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Registered number: 06529629









Cosatto Limited









Annual Report and Financial Statements

For the Year Ended 31 August 2024

 
Cosatto Limited
 
 
Company Information


Directors
A S Kluge 
M Swift 
J Phillips 




Registered number
06529629



Registered office
Bentinck Mill
Bentinck Street

Farnworth

Bolton

BL4 7EP




Independent auditors
Hurst Accountants Limited
Chartered Accountants & Statutory Auditors

3 Stockport Exchange

Stockport

Cheshire

SK1 3GG





 
Cosatto Limited
 

Contents



Page
Strategic Report
 
1 - 2
Directors' Report
 
3 - 4
Independent Auditors' Report
 
5 - 8
Statement of Comprehensive Income
 
9
Statement of Financial Position
 
10
Statement of Changes in Equity
 
11
Statement of Cash Flows
 
12
Analysis of Net Debt
 
13
Notes to the Financial Statements
 
14 - 32


 
Cosatto Limited
 
 
Strategic report
For the Year Ended 31 August 2024

Introduction
 
The Directors present the Strategic Report for the year ended 31 August 2024.

Business review
 
The Directors report a decrease in sales for the year of 4.2%, a slightly reduced Gross Profit %, but in mitigation of the resulting lower Gross Profits, a significant reduction in business expenses. Whilst not a return to profitability, these results are seen as a marked improvement on the prior year, despite a continued backdrop of cost-of-living pressures and increased competition in the business’s core markets.
From a geographical sales mix perspective, the Company’s main UK market saw a decline of 1.7%, with Europe and the Rest of the World dropping by 11.8%. The split of sales across the Company’s major sales channels and customer groups remained similar to the previous year.
An ongoing review of all business overheads continued throughout the year, with a strategy of curtailing where appropriate. Importantly this was delivered without affecting ongoing necessary product evolution, customer serviceability, and maintenance / improvement of core business processes and systems.
A return to profitability, coupled with an ability to operate within its available facilities remain the ongoing strategic focus of the Directors. Whilst a review of business expenses is a key element of this focus, the Director’s believe the ultimate route of success will be delivered by a growth in sales revenues.
The company has continued to finance its operations through historical retained profits with the support of borrowings through its finance partners. A refinance of the business in early June 2025 has generated additional facilities and when coupled with the latest business forecasts, the Directors are confident the growth delivered since the August 24 year end will continue.

Principal risks and uncertainties
 
The Directors believe the key risks and uncertainties faced by the Company are generally macroeconomic in nature. Fluctuations in foreign exchange is a key determinant of product cost and is managed through foreign exchange hedging activities. Inflationary and lead time pressures posed by international supply chains are managed through strong supply chain relationships, whilst inflationary pressures within the Company’s key sales markets are managed through product range, price review and positioning strategies. The business continues to maintain excellent levels of product availability and margin consistency, despite the backdrop of a constantly changing commercial landscape. 
The management’s objectives continue to be:
- Retain sufficient liquid funds to enable it to meet its day-to-day obligations as they fall due whilst maximising      returns on funds;
- Minimise the company's exposure to fluctuating interest rates when seeking new borrowings;
- Match the repayment schedule of any external borrowings with expected future cash flows expected to arise from    the company's trading activities;
- Minimise the company exposure to fluctuating exchange rates by entering into forward foreign exchange contracts;   and
- Continue to identify sales and marketing strategies that will enable sustainable growth in sales and ultimately    profitability.

Page 1

 
Cosatto Limited
 

Strategic report (continued)
For the Year Ended 31 August 2024

Financial key performance indicators

The company's financial key performance indicators are as follows
2024
2023
Turnover growth/(reduction)

-4.2%

-7.8%

 
 
Gross margin

56.7%

57.6%

 
 
EBITDA

£-168k

£-791k

 
 
Net Assets

£1,082k

£1,064k

 
 

Other key performance indicators
 
Other key performance indicators measured by the company are as follows:
- Product Return Rates.
- Employee Engagement Scores.
- Customer Feedback Scores.
- Social Media Following.


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



A S Kluge
Director

Date: 9 June 2025

Page 2

 
Cosatto Limited
 
 
 
Directors' report
For the Year Ended 31 August 2024

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

Directors' responsibilities statement

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 judgments and accounting estimates that are reasonable and prudent;

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

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the 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 2006They 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.

Results and dividends

The loss for the year, after taxation, amounted to £700thousand  (2023 - loss £1,052 thousand).

Dividends were paid amounting to £120,000 (2023: £312,328). The directors do not recommend the payment of a final dividend (2023: £Nil). 

Directors

The directors who served during the year were:

V Morley (resigned 31 December 2024)
A S Kluge 
M Swift 
J Phillips 

Page 3

 
Cosatto Limited
 
 
 
Directors' report (continued)
For the Year Ended 31 August 2024

Future developments

A review of the Company's activities for the year ended 31 August 2024 and its future prospects is set out in the Strategic Report. 

Going Concern
The Company has prepared monthly forecasts and projections for a period in excess of twelve months from the date of approval, and as at the year-end these projections indicate that the Company will be back on track to deliver a positive EBITDA and be cash generative once again for the next financial year. The forecasts have been created taking into consideration sensitivities to consider the current general economic conditions, the competitive nature of the industry, inflationary impacts,  sales volume and unit price pressures, and taking into account the continuing necessary cost control measures which commenced during the second half of the current financial year.
The Company finances its operations, largely, through retained profits with short term finance facilities in the form of loans secured on the assets of the Company. These are primarily used to support working capital requirements. With the losses sustained in the current and prior years, the ongoing support of loan facility providers is fundamental to the cash management of the business. The Company is pleased to report that continued facility provision has been obtained for the foreseeable future via a re-finance process which was completed in early June 2025. The directors are confident in delivering the new financial year forecast and returning the Company to a positive EBITDA, furthermore the directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future and that it is therefore appropriate to prepare the annual report and financial statements to 31 August 2024 on a going concern basis.

Disclosure of information to auditors

Each of the persons who are directors at the time when this directors' report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the Company's auditors are 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 auditors are aware of that information.

Auditors

The auditorsHurst Accountants Limitedwill 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.
 





A S Kluge
Director

Date: 9 June 2025

Page 4

 
Cosatto Limited
 
 
 
Independent Auditors' Report to the Members of Cosatto Limited
 

Opinion


We have audited the financial statements of Cosatto Limited (the 'Company') for the year ended 31 August 2024, which comprise the statement of comprehensive income, the statement of financial position, the statement of cash flows, the statement of changes in equity and the related notes, including a summary of significant accounting policiesThe 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 31 August 2024 and of its loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.


Basis for opinion


We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' 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


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 auditors' report thereon. The directors are responsible for the other information contained within the Annual ReportOur 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.


Page 5

 
Cosatto Limited
 
 
 
Independent Auditors' Report to the Members of Cosatto Limited (continued)


Opinion on other matters prescribed by the Companies Act 2006
 

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


the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.


Matters on which we are required to report by exception
 

In 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
 

As explained more fully in the directors' responsibilities statement set out on page 3, 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 6

 
Cosatto Limited
 
 
 
Independent Auditors' Report to the Members of Cosatto Limited (continued)


Auditors' 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 auditors' 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:

Identifying and assessing potential risks related to irregularities
In identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following:           
• The nature of the industry and sector in which the company operates; the control environment and business     performance including key drivers for directors' remuneration, bonus levels and performance targets.
• The outcome of enquiries of management, including whether management was aware of any instances of non-
            compliance with laws and regulations, and whether management had knowledge of any actual, suspected, or alleged
            fraud. 
• Supporting documentation relating to the Company's policies and procedures for:
    - Identifying, evaluating, and complying with laws and regulations
    - Detecting and responding to the risks of fraud
• The internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations.
• The outcome of discussions amongst the engagement team regarding how and where fraud might occur in the    financial statements and any potential indicators of fraud.
• The legal and regulatory framework in which the Company operates, particularly those laws and regulations which    have a direct effect on the financial statements, such as the Companies Act 2006, pensions and tax legislation, or    which had a fundamental effect on the operations of the Company, including General Data Protection requirements,   and Anti-bribery and Corruption.
Audit response to risks identified
Our procedures to respond to the risks identified included the following:
• Reviewing the financial statements disclosures and testing to supporting documentation to assess compliance with    the provisions of those relevant laws and regulations which have a direct effect on the financial statements.
• Discussions with management, including consideration of known or suspected instances of non-compliance with    laws and regulations and fraud.
• Evaluation and testing of the operating effectiveness of management’s controls designed to prevent and detect    irregularities.
• Enquiring of management about any actual and potential litigation and claims.
• Performing analytical procedures to identify any unusual or unexpected relationships which may indicate risks of    material misstatement due to fraud. 
Page 7

 
Cosatto Limited
 
 
 
Independent Auditors' Report to the Members of Cosatto Limited (continued)



We have also considered the risk of fraud through management override of controls by:
• Testing the appropriateness of journal entries and other adjustments. We have used data analytics software to    identify accounting transactions which may pose a heightened risk of material misstatement, whether due to fraud or  error.
• Challenging assumptions made by management in their significant accounting estimates, and assessing whether the    judgements made in making accounting estimates are indicative of a potential bias; and
• Evaluating the business rationale of any significant transactions that are unusual or outside the normal course of    business.        
                 We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
There are inherent limitations in the audit procedures described above, and the further removed non-compliance with laws and regulations are from the events and transactions reflected in the financial statements, the less likely we would become aware of them.  Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.


A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors' report.


Use of our report
 

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 2006Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.





John Glover (Senior Statutory Auditor)
for and on behalf of
Hurst Accountants Limited
Chartered Accountants
Statutory Auditors
3 Stockport Exchange
Stockport
Cheshire
SK1 3GG

9 June 2025
Page 8

 
Cosatto Limited
 
 
Statement of comprehensive income
For the Year Ended 31 August 2024

2024
2023
Note
£000
£000

  

Turnover
 4 
11,722
12,237

Cost of sales
  
(5,079)
(5,187)

Gross profit
  
6,643
7,050

Distribution costs
  
(1,336)
(1,962)

Administrative expenses
  
(5,659)
(6,095)

Other operating income
 5 
62
70

Operating loss
 6 
(290)
(937)

Interest payable and similar expenses
 10 
(227)
(161)

Loss before tax
  
(517)
(1,098)

Tax on loss
 11 
(183)
46

Loss for the financial year
  
(700)
(1,052)

Other comprehensive income for the year
  

Unrealised surplus on revaluation of tangible fixed assets
  
838
-

Other comprehensive income for the year
  
838
-

Total comprehensive income for the year
  
138
(1,052)

The notes on pages 14 to 32 form part of these financial statements.

Page 9

 
Cosatto Limited
Registered number: 06529629

Statement of financial position
As at 31 August 2024

2024
2023
Note
£000
£000

Fixed assets
  

Tangible assets
 14 
1,989
1,244

Investments
 15 
5
5

  
1,994
1,249

Current assets
  

Stocks
 16 
2,560
2,479

Debtors: amounts falling due within one year
 17 
987
1,303

Cash at bank and in hand
 18 
511
533

  
4,058
4,315

Creditors: amounts falling due within one year
 19 
(4,457)
(4,143)

Net current (liabilities)/assets
  
 
 
(399)
 
 
172

Total assets less current liabilities
  
1,595
1,421

Creditors: amounts falling due after more than one year
 20 
(235)
(263)

Provisions for liabilities
  

Deferred tax
 22 
(245)
(62)

Other provisions
 23 
(33)
(32)

  
 
 
(278)
 
 
(94)

Net assets
  
1,082
1,064


Capital and reserves
  

Called up share capital 
 24 
1
1

Revaluation reserve
 25 
1,407
569

Profit and loss account
 25 
(326)
494

  
1,082
1,064


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


A S Kluge
Director

Date: 9 June 2025

The notes on pages 14 to 32 form part of these financial statements.

Page 10

 
Cosatto Limited
 

Statement of changes in equity
For the Year Ended 31 August 2024


Called up share capital
Revaluation reserve
Profit and loss account
Total equity

£000
£000
£000
£000

At 1 September 2023
1
569
494
1,064


Comprehensive income for the year

Loss for the year
-
-
(700)
(700)

Unrealised surplus on revaluation of freehold property
-
838
-
838
Total comprehensive income for the year
-
838
(700)
138

Dividends: Equity capital
-
-
(120)
(120)


At 31 August 2024
1
1,407
(326)
1,082



Statement of changes in equity
For the Year Ended 31 August 2023


Called up share capital
Revaluation reserve
Profit and loss account
Total equity

£000
£000
£000
£000

At 1 September 2022
1
569
2,184
2,754

Prior year adjustment - correction of goodwill amortisation
-
-
(326)
(326)

At 1 September 2022 (as restated)
1
569
1,858
2,428


Comprehensive income for the year

Loss for the year
-
-
(1,052)
(1,052)
Total comprehensive income for the year
-
-
(1,052)
(1,052)

Dividends: Equity capital
-
-
(312)
(312)


At 31 August 2023
1
569
494
1,064


The notes on pages 14 to 32 form part of these financial statements.

Page 11

 
Cosatto Limited
 

Statement of cash flows
For the Year Ended 31 August 2024

2024
2023
£000
£000

Cash flows from operating activities

Loss for the financial year
(700)
(1,052)

Adjustments for:

Depreciation of tangible assets
122
147

Profit on disposal of tangible assets
(4)
(11)

Interest paid
224
160

Taxation charge
183
(46)

(Increase)/decrease in stocks
(81)
1,030

Decrease in debtors
317
442

Increase/(decrease) in creditors
1,157
(1,074)

Increase/(decrease) in provisions
1
(17)

Corporation tax received
-
7

Net cash generated from operating activities

1,219
(414)

Cash flows from investing activities

Purchase of tangible fixed assets
(30)
(50)

Sale of tangible fixed assets
4
45

Net cash from investing activities

(26)
(5)

Cash flows from financing activities

Repayment of other loans
(150)
(150)

Movements on invoice discounting and import loan facilities
(794)
999

Dividends paid
(120)
(312)

Interest paid
(224)
(160)

Net cash used in financing activities
(1,288)
377

Net (decrease) in cash and cash equivalents
(95)
(42)

Cash and cash equivalents at beginning of year
293
335

Cash and cash equivalents at the end of year
198
293


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
511
533

Bank overdrafts
(313)
(240)

198
293


The notes on pages 14 to 32 form part of these financial statements.

Page 12

 
Cosatto Limited
 

Analysis of Net Debt
For the Year Ended 31 August 2024




At 1 September 2023
Cash flows
At 31 August 2024
£000

£000

£000

Cash at bank and in hand

533

(22)

511

Bank overdrafts

(240)

(73)

(313)

Debt due after 1 year

(113)

-

(113)

Debt due within 1 year

(300)

150

(150)


(120)
55
(65)

The notes on pages 14 to 32 form part of these financial statements.

Page 13

 
Cosatto Limited
 
 
 
Notes to the financial statements
For the Year Ended 31 August 2024

1.


General information

Cosatto Limited is a private Company limited by members capital incorporated in England, number 06529629. The address of the registered office and principal place of business is Bentinck Mill, Bentinck Street, Farnworth, Bolton, BL4 7EP. 
The nature of the Company's operation and its principal activity is that of development, marketing and distribution of children's nursery related products. 

2.Accounting policies

 
2.1

Basis of preparation of financial statements

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

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

The following principal accounting policies have been applied:

 
2.2

Going concern

The financial statements have been prepared on a going concern basis. The following paragraphs set out the basis of which the directors have reached their conclusion.
At 31 August 2024 the Company had net current liabilities of £399k (2023 : net current assets of £172k) and made a loss after tax for the year of £700k (2023: £1,052k loss).
The Company has prepared monthly forecasts and projections for a period in excess of twelve months from the date of approval, and as at the year-end these projections indicate that the Company will be back on track to deliver a positive EBITDA and be cash generative once again for the next financial year. The forecasts have been created taking into consideration sensitivities to consider the current general economic conditions, the competitive nature of the industry, inflationary impacts,  sales volume and unit price pressures, and taking into account the continuing necessary cost control measures which commenced during the second half of the current financial year.
The Company finances its operations, largely, through retained profits with short term finance facilities in the form of loans secured on the assets of the Company. These are primarily used to support working capital requirements. With the losses sustained in the current and prior years, the ongoing support of loan facility providers is fundamental to the cash management of the business. The Company is pleased to report that continued facility provision has been obtained for the foreseeable future via a re-finance process which was completed in early June 2025. The directors are confident in delivering the new financial year forecast and returning the Company to a positive EBITDA, furthermore the directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future and that it is therefore appropriate to prepare the annual report and financial statements to 31 August 2024 on a going concern basis.

Page 14

 
Cosatto Limited
 
 
 
Notes to the financial statements
For the Year Ended 31 August 2024

2.Accounting policies (continued)

 
2.3

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is GBP.

Transactions and balances

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

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

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.

 
2.4

Revenue

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

Sale of goods

Revenue from the sale of goods is recognised when all of the following conditions are satisfied:
the Company has transferred the significant risks and rewards of ownership to the buyer;
the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
the amount of revenue can be measured reliably;
it is probable that the Company will receive the consideration due under the transaction; and
the costs incurred or to be incurred in respect of the transaction can be measured reliably.

 
2.5

Operating leases: the Company as lessor

Rental income from operating leases is credited to profit or loss on a straight-line basis over the lease term.

 
2.6

Operating leases: the Company as lessee

Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.

 
2.7

Finance costs

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

Page 15

 
Cosatto Limited
 
 
 
Notes to the financial statements
For the Year Ended 31 August 2024

2.Accounting policies (continued)

 
2.8

Borrowing costs

All borrowing costs are recognised in profit or loss in the year in which they are incurred.

 
2.9

Pensions

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 statement of financial position. The assets of the plan are held separately from the Company in independently administered funds.

 
2.10

Current and deferred taxation

The tax expense for the year 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 reporting 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 reporting 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 reporting date.

 
2.11

Intangible assets

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 comprehensive income over its useful economic life which is 10 years. 

Page 16

 
Cosatto Limited
 
 
 
Notes to the financial statements
For the Year Ended 31 August 2024

2.Accounting policies (continued)

 
2.12

Tangible fixed assets

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:

Freehold property
-
2%
straight line
Plant and machinery
-
20%
straight line
Motor vehicles
-
25%
straight line
Fixtures and fittings
-
25%
straight line
Computer equipment
-
20%
straight line

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.

 
2.13

Revaluation of tangible fixed assets

Individual freehold and leasehold properties are carried at current year value at fair value at the date of the revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Revaluations are undertaken with sufficient regularity to ensure the carrying amount does not differ materially from that which would be determined using fair value at the reporting date.
Fair values are determined from market based evidence normally undertaken by professionally qualified valuers.

Revaluation gains and losses are recognised in other comprehensive income unless losses exceed the previously recognised gains or reflect a clear consumption of economic benefits, in which case the excess losses are recognised in profit or loss.

 
2.14

Valuation of investments

Investments in unlisted Company shares, whose market value can be reliably determined, are remeasured to market value at each reporting date. Gains and losses on remeasurement are recognised in the statement of comprehensive income for the period. Where market value cannot be reliably determined, such investments are stated at historic cost less impairment.

Page 17

 
Cosatto Limited
 
 
 
Notes to the financial statements
For the Year Ended 31 August 2024

2.Accounting policies (continued)

 
2.15

Stocks

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 weighted average basis.
At each reporting date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.

 
2.16

Debtors

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.

 
2.17

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. 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.

In the statement of cash flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Company's cash management.

 
2.18

Creditors

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

 
2.19

Provisions for liabilities

Provisions are recognised when an event has taken place that gives rise to a legal or constructive obligation, a transfer of economic benefits is probable and a reliable estimate can be made.
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
 
Increases in provisions are generally charged as an expense to profit or loss.

Page 18

 
Cosatto Limited
 
 
 
Notes to the financial statements
For the Year Ended 31 August 2024

2.Accounting policies (continued)

 
2.20

Financial instruments

The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.

The Company has elected to apply the recognition and measurement provisions of IFRS 9 Financial Instruments (as adopted by the UK Endorsement Board) with the disclosure requirements of Sections 11 and 12 and the other presentation requirements of FRS 102.

Financial instruments are recognised in the Company's statement of financial position 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 trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs 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 receivables due with the operating cycle fall into this category of financial instruments.

Other financial assets

Other financial assets, which includes investments in equity instruments which are not classified as subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the recognised transaction price. Such assets are subsequently measured at fair value with the changes in fair value being recognised in the profit or loss. Where other financial assets are not publicly traded, hence their fair value cannot be measured reliably, they are measured at cost less impairment.

Impairment of financial assets

Financial assets are assessed for indicators of impairment at each reporting date. 

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.
 
Page 19

 
Cosatto Limited
 
 
 
Notes to the financial statements
For the Year Ended 31 August 2024

2.Accounting policies (continued)


2.20
Financial instruments (continued)


Financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instruments 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 payables, bank loans and other loans are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument 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.

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

Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables 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.

Other financial instruments

Derivatives, including forward exchange contracts, futures contracts and interest rate swaps, are not classified as basic financial instruments. These are initially recognised at fair value on the date the derivative contract is entered into, with costs being charged to the profit or loss. They are subsequently measured at fair value with changes in the profit or loss.

Debt instruments that do not meet the conditions as set out in FRS 102 paragraph 11.9 are subsequently measured at fair value through the profit or loss. This recognition and measurement would also apply to financial instruments where the performance is evaluated on a fair value basis as with a documented risk management or investment strategy.

The Company enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors and  loans from banks and other third parties.

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.

Page 20

 
Cosatto Limited
 
 
 
Notes to the financial statements
For the Year Ended 31 August 2024

2.Accounting policies (continued)

 
2.21

Dividends

Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.


3.


Judgements in applying accounting policies and key sources of estimation uncertainty

The preparation of the financial statements requires the Directors to make judgements, estimates and assumptions that affect the amounts reported for assets and liabilities as at the balance sheet date and the amounts reported for revenues and expenses during the year. However, the nature of estimates means that actual outcomes could differ from those estimates. The following material judgements have had the most significant effect on amounts recognised in the financial statements. 
Warranty provision
The Company offers customers purchasing goods a 4 year guarantee if they register the guarantee within 28 days of the purchase. The Company reviews its warranty provision on a regular basis. A warranty provision is made based on historical data regarding credit notes raised by the Company. At the year end, the warranty provision totalled £33,000 (2023: £32,000). 
Provision for impairment loss on trade debtors
The Directors of the Company exercises significant judgement in providing for impairment loss on trade debtors. At the year end, the value of trade debtors totalled £748,000 (2023: £1,107,000). 
Provision for obsolete and slow moving stocks
The Company reviews its stock to assess loss on account of obsolescence on a regular basis. In determining whether provision for obsolescence should be recorded in the profit or loss, the company makes judgements as to whether there is any observable data indicating that there is any future salability of the product and the estimated net realisable value for such product. Accordingly, provision for impairment is made where the net realisable value is less than the cost based on best estimates by the management. The provision for obsolescence of stock is based on the ageing and historical sales pattern. At the year end, the value of stock totalled £2,560,000: £2,479,000). 
Property Valuation
The Directors of the Company exercise significant judgement in assessing that the property valuation has not changed from the date it was valued to the balance sheet date. The value of the property at the year end totalled £1,817,400 (2023: £1,043,700). 
Other estimates and judgements
The Directors of the Company also exercise significant judgement in estimating the useful life of tangible and fixed assets. 
Should these estimates vary, the profit or loss and balance sheet of the following years could be impacted. 

Page 21

 
Cosatto Limited
 
 
 
Notes to the financial statements
For the Year Ended 31 August 2024

4.


Turnover

An analysis of turnover by class of business is as follows:


2024
2023
£000
£000

Design and manufacture of baby products
11,722
12,237

11,722
12,237


Analysis of turnover by country of destination:

2024
2023
£000
£000

United Kingdom
10,511
10,693

Rest of Europe
1,104
1,384

Rest of the world
107
160

11,722
12,237



5.


Other operating income

2024
2023
£000
£000

Commissions receivable
62
70



6.


Operating loss

The operating loss is stated after charging:

2024
2023
£000
£000



Profit on disposal of tangible fixed assets
(4)
(11)

Depreciation of tangible fixed assets
123
146

Exchange difference
-
(5)

Other operating lease rentals
3
3

Defined contribution pension cost
75
79

Page 22

 
Cosatto Limited
 
 
 
Notes to the financial statements
For the Year Ended 31 August 2024

7.


Auditors' remuneration

During the year, the Company obtained the following services from the Company's auditors:


2024
2023
£000
£000

Fees payable to the Company's auditors for the audit of the Company's financial statements
12
12

Fees payable to the Company's auditors in respect of:

Taxation compliance services
1
1

All non-audit services not included above
2
2

8.


Employees

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


2024
2023
£000
£000

Wages and salaries
1,931
1,970

Social security costs
201
201

Cost of defined contribution scheme
75
90

2,207
2,261


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


        2024
        2023
            No.
            No.







Administrative
49
53



Directors
4
4

53
57

Page 23

 
Cosatto Limited
 
 
 
Notes to the financial statements
For the Year Ended 31 August 2024

9.


Directors' remuneration

2024
2023
£000
£000

Directors' emoluments
445
368

Company contributions to defined contribution pension schemes
39
49

484
417


During the year retirement benefits were accruing to 3 directors (2023 - 3) in respect of defined contribution pension schemes.

The highest paid director received remuneration of £146 thousand (2023 - £115 thousand).

The value of the Company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £NIL (2023 - £9 thousand).


10.


Interest payable and similar expenses

2024
2023
£000
£000


Other loan interest payable
149
94

Other interest payable
78
67

227
161


11.


Taxation


2024
2023
£000
£000



Current tax on profits for the year
-
-


Deferred tax


Origination and reversal of timing differences
165
(46)

Adjustments to deferred tax charge in respect of prior periods
18
-


Taxation on profit/(loss) on ordinary activities
183
(46)
Page 24

 
Cosatto Limited
 
 
 
Notes to the financial statements
For the Year Ended 31 August 2024
 
11.Taxation (continued)


Factors affecting tax charge for the year

The tax assessed for the year is higher than (2023 - higher than) the standard rate of corporation tax in the UK of 25% (2023 - 22%). The differences are explained below:

2024
2023
£000
£000


Loss on ordinary activities before tax
(517)
(1,097)


Loss on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2023 - 22%)
(129)
(241)

Effects of:


Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
7
4

Capital allowances for year in excess of depreciation
-
5

Adjustment to deferred tax charge in respect of prior periods
18
-

Adjustments to tax charge in respect of prior periods
-
(28)

Book profit on chargeable assets
-
(2)

Unrelieved trading loss for the period
107
221

Other differences leading to an increase (decrease) in the tax charge
180
(5)

Total tax charge for the year
183
(46)


Factors that may affect future tax charges

The company has unutilised tax losses of £1.4m available to offset against future taxable profits.


12.


Dividends

2024
2023
£000
£000

A Ordinary


Dividends paid
120
312

Page 25

 
Cosatto Limited
 
 
 
Notes to the financial statements
For the Year Ended 31 August 2024

13.


Intangible assets




Goodwill

£000



Cost


At 1 September 2023
861



At 31 August 2024

861



Amortisation


At 1 September 2023
861



At 31 August 2024

861



Net book value



At 31 August 2024
-



At 31 August 2023
-



Page 26

 
Cosatto Limited
 
 
 
Notes to the financial statements
For the Year Ended 31 August 2024

14.


Tangible fixed assets





Freehold property
Plant and machinery
Motor vehicles
Fixtures and fittings
Computer equipment
Total

£000
£000
£000
£000
£000
£000



Cost or valuation


At 1 September 2023
1,065
821
13
319
371
2,589


Additions
-
13
12
3
2
30


Disposals
-
-
(13)
-
-
(13)


Revaluations
795
-
-
-
-
795



At 31 August 2024

1,860
834
12
322
373
3,401



Depreciation


At 1 September 2023
21
681
13
317
313
1,345


Charge for the year
21
61
1
2
37
122


Disposals
-
-
(13)
-
-
(13)


On revalued assets
(42)
-
-
-
-
(42)



At 31 August 2024

-
742
1
319
350
1,412



Net book value



At 31 August 2024
1,860
92
11
3
23
1,989



At 31 August 2023
1,044
140
-
2
58
1,244

The freehold property was valued at £1,860,000 by Fisher German LLP, on 10 March 2025, on an open market basis. The directors believe this to be the value as at the year end balance sheet date. 

The surplus on revaluation of freehold property in the year arising of £795k has been credited to the profit and loss for the year. All other tangible assets are stated at historical cost less depreciation and impairments.

If the land and buildings had not been included at valuation they would have been included under the historical cost convention as follows:

2024
2023
£000
£000



Cost
594
594

Accumulated depreciation
(151)
(139)

Net book value
443
455

Page 27

 
Cosatto Limited
 
 
 
Notes to the financial statements
For the Year Ended 31 August 2024

15.


Fixed asset investments





Unlisted investments

£000



Cost or valuation


At 1 September 2023
5



At 31 August 2024
5






Net book value



At 31 August 2024
5



At 31 August 2023
5


16.


Stocks

2024
2023
£000
£000

Finished goods and goods for resale
2,560
2,479


Page 28

 
Cosatto Limited
 
 
 
Notes to the financial statements
For the Year Ended 31 August 2024

17.


Debtors

2024
2023
£000
£000


Trade debtors
748
1,107

Prepayments and accrued income
239
195

Tax recoverable
-
1

987
1,303


An impairment loss of £13k (2023: £Nil) was recognised in administrative expenses during the year against trade debtors. 


18.


Cash and cash equivalents

2024
2023
£000
£000

Cash at bank and in hand
511
533

Less: bank overdrafts
(313)
(240)

198
293



19.


Creditors: Amounts falling due within one year

2024
2023
£000
£000

Bank overdrafts
313
240

Other loans
150
150

Trade creditors
2,043
994

Other taxation and social security
312
284

Invoice discounting and import loan facility
1,397
2,191

Other creditors
58
24

Accruals and deferred income
184
260

4,457
4,143


Other loans relate to a government Coronavirus Business Interruption Loan. This loan is repayable over 60 months, with monthly repayments of £12,500. Interest is charged on the loan at 3.99% per annum over Base Rate and the loan is secured by a guarantee from one of the directors, limited to £75,000.
The invoice discounting facility is secured on certain book debts of the Company and the import loan facility is secured on the companies freehold property and other book debts of the Company. 
Included within other creditors is a loan owed to ones of the directors amounting to £28,000. This loan is repayable over 60 months with interest charged at 8%. 

Page 29

 
Cosatto Limited
 
 
 
Notes to the financial statements
For the Year Ended 31 August 2024

20.


Creditors: Amounts falling due after more than one year

2024
2023
£000
£000

Other loans
113
263

Other creditors
122
-

235
263



21.


Loans


Analysis of the maturity of loans is given below:


2024
2023
£000
£000

Amounts falling due within one year

Other loans
150
150


150
150

Amounts falling due 1-2 years

Other loans
113
150

Amounts falling due 2-5 years

Other loans
-
113


263
413



22.


Deferred taxation




2024
2023


£000

£000






At 1 September
(62)
(108)


Charged to profit or loss
(183)
46



At 31 August
(245)
(62)

Page 30

 
Cosatto Limited
 
 
 
Notes to the financial statements
For the Year Ended 31 August 2024
 
22.Deferred taxation (continued)

The provision for deferred taxation is made up as follows:

2024
2023
£000
£000


Accelerated capital allowances
(48)
(36)

Revaluation of property
(209)
(28)

Other timing differences
12
2

(245)
(62)


23.


Provisions




Warranty

£000





At 1 September 2023
32


Charged to profit or loss
34


Utilised in year
(33)



At 31 August 2024
33

The Company gives a four year warranty on certain products sold. Such warranty is in respect of the Company's undertaking to repair or replace those items that fail to perform satisfactory upon meeting the terms and conditions set by the Company. A provision for warranty is calculated and recognised for each type of such product based available past historical data on the levels of repairs and returns. 


24.


Share capital

2024
2023
£
£
Allotted, called up and fully paid



844 (2023:844) A Ordinary shares of £1.00 each
844
844
15,600 (2023:15,600) B Ordinary shares of £0.01 each
156
156

1,000

1,000

The A Ordinary shares have full voting rights and full entitlement to dividends. 
The B Ordinary shares have no voting rights and are entitled to dividends after the A Ordinary shares. 


Page 31

 
Cosatto Limited
 
 
 
Notes to the financial statements
For the Year Ended 31 August 2024

25.


Reserves

Revaluation reserve
A revaluation reserve arose on a revaluation of a property in accordance with UK GAAP.
There are non-distributable reserves of £1,407,000 (
2023:£568,000) in respect of revaluations of land and buildings, net of depreciation recognised in the profit and loss account in excess of depreciation applicable under the historical cost convention and associated deferred tax liabilities.
Profit and loss account
The profit and loss account includes all current and prior period retained profits and losses. 


26.


Pension commitments

The Company operates a defined contribution 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 £75,000 (2023: £90,000). Contributions totalling £12,000 (2023: £12,000) were payable to the fund at the reporting date.


27.


Commitments under operating leases

At 31 August 2024 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

2024
2023
£000
£000


Not later than 1 year
-
3


28.


Related party transactions

During the year, £270,000 (2023: £312,000) was loaned to the Company by a director and £110,000 (2023: £312,328) has been repaid. At the year end there is £160,000 (2023: £Nil) due to the director. The maximum amount owed to the Director by the Company was £210,000 (2023:£130,328).  Interest is charged at 8% on £150,000 of the outstanding amount.


29.


Controlling party

The Company is controlled by A S Kluge, by way of his 100% interest in the voting share capital of the Company. 

 
Page 32