAL UK were based entirely on commission from sales made by other sites rather than direct customer generated revenues.

 

Because of this change to the business model, revenues for KOSTAL UK have reduced since the previous year.

Strategy

 

The company’s overriding goal in its new form is to ensure satisfaction for our key British multi-national automotive customers by managing the relationship and supporting the sales, design, manufacture and delivery of quality products from all entities in the global KOSTAL group.

 

Whilst we remain a trading company, the key elements to achieving this are:

 

 

KOSTAL UK LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 2 -
Principal risks and uncertainties

 

The management of the business and the execution of the company’s strategy are subject to a number of risks. With the FTA now in place with the EU, we have experienced acceptable logistics chains. We are therefore now in a period of stability and expect this to continue.

 

Inflationary pressures have eased for our business; however sustained higher interest rates may impact KOSTAL UK’s cost base in 2025 and beyond.

 

In order to continue successfully the business will stay focused around these 3 priorities:

 

1)    Employees health and wellbeing

2)    Supporting the profitable growth of the group

3)     Creating customer satisfaction

Financial risk management

 

The company’s operations expose it to a variety of financial risks including the effects of credit risk, liquidity risk and interest rates on debt. The company has risk management procedures which identify and monitor market, fiscal, operational, regulatory, environmental and product led risks. These processes are also used to identify performance and business development opportunities.

 

Credit risk

 

The company’s principal financial assets are bank balances and trade debtors’ which represent the company’s maximum exposure to credit risk in relation to financial assets. The company’s credit risk is primarily attributable to its trade debtors. Credit risk is managed by monitoring the aggregate amount and duration of exposure to any one customer depending upon their credit rating. The amounts presented in the balance sheet are net of allowances for doubtful debts, estimated by the company’s management based on prior experience and their assessment of the current economic climate.

 

Liquidity risk

 

The company’s security with regards to liquidity is achieved through management of working capital, and where necessary borrowings from other group companies. The amount of these facilities is renegotiated from time to time as required.

 

Interest rate risk

 

Interest bearing assets comprise cash and bank deposits and interest receivable from group undertaking, all of which earn interest at a fixed rate. Interest bearing liabilities comprise intercompany loans with fixed interest and repayment terms. The directors monitor the overall level of borrowing and interest costs to limit any adverse effect on the financial performance of the company.

Going concern

By the beginning of 2024, the company had fully transitioned from a distribution model into a small UK centre with a customer support focus. By July 2023 the company had ceased invoicing for product sold and the business model going forward was based on commission from sales made by other sites rather than direct customer generated revenues. The company's revenue and profits is therefore lower than historic levels.

 

Taking into account the change to the company's business model, the directors have prepared forecasts for a period of more than 12 months from the date of approval of these financial statements which indicate that the company will have sufficient funds, through the group cash facility available from the ultimate parent company, to meet its liabilities as they fall due for that period.

 

Consequently, the directors are confident that the company will have sufficient funds to continue to meet its liabilities as they fall due for at least 12 months from the date of approval of the financial statements and therefore have prepared the financial statements on a going concern basis.

KOSTAL UK LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 3 -

On behalf of the board

S Bennett
Director
25 March 2025
KOSTAL UK LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
- 4 -

The directors present their annual report and financial statements for the year ended 31 December 2024.

Principal activities

The principal activity of the company continued to be that of customer support, deriving commission from sales made by other sites rather than direct customer generated revenues.

Results and dividends

The results for the year are set out on page 9.

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:

S Bennett
H Hermann
Dr T Naumann
Business relationships

Fostering business relationships with key stakeholders, such as customers and suppliers, is also important to a company's success. A board should have visibility of these relationships so that it is able to take stakeholders' considerations into account when making decisions. In regards to our customer engagement, key account holders with group wide responsibility ensure close relationships with focus on future products and concepts as well as maintaining a closed feedback loop. As a participating member of The Society of Motor Manufacturing and Trades (SMMT) we engage with other business partners within our industry.

Strategic report

The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report.

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.

On behalf of the board
S Bennett
Director
25 March 2025
KOSTAL UK LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2024
- 5 -

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.

KOSTAL UK LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF KOSTAL UK LIMITED
- 6 -
Opinion

We have audited the financial statements of Kostal UK Limited (the 'company') for the year ended 31 December 2024 which comprise the profit and loss account, the balance sheet, the statement of changes in equity 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 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.

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

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

KOSTAL UK LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF KOSTAL UK LIMITED
- 7 -
Matters on which we are required to report by exception

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:

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.

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.

We assessed the susceptibility of the company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

 

 

KOSTAL UK LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF KOSTAL UK LIMITED
- 8 -

To address the risk of fraud through management bias and override of controls, we:

 

 

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

 

 

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the director and other management and the inspection of regulatory and legal correspondence, if any.

 

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or 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.

Richard Behan FCA (Senior Statutory Auditor)
For and on behalf of Kingswood LLP
28 March 2025
Chartered Accountants
Statutory Auditor
3 Coldbath Square
London
EC1R 5HL
KOSTAL UK LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2024
- 9 -
2024
2023
Notes
£
£
Turnover
3
3,215,542
16,630,211
Cost of sales
(423,424)
(13,739,804)
Gross profit
2,792,118
2,890,407
Distribution costs
(84,530)
(540,359)
Administrative expenses
(1,766,728)
(1,772,165)
Operating profit
4
940,860
577,883
Interest receivable and similar income
8
225,807
1,221,476
Profit before taxation
1,166,667
1,799,359
Tax on profit
9
(256,042)
(457,658)
Profit for the financial year
910,625
1,341,701

There are no items of other comprehensive income for either the year or the prior year other than the profit for the year. Accordingly, no statement of other comprehensive income has been presented.

The notes on pages 12 to 23 form part of these financial statements.

KOSTAL UK LIMITED
BALANCE SHEET
AS AT 31 DECEMBER 2024
31 December 2024
- 10 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
11
2,291
4,769
Current assets
Debtors
12
10,097,899
10,876,422
Cash at bank and in hand
200,088
200,000
10,297,987
11,076,422
Creditors: amounts falling due within one year
13
(1,286,010)
(2,976,826)
Net current assets
9,011,977
8,099,596
Net assets
9,014,268
8,104,365
Capital and reserves
Called up share capital
16
5,850,000
5,850,000
Profit and loss reserves
17
3,164,268
2,254,365
Total equity
9,014,268
8,104,365

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 25 March 2025 and are signed on its behalf by:
S Bennett
Director
Company registration number 02481321 (England and Wales)

The notes on pages 12 to 23 form part of these financial statements.

KOSTAL UK LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
- 11 -
Share capital
Capital contribution reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 January 2023
5,850,000
7,790,000
34,822,664
48,462,664
Year ended 31 December 2023:
Profit and total comprehensive income for the year
-
-
1,341,701
1,341,701
Dividends
10
-
(7,790,000)
(33,910,000)
(41,700,000)
Balance at 31 December 2023
5,850,000
-
2,254,365
8,104,365
Year ended 31 December 2024:
Profit and total comprehensive income for the year
-
-
910,625
910,625
Balance at 31 December 2024
5,850,000
-
3,164,268
9,014,268

The notes on pages 12 to 23 form part of these financial statements.

KOSTAL UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
- 12 -
1
Accounting policies
Company information

Kostal UK Limited is a private company limited by shares incorporated in England and Wales. The registered office is The Balance Pinfold Street, Suite 6F, Sheffield, S1 2GU.

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.

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:

 

 

The financial statements of the company are consolidated in the financial statements of Leopold Kostal GmbH & Co. KG. These consolidated financial statements are available from its registered office, An der Bellmerei 10, 58513 Ludenscheid, Germany.

 

1.2
Going concern

By the beginning of 2024, the company had fully transitioned from a distribution model into a small UK centre with a customer support focus. By July 2023 the company had ceased invoicing for product sold and the business model going forward was based on commission from sales made by other sites rather than direct customer generated revenues. The company's revenue and profits is therefore lower than historic levels.true

 

Taking into account the change to the company's business model, the directors have prepared forecasts for a period of more than 12 months from the date of approval of these financial statements which indicate that the company will have sufficient funds, through the group cash facility available from the ultimate parent company, to meet its liabilities as they fall due for that period.

 

Consequently, the directors are confident that the company will have sufficient funds to continue to meet its liabilities as they fall due for at least 12 months from the date of approval of the financial statements and therefore have prepared the financial statements on a going concern basis.

1.3
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for 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.

KOSTAL UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 13 -

 

Revenue from commissions is recognised based on sales of goods to specific UK customers from fellow group companies. Revenue is recognised only where significant risks and rewards of ownership of the goods have passed from the fellow group company to the buyer, and the amount of revenue and costs associated with the transaction can be measured reliably.

1.4
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:

Fixtures and fittings
5 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.

1.5
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible 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.

1.6
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.

KOSTAL UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 14 -
1.7
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, loans to fellow group companies 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.

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

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.

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.

KOSTAL UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 15 -
Classification of financial liabilities

In accordance with FRS 102.22, financial instruments issued by the Company are treated as equity only to the extent that they meet the following two conditions:

 

 

To the extent that this definition is not met, the proceeds of issue are classified as a financial liability. Where the instrument so classified takes the legal form of the company's own shares, the amounts presented in these financial statements for called up share capital and share premium account exclude amounts in relation to those shares.

Basic financial liabilities

Basic financial liabilities, including creditors and loans from fellow group companies, 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.

1.8
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.

1.9
Taxation

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

KOSTAL UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 16 -
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.

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.

1.10
Provisions

Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

 

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.

 

Where the Company enters into financial guarantee contracts to guarantee the indebtedness of other companies within its group, the company treats the guarantee contract as a contingent liability until such time as it becomes probable that the Company will be required to make a payment under the guarantee.

1.11
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.

1.12
Retirement benefits

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

1.13
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.

KOSTAL UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
1
Accounting policies
(Continued)
- 17 -
1.14
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. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are retranslated to the functional currency at foreign exchange rates ruling at the dates the fair value was determined. Gains and losses arising on translation in the period are included in profit or loss.

1.15

Interest receivable

Interest receivable and similar income includes interest receivable on funds invested. Interest income is recognised in profit or loss as it accrues, using the effective interest method.

2
Judgements and key sources of estimation uncertainty

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Key sources of estimation uncertainty
Warranty provisions

Products produced are subject to warranties to customers. Provisions are recorded to recognise the expected costs associated with claims made.

3
Turnover and other revenue

Turnover arises entirely from the principal activity of the company, and all arose in the UK. An analysis of the turnover by activity is as follows:

 

2024
2023
£
£
Turnover analysed by class of business
Sale of goods
-
15,052,958
Long term contract revenue
-
489,212
Commission revenue
2,789,812
-
Others
425,730
1,088,041
3,215,542
16,630,211
KOSTAL UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
3
Turnover and other revenue
(Continued)
- 18 -
2024
2023
£
£
Other revenue
Interest income
225,807
1,221,476
4
Operating profit
2024
2023
Operating profit for the year is stated after charging:
£
£
Exchange losses
345,356
671,500
Research and development costs
-
92,861
Depreciation of owned tangible fixed assets
2,978
175,345
(Profit)/loss on disposal of tangible fixed assets
-
146,308
Operating lease charges
63,504
65,458
5
Auditor's remuneration
2024
2023
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
32,500
40,000
For other services
Taxation compliance services
5,000
5,000
6
Employees

The average monthly number of persons employed by the company during the year was:

2024
2023
Number
Number
13
11

Their aggregate remuneration comprised:

2024
2023
£
£
Wages and salaries
711,923
629,639
Social security costs
95,476
76,250
Pension costs
41,972
38,734
849,371
744,623
KOSTAL UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 19 -
7
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
139,494
132,074
Company pension contributions to defined contribution schemes
9,768
8,816
149,262
140,890

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2023 - 1).

Certain directors do not receive any emoluments for their services as directors of the UK Company as an allocation of any amounts in relation to this entity would be insignificant, and are remunerated through Leopold Kostal GmbH.

8
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
88
2,941
Interest receivable from group companies
200,725
1,218,535
Other interest income
24,994
-
0
Total income
225,807
1,221,476
9
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
264,834
467,739
Deferred tax
Origination and reversal of timing differences
(8,792)
(10,081)
Total tax charge
256,042
457,658

 

KOSTAL UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
9
Taxation
(Continued)
- 20 -

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

2024
2023
£
£
Profit before taxation
1,166,667
1,799,359
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 23.52%)
291,667
423,209
Tax effect of expenses that are not deductible in determining taxable profit
488
634
Permanent capital allowances in excess of depreciation
(36,113)
34,412
Increase in tax rate on deferred tax balances
-
0
(597)
Taxation charge for the year
256,042
457,658
10
Dividends
2024
2023
£
£
Final paid
-
0
41,700,000
11
Tangible fixed assets
Fixtures and fittings
£
Cost
At 1 January 2024
15,436
Additions
500
At 31 December 2024
15,936
Depreciation and impairment
At 1 January 2024
10,667
Depreciation charged in the year
2,978
At 31 December 2024
13,645
Carrying amount
At 31 December 2024
2,291
At 31 December 2023
4,769
KOSTAL UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 21 -
12
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
-
0
649,329
Corporation tax recoverable
-
0
405,919
Amounts owed by group undertakings
9,826,580
9,672,046
Other debtors
133,361
19,962
9,959,941
10,747,256
Deferred tax asset (note 14)
137,958
129,166
10,097,899
10,876,422
13
Creditors: amounts falling due within one year
2024
2023
£
£
Trade creditors
661,859
1,595,601
Corporation tax
264,834
-
0
Other taxation and social security
39,315
354,944
Accruals and deferred income
320,002
1,026,281
1,286,010
2,976,826

 

14
Deferred taxation

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

Assets / (Liabilities)
Assets / (Liabilities)
2024
2023
Balances:
£
£
Accelerated capital allowances
135,764
127,221
Other
2,194
1,945
137,958
129,166
KOSTAL UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
14
Deferred taxation
(Continued)
- 22 -
2024
Movements in the year:
£
Asset at 1 January 2024
(129,166)
Credit to profit or loss
(8,792)
Asset at 31 December 2024
(137,958)

The deferred tax asset set out above is expected to partially reverse within 12 months and relates to the utilisation of future capital allowances against future expected profits of the same period.

15
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
41,972
38,734

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.

There was a pension creditor at the year-end amounting to £8,777 (2023: £7,780).

16
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £100 each
58,500
58,500
5,850,000
5,850,000

The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company.

17
Reserves
Profit and loss account

Represents the cumulative distributable profits and losses net of dividends and other adjustments.

 

18
Financial commitments, guarantees and contingent liabilities

The Company had bank guarantees totalling £226,200 (2023: £621,200) in place at the balance sheet date.

KOSTAL UK LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
- 23 -
19
Operating lease commitments
Lessee

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

2024
2023
£
£
Within one year
59,097
45,306
Between two and five years
59,285
73,635
118,382
118,941
20
Related party transactions

Amounts owed by group undertakings include a balance of £8,144,083 (2023: £7,266,336) on which interest is receivable at 3.2% (2023: 3%).

21
Ultimate controlling party

The ultimate controlling party is Leopold Kostal GmbH & Co. KG, incorporated in Germany.

The largest group in which the results of the Company are consolidated is that headed by Leopold Kostal GmbH & Co. KG, incorporated in Germany. The consolidated financial statements of this group is available to the public and may be obtained from their registered office, An der Bellmerei 10, 58513 Ludenscheid, Germany.

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