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Registered number:
For the Year Ended
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Cosatto Limited
Company Information
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Cosatto Limited
Contents
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Cosatto Limited
Strategic report
For the Year Ended 31 August 2025
The Directors present the Strategic Report for the year ended 31 August 2025.
The principal activity of the Company continued to be the development, marketing and distribution of children's nursery products.
The Directors report that turnover increased to £12.9m (2024: £11.7m), representing growth of 10.3% compared with the prior year. This reflects progress in rebuilding sales volumes across the Company’s core nursery product ranges and distribution channels following the challenging trading conditions experienced in the previous financial year.
Gross margin for the year was 54.2% (2024: 56.7%). The reduction compared with the prior year primarily reflects product mix, promotional activity and continuing inflationary pressures within international supply chains. Administrative expenses include £103k of exceptional costs associated with the refinancing of the Company's borrowing facilities. These costs relate primarily to professional advisory and legal fees incurred in securing revised financing arrangements. The Company reported an operating loss of £430k (2024: £290k) and a loss after taxation of £626k (2024: £700k), as shown in the Statement of Comprehensive Income. Although the Company reported a loss for the year, the Directors consider the improvement in revenue together with continued cost control measures to represent progress towards restoring profitability. The refinancing completed during the year has strengthened the Company’s funding structure and provides additional capacity to support working capital requirements and the future development of the business.
The Directors believe the principal risks and uncertainties facing the Company are largely macroeconomic in nature. Consumer demand within the nursery products sector continues to be influenced by cost-of-living pressures and competitive conditions within the Company's key markets.
Foreign exchange movements represent a key risk as a significant proportion of products are sourced internationally. The Company manages this exposure through foreign exchange hedging activities and ongoing monitoring of currency markets. Inflationary pressures and lead-time challenges within global supply chains remain important operational considerations. These risks are mitigated through strong supplier relationships, careful inventory management and ongoing review of product pricing and positioning.
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Cosatto Limited
Strategic report (continued)
For the Year Ended 31 August 2025
Other key performance indicators monitored by the Company include product return rates, employee engagement scores, customer feedback scores and social media following. These indicators assist management in monitoring product quality, customer satisfaction and brand engagement.
Outlook The Directors remain focused on restoring profitability through sustainable revenue growth, continued product innovation and disciplined cost management and expect the business to move towards positive EBITDA in the next financial year. Strategic priorities include strengthening relationships with key supply chain and retail partners, expanding international distribution and maintaining effective control of operating costs.
This report was approved by the board and signed on its behalf.
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Cosatto Limited
Directors' report
For the Year Ended 31 August 2025
The directors present their report and the financial statements for the year ended 31 August 2025.
The directors are responsible for preparing the strategic report, the directors' report and the financial statements in accordance with applicable law and regulations.
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 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The loss for the year, after taxation, amounted to £626 thousand (2024 -loss £700 thousand).
No dividends were paid in the year (2024: £120,000). The directors do not recommend the payment of a final dividend (2024: £Nil).
The directors who served during the year were:
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Cosatto Limited
Directors' report (continued)
For the Year Ended 31 August 2025
A review of the Company's performance and financial position for the year ended 31 August 2025 is set out in the Strategic Report.
Going Concern
The Company has prepared detailed forecasts and projections covering a period in excess of twelve months from the date of approval of the financial statements. These projections consider current economic conditions, competitive pressures within the industry, detailed forecasting of future revenue streams, margins and expenses as well as the continuing focus on cost control measures. Following the refinancing of the Company's borrowing facilities during the year, the Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future and accordingly the financial statements have been prepared on a going concern basis.
The auditors, Hurst Accountants Limited, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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Cosatto Limited
Independent Auditors' Report to the Members of Cosatto Limited
We have audited the financial statements of Cosatto Limited (the 'Company') for the year ended 31 August 2025, 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 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 auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the Annual Report other than the financial statements and our 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.
We have nothing to report in this regard.
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Cosatto Limited
Independent Auditors' Report to the Members of Cosatto Limited (continued)
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.
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.
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Cosatto Limited
Independent Auditors' Report to the Members of Cosatto Limited (continued)
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.
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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.
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.
for and on behalf of
Chartered Accountants
Statutory Auditors
3 Stockport Exchange
Stockport
Cheshire
SK1 3GG
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Cosatto Limited
Statement of comprehensive income
For the Year Ended 31 August 2025
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Cosatto Limited
Registered number: 06529629
Statement of financial position
As at
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 14 to 32 form part of these financial statements.
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Cosatto Limited
Statement of changes in equity
For the Year Ended 31 August 2025
Statement of changes in equity
For the Year Ended 31 August 2024
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Cosatto Limited
Statement of cash flows
For the Year Ended 31 August 2025
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Cosatto Limited
Analysis of Net Debt
For the Year Ended 31 August 2025
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Cosatto Limited
Notes to the financial statements
For the Year Ended 31 August 2025
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
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:
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 2025 the Company had net current assets of £205k (2024: net current liabilities of £399k) and made a loss after tax for the year of £626k (2024: £700k). The Company has prepared monthly forecasts and projections for a period in excess of twelve months from the date of approval, and 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 in the prior financial year. During the year, the Company refinanced its borrowing facilities and secured revised long-term financing arrangements, which continue to provide support for the Company’s working capital requirements. The Company finances its operations, largely, through operating cash flows 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 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 2025 on a going concern basis.
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Cosatto Limited
Notes to the financial statements
For the Year Ended 31 August 2025
2.Accounting policies (continued)
Functional and presentation currency
Transactions and balances
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Cosatto Limited
Notes to the financial statements
For the Year Ended 31 August 2025
2.Accounting policies (continued)
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Cosatto Limited
Notes to the financial statements
For the Year Ended 31 August 2025
2.Accounting policies (continued)
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.
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:
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.
Fair values are determined from market based evidence normally undertaken by professionally qualified valuers.
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Cosatto Limited
Notes to the financial statements
For the Year Ended 31 August 2025
2.Accounting policies (continued)
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 the profit or loss. Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
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Cosatto Limited
Notes to the financial statements
For the Year Ended 31 August 2025
2.Accounting policies (continued)
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 debtors, cash and bank balances, are initially measured at their transaction price (adjusted for transaction costs except in the initial measurement of financial assets that are subsequently measured at fair value through profit and loss) and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other debtors due with the operating cycle fall into this category of financial instruments.
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
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.
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Cosatto Limited
Notes to the financial statements
For the Year Ended 31 August 2025
2.Accounting policies (continued)
Basic financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Company after the deduction of all its liabilities.
Basic financial liabilities, which include trade and other creditors, bank loans and other loans are initially measured at their transaction price (adjusting for transaction costs except in the initial measurement of financial liabilities that are subsequently measured at fair value through profit and loss). When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future payments discounted at a market rate of interest, discounting is omitted where the effect of discounting is immaterial.
Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.
Trade creditors are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade creditors are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade creditors are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.
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 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.
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Cosatto Limited
Notes to the financial statements
For the Year Ended 31 August 2025
2.Accounting policies (continued)
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 £18,000 (2024: £33,000). 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 £919,000 (2024: £748,000). 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 £3,309,000 (2024: £2,560,000). 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 £1,822,000 (2024: £1,860,000). 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.
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Cosatto Limited
Notes to the financial statements
For the Year Ended 31 August 2025
Analysis of turnover by country of destination:
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Cosatto Limited
Notes to the financial statements
For the Year Ended 31 August 2025
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Cosatto Limited
Notes to the financial statements
For the Year Ended 31 August 2025
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Cosatto Limited
Notes to the financial statements
For the Year Ended 31 August 2025
11.Taxation (continued)
The company has unutilised tax losses of £1.9m available to offset against future taxable profits.
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Cosatto Limited
Notes to the financial statements
For the Year Ended 31 August 2025
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Cosatto Limited
Notes to the financial statements
For the Year Ended 31 August 2025
All other tangible assets are stated at historical cost less depreciation and impairments.
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Cosatto Limited
Notes to the financial statements
For the Year Ended 31 August 2025
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Cosatto Limited
Notes to the financial statements
For the Year Ended 31 August 2025
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Cosatto Limited
Notes to the financial statements
For the Year Ended 31 August 2025
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Cosatto Limited
Notes to the financial statements
For the Year Ended 31 August 2025
Revaluation reserve
A revaluation reserve arose on a revaluation of a property in accordance with UK GAAP. There are non-distributable reserves of £1,363,000 (2024:£1,407,000) 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.
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Cosatto Limited
Notes to the financial statements
For the Year Ended 31 August 2025
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 £69,000 (2024: £75,000). Contributions totalling £9,000 (2024: £12,000) were payable to the fund at the reporting date.
The Company is controlled by A S Kluge, by way of his 100% interest in the voting share capital of the Company.
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