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Registered number: 12943236
Melan & COA Limited
Annual report and financial statements
For the period ended 31 May 2025
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Melan & COA Limited
Company Information
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J Tague (appointed 20 August 2024)
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Melan & COA Limited
Contents
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Independent auditors' report
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Consolidated statement of comprehensive income
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Consolidated balance sheet
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Consolidated statement of changes in equity
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Company statement of changes in equity
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Consolidated statement of cash flows
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Notes to the financial statements
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Melan & COA Limited
Group strategic report
For the period ended 31 May 2025
The directors present the Strategic report for the year ended 31 May 2025.
Principal activities
Melan & Coa Limited (the "Group") has been hand-making, moulding and decorating beautiful luxury chocolate shapes and decorating chocolates using only the very finest ingredients for nearly 25 years. We design, market and sell under the L'Artisan Du Chocolat Limited and supply retailers and luxury hotels and restaurants with bespoke chocolate delights. The primary objective is to make imaginative, small-batch products for customers wanting something special.
We blend, mould and pack all of our products at our artisan atelier in Ashford, Kent.
Fair review of the business
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In 2022 the Group attracted investment in order to meet demand from premium retailers and grow its operation to meet significant demand. In hindsight, the last three years results have proved disastrous with a strategy to invest in more people, warehousing and infrastructure to facilitate significantly higher sales proving unsuccessful. Over this period costs of raw materials, people and utilities averaged more than 25% per annum and these costs were unable to be passed on to customers resulting in extensive losses.
The directors have monitored the progress of the Group's strategy by reference to selected financial and non financial performance indicators. The financial indicators are revenue, gross profit, operating expenses and operating profit.
The Group sales for this year were £10.3m compared to £13.1m for the previous same twelve months (a decline
of 21% on the previous year). Gross profit margin as percentage of sales has increased to 23% during the year
(2024: 10%). However, the effect of a number of onerous contracts and direct retail operations combined with a
rapid rise in the price of raw materials resulted in an operating loss of £3.3m (2024: £8m). The net loss for the year was £4.6m (2024: £7.6m).
The business' principal financial instruments comprise bank balances, trade debtors and trade creditors. The main purpose of these instruments are to finance the business' operations. Trade debtors are managed in respect of credit and cash flow risk by policies concerning the credit offered to customers and the regular monitoring of amounts for time outstanding. Trade creditors' liquidity risk is managed by ensuring sufficient funds are available to meet amounts due.
Principal risks and uncertainties
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The business operates in a highly competitive environment, with exposure to rapid changes in both the price of cocoa and currency exchange rates. The company looks to mitigate these risks by putting in place commodity pricing and currency contracts to support its commercial obligations.
The board has now established a formal process for identifying, evaluating and managing the business risks faced, with an ongoing review of progress against our short and medium term objectives. The risks reviewed include:
∙External business risks including regulatory and compliance obligations
∙Operational risks arising from supplier dependency, fire, material damage etc
∙Legal risks such as under factory and warehouse leases and contracts with customers and landlords
∙Information risks, including the integrity of IT systems and security of information
Page 1
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Melan & COA Limited
Group strategic report (continued)
For the period ended 31 May 2025
This report was approved by the board on 12 December 2025 and signed on its behalf.
Page 2
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Melan & COA Limited
Directors' report
For the period ended 31 May 2025
The directors present their report and the financial statements for the period ended 31 May 2025.
Directors' responsibilities statement
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The directors are responsible for preparing the Group strategic report, the Directors' report and the consolidated 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 the Group and of the profit or loss of the Group for that period.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Group's financial statements and then apply them consistently;
∙make judgments and accounting estimates that are reasonable and prudent;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and the Group and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The loss for the period, after taxation, amounted to £4,605,252 (2024 - loss £7,573,439).
No dividends were paid during the year (2024: £Nil).
The directors who served during the period were:
J Tague (appointed 20 August 2024)
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G Gillo (resigned 20 August 2024)
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A Weyns (resigned 7 June 2024)
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Disclosure of information to auditors
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Each of the persons who are directors at the time when this Directors' report is approved has confirmed that:
∙so far as the director is aware, there is no relevant audit information of which the Company and the Group'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 and the Group's auditors are aware of that information.
Post balance sheet events
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There have been no significant events affecting the Group since the year end.
Page 3
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Melan & COA Limited
Directors' report (continued)
For the period ended 31 May 2025
The audit registration of Kreston Reeves LLP was transferred to Kreston Reeves Audit LLP on 6 October 2025. Kreston Reeves Audit LLP were formally appointed as auditor to the company on 6 October 2025.
Under section 487(2) of the Companies Act 2006, Kreston Reeves Audit LLP will be deemed to have been reappointed as auditors 28 days after these financial statements were sent to members or 28 days after the latest date prescribed for filing the accounts with the registrar, whichever is earlier.
This report was approved by the board on 12 December 2025 and signed on its behalf.
Page 4
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Melan & COA Limited
Independent auditors' report to the members of Melan & COA Limited
We have audited the financial statements of Melan & COA Limited (the 'parent Company') and its subsidiaries (the 'Group') for the period ended 31 May 2025, which comprise the Consolidated statement of comprehensive income, the Consolidated balance sheet, the Company balance sheet, the Consolidated statement of cash flows, the Consolidated statement of changes in equity, the Company statement of changes in equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
In our opinion, except for the possible effects of the matter described in the basis for qualified opinion section of
our report, the financial statements:
∙give a true and fair view of the state of the Group's and of the parent Company's affairs as at 31 May 2025 and of the Group's loss for the period then ended;
∙have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
∙have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for qualified opinion
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We were not able to observe the counting of physical inventories or obtain sufficient audit evidence surrounding
the valuation of stock as at the end of the prior year and therefore the opening stock within the current year accounts. We were also unable to satisfy ourselves by alternative audit procedures to cover inventory quantities and valuation included within opening stock. Consequently we were unable to determine whether any adjustment to this amount was necessary.
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 Group 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.
Material uncertainty related to going concern
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We draw attention to note 2.4 in the financial statements, which indicates that the group incurred a net operating loss of £3,260,376 during the year ended 31 May 2025 and, as of that date, the group's net liabilities were £16,324,001. As stated in note 2.4, these events or conditions, along with the other matters as set forth in note 2.4, indicate that a material uncertainty exists that may cast significant doubt on the Group's or the parent Company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.
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.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Page 5
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Melan & COA Limited
Independent auditors' report to the members of Melan & COA Limited (continued)
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 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.
As described in the basis for qualified opinion section of our report, we were unable to satisfy ourselves
concerning the opening inventory quantities and valuation included within opening stock. We have concluded that where the other information refers to the inventory balance or related balances such as cost of sales, it may be materially misstated for the same reason.
Qualified opinion on other matters prescribed by the Companies Act 2006
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In our qualified opinion, based on the work undertaken in the course of the audit:
∙the information given in the Group strategic report and the Directors' report for the financial period for which the financial statements are prepared is consistent with the financial statements; and
∙the Group strategic report and the Directors' report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
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Except for the matter described in the basis for qualified opinion section of our report, in the light of the knowledge and understanding of the Group and its enviroment obtained in the course of the audit, we have not identified material misstatements in the Group strategic report or the Directors' report.
Arising solely from the limitation on the scope of our work relating to inventory, referred to above:
∙We have not obtained all the information and explanations that we considered necessary for the purpose of our audit; and
∙We were unable to determine whether adequate accounting records have been kept
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:
∙Returns adequate for our audit have not been recieved 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.
Responsibilities of directors
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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.
Page 6
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Melan & COA Limited
Independent auditors' report to the members of Melan & COA Limited (continued)
In preparing the financial statements, the directors are responsible for assessing the Group's and the parent 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 Group or the parent Company or to cease operations, or have no realistic alternative but to do so.
Auditors' responsibilities for the audit of the financial statements
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Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an 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 Group financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
Capability of the audit in detecting irregularities, including fraud
The objectives of our audit are to identify and assess the risks of material misstatement of the financial statements due to fraud or error; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud or error; and to respond appropriately to those risks.
Based on our understanding of the group and industry, and through discussion with the directors and other management (as required by auditing standards), we identified that the principal risks of non-compliance with laws and regulations related to health and safety, anti-bribery and employment law. We considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006 and taxation legislation. We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements including the risk of override of controls and determined that the principal risks were related to posting inappropriate journal entries to increase revenue or reduce expenditure and management bias in accounting estimates. Audit procedures performed by the group engagement team included:
∙Discussions with management and assessment of known or suspected instances of non-compliance with
laws and regulations (including health and safety) and fraud; and
∙Identifying and assessing the design effectiveness of controls that management has in place to prevent
and detect fraud; and
∙Review of cash expenditure to confirm no evidence of personal benefit; and
∙Challenging assumptions and judgements made by management in its significant accounting estimates;
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∙Identifying key contracts and confirming that all required procurement and tendering procedures have
been followed; and
∙Checking and reperforming the reconciliation of key control accounts; and
∙Performing analytical procedures to identify any unusual or unexpected relationships, including related
party transactions, that may indicate risks of material misstatement due to fraud; and
Page 7
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Melan & COA Limited
Independent auditors' report to the members of Melan & COA Limited (continued)
∙Confirmation of related parties with management, and review of transactions throughout the period to
identify any previously undisclosed transactions with related parties outside the normal course of
business; and
∙Performing analytical procedures with automated data analytics tools to identify any unusual or
unexpected relationships, including related party transactions, that may indicate risks of material
misstatement due to fraud; and
∙Reading minutes of meetings of those charged with governance and reviewing correspondence with relevant tax and regulatory authorities; and
∙Review of significant and unusual transactions and evaluation of the underlying financial rationale
supporting the transactions.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. We also:
∙Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
∙Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion of the effectiveness of the Company's internal control.
∙Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
∙Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our Auditors' report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our Auditors' report. However, future events or conditions may cause the Company to cease to continue as a going concern.
∙Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
∙Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion.
Page 8
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Melan & COA Limited
Independent auditors' report to the members of Melan & COA Limited (continued)
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an 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.
Mark Attwood FCCA (Senior statutory auditor)
for and on behalf of
Kreston Reeves Audit LLP
Statutory Auditor
Chatham Maritime
12 December 2025
Page 9
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Melan & COA Limited
Consolidated statement of comprehensive income
For the period ended 31 May 2025
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Exceptional administrative expenses
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Interest payable and similar expenses
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Loss for the financial period
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Total comprehensive income for the period
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Profit for the year attributable to:
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Owners of the parent company
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Total comprehensive income attributable to:
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The notes on pages 18 to 38 form part of these financial statements.
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Page 10
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Melan & COA Limited
Registered number: 12943236
Consolidated balance sheet
As at 31 May 2025
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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The financial statements were approved and authorised for issue by the board and were signed on its behalf on 12 December 2025.
The notes on pages 18 to 38 form part of these financial statements.
Page 11
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Melan & COA Limited
Registered number: 12943236
Company balance sheet
As at 31 May 2025
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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Total assets less current liabilities
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Creditors: amounts falling due after more than one year
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Profit and loss account brought forward
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Profit and loss account carried forward
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The financial statements were approved and authorised for issue by the board and were signed on its behalf on 12 December 2025.
The notes on pages 18 to 38 form part of these financial statements.
Page 12
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Melan & COA Limited
Consolidated statement of changes in equity
For the period ended 31 May 2025
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Equity attributable to owners of parent Company
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Prior year adjustment - see note 23
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At 1 June 2024 (as restated)
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Comprehensive income for the period
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Contributions by and distributions to owners
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Shares issued during the period
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The notes on pages 18 to 38 form part of these financial statements.
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Page 13
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Melan & COA Limited
Consolidated statement of changes in equity
For the period ended 31 May 2024
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Equity attributable to owners of parent Company
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At 1 June 2023 (as previously stated)
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Prior year adjustment - see note 23
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At 1 June 2023 (as restated)
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Comprehensive income for the year
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The notes on pages 18 to 38 form part of these financial statements.
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Page 14
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Melan & COA Limited
Company statement of changes in equity
For the period ended 31 May 2025
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Comprehensive income for the year
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Contributions by and distributions to owners
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Shares issued during the period
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The notes on pages 18 to 38 form part of these financial statements.
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Page 15
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Melan & COA Limited
Company statement of changes in equity
For the period ended 31 May 2024
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At 1 June 2023 (as previously stated)
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Prior year adjustment - see note 23
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At 1 June 2023 (as restated)
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Comprehensive income for the year
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The notes on pages 18 to 38 form part of these financial statements.
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Page 16
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Melan & COA Limited
Consolidated statement of cash flows
For the period ended 31 May 2025
Cash flows from operating activities
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Loss for the financial period
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Depreciation of tangible assets
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Loss on disposal of tangible assets
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Decrease/(increase) in debtors
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Loan interest written off
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Net cash generated from operating activities
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Cash flows from investing activities
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Purchase of tangible fixed assets
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Sale of tangible fixed assets
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Net cash from investing activities
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Cash flows from financing activities
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Net cash used in financing activities
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Net increase/(decrease) in cash and cash equivalents
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Cash and cash equivalents at beginning of period
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Cash and cash equivalents at the end of period
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Cash and cash equivalents at the end of period comprise:
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The notes on pages 18 to 38 form part of these financial statements.
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Page 17
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Melan & COA Limited
Notes to the financial statements
For the period ended 31 May 2025
Melan & Coa Limited is a limited liability company incorporated in England. The address of the
registered office is Production Atelier, The Long Barrow, Orbital Park Ashford, Kent, TN24 0GP. The
principal activity of the company is that of artisan chocolate manufacturers and retailers.
2.Accounting policies
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Basis of preparation of financial statements
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The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgment in applying the Group's accounting policies (see note 3).
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of comprehensive income in these financial statements.
The following principal accounting policies have been applied:
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Financial Reporting Standard 102 - reduced disclosure exemptions
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The company has taken advantage of the following disclosure exemptions in preparing its individual financial statements, as permitted by FRS102.
∙the requirement to present a statement of cash flows for the company;
∙the requirements of Section 33 Related Party Disclosures paragraph 33.7.
The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated statement of comprehensive income from the date on which control is obtained. They are deconsolidated from the date control ceases.
Page 18
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Melan & COA Limited
Notes to the financial statements
For the period ended 31 May 2025
2.Accounting policies (continued)
At the balance sheet date, the group has net liabilities of £16.3m after reporting an operating loss of £3.3m for the year ended 31 May 2025. The current economic conditions continue to create some uncertainty over the level of demand for the group's products. The group's forecasts and projections, taking account of reasonably possible changes in trading performance, show that the group should be able to operate within the level of its current facilities. However, as a result of these matters, the directors consider that there is a material uncertainty that may cast significant doubt on the group's ability to continue as a going concern and whether, therefore, the group may be unable to realise its assets and discharge its liabilities in the normal course of business at the amounts recorded in the financial statements.
In response to these matters, the group has undertaken a cost cutting exercise and has renegotiated numerous sales contracts to provide a more appropriate gross margin.
The group meets its day to day working capital requirements through loans provided by its shareholder and its typical trading cycle. As at 31 May 2025 and the date of approval of these financial statements, the group and group have no bank borrowings in the form of overdrafts or bank loans.
On this basis, the directors have determined that the actions they have taken are sufficient to mitigate the uncertainty and consider it appropriate to prepare the financial statements on the going concern basis.
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. 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 Group has transferred the significant risks and rewards of ownership to the buyer;
∙the Group 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 Group will receive the consideration due under the transaction; and
∙the costs incurred or to be incurred in respect of the transaction can be measured reliably.
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Operating leases: the Group as lessee
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Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.
Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.
Page 19
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Melan & COA Limited
Notes to the financial statements
For the period ended 31 May 2025
2.Accounting policies (continued)
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.
All borrowing costs are recognised in profit or loss in the period in which they are incurred.
Defined contribution pension plan
The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations.
The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance sheet. The assets of the plan are held separately from the Group in independently administered funds.
Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company and the Group operate and generate income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits;
∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met; and
∙Where they relate to timing differences in respect of interests in subsidiaries, associates, branches and joint ventures and the Group can control the reversal of the timing differences and such reversal is not considered probable in the foreseeable future.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
Exceptional items are transactions that fall within the ordinary activities of the Group but are presented separately due to their size or incidence.
Page 20
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Melan & COA Limited
Notes to the financial statements
For the period ended 31 May 2025
2.Accounting policies (continued)
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
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Short-term leasehold property
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The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
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Impairment of fixed assets and goodwill
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Assets that are subject to depreciation or amortisation are assessed at each balance sheet date to determine whether there is any indication that the assets are impaired. Where there is any indication that an asset may be impaired, the carrying value of the asset (or cash-generating unit to which the asset has been allocated) is tested for impairment. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's (or CGU's) fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (CGUs). Non-financial assets that have been previously impaired are reviewed at each balance sheet date to assess whether there is any indication that the impairment losses recognised in prior periods may no longer exist or may have decreased.
Investments in subsidiaries are measured at cost less accumulated impairment.
Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include labour and attributable overheads.
At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.
Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
Page 21
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Melan & COA Limited
Notes to the financial statements
For the period ended 31 May 2025
2.Accounting policies (continued)
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Cash and cash equivalents
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Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
In the Consolidated statement of cash flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Group's cash management.
Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
Page 22
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Melan & COA Limited
Notes to the financial statements
For the period ended 31 May 2025
2.Accounting policies (continued)
The Group has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.
The Group 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 Group's Balance sheet when the Group 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 debtors, cash and bank balances, are initially measured at their transaction price (adjusted for transaction costs except in the initial measurement of financial assets that are subsequently measured at fair value through profit and loss) and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Discounting is omitted where the effect of discounting is immaterial. The Group's cash and cash equivalents, trade and most other debtors due with the operating cycle fall into this category of financial instruments.
Impairment of financial assets
At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. If an asset is impaired the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.
If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.
Basic financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Group after the deduction of all its liabilities.
Page 23
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Melan & COA Limited
Notes to the financial statements
For the period ended 31 May 2025
2.Accounting policies (continued)
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Financial instruments (continued)
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Basic financial liabilities, which include trade and other creditors, bank loans, other loans and loans due to fellow group companies are initially measured at their transaction price (adjusting for transaction costs except in the initial measurement of financial liabilities that are subsequently measured at fair value through profit and loss). When this constitutes a financing transaction, the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.
Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.
Trade creditors are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade creditors are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade creditors are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.
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.
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 Group 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 Group 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 Group's contractual obligations expire or are discharged or cancelled.
Page 24
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Melan & COA Limited
Notes to the financial statements
For the period ended 31 May 2025
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Judgments in applying accounting policies and key sources of estimation uncertainty
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The preparation of the financial statements requires the directors to make judgments, estimates and
assumptions that can affect the amounts reported for assets and liabilities, and the results for the year.
The nature of estimation is such though that actual outcomes could differ significantly from those
estimates.
The following are the company's key sources of estimation uncertainty:
Stock provision
A provision has been made against slow moving inventory totalling £382,276 (2024: £Nil). This has been done on a judgemental basis taking into account product life cycle, historical sales patterns and inventory ageing.
Tangible fixed assets
The company has recognised tangible fixed assets with a carrying value of £1,595,794 (2024: £1,780,514)
at the reporting date (see note 13).
The company’s accounting policy sets out the approach to calculating depreciation for immaterial assets
acquired. For material assets such as land and buildings the company determines at acquisition or the
date of revaluation reliable estimates for the useful life of the asset, its residual value and
decommissioning costs. These estimates are based upon such factors as the expected use of the
acquired asset and market conditions. At subsequent reporting dates the directors consider whether there
are any factors such as technological advancements or changes in market conditions that indicate a need
to reconsider the estimates used.
Where there are indicators that the carrying value of tangible assets may be impaired the company
undertakes tests to determine the recoverable amount of assets. These tests require estimates of the fair
value of assets less costs to sell and of their value in use. Wherever possible the estimate of the fair value
of assets is based upon observable market prices less the incremental cost for disposing of the asset.
The value in use calculation is based upon a discounted cash flow model, based upon the company’s
forecasts for the foreseeable future which do not include any restructuring activities that the company is
not yet committed to or significant future investments that will enhance the asset’s performance. The
recoverable amount is most sensitive to the discount rate used for the discounted cash flow model as well
as expected future cash flows and the growth rate used for extrapolation purposes.
WIP and value of finished goods
The group has recognised stocks with a value of £1,488,155 (2024: £1,726,309) at the reporting date
(see note 15).
Due to the complicated process involved with making the finished goods the current process makes it
incredibly difficult to accurately assess the value of the company's WIP and finished goods. These estimates for the reporting period were based upon various assumptions which bring into question the reliability of the valuation within stock. Each of these stages can introduce variability in costs and yields. Factors such as changes in raw material costs, efficiency of production processes, and potential waste or spoilage during manufacturing can all impact the accuracy of WIP valuation.
Page 25
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Melan & COA Limited
Notes to the financial statements
For the period ended 31 May 2025
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An analysis of turnover by class of business is as follows:
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Analysis of turnover by country of destination:
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Insurance claims receivable
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The operating loss is stated after charging:
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Other operating lease rentals
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Page 26
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Melan & COA Limited
Notes to the financial statements
For the period ended 31 May 2025
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Staff costs, including directors' remuneration, were as follows:
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Cost of defined contribution scheme
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The average monthly number of employees, including the directors, during the period was as follows:
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Group contributions to defined contribution pension schemes
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During the period retirement benefits were accruing to 1 director (2024 - 1) in respect of defined contribution pension schemes.
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The highest paid director received remuneration of £373,655 (2024 - £NIL).
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The value of the Group's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £1,042 (2024 - £NIL).
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The value of the Group's contributions paid to a defined benefit pension scheme in respect of the highest paid director amounted to £1,042 (2024 - £NIL).
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The total accrued pension provision of the highest paid director at 31 May 2025 amounted to £NIL (2024 - £NIL).
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The amount of the accrued lump sum in respect of the highest paid director at 31 May 2025 amounted to £NIL (2024 - £NIL).
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Page 27
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Melan & COA Limited
Notes to the financial statements
For the period ended 31 May 2025
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Interest payable and similar expenses
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Other loan interest payable
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Current tax on profits for the year
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Adjustments in respect of previous periods
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Origination and reversal of timing differences
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Page 28
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Melan & COA Limited
Notes to the financial statements
For the period ended 31 May 2025
10.Taxation (continued)
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Factors affecting tax charge for the period/year
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The tax assessed for the period/year is higher than (2024 - higher than) the standard rate of corporation tax in the UK of 25% (2024 - 25%). The differences are explained below:
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Loss on ordinary activities before tax
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Loss on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2024 - 25%)
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Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
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Capital allowances for period/year in excess of depreciation
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Unrelieved losses carried forward
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Adjustment in research and development tax credit leading to an increase (decrease) in the tax charge
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Interest due on tax repayment
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Changes in provisions leading to an increase (decrease) in the tax charge
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Trading losses carried forward
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Intercompany loan writeoffs
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Fixed asset loss on disposal
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Adjustments in respect of prior periods
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Total tax charge for the period/year
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Factors that may affect future tax charges
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There were no factors that may affect future tax charges.
Page 29
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Melan & COA Limited
Notes to the financial statements
For the period ended 31 May 2025
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Accrued interest written off
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The above balance relates to interest charged on a loan provided to the comapny which has been written off alongside the loan.
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Page 30
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Melan & COA Limited
Notes to the financial statements
For the period ended 31 May 2025
12.Intangible assets (continued)
Page 31
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